Hotels fight back

The Furama RiverFront Singapore hotel introduced theme rooms, such as this underwater one, last year.
Photo: Furama Riverfront

 

They are dangling carrots to woo guests as the competition heats up with accommodation sites such as Airbnb offering lower-priced options

Free use of smartphones, halal breakfasts delivered to the door and tie-ups with luxury brands - hotels are pulling out all the stops to woo back travellers enticed by new travel accommodation sites such as Airbnb and Onefinestay.

Ask any seasoned traveller and he would probably agree that hotels are becoming a rather old-fashioned choice.

In recent years, the sharing economy has provided more options for accommodation - a busy scene which includes hotels, hostels, bed and breakfasts, serviced apartments and vacation rentals.

The past 15 years have seen the the emergence of at least 10 new players, such as short-term apartment rental site Roomorama, high-end serviced home-rental company Onefinestay and hospitality exchange website Couchsurfing.

But hotels are fighting back by leveraging on their strengths - utilising technology, providing better value for money and reaching niche audiences through their offerings - rather than slashing prices to compete with the new players.

It is going to be a tough fight, but competition only means more choices for travellers.

To keep up with competitors, hotel room prices may be lowered, but not significantly, experts say.

This is because home rentals will usually still be cheaper.

The most successful player in the home-sharing market seems to be holiday home rental website Airbnb.

Founded in 2008, it is available in more than 190 countries, 34,000 cities.

Airbnb hosts have welcomed more than 140 million guest arrivals.

Last year, several news sources reported the company to be valued at US$30 billion (S$43 billion).

As of 2015, Airbnb occupied the second-largest brand share in terms of global lodging - at 1.5 per cent - just behind the Hilton brand - at 1.9 per cent - according to market research firm Euromonitor.

Among Airbnb's strengths are its low prices, experts say.

A 2015 study by Carlson Wagonlit Travel, which manages travel for corporate clients, found that the average paid rates on Airbnb lodging were 37 per cent lower than traditional lodging.

Ms Shirley Tee, course manager of Nanyang Polytechnic's diploma in hospitality and tourism management, says: "Airbnb works for people who are looking to save on accommodation costs and for those with flexible expectations. The hotels will have to work harder at delivering a greater experience to retain market share."

While there are mixed reports as to how the alternative accommodation sector has affected the traditional hotel industry, hotels are doing what they can to win back guests.

One approach has been to leverage on technology to offer guests a better experience.

Guests at several local hotels - such as W Singapore, Orchard Hotel, Hotel Vagabond and Dorsett Singapore - get to use the hotels' mobile phones on which they can make free local calls and surf the Internet.

The Pan Pacific Singapore hotel, for example, has been providing this service to guests in several of its room categories since last August.

Its mobile phone features unlimited mobile data and lets guests make free overseas calls to 15 countries.

The hotel's general manager, Mr Gino Tan, 50, says its guests are happy with the phone service as it saves them from having to rent a portable Wi-Fi device or buy a local data phone plan.

Other hotels, such as Singapore Marriott Tang Plaza Hotel, have introduced a mobile app.

Its app, launched in December 2015, allows guests to check in and out seamlessly using their smartphones and chat with hotel staff or request services.

More than half of its guests now use the app to check in, says Mr Alvin Lim, 38, the hotel's director of marketing.

Parkroyal Hotels & Resorts also launched an app last November that offers guests access to more than 1,000 curated guides in cities such as Penang, Sydney and Singapore - where the brand has properties.

A second approach has been to offer better value to guests through tie-ups with other organisations, such as attractions and tour companies.

The QT Sydney hotel in Australia, for example, teamed up with the Sydney Opera House last year to offer bespoke options, such as a VIP experience that includes accommodation at the hotel, exclusive backstage access and a tour of the Opera House, followed by cocktails enjoyed with evening views of the arts centre's illuminated sails.

