How Guests and Technology Are Transforming the Hotel Industry

THE HOTEL sector isn’t the only industry that is being affected by the rise and rise of real customer power. Banking, shopping and even film and television are being challenged, having to find new ways of operating to keep up with consumer desire.

THE HOTEL sector isn’t the only industry that is being affected by the rise and rise of real customer power. Banking, shopping and even film and television are being challenged, having to find new ways of operating to keep up with consumer desire.

While revenues may be good at the moment with hotel bookings and occupancy high, this is not a world where businesses can afford to tread water for too long. Continous change is the mantra.

Adapt or die, might be a more pertinent alternative.

The rise of the millenial, who is comfortable with a digital, big data world and increasingly uses his or her influence to dictate what businesses provide, is the key demographic for the next decade. Millenials know what they want and they expect the wolrd around them to adapt and deliver. Nowhere is this more apparent than in the hotel industry where a more personal, more relevant and more responsive service is now being demanded.

While those hotels that are slow to react may find themselves left behind, this brave new landscape presents numerous opportunities for those who are prepared to embrace the latest technology and move away from some outmoded business practices.

The Rise of the Mobile Device

Mobile has been the transformative development of the 21st century. The rise of the smartphone and greater connectivity has not only had an effect on the way we communicate, it has created a flood of changes across many industries, challenging them to behave in ways that, ten years ago, would have been inconceivable. There are some 1.75 billion smartphones in use today – the number is increasing and so is the connective technology. It allows us to buy products on the move, check reviews, book online, watch videos and play games. And that’s just the start.

Hotels are starting to produce their own apps that give guests easy access to a more personal experience. It means also that businesses can gain valuable insight into what guests want and can develop their business model to deliver a better experience.

Smart engagement can include allowing guests to book in and check out by mobile phone rather than queing at the reception desk, give electronic entry to rooms through smartphone keys, push notifications of better offers and provide information on everything from room service to what local sites to see. In some hotels guests can control the room temperature, operate the TV and switch on the lights with their smartphone as well as order from the room service menu.

Millenials in particular find this kind of interaction valuable. Indeed, 46% of them say that being able to check in and out at a hotel using their mobile phone would make them more likely to return. This is important when you consider that this demographic is set to become the dominant customer group by 2017, overtaking babyboomers.

Hotels Are Lagging Behind

Despite some major hotel chains taking on more mobile technology and using it to help define their business practice, the industry as a whole has lagged behind other sectors. Banking, shopping and transport are all ahead of the curve in comparison.

There’s no doubt things have changed.

Many hotel businesses still focus on their websites but customers are increasingly searching on price comparison sites rather than going straight to an individual brand site. Guests want to be able to check in on their mobile device and not have to stand in another queue waiting to be attended to. Guests also expect a higher level of personalisation and hotels need to gather the right kind of data and act on it intuitvely.

Co-Creation is Key

Not only do hotels need to embrace mobile technology and other interactive changes, they need to work in new partnerships. That means joining forces with shops, restaurants, local attractions and rising services like Uber that can all add to the experience of their guests. It’s a complicated business and needs hotels to work in partnerships that they may not have considered before.

Getting to Grips with New Markets

It’s not just existing millenials that hotels need to engage with more effectively. There are new markets developing for which tailored approaches are required. 97 million Chinese tourists travelled abroad in 2013 and this is set to increase drammatically by the end of the decade. That means providing Chinese language television in rooms, allowing guests to book mini-bar items that are in Mandarin before they arrive and other initiatives to make their stay more comforatable.

Getting the Right Infrastructure in Place

While embracing big data and digital technologies to improve guest experiences is the goal, the truth is that many hotels simply don’t have the key talent, technology and business models in place at the moment. Reinventing a business for the next decade is a challenge, particularly for smaller hotels and chains. The need for continuous improvement can be tiring not least because of the speed of change.

Large corporations such as the Hilton, which currently dominates about 50% of social media for hotels, can take advantage of the changing landscape because they have the financial resources to do so. Building an IT structure that can deliver results is expensive and attracting the right talent who can implement smart strategies is going to be key for many hotels.

Some 30% of hoteliers are expected to hire staff to specifically help with social media promotion and digital interaction in the next few years. It’s not only about bringing on new staff, though, there is a need for hotels to upskill their current employees so that they can meet the demands of a more interactive and personalised provision.

It is a key to survival in the next decade or so that hotels get the right infrastructure in place. At the moment, many are either not interested or are simply moving too slowly for the market they find themselves in.

The Importance of Brand

Consumers have changed and are more likely to go on price comparison sites and look for best deals rather than focus on one particular brand. This presents a problem for hotels as customers will often look for a good price and then read the attending reviews rather than select a hotel chain that comes readily to mind. Nearly half of guests don’t even visit a hotel website before they arrive to check i, they’ll have done all their research on comparison sites.

This might be because the majority of guests see price (79%) as a key factor in choosing where to stay. Negative comments on comparison sites can also have a damaging effect on bookings. It requires hotels, particularly the smaller ones, to have a more imaginative approach to online content and their social media prescence as well as they handle complaints with guests. It’s something that can be done well or done badly, depending on whether a hotel has the right strategy in place. We no longer live in a world where everything can be tightly controlled and allowing organic development of online brands, with the help of consumers, is key.

Brand is still important. The concept hotels have to understand is that, like guest experiences in the real world, online is changing quickly. Marketing and brand strategies have to be in continous development.

Going mobile and providing a more digital personal experience doesn’t mean that face-to-face contact and interaction are going to be a thing of the past. Mobile interaction is a tool to be used in addition to this and provides the value added extras that guests are looking for. Hotels in the future need to know who their demographic is and what these people are looking for in terms of personal experience. They need to have the digital tools in place but they also have to have the staff who can implement this technology well. Then there’s the problem of developing brand awareness and other approaches that all go into a successful mix.

There’s no doubt that these are challenging times for hotels and their owners. Being dismissive of disruptive technology like smartphones is not an option. The businesses that don’t engage in a strategy of continous development will undoubtedly face disruption and the possibility of losing their foothold in the market. That could see many facing a difficult period in the years to come.

The author is the marketing head of a company that specializes in mobile led digital solutions and a part-time food critic.

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