Millennials are shaping the future of the hospitality industry, forcing hotels to develop differentiating strategies to ensure they continue to attract — and retain — guests. Given Dubai’s position as a global tourist destination, it comes as no surprise that some hotels are jumping on the bandwagon of innovation to present a more authentic travel experience.

Tech-savvy millennials carry different travel habits and expectations than previous generations. Indulging in authentic meals, socialising with locals and seeking unique cultural experiences are at the top of the to-do list.

Instead of seeking accommodation based on premium experiences and amenities such as spa treatments, millennials are likely to choose spaces based on requirements such as free Wi-Fi and easy access to public transport. In addition, millennials are constantly in search of differentiated products. Localisation (bringing the locale to the hotel) and personalisation (emphasising human touch-points) are becoming increasingly significant in determining accommodation choices.

Standing out from the crowd

As competition from holiday homes expands, so has the magnitude of its impact on the hotel market. Consequently, setting a differentiating and competitive strategy to strengthen the brand is imperative.

Launching sister chains aimed at holiday homes’ core market

The newest generation of travellers view hospitality as a place to experience and not just a place to sleep. With stiff competition from Airbnb and other holiday home providers, hotels have to adjust their offerings to retain their customers and meet the expectations of new clientele.

Various hotel brands have already realised this and have created sister chains targeting young, authentic and budget-conscious travellers. In early 2016 Hilton introduced ‘Tru by Hilton’, a chain focused on travellers looking to spend between $75-$90 a night who, according to Hilton, make up 40 per cent of demand for hotel rooms.

Redeveloping technology and marketing strategies

Social media has played a major role in how hotels connect and communicate with their customers. Leveraging platforms such as Twitter, Facebook and Instagram to strengthen brand recognition is becoming crucial.

Technology also plays a key role in revolutionising hotel brands. According to Carlson Wagonlit Travel Company, 40 per cent of leisure travellers and 36 per cent of business travellers book overnight hotel accommodations using their mobile phone. Optimising the hotel’s booking engine for mobile viewing will improve the guest’s experience. Self-check-in, live chat and mobile keyless hotel access are all examples of how technology is advancing to improve the guest experience and ensure brand continuity.

Maintaining consistency

While developing a brand strategy around ideas that travellers like to explore, maintaining a consistent experience not easily repeatable elsewhere is equally important. Creating loyalty programmes and offering rewards that align with guests’ lifestyle is crucial. While traditionally the norm is to reward frequent hotel guests with discounted rooms or meals, new-generation travellers are looking for relevant experiences.

The Clarion Collection Tapto (Nordic Choice) in Stockholm offers a walk-in closet for travellers. Guests are given a selection of their favourite clothing brands and if they like something they can add it to the bill. Aqua Aston Hospitality in Hawaii rewards its guests with a $20 Starbucks gift card every time a guest makes a reservation through the hotel’s site.

Dubai’s 5-star hotel offerings supported by world-class infrastructure, namely Emirates Airlines and Dubai International Airport, have cemented its position as a global tourist destination.

However, increased concerns of regional unrest and the devaluing of non-US dollar pegged currencies resulted in a slowdown in tourist numbers, mainly from Russia and China. Coupled with strict competition from a growing supply pipeline, hotel operators now have to work harder to customise the guest experience and offer innovate products, to stand out from the crowd and ensure a recurring stream of revenues.

Case study

Located in Dubai’s well-established and vibrant centre, the Rove overlooks the city’s most exclusive landmarks, Burj Khalifa and The Dubai Mall. The product of a joint venture between two of the emirate’s largest developers, Rove is a distinct example of how hotels in Dubai need to rethink their strategies and focus on differentiating their product to ensure they maintain their competitive advantage and continue to attract customers.

The artsy and quirky interior offers a look into the local culture and showcases art pieces by home-grown talent. The use of space is also unique. Instead of only serving the purpose of check-in, the lobby area is designed as a social space for interaction with retro couches and bean bags. Corridors are decorated with life-size murals of the more traditional parts of Dubai featuring alleys and shop facades.

For business travellers the Rove offers spaces that can be customisable for all needs. By just visiting the website and choosing the set-up, from board rooms to theatre style and DIY layouts, meeting rooms can be tailored to serve your event’s purpose.

In addition to maintaining an interactive and user-friendly website, Rove’s marketing strategy utilises modern technology to reach out to customers. Advertising through social media, maintaining a daily blog with lifestyle views, and using a simple hashtag (#dreamworthy, #spaceisking, #artsy) has made it easy for people to recognise the brand.

A Rove mobile app is also currently being developed. Through the click of a button, visitors can unlock their room and check in and out from anywhere in Dubai.

These strategies to promote brand visibility particularly within a segment of the market that has been priced out for some time, is expected to drive the success of the Rove hotels.

The writer is Head of Research at Knight Frank Middle East.