IHG Trend Report 2012

TREND REPORT 2012

INTERCONTINENTAL HOTELS GROUP TREND REPORT 2012 A hotel by definition is a place that provides services to fulfill the needs of travellers and tourists. Therefore, a core part of the industry is based around day to day human interaction.

With technology moving faster than ever and business and leisure travel quickly evolving, so the need to really understand what guests want is ever more prevalent.

Core to understanding what guests want now is largely gained by listening to them. However, when it comes to what they may expect in the near future, this is a little trickier and can be pre empted by tapping into bigger global trends and insights. As one of the world’s largest hotel companies, IHG has seven hotel brands catering to the different lifestyles and needs of global travellers. Listening to guests has led to us developing different services and technological innovations that offer greater flexibility. A recent example of this was the iPhone booking apps for all of our hotel brands. This built on the Holiday Inn mobile check-ins that allow guests to bypass the front desk and unlock their hotel room door with an audible tone in eight different languages. By keeping close to how human interaction is evolving and tracking the way in which the world is behaving, IHG looks at some of the key global trends and insights for 2012 and ways in which hotels may need to adapt to cater for tomorrow’s guest.

CONTRIBUTORS AND SOURCES Stephen Armstrong, Journalist, The Sunday Times Ian Bell OBE, Director, The ARC Addington Fund Gareth Coombs & Sean Moore, Cambridge Strategy Centre Laura Craik, Fashion Editor, The Times Karen Dacre, Fashion Editor, London Evening Standard Mei Hong Chu, ex-hotelier, Chang Sha Bill Dodson, author China Inside Out: 10 Irreversible Trends Shaping China and its Relationship with the World, Principal TrendsAsia Ltd Jane McGonigal, author, Reality is Broken: Why Games Make Us Better and How They Can Change The World Damien McKeown, advertising planner Mark Ratcliff, Murmur Research Laura Smith, script editor Sheila Speed, teacher & blogger The Outside Collective, graphic design Ekow Eshun, artistic director, ICA

CONTENTS MACRO 1 REMAPPING MICRO 1 - The Aerotropolis MICRO 2 - Urban Oases MICRO 3 - Urban-Rural Inversion MICRO 4 - De-centering

MACRO 2 BRAIN SPA MICRO 1 - The IQ Economy MICRO 2 - Ambient Shopping MICRO 3 - Performance Sleeping

MACRO 3 DEMO-LUXURY MICRO 1 - Enter-tailment MICRO 2 - Mass Bespoke & Co-creation MICRO 3 - Luxury Shame & New Artisans MICRO 4 - Renting Tourism MICRO 5 - Urban Farm Restaurants

6 10 14 16 18

20 22 24 26

28 30 32 34 36 38

MACRO 4 THE INTERNET OF THINGS MICRO 1 - Tell-and-Tag MICRO 2 - Data Tsunami MICRO 3 - Social TV MICRO 4 - Collaborative Accommodation

MACRO 5 PEOPLE PLAY MICRO 1 - Active Loyalty MICRO 2 - Progressive Play MICRO 3 - Empathic Design

40 42 44 46 48

50 52 56 58

REMAP MACRO 1

Remapping is the breaking down of basic assumptions and patterns in global lifestyle and travel.

By looking at global developments and advances in lifestyle we will be able to track sociological changes in the nature of cities and how they develop. Equally, travel is no longer one or two way.

Families are ‘multi mapping’ when they go away. This is less about ‘one destination’ and more about destination hopping. In terms of cities this is seeing the rise of the importance of ‘sub cities’ and little streets hidden away holding the key to fantastic new experiences. Remapping is unlocking the potential of the world beyond ‘big cities’.

Remapping in relation to travel challenges the way we tend to think about travel in dualistic terms, hence business or leisure; domestic or international; rural or urban; peak/off-peak; sophisticated or ‘real’; uptown or downtown. It’s partly to do with business convention, and partly to do with some fundamental basics in Western thought.

For residents and tourists alike it is very clear now that the individual’s concept of a city’s geography differs according to their lifestyle tastes. Overall, the whole relationship between cities seems likely to change in the coming decade, especially in developing countries where ‘Tier Two’ cities will begin to rival ‘Tier One’. From the list of the richest 600 urban settlements in the world, one out of three developed cities will fall out of the list by 2025.

If you look at some of the developments in travel taking place now, and some that are likely to happen in the near future, many of these basic oppositions are challenged. The predicted growth in outbound travel from China could change the notion of peak and off-peak, as it has in Mauritius, and even the kinds of places we think of as tourist destinations.

...less about ‘one destination’ and more about destination hopping

PPING 7

The fragmentation and specialisation of tour operation (with new operators offering ‘culture breaks’ to places relevant to current affairs, or ‘art tours’) finds a new travel space between work and leisure; tourboarding suggests a new space between home and boarding house, perhaps a little like the small traditional Chinese hostel or European pension, but less formal.

Remapping also resonates with cities and what the future holds.

As major cities expand, the importance of surrounding areas come to fruition. Some micro cities are starting to become even more attractive and as important as those major cities used to be.

This is the start of remapping. The same is happening in smaller cities and suburbs. Suddenly – what’s round the corner is more exciting and alluring than ‘what’s on the high street’….

MACRO 1

REMAPPING

From the list of the richest six-hundred urban settlements in the world, one out of three developed cities will fall out of the list by 2025

9

MICRO 1

THE AEROTR Aerotropoli are mini-cities that grow up around airports, or increasingly, are built as part of the overall airport development and their presence will increase globally in the coming years.

In 1991, the writer Joel Garreau coined the term ‘edge cities’ to refer to mid-rise clusters of retail, entertainment and office/ business space that develop quickly in areas that used to be residential suburbs or satellite towns. Critics Robert Land and Jennifer Lefurgy (in their essay “Edgeless Cities: Examining the Noncentered Metropolis” published in Housing Policy Debate 14:3, in 2003) had argued that no more edge cities would be built in the 21st century, but in fact, they are proliferating in developing countries and have become popular with foreign companies locating in the territories. Bangalore in India has spectacular examples on its peripheries, and much of Dubai, decentered and dominated by freeways, feels more ‘edge’ that Garreau’s original American examples. Festival City is a prominent example; an urban community that has been designed to capture the ground breaking 21st Century spirit of Dubai and offer a rich and vibrant living experience that interconnects all that the city has to offer by an impressive 30 kilometre internal road network.

