Hospitality customer engagement technology could help innovate guest experience and revitalize loyalty programs.

Improving guest engagement and experience is taking center stage on the list of priorities for the hospitality industry as reports emerge showing that guest expectations have rapidly evolved over the past few years.

An increase in guest engagement can indicate an increase in hotel revenue. Reports show the average spent by an actively disengaged guest during a stay is $403, much less than the average total spent during a stay by a fully engaged guest ($588).

A guest’s perceived level of engagement can also be a strong indicator of their perception of a hotel or brand, as well as their behavior during a stay. About 80 percent of guests who feel that a hotel cares for their well-being are “fully engaged” brand ambassadors who actively support the brand. And both business and leisure travelers are reported to be willing to spend more to stay with a brand or hotel they have a preference for.

The $185 difference between what an engaged and a disengaged guest spend during a stay shows how much hospitality stands to lose simply by not actively engaging guests throughout a stay.

The $185 difference between what an engaged and a disengaged guest spend during a stay shows how much hospitality stands to lose simply by not actively engaging guests throughout a stay. Unfortunately, only 22 percent of guests report feeling engaged by the hotel they stay with most often. And about two-thirds of leisure travelers and half of business travelers say they aren’t loyal to any one hotel brand.

“A lot of people are saying brand loyalty is dead, that there are no true advocates,” said Sergio Iacobucci, Qubit senior associate strategist. “In my view, that’s not the case, it’s just a lot of companies have given up giving true customer experience. But the cost of providing that just goes into other areas of marketing such as reacquiring customers.”

With such potential revenue-related benefits tied to improving guest experience and engagement, hospitality management must constantly assess set standards and consider adopting new ones.

Many have begun to turn to guest or customer engagement technologies (CETs) in order to tackle the monumental task of managing the relationship with today’s guests. These can make it much easier for hotel management and staff to track interaction with guests throughout the entire travel journey, from booking to after checking out.

According to a recent report, 71 percent of hotel and restaurant executives said they were adopting customer engagement technology to enhance customer experience and satisfaction. And while all hoteliers and hospitality executives report using social media to improve guest engagement, a much smaller number make use of more intuitive customer engagement technology tools for improving the relationship with guests. According to a study by Hospitality Technology, these tools include:

• Mobile check-in (23.3 percent, with 38.3 percent planning to implement within 1 year)
• Tablet/iPad for check-in (15 percent, with 46.7 percent planning to implement within 1 year)
• Location-based technology (18.3 percent, with 40 percent planning to implement within 1 year)
• Room control devices (8.3 percent, with 25 percent planning to implement within 1 year)
• Mobile wallet (6.8 percent, with 39 percent planning to implement within 1 year)
• Smartphones as room keys (5 percent, with 31.7 percent planning to implement within 1 year)

The dramatic increase in implementation of such hospitality customer engagement technology is largely due to increased travel by Millennials, who now comprise the largest portion of the global workforce. Millennial travelers, and the broader segment of travelers who exhibit the Millennial mentality, are accustomed to brand interactions driven through technology, and they expect a level of innovation in the hotel experience as well.

It’s now obvious that improving guest engagement in hotels is aligned with the ability to increase hotel revenue. By incorporating new hospitality technology, like a hotel mobile app or in-room tablets that innovate the guest experience, the global hospitality industry will continue seeing incredible levels of growth into the future.

Hotel keyless room entry is arguably the most talked about hotel technology trend currently available.

It’s a game changer. Mobile access at hotels empowers guests with the ability to bypass the usual hotel check-in process. They skip traditional procedures and can head to their room more quickly to unlock their guestroom door through contactless mobile key technology.

It has the potential to improve the guest experience substantially. Today’s guests, particularly those who fall within the Millennial demographic, have shown great appreciation for being able to use their mobile device during travel and hotel stays, even prioritizing packing a smartphone over a toothbrush, deodorant or even a driver’s license. Research even shows that 1 in 8 people are addicted to smartphones and spend an average of almost four hours a day using them.

