Luxury hotels are turning to crowdsourcing and crowdfunding to get their properties financed, rather than banks and traditional investment routes, reveals the WTM Global Trends Report 2015, in association with Euromonitor International, released today (Monday 2 November) at World Travel Market London.
For the crowdsourcing stage, would-be hoteliers use social media to get ideas from consumers, who are then encouraged to give feedback through the design and development stages.
Then individual investors are sought to raise the capital through crowdfunding with contributors receiving benefits for their investment, such as free stays once the hotel is open.
Examples include Prodigy Network, a real estate crowdfunding firm, which plans to create a 194-unit space for short and long-term hotel rooms, called ‘cotels’ in downtown New York.
Another is recent start-up Amberlair, which hopes to open a crowdsourced and crowdfunded luxury boutique hotel. The exact location and design will be chosen by investors.
The luxury segment will be the main player in this new trend, as there is a potentially long lead time for crowdfunding and the concept is best suited to individual hotels with unique features, reveals the report, which is celebrating its 10th anniversary at WTM London 2015.
Crowdsourcing has the potential to significantly change future hotel designs and creation and is not restricted to the design of new properties.
For example, Marriott International used digital crowdsourcing to create brand innovations such as towel design and vending machines, with the best ideas implemented at certain US Marriott outlets.
The WTM Global Trends Report 2015, in association with Euromonitor International, forecasts crowdfunding initiatives of the future could create themed hotels, funded by small-time investors who share a passion in anything from hobbies, books, TV shows or films.
According to Crowdsourcing.org, total funds raised worldwide grew from US$2.7 billion in 2012, to US$5.1 billion in 2013 and are expected to reach an estimated US$10 billion for 2015.
Euromonitor International, Head of Travel, Caroline Bremner said: “Crowdfunding has its roots in the US and Europe, but with global internet access at 40% and growing, Asia is likely to see development, particularly as hotel demand continues to expand.
“With personalisation a growing aspect of many travel brands, the concept of a hotel ‘created by you, designed by you, funded by you’ is likely to appeal to many consumers.
“However, crowdsourced hotels will need to be careful to maintain a unique element to their offer otherwise consumers will no longer choose to be involved in either ideas or funding.”
World Travel Market, Senior Director, Simon Press said: “Once again, social media is at the forefront of this new way of funding projects. If done well, crowdsourcing and crowdfunding will work brilliantly in the hotel environment because future guests are involved right from the beginning of the project and – once the hotel is up-and-running – are bound to remain loyal to the brand they helped create.”
About WTM Global Trends Report, in association with Euromonitor International
Celebrating 10 years of partnership, the leading global travel event World Travel Market (WTM) and strategic global market research provider Euromonitor International are pleased to reveal the top travel trends in the WTM Global Trends Report 2015, in association with Euromonitor International. For ten consecutive years, the report has been at the forefront of accurately predicting major travel trends around the world, looking at how the travel industry is developing in a rapidly changing landscape. The WTM Global Travel Trends Report, in association with Euromonitor International, offers an insight into to the size and shape of travel and tourism and identifies pressing industry issues, emerging brands, destinations and demographics, growth categories and consumer trends.
About World Travel Market London
WTM London, the leading global event for the travel industry, is the must-attend four-day business-to-business exhibition for the worldwide travel and tourism industry.
Almost 51,500 senior travel industry professionals, government ministers and international press, embark on ExCeL – London every November to network, negotiate and discover the latest industry opinion and trends at WTM.
WTM London, now in its 36th year, is the event where the travel industry conducts and concludes its deals. WTM 2014 will generate around £2.5 billion of travel industry contracts.
WTM London is part of Reed Travel Exhibition’s World Travel Market events, which also includes Arabian Travel Market, World Travel Market Latin America and World Travel Market Africa. www.wtmworld.com
World Travel Market Events
World Travel Market is comprised of the leading leisure travel events in the world; World Travel Market London, WTM Latin America in Sao Paulo, WTM Africa in Cape Town and Arabian Travel Market in Dubai.
New events for 2016 are WTM connect Asia and WTM connect China, which join WTM connect Ski and International Golf Travel Market. These unique one-to-one events are targeted at leisure and niche travel markets, allowing exhibitors to exclusively meet with elite hosted buyers.
The World Travel Market events are attended by the global travel and tourism industry’s senior executives to conduct business deals and discover the latest research, insight and opinion.
In 2014, the World Travel Market events facilitated around $7 billion in industry deals from negotiations between the more than 15,000 buyers, 9,500 exhibitors (1,500 main stand holders and 8,000 stand sharers) in attendance of its four events.
WTM is part of Reed travel Exhibitions, the leading events organizer in the travel industry, and is owned by the world’s leading events organiser Reed Exhibitions.
Reed Travel Exhibitions
Reed Travel Exhibitions (RTE) is the world’s leading provider of exhibitions in the travel and tourism industry. Its wide-ranging portfolio of events around the globe covers leisure travel, luxury travel, meetings, incentives and business travel, as well as golf, ski and spa travel.
RTE, which organises more than 22 events around the world, includes three divisions; World Travel Market, IBTM Events and International Luxury Travel Market.
RTE is a business unit of Reed Exhibitions.
About Reed Exhibitions
Reed Exhibitions is the world’s leading events organiser, with over 500 events in 43 countries. In 2014 Reed brought together over seven million event participants from around the world generating billions of dollars in business. Today Reed events are held throughout the Americas, Europe, the Middle East, Asia Pacific and Africa and organised by 41 fully staffed offices. Reed Exhibitions serves 43 industry sectors with trade and consumer events. It is part of the RELX Group plc, a world-leading provider of information solutions for professional customers across industries.
About Euromonitor International
Euromonitor International is the world’s leading provider for global business intelligence and strategic market analysis. We have over 40 years of experience publishing international market reports, business reference books and online databases on consumer markets. We deliver market research solutions to support strategic planning for today’s increasingly international business environment. Our research offers in-depth market analysis on consumer goods and services industries worldwide, as well as economic, demographic and socio-economic data and insight on countries and consumers. Euromonitor International is headquartered in London, with regional offices in Chicago, Singapore, Shanghai, Vilnius, Sao Paulo, Santiago, Dubai, Cape Town, Tokyo, Sydney and Bangalore, and has a network of over 800 analysts worldwide.