John Kasarda, a professor at the University of North Carolina, sees the edge city concept evolving into something bigger, more important and internationally networked; it is this model he calls the Aerotropolis. They typically include retail malls, office space, wide ‘aeroplane’ roads, business centres, campuses of multinational companies, logistics hubs, warehouses, and headquarters of companies specialising in freight and export of small, light goods and, of course, hotels.

ROPOLIS

11

...by 2020,

82%

of the population will live within 90 minute drives of an airport

...for modern business travellers, the ‘hinterlands’ of cities now extend to areas within short-haul flight distance

“The three rules of real estate have changed from location, location, location to accessibility, accessibility, accessibility,” Kasarda argues, suggesting that for modern business travellers, the ‘hinterlands’ of cities now extend to areas within short-haul flight distance.

The Aerotropolis is a global phenomenon, but the most conspicuous examples are being built in the Middle East and East Asia.

New Songdo in South Korea is a vast instant Aerotropolis due for completion in 2015. Dubai’s World Central International Airport will feature, among other things, a new golf course and one of the largest malls on earth. Bangkok’s Suvarnabhumi Airport development will have substantial residential housing and hospitals. Predictably, China is at the forefront, with the biggest plan for airport building of any country in history. Last decade, it announced it would build 100 new airports by 2020 (the first 40 are already complete), and most of these will be on the Aerotropolis model; by 2020, 82% of the population will live within 90-minute drives of an airport. China is also building Aerotropoli in economic zones in Africa. Zambia’s Lusaka New Airport City will house 100,000 people, including many Chinese.

If Kasarda is right, then the 21st century will see the nature of cities change, from single units based around downtown areas, to interconnected ones linked in a web of air routes and transport arteries.

For the person on the street, the big change in the near future will be the declining emphasis on unique and individual centres.

And in the far future? Garreau recently revisited his original work and created a new scenario in which edge cities follow the recent inner city path; artists move into derelict retail and warehouse space and make the area Bohemian, the young and aspirational middle classes follow, and the edge city becomes gentrified, attracting the wealth from the inner zones and green field areas.

We shall see.

MICRO 1

THE AEROTROPOLIS

URBAN O

52%

of spa visitors have used Groupon to source spa information in the past year

MICRO 2

High-end spa chains have traditionally based themselves in exotic holiday destinations offering an escape from the city for stressed professionals. However, with a remapping of tourist travel taking place internationally and airline numbers still vulnerable in the global finance crisis, luxury spa chains are now reversing the equation and opening branches in city centres formerly not within their brand proposition.

With cost-conscious consumers more deal savvy than ever, even high-end spas can’t afford to sit waiting for custom. According to Coyle Hospitality Group’s 2011 Global Spa Report, getting a good deal is more important for consumers than ever before. For instance, 52% of spa visitors have used Groupon to source spa information in the past year; a massive leap from 22% in 2010. By locating themselves in central city locations, the high-end chains can also take advantage of the day spa market with customers dropping in for a facial or treatment on a weekend, rather than on a once-a-year basis during a luxury holiday. Like many other business sectors, spa chains have to adjust their business models in order to remain closer to their customers – quite literally when it comes to the opening of urban oases. For hotels, in-room spa products and having ‘spa like’ qualities integrated into the bathroom still remain high on the list for a truly ‘zen-like’ stay. Regular shampoo and conditioner have been replaced by ‘cleansing experiences’ and we find that a room is judged as much for its bed as its ‘spa capabilities’ and take home goodies.

OASES

15

MICRO 3

URBAN-RURAL I As our desires and values around travel shift and our lives are remapped, so too do some of our expectations of what we will find at the end of a journey. In the past, we sought out the countryside for relaxation, escape, a retreat from the brute concrete of the city. Likewise, we were attracted to towns by their lights, buildings and busyness and were prepared to put up with the noise and grime that went with that. Things are turning round.

Part of the attraction of the countryside now lies in the possibility of staying in strikingly modern dwellings.

In Japan, architectural studio Go Hasegawa has created a dramatic weekend countryside rental – Pilotis in the Forest, a minimalist tree house that stands 6.5 metres high on stilts among the upper branches of a forest three hours outside Tokyo. Further afield, the Naoshima Art House Project on Naoshima Island is a museum and hotel complex located in the remote Seto Inland Sea of western Japan. The museum boasts a world class private collection of contemporary art housed in specially designed buildings created by superstar architects such as Tadao Ando.

As a trend this could become evident in the hotel industry over the coming years, particularly as rural spaces are developed further and the consumer desire for interesting architecture and design increases.

INVERSION

17

MICRO 4

DE-CENTE ...different cultural properties, notably food, culture and sport, have the power to rejuvenate and recreate neighborhoods.

One effect of the combination of trends in this section is the de-centering of the social geography of countries and cities as new demographics enter the travel market. As cities spread and as brands and urban areas learn to target people by lifestyle, traditional centres lose some of their pull and a more dispersed ‘map’ emerges.

Consider for example the tourist map of Europe under the influence of the rapid expansion of outbound Chinese tourism. In 2011 Chinese travellers were expected to number 58 million and to spend a record $55 billion; in France, Chinese travellers already account for 20% of all tourist spending. The different interests of Chinese tourists have transformed previously unvisited towns into hotspots. Trier in Germany, for example, is popular because of Karl Marx’s former residence there; Montargis, a small town to the south of Paris, has a special tour route to show off places where Chinese leaders such as Deng Xiaoping and Cai Hesen lived in the 1920s.

Within domestic markets it has become clear to urban planners that different cultural properties, notably food, culture and sport, have the power to rejuvenate and recreate neighbourhoods.

