The key to making Sri Lankan hotels more customer-focused

The Evolving Tourists Expectation Model (ETEM)

The authors of this article introduced their new concept: “Evolving Tourists Expectation Model” (ETEM) in a previous article. Encouraged with the interest it created, the authors decided to write this follow up article.

In a nutshell, ETEM is a model which identifies the evolving expectations of tourists, towards being concerned about Environmental-friendly Sustainable Operation (ESO) in the tourism products and offerings they purchase. In applying this model specifically to hotels in Sri Lanka, hoteliers should use this model in the context of:

• global tourism trends, and
• post-war tourism trends in Sri Lanka.

Global tourism trends

Research clearly indicates that it will be crucial for hotel developers, owners, operators and managers to proactively implement sustainability throughout the design and construction of new hotels as well as in upgrading projects. A clean, healthy and protected environment is not only good for tourism, but is also key to its competitiveness. The “new” emerging tourists, in general, are information savvy, more demanding, have wide and complex range of demands, seek more personalized experience, and have higher expectations levels. In a research study done by Fast Future Research, and commissioned by Amadeus, entitled “Hotels 2020: Beyond Segmentation” it was found that tourism has to “move away from segmentation”, and towards a “total service model, delivering a personalized experience through a wide spectrum of service choice.”

Hence, the emerging demand of the discerning tourists is for more experience, exploration and learning, rather than the old fashioned, basic needs for good rooms, good food and facilities. Based on recent research the following top five future trends can be predicted:

1. Tourists in the young adult demographic will represent a significant future tourist market of environmentally-conscious consumers with changing preferences.

2. Hotel accommodations will continue to burden the environment and may create new costs for the industry, as regulations to reduce emissions will take effect in the future. Developers should be proactive to ensure that new hotel building designs fully incorporate sustainability.

3. Corporate client base of the hotel industry is significant and its concerns, ranging from keeping conferences green to promoting employee health and wellness, will keep the hotel industry thinking of ways to be creative.

4. Engaging hotel guests in sustainability efforts – by educating them on how they can minimize their room’s energy use, highlighting local food options on the menu and providing incentive programs for foregoing daily room cleaning – will empower guests to participate while helping the hotels achieve efficiency targets.

5. More tourists are seeking authentic travel experiences that allow them to participate in local cultures. Travel operators who package trips in a creative manner to allow tourists to have a cultural travel experience and remain sensitive to the interests of local cultures, stand to benefit.

Sustainability will play a more important role in determining consumer preferences in the coming years. A recent study by Expedia showed that over 75% of 5,000 respondents were familiar with the hotel industry’s efforts to improve environmental performance, but were more interested in how the sustainability efforts had affected their experience, and how they themselves had contributed to helping the environment.

At the recently concluded World Travel & Tourism Council (WTTC) 2013 summit in Abu Dhabi, David Scowsill, the President and CEO of the WTTC, stated in his address: “Sustainability is also a big issue for the Travel & Tourism industry. Over the past two decades, the industry has made significant steps towards improving environmental impact and community engagement but these approaches now need to be incorporated into core business models. To achieve this, the industry has to make itself accountable and measure and openly report the impacts of its operations.”

In the past, it may have sufficed to undertake a number of sustainability initiatives “behind the scenes” and later disclose them in sustainability reports, but in the future, it will be critical to engage consumers in corporate sustainability programs to maximize returns on investments. Deloitte research has indicated that these efforts could pay large dividends to hoteliers as consumers stick to choices that are aligned with their values, and this fosters brand identity and loyalty.

Applying ETEM to Sri Lankan hotels

In their original article, the authors identified five key segments of tourists based on ETEM. Based on the above discussion and in the context of the hotels in Sri Lanka, these segments can be further described as:

1. Guests who are easy to satisfy with basic products at cheap prices. These guests aim to get ‘good deals’ and usually not too worried about lack of environmentally-friendly practices in hotels. Most ‘charter flight’ guests who patronized Sri Lankan hotels during the 26-war from 1983 to 2009 belonged to this segment. They played an important role during those tragic years to help many Sri Lankan hotels to avoid bankruptcy, for which Sri Lanka should be grateful. However, this segment is currently in the decline.

2. Guests who are satisfied with good core products in hotels such as rooms, facilities and food. These guests aim to get ‘good products’ at good values and usually not that worried about lack of environmentally-friendly practices in hotels. Most guests who patronized Sri Lankan hotels during the last few years since the end of the 26-year war in 2009 to 2013 belonged to this segment. This segment is still quite large in Sri Lanka, although declining.

3. Guests who are expecting basic ESO in addition to good core products in hotels. These guests aim to stay only at hotels who have initiated environmentally-friendly practices. Most of the current day guests belong to this segment. This segment will continue to increase for the next few years and very likely will replace most of the guests from the first two segments.

4. Guests who are insisting on experiencing good ESO and enjoy these practices immensely. These guests will stay only at hotels who have well-established and well-managed environmentally-friendly, sustainable practices. Currently, this is a small segment, but with the potential of rapid increase in size and influence to Sri Lankan hotels within this decade.

5. Guests who would not stay in any hotel which does not have excellent ESO. These guests are usually spiritual about the concept of sustainability and actively participate and contribute to ESO during their hotels stays. Currently this is a very small segment, but with the potential of gradual increase in size and influence to Sri Lankan hotels over the next few decades.

Conclusion

ETEM concept should be further tested. It is possible that currently a hotel may have guests from all five segments, at the same period. However, it is observed that in Sri Lanka, the movement is upward in the ETEM pyramid, both in terms of tourist’s concerns for the environment and their spending power. It is most likely that the higher levels will grow greater with time. This means that Sri Lankan hoteliers must focus on ESO and destination marketers must adjust their marketing strategies, accordingly. All relevant and interconnected aspects such as channel selection, public relations, advertising, pricing, staff selection and training as well as the manner in which the Sri Lankan hotels are developed and managed has to change.

Realizing that good sustainable practices are an absolute need for development, a good cross-section of hotels and other tourism accommodation providers in Sri Lanka are beginning to embrace greening practices. Many establishments are beginning to realize that sustainability is not only vital for operational cost management, but that it is becoming an important marketing tool. It is desired that all hotels, guesthouses and inns in Sri Lanka join EU SWITCH-Asia Program and enhance their environmental performance. The entire hotel industry in Sri Lanka can and should learn from each other’s best practices. Smaller hotel companies could certainly benefit by learning from the best practices of larger organizations. The hotel industry in Sri Lanka is in the correct path towards making hotels more customer-focused and environmentally-friendly.