A Lack Of Technology Is Hampering The Hotel Industry
Isn’t it about time that hotels caught up with technology?
Hotels are something that most people only get to enjoy a few times a year.
Many of us revisit the same hotels if we have had an exceptional experience and loved the ambiance and facilities. Most people fail to make the most of everything that either the hotel or destination has to offer due to lack of knowledge or time to spend on discovery.
In the first wave of digital disruption, hotel and flight aggregators and Online Travel Agencies (OTAs) changed the game, enabling faster, one stop access to a huge choice of hotels and (at least on the surface) preferred pricing. However, the actual experience of travelling once you board a flight and arrive at a destination remains little different to decades ago. You are at the mercy of whether you have helpful airport staff, taxi drivers, front desk staff and concierges – and, beyond some attempts at promoting loyalty at the high end, most folk are treated identically.
Technology has radically changed what is possible when it comes to customer experience, yet many hotels are still yet to fully recognise this, let alone realise the benefits.
Travelling is a deeply meaningful experience, one that people save up for years for and pin their hopes and dreams on. As the saying goes, travel is the only thing that we buy that makes us richer. Why then is the customer experience so hit and miss and too often left to serendipity ?
Once a customer has checked in to a hotel, too often they have no further engagement with the hotel until they leave. This is a lost opportunity to build a meaningful relationship and add value. OTAs have no personal contact with a guest yet by leveraging clever marketing, analytics and fairly vanilla loyalty schemes, they win the customer over. The same can’t always be said for the hotels themselves. As the CEO of Expedia recently said provocatively, hotels only have themselves to blame if they have a guest in their hotel for two to three nights and do not use this opportunity to build a stronger relationship with them. However, if one looks through the eyes of a hotel General Manager (GM), running a hotel is a time intensive and expensive business. In the hospitality industry, significant fixed assets and costs together with fluctuating occupancy rates and reduced yields make for a challenging balancing act. Whilst some large hotel chains have invested in IT systems, much of the tech stack is legacy and is not interoperable. For independent hotels and small chains in particular, mastering technology, data analytics and marketing is a big ask. The behind the scenes operations of a hotel dominate every waking moment and these disciplines are not necessarily skill sets that naturally reside back of house.
Bring on the hotel technology revolution
This is where technology could, should and indeed can play a significant role . The opportunity is clear – to enhance the experience for the traveller whilst also enabling the hotelier to better serve their needs. The hotel should strive to be a helpful companion, finding more effective and efficient ways to engage with their clients. The question is – how can hotels achieve this?
The first step for the hotelier is to build a better picture of what the traveller is looking for before they book. By capturing personal data (with the necessary opt ins of course), hotels can personalise search results and build recommendation engines that suggest the ancillary extras that turn a stay from a room booking into an experience.
Unlike many consumer transactions, travel is intrinsically linked to our human instinct to seek out belonging and self actualisation. It’s a deeply personal and purposeful pursuit yet too often the actual experience is cold and impersonal.
Many travellers spend hours researching the best things to do at a destination before they set off on their trip. On the other hand, others are too busy with work and family commitments to get the chance to do so. Both groups deserve to be catered to and technology certainly has the ability to provide more tailored recommendations based on a person’s profile, interests and risk appetite.
Hotels can help travellers to make the most of the most important element of their trip – the time spent in destination. Most visitors, particularly to cities, are only aware of the obvious tourist spots. Some are lucky to have a helpful concierge to guide them, but again this is hit and miss. There are tourists who will pay through the nose for a guide to show them the hidden delights of a city – but why shouldn’t every traveller have this experience? Technology can enable all of us to “travel like a local” and uncover those delights that make travelling the most enriching experience known to man.
Whilst it’s generally the time away from the hotel that truly makes a holiday, technology can also enhance the time spent in the hotel. Guests want convenience and flexibility that suits their plans. Restaurants, spa bookings and in room dining are generally inflexible and require precious minutes spent at the front desk or on the phone to arrange. Many guests will have language difficulties or anxieties about speaking to hotel staff; accessing these services via digital platforms enables everyone to partake and saves time.
So let’s imagine that the booking experience and the in hotel experience have been done well and delighted the guest. The customer experience does not stop there. When a guest checks out of a hotel, they will likely get a generic email asking them to review it. However, they won’t be sent anything that reminds them of the fun they had and they probably won’t be prompted to retain a relationship with the hotel in the future. Loyalty schemes exist in many of the big chains but it is rare for guests to rate them – either they feel the rewards are not relevant to them or they can’t redeem their points. Herein lies a huge opportunity for hotels to use data collected across the journey to personalise the types of rewards that guests can access. A mobile first loyalty scheme that personalises rewards and offers to guests could transform repeat business.
Hotel specific technology solutions
We have established there is much that can be done to improve the hotel guest experience and indeed many angles from which to approach this issue. Technology solutions available today fall into a number of categories:
1) Those who are seeking to disrupt the dominance of Booking.com and Expedia by bringing new OTA models to market that undercut the high percentages paid out. One such player in the UK is Hotel Bonanza which charges consumers a £10 membership fee in return for a guaranteed minimum discount across its hotel collection. Many hotel chain bosses have been vocal that they see much disruption ahead for the OTAs; this may be wishful thinking but it is undoubtedly an area ripe for disruption based on the conversations I have with hotel owners who object to paying such high commissions.
2) Those focused on in-room technology. Handy.travel (Tink Labs) leads the pack here with its handy technology which sits in over 600,000 hotel rooms across the world, but other players include Digi Valet who are focused on automating in room entertainment, blinds and air conditioning from a central tablet control. Amazon has woken up to this opportunity, recently announcing that it is launching a tailored Alexa smart speaker service for hotels, partnering with Marriott. This is Amazon’s second attempt at cracking hotels after a largely unsuccessful trial in The Wynn in Las Vegas. As the search landscape slowly pivots to voice, this would see Amazon go head to head with Google. With their control of the search landscape in non Asian markets, Google are also well placed and Google Home is scaling fast.
Expedia is not sitting back passively either. Their CEO recently announced that they are exploring keyless room entry and other in-hotel technology solutions to connect beyond the booking.
3) There are also those developing business intelligence tools to provide better guest analytics to hotel owners. Players in this space include Hotel IQ and Juyo Analytics. As with many industries, there is an increased focus on analytics to help identify loyal customers, lookalike customers and to inform marketing and Customer Relationship Management (CRM) efforts.
4) Lastly, there are those launching new reward based digital platforms that seek to provide genuine recognition and rewards for loyalty. A good example would be Wanup, which is a Spanish startup backed by Hoteles Catalonia.
Jumping on the bandwagon (or train, car or aeroplane)
In summary, there is a growing range of technology focussed hospitality players. Increasingly, the big tech giants are also parking their tanks on the lawns, seeing an industry that is calling out for better customer experience.
From my conversations with hotel owners and GMs of late, they truly value the opportunity to engage with their guests but also yearn for solutions which help them automate costly manual functions such as check in, check out, billing, in room dining and housekeeping.
Hoteliers are not yet crying out for technology led problem solving but the enlightened owners and GMs are increasingly looking for innovative solutions to solve decade old problems.
Technology is undoubtedly the answer to reimagining the guest experience but making the right calls on who to partner with and how to model out the return on investment is still a work in progress. The travel industry is often talked about as one of the first to have been disrupted but we are now entering a new era where everything is up for grabs. The winners will be those that truly put the consumer at the heart of what they do, enabling guests to make the most of every single trip in whichever way they want to.
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