Last June, the hotel also partnered tour company My Detour Sydney to offer guests tailor-made tours from the hotel to the streets of Sydney, bypassing the tired tourist spots.

In Siem Reap, Cambodia, the Shinta Mani Club boutique hotel has partnered tour companies since last year to offer "alternative" activities, such as a visit to a monk blessing ceremony and tickets to a Cambodian circus performance at discounted rates.

Closer to home, the Four Seasons Hotel Singapore has also teamed up with L'Occitane to launch the French skincare brand's first spa in Singapore last year at the hotel.

Some promotional rates to the spa are offered to hotel guests.

A third approach by hotels is to cater to niche groups, such as families and Muslim travellers.

Furama RiverFront Singapore introduced both theme rooms and family rooms last year.

The Radisson Golf & Convention Center Batam hotel in Indonesia introduced Segway and hoverboard activities last September as a fun way for guests to get from one outdoor area to another in the hotel.

To woo Muslim tourists, Orchard Hotel provides halal breakfasts served in bento boxes upon request and has had halal-certified selections in its in-room dining menu since 2014.

Although most hotels do not seem to be competing with the low prices offered by new players, at least one hostel plans to play that game.

Adler Luxury Hostel in South Bridge Road will launch a lower- priced, no-frills accommodation later this year called Adler Hostel.

Here, guests can get a bed for $30 a night, which is more than 30 per cent cheaper than at Adler Luxury Hostel.

The hostel's owner, Mr Adler Poh, 29, says: "In this new economy, it is all about providing travellers with options at difference price points."

It will be a tough fight to win back guests, note some experts.

Dr Michael Chiam, 55, a senior tourism lecturer at Ngee Ann Polytechnic, says: "The hotels can win part of the market back by providing more personalised and authentic experiences. But they may not be able to win back everyone, especially those who want a high degree of interaction with the host."

But professor of marketing Jochen Wirtz, 54, from the National University of Singapore, says the travel industry is growing, so the new travel accommodation options are largely expanding the market rather than cannibalising existing options.

"Competition is good for all involved - it keeps providers on their toes so they innovate. Guests have more options and better choices. And cities benefit as they can accommodate more guests without having to build new hotels."

Photo: The Straits Times

Hotels: personalised service and loyalty points

Mr Mark Chua stayed at the Hilton in Tokyo on his visit last year.Photo: Courtesy of Mark Chua

On his 28th birthday last November, Singaporean Mark Chua was staying at the Hilton in Tokyo, when the hotel staff surprised him with a birthday cake delivered to his room.

The management consultant, who also runs a travel website called The Shutterwhale (www.theshutterwhale.com), says: "The staff must have found out it was my birthday from the details in their system.

"I was impressed because the gesture showed initiative."

Because of such personalised service, he prefers to stay in hotels whenever he travels, usually at places under the Hilton, Hyatt or InterContinental brands.

"Reputable hotels are known for their high standards - in terms of location, service, facilities and Internet connectivity," he says.

"I want to be sure that when I travel, these standards are met."

He especially needs a good Internet connection because he updates his website while travelling and such connectivity is "almost guaranteed" in a good hotel.

And after a long day of travelling, he adds, he wants to return to a place he calls home.

"Hotels are as close to home as I can get," he says.

"They are familiar, so familiar I know what brand of soap will be used in the bathroom."

One of the biggest draws of hotels, he says, are their loyalty programmes.

He is a member of six.

These programmes allow frequent guests to accumulate points, which can be used to redeem rooms.

Top-tier members of these programmes can also get room upgrades, enjoy late check-out and access exclusive guest lounges serving free food and drinks.

The bachelor says: "Instead of spending money on drinks outside the hotel, we can just enjoy our cocktails in a classy environment and they are free."

On average, he spends between $200 and $300 a night on hotel accommodation.

He justifies the cost as it helps him earn points for future stays.

"I don't consider myself rich.