A new contemporary process, which sees retail and leisure brands following artists into industrial and down-at-heel areas from Paris’s Menilmontant to Brooklyn’s Williamsburg to Melbourne’s Fitzroy, has created a new kind of ‘boutique downtown’ based chiefly on the pull of the area’s culture. These new areas have become big draws for boutique and art hotels. With different areas of cities learning to promote and market themselves on the back of specific properties, one individual’s mental map of a place is likely to be different from another’s. One wonders how long it will be before hotel concierges begin keeping a range of different interest-based maps in their desks, rather than handing out the usual one-size fits all….and then keeping a record of ‘which guest went where’…

ERING ...in 2011

Chinese

travellers were expected to number

58m

, and to spend a record

$55bn

BRAIN MACRO 2

This trend focuses on the current global desire to develop and refresh our minds just as we have embraced new and inventive ways to do the same with our bodies. The Global Brain Spa can manifest itself in a number of ways from the central learning sites found in many major cities to the retail spaces selling atmosphere as much as products. Running alongside this is the constantly growing statistic that more people globally are enrolling in education at later stages in their lives – and here we see the emergence of the ‘Brain Training’ phenomenon. As an example, an Association of Graduate Liberal Studies Programs (AGLSP) study by the The New York Times showed that between 2001-2005 the number of US graduates over 50 years-old grew by 38%.

In the health and wellbeing markets in 2011 there was continued expansion and activity – but arguably the most innovative and interesting developments, particularly for a travel or leisure brand, are in mind/brain refreshment or enhancement. There are two drivers here: escape from the pressures of stressful jobs in mundane environments and self-improvement.

In the case of the second driver, self improvement, the phenomenon sits in the international trend toward ‘braining up’. The context for this is the massive social, economic and technological changes taking place around us and the desire among many not to get left behind by those changes but, instead, to feel empowered, knowledgeable and ahead of the game. Simply put, there is a new premium on being smart, curious and eager to know more. This, after all, is the age when the new masters of the universe; Bill Gates, Mark Zuckerberg, Google’s Sergey Brin and Larry Page all boast IQs over 150.

The headline element of this is the rise of the Brain Spa. Brain Spas are city centre sites of learning where you can take in a lecture or debate or follow a structured course in a stylish, relaxed environment. Places where you can stimulate your mind and make sense of the world in your lunch hour or after work. Examples include the TED talks, London-based School of Life and Idler Academy, the New York Public Library’s Live talks series, the globally-located Intelligence Squared debates and the super luxury Library retreat in Koh Samui.

...between 2001-2005 the number of US graduates over 50 years-old grew by

SPA Beyond the Brain Spas, we can see this trend taking place online – with the massive success of big idea forums like iTunes U (31 million downloads) and TED talks (290 million downloads) where, to quote iTunes U, you can ‘learn anything, anytime, anywhere’.

Looking at the business world, Forbes has tipped the market for goods and services that claim to enhance IQ, creativity and energy as the next trillion-dollar industry. Big winners already include brands like smart drugs company Brite Age and pharma-performance brand Vitabiotics. Not forgetting Nintendo whose brain training games have massively boosted company profits and redefined the games market. Their Brain Training game title has sold 18 million units worldwide, with 7.8 million sold in Europe alone.

MICRO 1

THE IQ ECO The market for goods and services responding to the new demand for mental stimulation is set to skyrocket across this decade. The next trillion dollar industry already has visible winners including brands like Red Bull, leader of the $14 billion energy drinks industry that grew 16% from 2005-2009.

Brain fitness is based on the belief that the brain, like the body, needs regular exercise to stay fit and fully functioning. The idea is controversial. For instance, a panel of scientific experts gathered by the UK’s Which? Magazine found that, the pleasures of game play aside, there was no evidence that playing ‘Dr Kawashima’s Brain Training’ for the Nintendo DS had any impact on brainpower.

However, there is also considerable research that shows positive results from brain fitness regimes including a 2006 study in the journal Geriatric and Cognitive Disorders, which measured memory in older adults. The result is a booming market, much of it by way of computer-based games and activities. The U.S. brain-fitness-software market was worth $265 million in 2009 up from $225 million in 2008 and $100 million in 2005 according to SharpBrains, a San Francisco-based firm that tracks the cognitive-fitness industry.

So far, sales in the sector have been driven mostly by consumers doing programmes on their home computers; however, SharpBrains expects the market to grow to between $1 billion to $5 billion by 2015, with future growth driven by insurers, schools, employers and even governments seeking to reduce health-care costs. As SharpBrains CEO Alvaro Fernandez puts it, continued demand “presents significant opportunities for innovation, investment, business development”. With the added bonus that we might all live healthier, smarter lives as a consequence. So, for the future of hotels – will this mean we find Brain Spa menus in the room?

$

$

ONOMY

$

$

...market to grow to between

$1bn to

$5bn by 2015

$ ‘The next trillion dollar industry’

23

MICRO 2

AMBIENT SH The rising popularity of Brain Spas as spaces to seek relaxation and mental stimulation threatens to make traditional urban leisure pursuits like shopping look decidedly old fashioned; all the more so with the economy continuing to struggle. A raft of retail giants are now starting to rethink their physical shops as ‘experiential spaces’ where you can test out the look and feel of a brand.

This is the retail space as soft sell, a site for customer engagement and exploration, with the vulgar business of purchase deferred to a later date or devolved to an online transaction. Think of the Apple stores or Sony Centres worldwide or international flagship showrooms for brands like Nintendo or Bose. The tactic is the same in each case. No racks of merchandise or long queues at the checkout, simply a chance to try out product and create an affinity with the brand’s philosophy.

A number of retailers have gone further, turning stores into third-space hangouts that function as surrogate social spaces. Visit the global National Geographic store chain and you can sip coffee in the café and take in a lecture or a film.

In this trend toward ‘ambient shopping’ retail stores are proving particularly innovative. For instance, many independent stores are fighting back against their mainstream competitors by using imaginative third-space strategies including ‘play areas’ and ‘browse before you buy’ chill out zones.

But what does this all mean for hotels? Will it mean hotels package up and sell their atmosphere to passing tourists, or equally follow book stores and create new ‘lobby lounging’ areas? Time will tell.

...‘experiential spaces’ where you can test out the look and feel of a brand

HOPPING

MICRO 3

PERFORMANCE Research into sleep and ‘sleep medicine’ can be traced back to the early 20th century. The modern incarnation, which brings together different medical disciplines, has grown hugely in the last 20 years and there are now sleep research centres all over the world. It is easy to imagine more companies whose business involves sleep becoming more actively engaged in the subject, just as many food companies become involved in debates about nutrition.

...companies whose business involves sleep becoming more actively engaged in the subject

There were two particularly interesting developments in 2011.