A major component of keyless room entry at hotels is radio-frequency identification (RFID) technology. RFID technology has become a key component in the Internet of Things (IoT) as a means of tagging, or identifying, physical objects on the IoT network. Early projections predicted that 9.2 billion tags would be sold in 2015, up 2 billion from the year before.

Using insight delivered by hospitality technology, employees “move past transactions, into an interactive space where they can personalize the experience.”

“Where RFID is going to play in the Internet of Things is by adding the unique value of what’s going on at a particular point on a specific object at an exact time,” said Doug Bellin, global senior manager, manufacturing and mining, Cisco. “There’s value in that sort of insight.”

For instance, RFID tags placed in items can already provide information about the object such as surrounding temperature and location tracking.

Disney, a leader in creating incredible guest experiences, already uses RFID technology in the form of wristbands (MagicBands) and cards to track unique guest activity throughout hotels, resorts and parks. Implementing RFID has meant the elimination of paper, such as itineraries and tickets. Guests don’t have to carry cash or hotel room keycards.

Using insight delivered by such guest engagement technology, employees “move past transactions, into an interactive space where they can personalize the experience,” according to Meg Crofton, former president of Walt Disney World Resort and one of the original minds behind the development of this digital guest experience system.

“The whole system gave Disney a way of understanding the business,” said Nick Franklin, formerly the executive vice president of Disney’s next-generation experience and another member of the team who started MagicBands. “Knowing we need more food here, how people are flowing through the park, how people are consuming the experiential product.”

Several of the leading providers of hotel room mobile access technology utilize RFID locks, including Kaba Lodging and ASSA ABLOY (formerly VingCard ElSafe). One of the first steps to enabling a property with hotel keyless room entry is the installation of RFID locks. Staff can assign a digital hotel room keycard to guests, sent straight to their mobile device, and guests can then use their mobile device to unlock a hotel room door by holding the device in the lock.

Many hotels are taking it a step further by offering the contactless hotel room entry feature through mobile hotel apps that also allow guests to view information about hotel services, place orders and book reservations as a means of leveraging mobile for revenue generation. Some hotel brands have also required that guests register for loyalty programs in order to receive guestroom mobile access.

Hotel technology helps Latin American hospitality rebound following turbulence.

Latin American hospitality and tourism have experienced a bit of turbulence in recent years, with both highs and lows marking the industry’s performance. Hospitality investors largely express optimism in regard to this region, though.

“We are in a moment where there is a slowdown of the economy in the region and in the world, but the region is not like in the past, where a slowdown appeared and the region went into crisis. There is a slowdown now, but it’s not a crisis,” said Arturo Rosa, president and founder of the South American Hotel & Tourism Investment Conference (SAHIC).

Other challenges faced by the Latin American hospitality industry include high inflation, currency devaluation, and a rate of supply that has outpaced demand. In 2015, South America had 400 hotels in its pipeline.

Different countries have fared differently in this environment.

For instance, the 2014 FIFA World Cup and the upcoming 2016 Olympic Games have impacted Brazilian hotels and lodging businesses tremendously and led to a surge in the influx of travelers.

Attendance to the World Cup exceeded expectations by 67 percent, resulting in over a million total visitors to Brazil in 2014. São Paulo and Rio de Janeiro welcomed the bulk of the 1.5 million tourists to the country, as these cities were the main locations for the event. The average daily rate (ADR) for hotels in Rio de Janeiro in 2014 increased by 5.7 percent and led to an increase of 1.4 percent in ADR, while São Paulo experienced a slightly smaller increase in ADR of 1.9 percent and increase in RevPAR of 2.6 percent.

“Like it or not, the sharing economy is here, but the secret sauce of any hotel experience is what we can bring to the guest.”

Total international tourist arrivals to Brazil are expected to more than double by 2024 to 14.2 million, and increases are expected in both corporate and leisure travel to the country.

Another current development impacting Latin America that had the global hospitality industry buzzing was the reduction of travel restrictions between the U.S. and Cuba. Cuba is already one of the leading Latin American islands for travel and tourism, and hospitality brands and investors have shown enthusiasm to enter its stage.

