BERLIN — While there was once a period when travelers going abroad looked for some comforts similar to home while staying at hotels and dining, appetites have shifted to more locally authentic experiences, experts say.
Brand executives speaking during the "Trends in action: Leaders' perspectives on adapting to drive growth" session at the recent International Hospitality Investment Forum EMEA in Berlin said highlighting local culture is now vital for international travelers.
"The biggest behavioral shift that you've seen in the last 20 years — particularly with Americans as they are still the largest population of wealthy travelers in the world — they have really shifted from a place where wherever they were going in the world, they wanted to really shield themselves a little bit from the local community and the local food and flavor," said Barbara Muckermann, group CEO of Kempinski Hotels. "This is what really started all the great brands you know that were really showing this shelter around the world. Now today, customers at every demographic level, from boomers down to Gen Z, want to throw themselves inside the destination. You now have guests that will try street food in Singapore, which 20 years ago was unheard of."
Peter Krueger, CEO of holiday experiences for TUI Group, said this shift has been driven by social media, where guests see more local experiences and want to put themselves into what they see.
"We say experience is the new luxury because people want to come to a destination based on specific experiences," he said. "So from a search perspective, people type in 'Give me the best diving spots in Africa.' They don't say they want to go to a four-star or five-star hotel."
He noted his company now sells roughly half of those types of experiences before the customer arrives at the destination.
While large international brands continue to look to grow across segments, more focus and energy is being put into the luxury side given that is where the best performance has gone in recent years.
Neal Jones, president of EMEA for Marriott International, noted, however, that more cost-conscious travelers are still spending where they see value.
"It might well be that a midscale customer is not spending as much as the luxury customer, but they're still spending more on experiences," he said.
He noted his group has been "fairly aggressive" in growing its luxury portfolio, while also focusing on "premium select and midscale."
Experts said there's also been a higher expectation for personalization in travel as artificial intelligence has grown more prevalent.
Dillip Rajakarier, group CEO for Minor International and CEO of Minor Hotels, said AI gives hotels a better technology base to deliver on the promise of experiential travel.
"That experience actually carries through from the time or even prior to booking ... to the post-departure experience," he said. "I think that's all customized so that we actually try to keep that guest within the ecosystem or at least within our loyalty system."
While the growth of loyalty programs has been a major focus across hotel brands, Muckermann said the industry needs to re-examine just what that term means.
She said loyalty in hotels can mean getting guests to choose your brands because they enjoy the experience of staying at them or it can mean creating a system where guests are recognized for staying within a specific ecosystem.
"The two behaviors at the core of it, for me, are different," she said. "One is recognition based ... versus a reward program."
Simon Vincent, executive vice president and president of EMEA for Hilton, said the large macro-loyalty programs such as Hilton Honors do have downstream experiential benefits for customers, and he noted that due to that large volume of data it allows them to collect, they are now "on the cusp of hyper-personalization."
"We have the ability, if you look at our CRS systems, property management systems, all of our tech stack is now in that cloud, and they can consolidate that data and make that accessible," he said. "I can't today guarantee to you that if you order a flat white in Spain, then you'll get a flat white in Bangkok, but I think that's coming."
He called using data to better serve specific guests across the globe the "secret sauce" for the large, tech-enabled hotel brands going forward.
"We're one of the few people that have kept that all in house, and I think that is going to be a major, major point of difference," he said.
Jones agreed that the large brand companies will have to lean into personalization more than ever before.
"You've got to be able to personalize the experience and the stay depending on what a particular guest is looking for, and every single customer is looking for something different," he said.