Firstly, Cheri Mah, a researcher at the Stanford Sleep Disorders Clinic and Research Laboratory, published a study that demonstrated far more conclusively than had been shown before the link between physical performance and the length or quality of sleep. Secondly, for the first time, a consumer-facing brand partnered with a medical facility to investigate and promote ‘Sleep Health’. The Sleep Medicine Labs were created in Toronto, Canada, after a mattress retailer, Sleep Country Canada, joined with the University Health Network of Toronto General Hospital to ‘develop and promote an education and awareness programme targeting sleep and sleep disorders.’ The benefits to the brand are clear with links to the lab, research papers and sleep health tips on the website adding credibility to the company’s ability to help you choose the right mattress.

Sleep research seems destined to grow in importance and value in the coming years. Health problems, particularly obesity, are increasingly being linked to sleep disorders, and with globalised industries moving to round-the-clock working, shift work is on the increase. The Institute of Circadian Physiology in Boston has estimated that sleeping problems cost American businesses $70 billion in lost productivity, medical bills and industrial accidents each year.

A hotel group entering the debate and developing their own sleep research centre could allow them to become market leaders in what is evidently a growing trend.

E SLEEPING

27

MACRO 3

DEMO-LU This trend is twofold - it is about looking at a new type of luxury - an accessible luxury that satisfies the global desire to stimulate our over-heightened senses. We have become more adventurous coming out of the recession and are taking mini ‘shopping stepping stones’ rather than indulging in bigger luxuries.

Luxury no longer has to mean high-cost, it is about ‘heightened experiences’ and expecting more out of life. From getting into an elevator, to our car journey to work, we are all less likely to compromise on everyday experiences. And why is this? The development of the luxury niche market was one of the big global business stories of the last 15 years, but post 2008 economics have challenged and altered it considerably. As a global society, we are being over-communicated to; brands are going bigger, bolder and as a result we are becoming over-stimulated requiring more as consumers.

Spending ‘stepping stones’ mean we are investing more and more in everyday luxuries as we turn our backs on bad times.

This confidence has seen a surge in ‘demo luxury’ purchasing.

In a January 2011 report by Mintel, 67% of global restaurant goers said that their most popular eating destination was in the casual dining sector. Of those restaurant goers, 66% said that they planned to continue spending the same on dining out in 2012 as they did during recession-hit 2009–2010.

‘Luxury’ is not necessarily about high-cost heritage-label items and private jets. It is about lifestyle choices that feel special and/or indulgent. In 2009 China overtook the US to become the world’s second largest luxury goods market, with 27.5% of the market. By 2014, it will outstrip current leader Japan to become the world’s biggest market for luxury goods. This will mean a different sort of luxury market – one tailored to the demands and expectations of the brand hungry, urban middle-class, under-45year-olds who make up 80% of China’s luxury consumer base.

Importantly, it will mean outlets in second tier cities like Chengdu, Shaoxing and Wuxi where more than 60% of the growth is occurring.

...67% of global restaurant goers said that their most popular eating destination was in the casual dining sector

UXURY

29

MICRO 1

ENTER-TAI Following the idea that we are being over-communicated to by brands, resulting in over-heightened senses, we now look for everything to be ‘experiential’ in some way in order to keep us successfully engaged.

A rise can be seen in ‘themed brand stores’, ‘brand museums’ and, in the case of Disney, ‘Imagination Parks’ offering an ‘enter-tailment’ venue, i.e. one that offers entertainment primarily with promotion of the actual brand product in the background.

The authors of research published in the Journal of Retailing suggested that these new brand spaces were ‘quilting points’ or points du caption, i.e. places that gave brand values a physical form and knitted them into reality. In the US, Randy White, the chairman of the White Hutchinson Leisure and Learning Group, has suggested that these stores cater to a ‘new consumer’ who visits shops often but is less focused on purchasing.

Examples of enter-tailment include: Mattel’s American Girl Place; M&M’s World; Johnnie Walker House in Shanghai’s Sinan Mansions; House of Barbie in Shanghai; Mercedes Benz World in London; San Rio stores across the world; the various gentleman’s club-style retail interiors for high-end men’s brands e.g. Dunhill, Louis Vuitton and Austin Reed.

...offers entertainment primarily with promotion of the actual brand product in the background

ILMENT

MICRO 2

MASS BESPOKE AND During the last decade, mass market brands often sought to differentiate their products by adding short-run premium lines – from limited edition Nikes to H&M’s hugely popular collaborations with designers like Karl Lagerfeld and Matthew Williamson.

The opportunities for self-expression offered by digital technology – smartphones, YouTube, Flickr – mean that consumers today expect a higher level of interaction with brands and a greater degree of personalisation from what they buy into.

Companies are responding with a new generation of ‘mass bespoke’ or ‘co-created’ goods. In comparison to the old limited edition lines, the emphasis here isn’t just on exclusivity. Rather, it’s to do with brands acting as facilitators offering customers the chance to create unique designs and even to sell them on the open market. That’s exactly how Keds, the US shoemaker’s, Keds Collective initiative works. Customers can design their own shoe then sell the result on the Keds site or buy the work of other would-be designers. Rather than jealously guarding their brand Keds acts as a peer-to-peer, open source network for creativity.

Levi’s is working in a similar way allowing customers to fully customise their jeans at the Levi’s Tailor Shop in the company’s flagship San Francisco store. By keeping the customisation process local rather than industrial in scale Levi’s avoids tricky supply chain issues. It also gives customers a reason to visit the store, hang out and to share the experience with friends. In tandem with the customer-facing brands, a new raft of businessto-business startups is also growing to help brands fulfill their customisation requirements, including Ponoko, Zazzle, Lulu and Shapeways.

A hotel could engage with customers in the future in this unique collaborative way by offering the opportunity to be involved in the room design process ahead of new openings.

...brands acting as facilitators offering customers the chance to create unique designs

D CO-CREATION

MICRO 3

LUXURY SHAME & N This trend looks at the rise in authentic artisan-produced goods. A couple of years ago, Forbes magazine pointed out that the boom in luxury and its penetration of a mass audience meant that across the world those who sought out true exclusivity would evolve their tastes. At the same time some commentators in the US had identified the phenomenon of ‘luxury shame’ – essentially the feeling that in a time of recession, displaying ostentatious wealth was both tasteless and likely to attract derision.