I believe in spending wisely and I want every dollar I pay to earn points or airline miles."

Although he has never tried any of the new travel accommodation options such as Airbnb and Onefinestay, he says: "I don't think they are bad. But they don't fit with my objective, at least for now.

"If I used Airbnb, for example, there are just no points to earn."

AIRBNB: collecting eggs, picking peaches for meals

Ms Tiffany Loh (above, with husband Paul Lim) in Australia in 2015. She stayed with an Australian woman who had a mini-farm.Photo: Courtesy of Tiffany Loh

Teacher Tiffany Loh, 27, has not stayed in a hotel for the last four years although she travelled quite extensively in that period.

This is because she is an Airbnb fan, having made more than 25 bookings through the holiday home rental website when travelling to Australia, Malaysia, Indonesia, Japan, Croatia and the Maldives.

She usually travels with her husband Paul Lim, 29, who is also a teacher, and other family members.

They have a 21/2-year-old daughter and a nine-month-old son.

For Ms Loh, one obvious draw of using Airbnb is the attractive price.

For example, she paid as little as $40 a person a night at a traditional stone house in Croatia in 2014.

The most she has paid is $110 a person a night, at an air-conditioned guest house in the Maldives in 2015, which provided free meals and snorkelling.

She says: "It has been years since I have searched for hotel rates online. I think Airbnb will always be cheaper."

Staying in a local's home - sometimes even with a local - also offers an authentic travel experience, she adds.

"I think hotels are pretty much all the same.

But when I travel, I want to experience what locals go through. So far, my Airbnb experiences have all been unique."

On a 2015 trip to Margaret River, a small town south of Perth, Australia, her family stayed in a suburban home with an Australian woman, who kept a mini-farm in her backyard, complete with horses, sheep and free-range chickens.

She says: "One morning, she let my daughter help her collect freshly laid eggs.

We could also pet and feed the sheep and guinea pigs.

"She also grew fruit trees - peach, lemon, avocado - and let us pick the fruits to use in our meals.

Staying at her place felt really special."

While Ms Loh has heard of horror stories of Airbnb users encountering strange hosts, dirty homes or photos that were fake or exaggerated, she feels it is the duty of users to do their research before choosing a property to stay in.

"I usually pick only places with at least 15 recent positive reviews.

And before I book, I sometimes also message the host to see how responsive or helpful he is."

Acknowledging that should an emergency occur, a host might not react as quickly or appropriately as hotel staff, she says: "There is a risk, but I accept it.

"While overseas, I always have the emergency numbers on hand. If you ask me, we should not rely on hotel staff. We should know what to do ourselves."

How to get better hotel rates

Enrol in a hotel's loyalty programme.

It will allow you to accumulate points which can be used to redeem rooms.

Book your hotel and flight together for extra savings.

Book a room at a newly opened hotel.

It might have an opening deal.

Call the hotel's reservation number and negotiate for a lower rate.

If your schedule is flexible, suggest shifting the dates and rates can fall.

If you are celebrating a special occasion, such as a birthday or honeymoon, tell the hotel staff, who may throw in an upgrade or freebies.

Tell your friends about the hotel.

It might reward you with points that can be used for future hotel stays.

How to choose Airbnb lodging

Do your research.

Find out where the property is.

Is it close enough to the attractions you want to visit?

Be clear about your requirements.

Are you willing to share the property with a host?

Do you need Wi-Fi? Must you be able to cook?

Read all the reviews.

If the host is amazing, it will show.

If there is a bug infestation, it will also show.

Read the house rules.

Some can be quite strange.

I once stayed at a property where the host forbade me to shower after 11pm because it would be "too loud".

Book about 11/2 months before your holiday.

The cheap and good properties are usually snapped up quickly.

But if you book too early, the host might not know if the property will be available on the dates you want to stay.

bang@sph.com.sg


This article was first published on January 15, 2017.
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