Dive Brief:
- Wyndham Hotels is teaming with Instacart and Peapod to launch a new service that brings groceries straight to guests’ doors, according to Retail Leader.
- The service is being tested at eight Hawthorn Suites hotels in Chicago; Philadelphia; Raleigh and Charlotte, NC; Hartford, CT; and Orlando.
- Online grocery ordering and delivery was a $42 billion industry last year, an increase of more than 160% over 2015.
Dive Insight:
Traditionally, many in the hospitality industry don't see mixing grocery delivery with hotels as a strong move. Hotels make money when guests dine in their restaurants or buy items from their stores. Both of these segments of the business will see profits fall if more people start utilizing the grocery delivery service.
Plus, some people at hotels are on vacations and don’t want to bother with cooking and thinking about shopping—even if it’s done online. The cost involved with the service may scare off numerous people who could easily find the nearest store and pick up what they need while away from home.
On the other hand, long-term travelers may be hungry for a taste of something homemade. No matter how large a vacation budget or expense account, cooking at home helps the consumer know what he or she is eating. According to Peapod and ORC International, 72% of people cook at home at least four nights per week. If a hotel room is equipped for cooking, it only makes sense to help guests make it happen. Finding a supermarket in a strange city and taking the time to shop may not be how travelers want to spend their time, so this service helps cater to their needs. And the program has several in-room recipes available, for which hotel guests can request ingredients.
Online grocery ordering and delivery in general is expected to grow. Industry insiders feel it could potentially increase five-fold over the next 10 years with U.S. consumers spending upwards of $100 billion by 2025.
Nielsen’s “The Future of Grocery” report predicts ordering online for pickup or delivery will increase substantially in the years ahead, just as it did from 2015 to 2016, when it saw a more than 45% increase. Programs like this, where hotel guests can have a positive experience with grocery delivery, can help enthusiasm for grocery e-commerce spread. It's possible that a traveler who liked the convenience of online ordering and delivery on vacation will also take advantage of the service when he or she comes home.