One aspect of that authenticity attracting increasing attention, particularly in affluent countries, is artisan-produced goods. The principle extends across many sectors and has been particularly strong in food, as consumers take a greater interest in provenance and health. The trend has allowed cities like Sweden’s Ostersund, regional capital of the area with the EU’s highest concentration of organic food production and a centre for the increasingly fashionable Nordic cuisine, to boost tourism. In the future, hotels can harness this authentic aspect in their restaurants.

NEW ARTISANS

35

MICRO 4

RENTING TO Among affluent women in the world there are some interesting, converging trends around travel and clothing; recent years have seen the emergence of luxury clothing and accessory rental services for the commitment-phobic.

One London-based fashion editor observed that there is a trend for “high-achieving, globally-operating, frequent-flier professional women who do a great deal of their clothes shopping in airports, or in downtime in the cities they have travelled to. It’s partly out of time-poverty at home, but it also helps you travel lighter.” Surveys also show that British women at least are more adventurous in clothes purchasing when travelling abroad on holiday. All these factors surely contribute to global airport retailing, worth $27.1 billion, now being the second fastest-growing channel of global retail after e-tailing.

58%

At the same time, recent years have seen the emergence of luxury clothing and accessory rental services for the commitmentphobic. No one has attempted to explore the relationship between this and travel, it’s worth noting that research shows that women consistently spend highly on new clothes for holidays, over pack, and wear only half of the clothes they take. It may be stating the obvious, but psychologists ascribe this to the need for a sense of choice, the choice being more important than the clothes themselves. In a poll run by website Gocompare.com, 58% of women studied said they regularly found it impossible to stay within their designated weight limit on flights due to a desire for clothing choice whilst on holiday.

...global airport retailing, now worth

$27.1bn,

is the second fastest-growing channel of global retail after e-tailing

OURISM of women studied said they regularly found it impossible to stay within their designated weight limit on flights due to a desire for clothing choice whilst on holiday

%

Same-day delivery in major cities is a big help to travelling women and increases the sense of choice just as over packing does. In the future, it is likely that hotels with a lot of business travellers, say, might have tie-ins with local retailers or rental services that allow you to buy or rent from a capsule collection, maybe online in your room, and have it delivered to you within hours. It is worth noting that Japanese capsule hotels already routinely sell socks and underwear and include nightwear in the capsule rental.

MICRO 5

URBAN FARM RES Urban agriculture has been a developing trend over the past decade with an estimated 0.15-0.20% of the world’s food currently produced in urban areas. As a result of this, one can see a rising trend in restaurants that farm for themselves.

The worldwide concern with environmental sustainability continues to foster interest in local sourcing of food and recently there have been signs of an overlap between this trend and that of urban farming. Urban farming is the use of green space within cities for the purposes of food production. It often deploys vertical farming techniques, i.e. the use of roofs or platforms on several storeys. There are examples of this all over the world including Osaka, Japan, where the new Station City development has a 1,500 square metre roof of gardens growing fruit and vegetables.

In Tokyo a similar urban farming initiative has seen former retail buildings converted to paddies for vegetables. In New York, the Gotham Greens company last year did its first harvesting at its 15,000 square foot rooftop greenhouse in Brooklyn and is selling to upmarket retailers such as Whole Foods market. In Singapore the Changi General Hospital uses its roof to grow food and also as a therapeutic space for recovering patients.

IHG’s own commitment to sustainability can be seen through examples such as the InterContinental Boston, which in June 2010 introduced 10,000 honey bees onto its roof deck apiary and the colony has since grown to more than 40,000. The hotel has been working with a local bee expert to train its Sous Chef, Cyrille Couet on bee keeping, as well as installing “Bee TV”, a live camera feed from the apiary so guests can see the bees in action. At Holiday Inn Airport San Antonio, a roof-top herb garden watered by air conditioning condensation has been implemented.

Will we see a bee apiary develop into an insect zoo in future or a herb garden grow into a vegetable park perhaps?

STAURANTS

...estimate

0.150.20%

of the world’s food currently produced in urban areas

39

MACRO 4

THE INTERNET O This trend tracks the journey of our relationship with the internet, looking at where it has developed in the past decade and envisaging where it will head in the future. In particular, it looks at the removal of the internet from the virtual world and its placement in the everyday objects we find around us.

Across the past decade our relationship with the internet has moved from the desktop and the laptop to the tablet and the mobile phone, enabling us to have more fluid and convenient access to information wherever we go. The next step is for the internet to reach beyond the virtual space and embed itself in the buildings and objects around us.

From the ‘anytime, anywhere’ connection that we now experience with the internet via broadband, wi-fi and mobile, we are moving to an era where every ‘thing’ is connected. The question on everyone’s lips is which brand will be able to bring us global wi-fi? Or at least – take ownership of providing wi-fi to key cities...?

Going back to the anytime, anywhere theory - imagine a fridge that texts you when the lettuce inside it is reaching its sell-by date. A car that controls speed and direction to avoid traffic.

Welcome to the era of the Internet of Things – a network of objects able to talk to each other, connect to the Net and share information with us, or each other, across the globe.

By 2015, the number of internet-connected devices in the world will have reached 15 billion, according to Cisco’s Visual Networking Index. The result, says the company’s Chief Futurist Dave Evans, will be a ‘thinking planet’ of objects and computers. A planet sharing real-time data across businesses from retail and supply chain management to weather forecasting, farming and medicine.

The network is already taking shape around us. It is what makes it possible for an Oyster card used in London across tubes, buses and the overground to debit your bank account automatically when it runs out of credit. It is what allows us to rent a vehicle by the hour from Zipcars or go jogging in a pair of Nike+ trainers that are connected to your iPod. HP Labs has announced a project to build a ‘Central Nervous System for the Earth’ (CeNSE). The aim of CeNSE is to create a planet-wide sensing network using billions of tiny accelerometers which detect motion and vibrations. The sensors might be stuck to bridges and buildings to warn of structural strains or weather conditions or scattered along roadsides to monitor traffic, weather and road conditions. Chinese Premier Hu Jintao has also declared his intention to make China the world’s leading ubiquitous computingenabled country.