Starwood Hotels & Resorts becomes the first U.S. hotel brand approved to operate in Cuba in about 60 years and plans to brand three hotels in 2016. The cruise industry is also capitalizing, with a Carnival cruise line beginning trips to Cuba.

The tourism and hospitality industry in Mexico is currently flourishing, and the country has steadily dominated as one of the top 15 destinations visited by global travelers. Overall, there has been a 10-percent increase in occupancy rates over four years.

SAHIC’s Rosa says that the Andean region, including Bolivia, Colombia, Ecuador, and Peru, is one of the most attractive throughout Latin America to hospitality industry investors and hoteliers.

Colombia stands out in South America, experiencing economic growth of 4.6 percent. However, the recent devaluation of the Colombian currency, which also occurred in other areas of this region such as Brazil, Argentina, and Venezuela, has led to a decrease of 8.5 percent in ADR and the country has also seen a decline in occupancy of 2 percent.

Still, hotel brands see Latin America as a region ripe with opportunity.

Carlson Hospitality CEO David Berg called Latin America a « very important focus » for the brand. Starwood Hotels & Resorts, Wyndham Hotel Group, Hilton Worldwide and Accor Hotels also expect to grow their portfolio of hotels in Latin America.

As international brands establish more of a presence in Latin America, they will bring with them more sophisticated hotel technology, which has been a major focus of hospitality brands looking to be more competitive on the modern global landscape. The introduction of hotel mobile apps by many brands and the use of guestroom technology have been adopted as ways to engage and satisfy guests, whose expectations have rapidly changed when it comes to the definition of the hotel experience.

Currently, 155.9 million individuals in Latin America are plugged into their mobile devices and as the number of mobile users increases, hospitality technology must keep up to accommodate the use of mobile technology by travelers.

Hotels in Latin America are already beginning to embrace hotel technology as a way to compete on the global scene. Brazil’s Unique Garden Hotel & Spa is one example of a hotel that has expanded its guest technology to improve guest service and engagement. Capitalizing on the gains of tablet usage, the São Paulo resort took advantage of the strength of the tablet market in Latin America by installing touchscreen tablets in hotel guest rooms.

Another hotel in Latin America that has upgraded its guest technology is Rancho Santana in Nicaragua. The seaside luxury resort introduced both a mobile hotel app and in-room tablets to improve guest engagement.

Rancho Santana General Manager Chris Currey said, “Rancho Santana’s in-room tablets and mobile application are a fun and efficient way to communicate with our guests beyond the face to face time they receive from our Concierge team…The in-room tablets are also a great way to reach our more passive guests who may not be inclined to visit the Concierge for all their questions, as well as first-time guests who haven’t come to realize just how much there is to see and do at the ranch.”

“They allow us to elevate the guest experience by making a lasting impression whether they are perusing the tablet with the guest in person, giving guests access to more information in the room, and even continuing to engage them once they’ve gone home and settled back into their routine.”

Embracing hotel technology is just one of the many ways the Latin American hospitality industry can combat some of the many challenges facing the region.

Jorge Giannattasio, senior vice president and chief of Latin America operations for Starwood Hotels & Resorts, said improvements to the guest experience are the best way for the hospitality industry to compete, particularly with Airbnb. “We are seeing large hotel companies like ours…enhancing the overall guest experience. That is where we are very different [from Airbnb].”

David Berg, CEO of Carlson Hospitality Group, said the challenges to Latin American hospitality and competition from disruptors like Airbnb are actually beneficial to the industry overall by inspiring hoteliers to “up our game.”

Berg said, “Like it or not, the sharing economy is here, but the secret sauce of any hotel experience is what we can bring to the guest.”

How is hotel technology empowering North American hospitality to better serve its modern staff and guests?

North American hospitality has rebounded quickly following the economic recession, leading to a period of relative prosperity in recent years. Reports project that hotel occupancy rates will continue to break records through 2017, translating into increases in room rates and new development.

