This year marks the centennial of the Cornell Nolan School of Hotel Administration, founded in 1922 – and on April 26, 2022, industry leaders and experts came together for a keynote webinar to commemorate the occasion and celebrate the contributions of the school and its faculty to research centered on hospitality and thought leadership.
The keynote was co-produced by Cornell’s Center for Hospitality Research (CHR) and eCornell and moderated by Hannah DeMaio, vice president of brand strategy at Women Leading Travel & Hospitality NAPCO Media. Panelists included Jamie Cohen, CFO of Vacasa; Heeyon Kim, assistant professor of strategy at Cornell Nolan School; and Emily Weiss, Senior Managing Director of Accenture’s Global Travel Industry and CHR Advisory Board Member. Their discussion focused on the strategies of hospitality industry innovators and disruptors, lessons to be learned from the successes and failures of these forerunners, key drivers of travel innovation and disruption, and predictions for the future. coming.
Innovation and disruption
As more tech startups enter the hospitality market, “innovation” and “disruption” have been the talk of the industry, but what do these terms actually mean? While innovators develop “new products, processes or business models to create value for customers or employees, “disruptors”, according to Professor Kim, go even further by “significantly [changing] how the industry works.
Well-known industry disruptor Airbnb, for example, started out as “a couch-surfing type of bed and breakfast,” before becoming the market leader in home-sharing (Source: Statista). Connecting travelers with landlords looking to rent their extra space turned out to be a billion dollar business idea and redefined accommodation. Similarly, Cohen highlighted how ride-sharing service Uber redefined mobility and Expedia, the first online travel agency (OTA), redefined the way people book travel. And as Weiss mentioned, up-and-coming disruptors like citizenM, a modular hotel company, and Sonder, a short-term rental company, are poised to further redefine aspects of the hospitality industry. The defining quality that these disruptors share? A talent for unlocking customer value by doing things differently.
The Competitive Advantage of a Disruptor
Often viewed as a threat by established businesses, would-be disruptors can fly under the radar. According to Kim, disruptors often start out as small companies with inferior products at the lower end of a market, hiding them from established companies until they suddenly take hold – for example, the once-obscure Netflix, replaces Blockbuster.
These characteristics give innovators and disruptors a certain edge over traditional organizations, but that’s not all. A “test and learn” mindset — in which companies aren’t afraid to test new ideas — is essential, Weiss and Cohen agreed. While large, established companies can implement this mindset, it’s easier for internet-focused businesses, which are easier to scale, Cohen suggested.
Disruptors often invest in mobile-centric design and “high-quality, easy-to-use” technology to reliably solve customer “pain points”. They can also capitalize on the convergence of different industries by creating a “seamless” end-to-end user experience that solves something for customers, such as the need for food and transportation satisfied by Uber Eats, Weiss added. By embracing technology, she noted, disruptors are capturing customer and employee data and applying it holistically to solutions.
Make room for disturbances
As disruptors emerge, companies may feel the need to change their strategies to compete with them. In a caveat to the dynamic described earlier, Kim noted that while disruptors “often seem threatening”, most of them actually fail, it’s more important for incumbents to play to their strengths. than trying to grow in all avenues.
As a result, companies sometimes have to make room for disruptions rather than directly compete with them. Focusing on and capitalizing on existing strengths is essential for growing organizations, but so is prioritizing and rewarding top-down progressive thinking. As Cohen described, this includes fostering a mindset for technology advancement among employees, but also forming specialized incubation teams that can focus on product creation, testing , iteration and creation of minimal viable products (MVPs). Because these teams are separate from day-to-day operations, there is no risk of intra-company competition for resources. Other strategies, suggested by Weiss, include embracing the broader “ecosystem” of other organizations that can complement and build on your strengths, and creating new leadership roles to “elevate the importance of innovation”. She noted that for an old industry like hospitality, embracing change at this stage is essential and will open the door to new opportunities.
Drivers of Innovation in Travel and Hospitality
Innovation and disruption in the hotel industry are not phenomena without a cause. What has motivated them over the past decade? According to Cohen, the proliferation of cell phones, which has created customer expectations around technological accessibility; the emergence of an on-demand economy based on mobile design, making it possible to move from a “do-it-yourself” mentality to a “do-it-for-me” mentality; and customers’ desire to “live like a local”, tapping into “personalization”.
The lingering effects of the pandemic continue to drive innovation ahead. As Weiss mentioned, contactless, which had long been a “conversation piece”, was finally pushed to the fore by COVID, and new business models centered on the “digital nomads” and the “worker” were born. a need for flexibility in life. and working arrangements. Climate and sustainability issues, as well as inclusion and diversity, such as increased accessibility for people with disabilities while traveling, have also become important drivers of hotel innovation. Finally, although unpredictable, new technologies such as virtual reality (VR) and the metaverse will also likely impact hospitality.
Lessons from other industries
In terms of innovation, the hotel industry could learn from other industries. Weiss suggested retail, for example, and the relative ease of canceling a dinner reservation compared to a flight or hotel reservation. Consumer expectations regarding the ease of these transactions can lead to a corresponding “retail” of travel.
Cohen turned to tech companies that not only “transformed” their industries, but created “addressable market expansion,” like OpenTable and Doordash, making things so easy that use cases expand. beyond what people generally think.
Looking ahead, panelists gave their predictions on the next big industry disruptor. These included social and environmental issues, as well as virtual reality and new payment models. Ultimately, however, Kim commented on the unpredictability of future disruptions, stressing the need to look at both small business and macroeconomic shifts, for example those in technology, demographics, labor and lifestyle.
With the last hundred years under its belt, travel and hospitality now looks forward to another century of unprecedented change. To catch all the panelists’ insights into this exciting time, watch the full keynote.
About Cornell Nolan School of Hospitality Administration
The Cornell Peter and Stephanie Nolan School of Hotel Administration is the world’s premier hotel education school. As part of the Cornell SC Johnson College of Business, the school is at the forefront of hospitality education and research worldwide – marketing, finance, real estate, operations, and more. applied to the largest and most exciting industry in the world. . Top faculty, industry leaders, alumni and students work together to generate new knowledge for the hospitality industry and form the premier network that shapes the industry every day.