Hotel rate growth may have started to level off in the latter part of this year, but pricing remains extraordinarily high and is likely to remain elevated well into 2024.
Hotel guests may have already come to terms with paying a premium, but what is anticipated to shift next year is their mindset.
"In recent years, expectations have declined as service levels have dropped because of staffing issues," said Craig Strickler, president at Valor Hospitality Partners, a global hotel development and management firm with more than 90 properties in its portfolio. "However, with travel demand returning and costs increasing, the combination of guests paying more for lower levels of service is unacceptable."
According to Strickler, travelers will be less willing to make compromises in the coming year, and hotels will face more pressure than ever to deliver on heightened guest expectations.
Hotels have been testing digital tipping options, but 2024 could be the year the industry adopts widespread cashless tipping options. Photo Credit: Andrey Sarymsakov/Shutterstock
The hotel industry's ongoing labor shortage, of course, continues to linger, but with staffing challenges slowly but steadily improving, Strickler predicts that hotels will put renewed focus on properly training their teams and getting "back to basics."
That includes simple things like greeting guests with a smile, ensuring hotel rooms are thoroughly cleaned and offering great food and beverage service, he said.
"There may always be a new technology that comes out or a new F&B trend, but at the end of the day, guests want genuine, thoughtful service at every encounter," Strickler said.
The case for digital tipping
How guests are able to show appreciation for genuine and thoughtful service, meanwhile, is also likely to evolve in 2024. The hotel industry has been on the cusp of adopting widespread digital tipping for quite some time, but the practice has yet to be widely embraced at properties.
With virtually all of hospitality's biggest players already in the process of piloting the approach to digital tipping, next year may finally be the year that cashless tipping -- already commonplace across coffee shops, ridesharing services and other venues -- goes mainstream within the hotel sphere.
"I think 2024 is the year where the early digital-tipping movement will turn into a much bigger moment for the category," said Russell Lemmer, the CEO and founder of Grazzy, one of several digital-tipping startups that have sought to carve out a niche within the hospitality space.
Lemmer said the number of hotel ownership and management groups putting out formal RFPs has increased exponentially over the past year, and a growing number of pilot programs are poised to graduate to standard operating procedure in the year ahead.
Grazzy has also been in the process of formalizing new partnerships, most recently becoming a preferred vendor of digital-tipping tools for Hyatt Hotels Corp. Consequently, more than 700 Hyatt locations in the U.S. are preapproved to utilize Grazzy as a digital-tipping solution.
Positive word-of-mouth will also be key in pushing the adoption of digital tipping, said Lemmer, who cited an anecdote about the positive impact digital tipping had on a hotel worker at an Embassy Suites in Texas named Darren.
"Darren made complimentary omelets at breakfast, and he had a little glass tip jar, but he got almost no tips, because when people come down in the morning for breakfast, they only bring two things with them: They bring their room key and their phones," Lemmer said. "But the minute we enabled him with just a single QR code, Darren went from making $5 to $10 a week in tips to over $500 a week. The benefits of that dollar or two more an hour is very real for the end users."