HB ON THE SCENE: Future trends point to paradigm shift for hotel technology

NEW YORK—Whoever can predict and harness the technology of the hotel industry’s future will win it. But what will that future look like—robot concierges? Apps or tablets that handle every guest request—or even suggest an amenity before a guest thinks to ask? New, easy-to-use ways to book hotels? A new research study from Amadeus and InterContinental Hotels Group (IHG), “Drivers of Change in Hospitality,” aimed to find out.

Last month, Hotel Business met with the companies to discuss the findings.

The companies tapped an independent team of researchers at the Foresight Factory for the findings, with additional insights and commentary from Cornell’s Center for Hospitality Research. Informed by indsutry experts and more than 7,500 consumers across various global markets, the study identifies three trends the industry must respond to if it wants to meet the needs of future guests: the beginning of the end for room types; the rise of tech-augmented hospitality; and achieving cult status at scale.

Francisco Pérez-Lozao Rüter, president, hospitality, Amadeus, noted that hotel technology has a very rooms-centric view. “The hotels don’t have a very guest-centric view; they’re not very good at interacting with the guest and recognizing the guest [from a technology perspective],” he said, pointing to the disconnect between how hotel technology handles guests and the guest-first approach hoteliers have in interpersonal interactions.

Findings predict traditional room types won’t be around for long. According to the report, 61% of global travelers prefer hotels to be priced in a way that allows them to add on bespoke options. Enter attribute-based bookings, in which guests will be able to choose customized rooms: yoga mats instead of desks, for example. More than that, technology will enable hotels to offer nontraditional lengths of stay—instead of early check-in or late checkout, guests could book for the times most convenient to their travel plans.

“The crux of this hinges on the entire way the hospitality industry sees their properties and the way guests can access them, moving it from ‘This is what we have’ to allowing guests to book what they want,” said Clodagh Brennan, senior trend analyst, Foresight Factory. “It requires completely rethinking how people see properties and how they book, and changing that architecture so it’s much more flexible and you can offer different attributes in the whole booking process… This provides a huge opportunity to unbundle the standard room types and to monetize particular assets or add a different value to them based on what the consumer might want or need.”

Of course, hoteliers need to do this intelligently. “The guest is accustomed to these room types, so you just can’t say, ‘Forget about that’; it can be confusing and overwhelming,” Brennan said. “People need to have these decisions tailored for them, and that can be by rebundling them in new ways or, in the future, it can also be about using AI and analytics to help make intelligent suggestions that already take into account specific preferences; if it can pull all of that into the mix, it really narrows down the choice and presents the guest with what’s most relevant for them in that moment.”

Chris K. Anderson, director of Center for Hospitality Research, Cornell University, noted that it’s not dissimilar to what the airlines went through. “When American first tried to charge $15 extra for leg room in economy, that was an utter failure,” he said. “But fast forward 10 or 12 years, and that’s one of the biggest moneymakers for airlines…selling the value and getting way more than $15. There’s this evolution in communicating the value and consumers recognizing it. It’s not going to be everything unbundled all at once; it’s going to have to be this process where you have things that are easily recognizable, and may not be monetized. You might use that unbundling to improve the experience and drive loyalty rather than profit. At the same time, owners are not going to do anything for free, so part of this is that give-and-take between improving the brand experience and ensuring individual owners are profitable.”

It’s not just guest-facing tech that needs to change. “Because it’s so much more complex than the current system, the back-end system needs to be able to cope with that complexity, and it needs to present that complexity in a way that’s really simple for the hotel staff,” Brennan said. “They need to be able to access that information easily and make sure they can execute with what they’ve promised.”

Jeff Edwards, SVP, global hotel & owner solutions, IHG, added, “We knew we needed to make an investment in a foundational platform—to keep gluing these virtual systems was nonsense; you just can’t get the value you need. We took the big and painful step of changing out that infrastructure because we know we need to implement that in order to build what we want to do. We also recognized we wanted a unique user interface for our employees. To simply automate things and provide them this wealth of information and expect people who have relatively high turnover in hotels to be experts at this was ridiculous. That marriage of robust data, personalization and a delivery mechanism our employees can use so they can focus their time on the engagement of the guest…we get the value.”

The next step for IHG is to implement attributes-based booking. “We decided to start at our most complex properties first. The rollout of the attributes will begin in 2020,” said Edwards.

Another upcoming trend is the rise of tech-augmented hospitality. Automation won’t supplant personnel, but it will assist staff. “Rather than automation wiping out all of the staff, it’s going to empower them to deliver better service,” Brennan said. “Appropriate automation will remove unnecessary admin, which gives staff working there a chance to interact with the guest, building an emotional connection. Secondly, technology can empower the staff to make certain decisions. Rather than staff members picking a room, for instance, that room will be allocated based on someone’s preferences… The technology knows more about the guest than the staff.”

And while many guests are comfortable using an app to order a taxi or pay a bill, the majority of guests (67%) say they prefer to interact with a person for the emotional connection. Interestingly, Asian travelers are more likely to prefer automated interactions than human ones, as compared to travelers from Europe or the Americas.

What does achieving cult status at scale mean? Building that emotional connection with guests, driving their loyalty. Some 70% of global travelers would like hotels to provide more advice and tips about unique things to do, with only 20% saying they currently get ideas from the hotel. And this relationship must be underpinned by technology if it is to function at scale.

“Achieving cult status at scale is about how you can use what you know about the guest to really add value to their experience, push it beyond what’s expected,” Brennan said. “This is important as a means for brands to differentiate themselves away from price and location. Obviously, that’s super important when you’re booking, but think about what you can offer that’s not transactional, that’s an emotional connection.”

This includes not just knowing about the guest but also about their trip “such as knowing what they’re doing during their journey,” Brennan said. “You can then create these relevant suggestions that are going to be welcome.” How will this happen? “It needs to be a very open system, easy APIs, so you can link up what you’re doing in your hotel with what’s happening outside to make sure that journey is one that data can flow through,” she said. HB

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