China’s maritime system is already part of the Internet of Things with the progress of major waterways and more than 100,000 ships now able to be monitored by sensor network. In the most striking sign of national intention, the regional government of Chongqing has signed a deal worth up to $7 billion with telecom giant China Unicom to turn the municipality into a flagship site for research and development projects related to the Internet of Things.

OF THINGS By 2015, the number of internet connected devices in the world will have reached 15 billion

The next step is for the internet to reach beyond the virtual space and embed itself in the buildings and objects around us

MICRO 1

TELL-AND A growing number of companies are seeking new creative possibilities from the coming Internet of Things. Along with the Minneapolis-based Citizen and New York’s StickyBits, ‘tell-and-tag’ companies, as the The New York Times has called them, are aiming to embed narrative and personal story into inanimate objects whether that be the life story of a second hand book or a marketing spiel from a cola can.

The Internet of Things allows tagged objects to talk to each other, and the bet is on that we will want to eavesdrop on what they have to say. For example: a picture of a celebrity’s handbag inside a magazine photo will bring up information about who designed it and link to a website where it can be bought.

This micro-trend highlights the blurring of lines between the physical and digital worlds. For example, Home Plus, the Korean arm of Tesco, is enabling smartphone-equipped commuters to browse for grocery items while waiting for the subway. Sheets of photo-realistic billboard paper display pictures of tagged goods. Shoppers pay on the spot and the goods are waiting when consumers gets home. The approach is working, with the company reporting a sales spike of 130% in three months in 2011. For brands, the rise of tell-and-tag may be about to usher in a new age of interaction between products and consumers.

For the hotel, this could mean consumers being able to order own-brand products directly from their rooms, allowing them to take the hotel experience home. For example, one could stay at an IHG hotel and directly order the InterContinental Egyptian cotton bed sheets following a restful night’s sleep. Alternatively, does the future see guests being able to search for a specific menu on their iPad and ‘send it to the kitchen’ to be cooked for their dinner? And so the emergence of the ‘Tablet to Table’ phenomenon begins…

The Internet of Things allows tagged objects to talk to each other...

D-TAG

...new age of interaction between products and consumers

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MICRO 2

DATA TSU One of the most dramatic consequences of the emerging Internet of Things is the massive amount of new data on the web that will come as a result. As more and more devices and objects in the world are connected to the Internet, increasing amounts of data will be generated and exchanged and stored online.

In 2011 alone, 1.8 zettabytes (or 1.8 trillion gigabytes) of data will have been created, according to research by analysis firm IDC. By 2020, the amount of data will have grown by another 50 times driven largely by more embedded systems such as sensors in medical devices and structures such as buildings and bridges.

This raises the societal problem of how to stay on top of that vast wave of information instead of being crushed by it.

This, in part, is what’s driving the growth of cloud computing.

By 2015, according to IDC, 20% of all global information will be attached to cloud services as consumers and businesses seek to manage their accumulated amounts of photos, music and video files. The most powerful computer on Earth, the K Computer built

by Fujitsu, can manage 8.2 petaflops per second. However, the next generation of machines will need to be a thousand times faster and operate at exaflop speeds of one quintillion (one million trillion) calculations per second.

China has announced they are seeking victory by 2016. After the space race of the 1960s, the first great struggle superpower of the 21st century looks likely to be over computer processing speeds.

So as the cloud begins to grow – the question on everyone’s lips is when it will burst? At the moment, the cloud is only set to get bigger.

In 2011 alone

UNAMI

1.8

zettabytes

(or 1.8 trillion gigabytes) of data will be created

By 2015, according to IDC, 20% of all global information will be attached to cloud services as consumers and businesses seek to manage their accumulated amounts of photos, music and video files

As the data tsunami gets closer in the coming years and computers for the domestic market speed up in tune with the race for the fastest possible machine, we should expect to see processing speeds become an increasingly important mark of premium differentiation in commerce – for instance the hotel with superfast wi-fi will be able to point to this as an added-value service for customers. You may get it free‌but who gets it fast...?

...the cloud is only set to get bigger

45

SOCIAL MICRO 3

While much frenzied attention is paid to the geo-tagging technology that links online and physicalworld presences, other media commentators and programmers are turning their attention to the linkage of entertainment-viewing and online activity.

Specifically, they are looking at the ‘two-screen’ phenomenon of what is called ‘social TV’ or ‘co-viewing’. Co-viewing simply involves using Twitter, forums or messaging services to converse about a television show as you watch it. The practice is increasingly widespread (the research company Nielson found that during the Chinese New Year in 2011, 42% of the viewers it tracked used the internet at the same time as watching television), and recent months have seen the launch of websites and apps (Comenta.tv in Argentina, Starling in the US) that either seek to capture and aggregate all the conversations, or (Trendrr, TVgenius.net) record which programmes generate the most discussion. This trend moves the old ‘water cooler’ conversation to run simultaneously with the show’s broadcast and contradicts former predictions that the growth of television on demand would eradicate communal viewing. It also demonstrates the important, though not terribly newsworthy, media trend for broadcast television to flourish and grow even as the internet offers competition.

57% 40%

47%

36%

21% 55+

TOTAL

35-44 18-30

Source: Adweek / Harris Interactive, May 2011

45-54

AGE

L TV

...during the Chinese New Year in 2011, 42% of viewers tracked used the internet at the same time as watching television

47

MICRO 4

COLLABORATIVE ACC Online social networking has moved to a new phase of singleissue and purposeful networks designed to allow people to collaborate. This is particularly true with respect to travel where a host of websites have reinvigorated the concept of home sharing.

Perhaps the best-known is AirBnB, a global service that allows users to list rooms in their homes for rent and to search by city or region to find somewhere to stay. It ties in with Facebook so that you can find people in your network offering accommodation too; so far, its networks comprise 20 million connections.

Another interesting example of collaborative accommodation is the China-based Tourboarding which links up Chinese residents who want to be fluent in a second language, without being able to afford to pay for lessons, with people who wish to travel to China on a budget. Travellers ‘pay’ for accommodation and guided tours by teaching their hosts some language skills.

This matching of people with similar needs could be extended further to people with similar interests. Ever more sophisticated algorithm technology is currently driving a boom in dating websites with each website promising better matches than the last. The internet dating machine is expected to grow at a rate of 10% annually, with the market currently worth in excess of ÂŁ120 million in the UK alone. Media brands commanding clear and identifiable demographics have been able to launch their own dating sites, and it is tempting to ask if in future they might try collaborative accommodation. In the future, hotels might find themselves competing with brands currently well outside the conventional travel sector.