Despite this success, North American hospitality businesses are facing a number of challenges, many of which can be addressed with strategic implementation of hotel technology.

Sixty-four percent of U.S. adults now own smartphones, a figure that has nearly doubled since 2011. Not to mention the fact that about half of smartphone owners believe they “couldn’t live” without a mobile device.

In Canada, the number of adults who own smartphones reaches 68 percent, and the Caribbean mobile market has exhibited promising growth in recent years.

Given these numbers, it isn’t surprising that the popularity of hotel apps for communication and services, like booking and mobile check-in, is on the rise. In 2014, 40 percent of people in the U.S. used their mobile devices to book travel reservations. Some of the other services that guests have responded well to include:

• Receiving assistance from staff
• Making requests to housekeeping or operations
• Maps and directions
• Controlling room settings
• Ordering room service

Hotel occupancy rates will continue to break records through 2017, translating into increases in room rates and new development.

The United Nations World Tourism Organization (UNWTO) forecasts that more than 300 million people in the Millennial demographic, ages 18 to 30, will travel to North America in 2020, expanding at a rate of 9 percent per year compared with 2 percent for other age ranges. As Millennials, these travelers are proven to place a high value on mobile as an integral part of the travel experience, and the more successful North American hospitality industry players with this group will be the ones who strategically leverage mobile devices as a means to communicate with and attract prospective guests.

Optimistic predictions for leisure travel are tempered by anticipated slowdowns in business travel, though, which could lead to increased competition among North American hospitality to secure bookings.

“While total committed occupancy for 2016 is off to a strong start…business demand pace has slowed, creating greater dependency on hoteliers to offset the slowing pace with discounted leisure and promotional bookings,” said John Hach, TravelClick’s senior industry analyst. “As a result, hoteliers must ensure that they are measuring and monitoring local advance booking trends across all channels to reach their 2016 revenue per available room objectives.”

Hotel technology will be a key factor in gaining a competitive edge, as business travelers have been shown to be more interested than leisure travelers in the ability to actively use mobile devices for communication and convenience during travel. Nearly 100 percent of U.S. business travelers own a smartphone, and it’s average for one in this group to carry three to four devices with them. Ninety percent expect hotel WiFi access.

Offering hotel technology, such as widespread WiFi access, in-room tablets or a hotel app, could all contribute to securing corporate and group business, as well as winning loyalty.

Another challenge facing North American hospitality relates to labor. Labor costs are a dominant expense for hotels in the Caribbean, Canada and the U.S. Apart from costs, issues relating to staffing include low employee satisfaction, insufficient productivity, and high turnover rates. Hotel staff is the face of a hospitality brand, so having unmotivated employees can be an impediment to ensuring that guests are engaged and well served.

Oftentimes, a lack of sophisticated hotel technology results in requiring staff to perform manual, tedious tasks, such as managing handwritten tickets and relaying guest information across multiple departments. New hotel systems ease this burden by automating operating processes. More hotel staff are left free to spend time focusing on addressing guest concerns and providing outstanding service. In addition, labor costs can be controlled more efficiently by employing technology to take on a lot of the basic, daily repetitive tasks.

Implementation of hotel technology can also assist North American hoteliers in succeeding when it comes to other initiatives as well, such as the push for green hotels.

“Going green has become a cost-saving trend in the Caribbean,” said Scott Smith, MAI, senior vice president of PKF Consulting. “Investing in sustainable energy has become very important to hotels in the region. While utility costs in the Caribbean may be high right now, I expect that the use of sustainable technologies will help reduce energy costs in the future.”

Developments in hotel technology have allowed hoteliers to begin the reduction of operating costs with advanced functions such as automated room controls. These allow the hotel to set up sensors that allow automatic adjustments to lighting and energy use in rooms depending on factors such as time of day, temperature and human presence. It’s part of the smart hotel trend that ties in with the expansion of the hotel Internet of Things.

