EXECUTIVE INSIGHT

This post provides insight directly from a member of our executive committee, CEO & President David Adelson.

I read something this week that really caught my eye and made me pause. A quarter of all hoteliers still currently use pen-and-paper (or manual) methods to manage operations, while nearly 2 in 10 have no structured hotel management system outlined at all, according to a new study by Software Advice.

Although many hotels and brands have begun to embrace technology, mainly to improve relationships with guests, these eye-opening statistics reveal there is still a way to go before hospitality begins to catch up with many other industries.

Here are four ways that the right digital tools can drastically improve an organization’s operations.

Do More with Less

With technology, you can better manage resources to ensure that you’re using what you have to full potential. You’ll be able to monitor guest rooms, inventory and staff more effectively in order to eliminate unnecessary costs.

Increased Productivity and Efficiency

Automating basic processes reduces the need for your management and staff to waste time completing tedious tasks, such as data re-entry, that can be both exhausting and demoralizing. By spending less time on such things, they can instead focus on engaging with your guests and working on projects that will provide greater benefit to your organization.

And by keeping employees feeling fulfilled and satisfied, you actually save money, as losing an employee can cost a business between $10,000 and $30,000.

Reduced Opportunity for Errors

Have you ever had to do something repetitive and accidentally made a mistake because you got distracted or bored? Businesses reportedly lose up to $600 billion each year due to distractions in the workplace. Using digital systems for this kind of work, such as data management, can minimize the number of human errors and reduce time spent on do-overs or corrections.

Get to Know Your Business Better

These days, data is gold, and technology is opening doors when it comes to gaining actionable intelligence about customers and staff. Digital systems can provide a bevy of information instantaneously, using only a fraction of the resources it would have taken in the past to gather the same amount of data.

This information offers a window into learning more about your customers and your operations, and can then applied to make forecasts for your business future and create proactive strategies to respond to these expectations.

As technology becomes more advanced, we’ll see the things it’s able to help us accomplish expand. Hoteliers, make sure you stay aware of what’s available and invest in taking advantage of new innovation to avoid getting left behind.

EXECUTIVE INSIGHT

This post provides insight directly from a member of our executive committee, CEO & President David Adelson.

In some ways, hotel rooms today look much the same as they did 50 years ago. The basics are all there: a bed, a TV, running water. Change has been slowly making its way through hotels, and the differences are not immediately obvious.

Still, if you look a little more closely (or have been paying attention to the recent hospitality industry headlines), you’ll notice that technology is making a big difference in the way hotels operate and interact with guests. Hotels have increased their technology budgets and explored ways to improve the guest experience in and out of the guest room.

Noticeable examples are guestroom tablets and other such devices put in rooms for guests to take advantage of during their stay. These can have a number of benefits for hotels. Most obvious is the impact on a hotel’s reputation. Hotels offering in-room tablets and improved tech features were rated more favorably by AAA when the organization was awarding diamond ratings this year.

And guests have made it clear that they want to be in the driver’s seat when it comes to the details of their stay.

In-room tablets, now provided as complimentary guestroom features by some of the leading hotels in the world, can be perfect tools to this end. Installed correctly, they offer a huge opportunity for hotels to give guests what they want most: options. It also allows hoteliers to go beyond the traditional in-room layout.

Let’s first consider standard in-room entertainment, such as a TV with cable/PPV or a bedside radio.

Reports show that the amount of time spent watching media content online or through streaming services as opposed to traditional cable services has increased, while viewership of traditional TV has declined. In fact, 40% of households subscribe to a VOD streaming service, like Netflix or Amazon Prime Instant Video, and cable giants, such as HBO and CBS, are introducing similar services.

Ericsson predicts that streaming on-demand content will overtake broadcast TV for viewership this year. And Niklas Rönnblom, Ericsson ConsumerLab Senior Advisor, said: “Mobile devices are an important part of the TV experience, as 67% of consumers use smartphones, tablets, or laptops for TV and video viewing. Furthermore, 60% of consumers say they use on-demand services on a weekly basis. Watching TV on the move is growing in popularity, and 50% of the time spent watching TV and video on the smartphone, is done outside the home, where mobile broadband connections are facilitating the increase.”