In the future hotels might find themselves competing with brands currently well outside the conventional travel sector

COMMODATION

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PEOPLE MACRO 5

This trend highlights the progression of how brands are studying the consumer. Gone are the days when the behaviour of typical consumers can be thought of as interchangeable. Brands know that a consumer will invest emotion in a lifestyle decision. However, this interaction has moved to a completely new level. This trend is about how brands are actively ‘involving’ consumers in how they both connect with them and as an ‘influence’ as to how they build their products. We can now see examples all over the world of brands/governments/charities/employers engaging with the public using playful, game-like tactics and involving them ‘beyond’ the purchase alone. Rather than applying a single generic marketing model to everyone, one day brands will have our own unique ‘preferred’ way to interact as a database.

Until a few years ago, most researchers assumed that the typical consumer acted rationally and was motivated by a common self-interest. This meant consumers could be studied as if they were interchangeable robots making logical choices and that their choices were the result of rational mental processes of information-gathering and comparison. ‘The Consumer’ could feel somewhat distant from what most of us think of as an actual human being.

These days academics now research ‘why consumers behave the way they do’ instead of assuming they always act in their own best interest. Turns out we often make illogical decisions with our money based far more on emotion than mathematics and critical thinking. Authors often document examples of organisations using unusual, irrational and/or emotional ways of communicating in order to improve results.

In many ways it is the shift in thinking, from looking at what we actually do rather than at what we think we do, that is more important and impressive than any individual examples of it in practice. It is a movement of thousands of small ideas rather than of one big movement.

PLAY Rather than applying a single generic marketing model to everyone – one day brands will have our own unique ‘preferred’ way to interact as a database

So here comes the emergence of two new ways of engaging the consumer - the first is through ‘nudging’. This means pulling out triggers in our minds that pull on the more irrational side of the brain. Nudge theory is also becoming popular in politics via the Chicago-based academic Richard Thaler whose ideas have received sympathetic hearings in the White House and Downing Street. Similarly, David Brooks’ book, The Social Animal, stresses the importance of the ‘inner mind’ – the unconscious reel of emotions, intuitions, biases, longings, character traits and social norms.

The second is ‘consumer collaborating’ – working with consumers to co- create new products, such as the Fiat Mio in Brazil. Some are using this form of thinking in motivation or punishment such as punishing someone for libel by making them tweet a retraction 100 times (seen in Malaysia www.guardian.co.uk/world/2011/ jun/02/Malaysian-tweet-apology-defamation)

MICRO 1

ACTIVE LO Active loyalty is a term now being used to describe the ways in which brands are using game-play techniques to keep consumers loyal. Customer loyalty schemes are not always the long-term allegiance-builders we once hoped they would be. In reality, many customers go through an initial period of enthusiastic collection and spending only to end up with a pile of points they will never use – and meanwhile they will have joined the loyalty schemes of competing brands. Thus they become disloyal loyalists, passively aligned with several rivals in each field. Some brands believe that their collective consumer base have enough points to holiday for life. Can you imagine – many of us may be sat here today with a holiday in our handbag…

The principle of game-play, essentially an offshoot of social media marketing, is increasingly seen as the next step for loyalty programmes. Game-play takes the brand-consumer link to a new level by making the consumer an active partner in an evolving relationship rather than passive recipient of points or benefits; essentially it turns the relationship into a game by adopting the principles of video games and social network sites, and location-based services like Foursquare, Groupon, Hunch, Facebook Place, and Google+, and social shopping strategies like Team Buy (China) and Tuangou (China).

A host of game-play platforms (such as Crowdtwist, Scvngr, Gamify and Badgeville) allow consumers to check into locations, co-operate or compete with other consumers, move up and down levels, earn badges and virtual goods, share content and receive notifications. They also turn mundane tasks like completing surveys into fun, reward-based activities thus encouraging consumers to spend more on sites and divulge more personal data. The Taco John restaurant chain in the US, for example, offers bonus points to customers who post pictures of themselves and their meals on its website; Starbucks’ rewards programme allows you to progress through different levels of reward depending on how much you spend. Pepsi became the leading trending brand on Foursquare with a strategy that designated special Pepsi locations around the world and awarded FourSquare, Facebook and Twitter badges to people checking in at any three of these locations; badge holders were then entered into prize draws.

Game-play takes the brand-consumer link to a new level by making the consumer an active partner in an evolving relationship rather than passive recipient of points or benefits

OYALTY

At present, this sort of activity seems to be chiefly confined to Western, developed countries but everyone seems to be talking about it. Research company M2 reports that brands spent $10 million on game-play marketing in 2010; of that total spend, 33% was on game-play loyalty programmes, 22% on awareness-building and 44% on engagement. Entertainment industries have led the take up followed by publishing, consumer goods and healthcare. While most of the loyalty-based gameplay applications are essentially new spins on the collect-and-spend model, the level of energy and innovation in this field are set to make it important. M2 predicts that the total spend, will rise to $1.6 billion globally by 2015. For a hotel, this could mean taking the tested collect-and-spend model and incorporating social media usage to develop the loyalty programme.

MICRO 1

ACTIVE LOYALTY

...brands spent

$10m on game-play marketing in

2010

MICRO 2

PROGRESSIV The principle of using game-like communications and experiences is far from being limited to brands; some of the most innovative and effective examples have come from individuals and governments seeking to improve welfare and health, or to help the disadvantaged.

Perhaps best known, and almost certainly the oldest, is the Texas Department of Transportation’s ‘Don’t Mess With Texas’ anti-litter campaign, which helped to reduce littering among recalcitrant young men by creating an aggressive, macho slogan (and language) which has since passed into common usage. A similar example is the Brazilian initiative to draw attention to the problem of drink driving by giving people bar tabs that add the possible medical costs of drink-driving to the bill.

Gaming for Good has two variants – those that work on an individual and those that are collective. One of the most curious examples is found in the Philippines, where the Green Bank of Caraga in Mindanao offers an anti-smoking bank account. The person trying to quit deposits the money they would have spent on cigarettes for six months. After which, if clean, they get their money back; if not, the account is closed and the money given to charity. Those who open an account are 53% more likely to succeed; according to a US evaluation, it is currently the most successful anti-smoking scheme in the world. Perhaps, globally, we will see this as inspiration for innovative loyalty programmes.