Providing guests with the ability to control the room environment through in-room tablets or mobile devices also adds to enhanced brand perception and overall guest satisfaction.

To learn more about how North American hotels are improving the guest experience with hospitality technology, read about the digital experiences of our clients throughout the continent.

Hospitality technology will only succeed when it comes to providing insightful guest data through hotel system integration.

It’s become commonplace for there to be several different hotel systems by various hotel technology vendors and software developers running at a single property. Such a reality means that many hotels have a fragmented back-end environment that can be overwhelming and frustrating. It also allows potentially useful data to be lost or overlooked rather than leveraged with a single view capability. The solution is the prioritization of hotel system integration.

Todd Hotaling, Vice President of Revenue and Marketing at Lodging Hospitality Management, said, “Looking ahead, I think the major issue will be obtaining key guest information and having the ability to dissect and present it. Since various systems are used in the total process of booking a reservation, some key data such as time of reservation, sub-channels, and event guest preferences can fall off once it gets into a PMS.”

A hospitality industry vice president of revenue strategy and distribution was quoted in a recent report as saying, “Our systems very much hinder our efforts today to provide a personalized experience. We have a hard time welcoming a guest back. We can sometimes identify someone who has been to the same property again, but because of the separate property management systems, it’s hard to identify guests across properties.”

Developments in hotel technology are making it more of a reality for the hospitality industry to benefit from a collection of operational and guest data, but this depends on the ability of enterprise software providers to enable hotel system integration across the board.

“Our systems very much hinder our efforts today to provide a personalized experience.”

 

The benefits of system integration go beyond improved transfer of guest data, too.

Having information automatically communicated between systems means it won’t have to be done manually by hotel staff, which increases efficiency and reduces possible errors. Hotel management can also reduce the number of paper tickets that need to be kept track of and updated by storing information electronically. Improvements can also be made the

The hotel Property Management System (PMS) is a key component of hotel system integration. An interface between the hotel PMS and other systems is critical because it allows for verification of guest identity, status, and room number.

Another key hotel system integration is with the Point-of-Sale (POS) system. It results in a more streamlined SOP when it comes to charging guests for onsite purchases and updating the guest folio. Few things are more annoying to a guest than incorrect charges to their folio, and automating the process of keeping track of this information can result in increased accuracy.

Guest relationship management software has been identified as the third most commonly used hotel management system and, as such, should also be considered during the hotel system integration conversation. The fact that this software is guest-facing and is used by guests to input such large and varied amounts of information makes it necessary that this type of system be connected with all others to amplify the benefits of collecting guest service, satisfaction and engagement data.

Still, there are a number of issues that still stand between the hospitality industry and total hotel system integration:

• Security
• Differences between legacy and modern version of systems
• Lack of unified standards between systems
• Integration between Cloud-based and on-premises systems
• Insufficient hotel information technology support staff

Douglas C. Rice, Founder and CEO Emeritus of Hotel Technology Next Generation (HTNG), said, “Systems also need to expose data and core processes through easily accessible Application Programming Interfaces (APIs). The days of systems that insist on initiating a particular process only through its own user interfaces are history. A PMS needs to be able to check-in a guest, but it also needs to expose that check-in process to mobile apps, kiosks, websites, and other systems.”

Hotel system integration should be part of the discussion between hoteliers and hotel technology providers before implementation. Integration can often be a complex topic and ensuring that a selected technology vendor understands the significance of seamless communication between all property systems can improve the overall experience.

Mark Pate, Assistant Controller and IT Director at Highpointe Hotel Corporation, said, “We’re dedicating more time and resources to complete [system integration] projects. It is very easy to hit a hurdle, get off track and then never finish the initial plan. We partner with vendors that specialize in system integration.”

Rice also added that mobile is changing the nature of hotel system integration by “forcing a decoupling of business logic from the user interface.”

“The nature of integration changes dramatically when consumers start accessing your system through a [hotel] mobile app that might do a hundred other things that you don’t do,” Rice said.