Those who open an account are 53% more likely to succeed; according to a US evaluation, it is currently the most successful anti-smoking scheme in the world

VE PLAY

57

MICRO 3

EMPATHIC Total spending for the United Arab Emirates interior design segment is expected to grow to $22.5 billion...

A trend focused on the simplicity of design, based on design moving from a secondary thought to one of the biggest growing areas of spending in the global market. Total spending for the United Arab Emirates interior design segment is expected to grow to $22.5 billion, according to reports.

However, in the last few years there has been a shift in the design world away from self-expression on the part of the designer and towards unobtrusive efficiency and an understanding of human psychology. One major inspiration has been the concept of wabi-sabi, a key ideal in Japanese traditions of beauty. It represents a concept of simplicity, economy and modesty in design and an appreciation of ‘imperfect perfection’ of natural objects and processes. No direct translation of it exists in English, but a phrase that comes close is ‘wisdom in natural simplicity’.

Wabi-sabi has been the reigning principle behind the layout of Zen gardens, tea houses and other enduring symbols of Japanese tradition for at least the past seven hundred years. It is still a powerful influence today on the work of leading product designers.

In 2006, the influential Japanese and British designers Naoto Fukasawa and Jasper Morrison organised an exhibition called Super Normal that gathered outstanding examples of refined modern design from earlier decades alongside the creations of a rising generation of international design stars, such as Australia’s Marc Newson and Konstantin Grcic of Germany. The point of the show was to celebrate unostentatious, minimal empathic design; products that were less interested in shouting attention to themselves and were dedicated instead to an elegant understated usefulness.

The show brought the wabi-sabi aesthetic powerfully up to date as industry publication Business Week recognised recently by including Fukasawa in their list of the world’s most influential designers and citing him as an heir to the wabi-sabi ethos.

Since Super Normal, there has been a growing debate in the design world around the aims and purposes of the industry. Alice Rawsthorne, design columnist for the International Herald Tribune has criticised ‘Design-with-a-capital-D’ citing the ostentatious creations of a design celebrity like Philipe Starck as out of step with an age of scarce resources and diminishing finances.

Exciting work is going into creating products with the right feel – things that you want to touch and hold and make part of your life. In that category, we can put the ongoing work of Fukasawa and Morrison, the minimalist furniture of Japan’s Studio Juju and the products of French duo Ronan and Erwan Bouroullec. In terms of design, this can be harnessed within a hotel to support a marketing strategy promoting ease and simplicity.

DESIGN ...wisdom in natural simplicity

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ARTICLES AND REPORTS A Coal in the Heart: Self-Relevance As A Post-Exit Predictor of Consumer Anti-Brand Actions, Allison R Johnson, Maggie Matear, Matthew Thomson, Journal of Consumer Research Vol 38 No 1, June 2011 Gamification A Presentation by M2 Research, The Gamification Summit, Mission Bay Conference Centre, University of California, San Francisco, Jan 20 2011 CARES Commitment Savings for Smoking Cessation in the Philipines, Xavier Gine, Dean Karlan, Jonathan Zinman, Innovation for Poverty Action/Massachusets Institute of Action Technology Abdul Latif Jamal Poverty Action Lab, 2007 Global TGI Barometer Issue 18: Charitable Donation, Kantar Media, 2011 Super Normal, exhibition, Naoto Fukasawa, Jasper Morrison, 2006 Edge City: Life on the New Frontier, Joel Garreau, Anchor, 1991 Edgier Cities, Joel Garreau, Wired magazine, 2004 2011 Global Spa Resort, Coyle Hospitality Group, 2011 2011 Spa Market USA, Diagonal Reports, 2011 Edgeless Cities: Examining the Noncentered Metropolis, Robert Land and Jennifer Lefurgy Housing Policy Debate Vol 14 No 3, 2003 Green Book of China’s Tourism 2011: China’s Tourism Development Analysis and Forecast, Zhang Guangrui, Song Rui and Liu Deqian, China Outbound Tourism Research Institute Americans and their Cell Phones, Aaron Smith, Pew Research Center, 2011 Transforming Brain Health with Digital Tools to Assess, Enhance and Treat Cognition across the Lifespan: The State of the Brain Fitness Market 2010, Alvaro Fernandez, 2010 How To Be Free, Tom Hodgkinson, Hamish Hamilton, 2009 The Mind Body Interaction: Interdependence of Mental and Physical Health, Dr Badar Sabir Ali, Associate Professor of Family Medicine at the Aga Khan Univeristy Hospital, Karachi Improvement of Episodic Memory in Persons with Mild Cognitive Impairment and Healthy Older Adults: Evidence from a Cognitive Intervention Program, Sylvie Belleville, Brigitte Gilbert, Francine Fontaine, Lise Gagnon, Édith Ménard, Serge Gauthier Dementia and Geriatric Cognitive Disorders, Vol 22, No 5-6., 2006 Extended Sleep and the Effects on Mood and Athletic Performance in Collegiate Swimmers, Cheri Mah, Stanford Sleep Disorders Clinic and Research Laboratory, 2009 Aerotropolis: The Way We’ll Live Next, Greg Lindsay & John Kasarda, Farrar., Strauss & Giroux, 2011 The Globalisation of Indigneous Art: The Case of Mata Ortiz Pottery, Jose F Medina and Esmerelda de los Santos, The Univeristy of the Incarnate Word, San Antonio Texas, report presented at Fostering Business Entrepreneurship in the Americas conference, Manaus, Amazonas, Brazil, July 2008 Spring 2011 Update: Luxury Goods Worldwide Market Study, Bain & Company May 2011 Beyond 2020: The Future of Food, The Future Foundation, 2011 Hardcore Healthcare: The Art and Science of 21st Century Wellbeing, Future Foundation, 2011

About IHG IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation operating seven hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites® . IHG also manages Priority Club® Rewards, the world’s first and largest hotel loyalty programme with over 61 million members worldwide.

IHG is the world’s largest hotel group by number of rooms and franchises, leases, manages or owns over 4,500 hotels and more than 666,000 guest rooms in 100 countries and territories.

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