INTELITY offers more integrations between guest service technology, both on mobile and in-room devices, and other hotel systems than any other company in the world. For more information about how guest service and engagement technology can integrate with other hotel systems to enhance hotel guest data strategy, visit our website.

 

What is the future of technology in European hotels?

The European hospitality industry is stronger than ever. It’s one of the continent’s fastest-growing industries for employment, and hospitality investment in Europe exceeded its all-time high, increasing by almost 50 percent from 2014 to 2015. According to a 2015 report, investors in the European hospitality industry have displayed great confidence in the future of travel, tourism, and hospitality.

Europe’s tourism industry is one of the most mature and most attractive to international travelers, accounting for 51 percent of total international arrivals. The Northern and Southern/Mediterranean regions accounted for the most growth in travel arrivals. In all, Europe had a strong presence on the list of top 10 tourist destinations in the world, with five countries making the list:

• France
• Spain
• Italy
• Germany
• United Kingdom

With statistics revealing such strong performance, there is abundant opportunity for the European hospitality industry to capitalize on. This is not the time for complacency, though. A number of factors still pose a potential threat to this success.

There are still traditional challenges, such as costs of labor and materials or fees such as VAT and excise taxes. More stringent policies relating to border control in the wake of events such as the attacks on Paris have also caused disruptions to hospitality. In Paris, luxury hotel bookings dropped 50 percent and overall hotel bookings dropped 30 percent in the wake of the attacks, and the subsequent border closing caused long delays for travelers seeking to enter the country.

Other items have emerged on the list of challenges.

Airbnb and the sharing economy are gaining traction in Europe. The company set up a European headquarters in Dublin to pursue more strategic expansion on the continent. The largest Airbnb hub outside of the United States is actually in Paris, with 60,000 people featuring listings.

Gabriel Escarrer, Vice Chairman and CEO of Meliá Hotels International, identified Airbnb as the biggest current threat to global tourism. “It is killing Barcelona’s exemplary tourism model,” he said to a Spanish newspaper. Barcelona is currently third on the list of most visited European cities with over 7 million visitors in 2015, but Escarrer warned the city would be a “victim of its own success” if it didn’t seek to figure out a solution to the growth of Airbnb.

The popularity of Airbnb evidences a shift in the desired travel experience, as Millennials become the predominant patron demographics. Expectations of hospitality and lodging are evolving with a focus on the incorporation of technology into the travel journey. Airbnb has been incredibly successful at offering innovative, sleek mobile features that users find appealing and easy to use.

Among Millennial travelers, 56 percent consider both traditional and alternative lodging options, such as Airbnb and vacation rentals, compared to just 38 percent of travelers in older age groups. Many younger travelers are styled as “digital natives” because they grew up with nearly constant access to computer technology and the Internet. This group has been shown to expect more highly targeted, personalized marketing from hospitality brands, with 70 percent expressing a preference for an immersive, unique experience.

56% of Millennials consider both traditional and alternative lodging options, such as Airbnb and vacation rentals

The tech-hungry Millennial mindset, which has spread to other age groups older and younger, has led to the need for a different, more digital guest experience than in the past, such as complimentary Wi-Fi access and self-service tools, such as hotel in-room tablets, mobile key room entry, check-in kiosks and automated information desks. Hospitality technology in European hotels could have a huge impact on guest perception.

Another more dominant trend in the global hospitality industry with a considerable impact on Europe is the rise of mobile. Mobile travel bookings will jump to 22 percent in 2016, and guests are now coming to expect the availability of a hotel mobile app for easy access to information, services, and communication with staff.

Embracing digital innovations and increased use of technology were both identified by leading global corporation Pricewaterhouse Coopers as a top priority and one of the most impactful trends for the European hospitality industry.

Looking to the future, the European hospitality industry will continue to flourish if it can successfully adapt to new technology in European hotels as a powerful means of increasing guest satisfaction, improving guest engagement, and overcoming operational challenges such as staff and material limitations.

If you’re interested in learning more about how global hotels are leveraging hospitality technology to meet the needs of guests, contact us to schedule a demo.