Sunil Marolia, Vice President of Product Management at Smith Micro, said, “Mobile entertainment has rapidly displaced in-room entertainment for frequent travelers, and today’s hotel guest wants to access a variety of services via their mobile phones or tablets. This presents a huge opportunity for the hospitality industry, as more efficient services, customized promotions, and consumer analytics can be enabled through hotel loyalty applications, which are already popular with 54% of travelers we surveyed.”

TV is certainly not going anywhere, as it’s still the channel most often used by consumers, but hoteliers should be very interested in this shift in media consumption and the future of TV as a whole. Netflix has announced that it will be testing out placement of its service in hotel rooms. CuriousTV, an online education company that serves as a YouTube alternative, is also testing out placement in hotel rooms by offering videos about a number of educational topics, from business to DIY craft tutorials.

Mobile technology will be key to remaining relevant when it comes to the in-room entertainment that guests want. Nearly half of travelers polled in a recent survey said they were “very likely” to order in-room entertainment in a hotel room if it could also be accessed via mobile, a 10-percent increase from only two years ago. With tablets, hotels can offer access to streaming media content that guests choose for themselves.

This includes music and radio.

Studies show that Internet radio services, like Pandora and Spotify, are growing in popularity among 13-35-year-olds, while AM/FM radio listening time has decreased. In-room tablets are a great way to offer guests the ability to listen to music that they select rather than just offering a bedside clock-radio.

In-room tablets also offer other entertainment alternatives, such as the consolidation of printed materials such as magazines, newspapers, and books. In 2014, half of Americans owned a dedicated device, either an e-reader or tablet, for reading eBooks. It’s a great way to have a large quantity of reading material available to guests that can be quickly and immediately changed to keep offerings fresh.

All in all, tablets are a flexible in-room technology that can have a huge impact on the guest’s entertainment experience, allowing them to define exactly what they want rather than having a limited set of options that isn’t aligned with what they’ve grown accustomed to in their daily lives.

It’s not surprising to learn that 80% of mobile apps are deleted after only one use when you consider the vast amount of apps that are available and competing for space on user smartphones.

Despite this statistic, it’s essential for businesses in any industry, including hospitality, to offer an app. Although the rate of app downloads is reported to possibly be in decline, overall usage and engagement are up. Mobile app usage grew 52% from June 2013 to June 2014, surpassing the use of desktop PCs and mobile web browsers, according to the U.S. Mobile App Report from comScore.

If you’ve already developed a mobile guest app (or worked with us to do so), the next thing on the list is making sure you’re getting the highest ROI on your investment by maximizing its reach and making sure that it isn’t among the apps that get deleted.

Have you told people about your app?

OK, this one seems fairly obvious, but you would be surprised at how many people overlook this simple point. If no one knows about your app, how can they use it? Getting the word out about your app is arguably the most important step to take, after careful design. A strong, creative marketing strategy is crucial.

Be excited! You’ve invested in creating this, and you want to brag about it with announcements on your website, social media platforms, to the press, and everywhere else possible. Word of mouth is the strongest tool in your arsenal, so make sure you and all of your employees are spreading the word whenever they have the opportunity, too. And remember, this isn’t a one-time effort. You’ll want to continuously remind people about your amazing app and all of the cool updates you make to it.

InterContinental Hotels Group (IHG) created an elaborate marketing strategy, with the help of Google and Forrester Research, when they launched a mobile-optimized site and an app with the primary message, “Book a room. Whenever. Wherever.” The company saw 100,000 downloads of its app in only the first three-and-a-half months. “By using text specifically aimed at mobile users, we saw revenue from our mobile search activity increased by 91% percent YOY,” said Marco De Rosa, IHG Interactive Marketing Manager EMEA.

Is your app useful?

What’s the point of your app? Is it actually something that users are going to be able to make use of on an ongoing basis? For hotels, this means considering ways to make your app useful to guests even when they’re not on property. For example, making it easy to book a reservation (at a great rate) through the app or do preliminary research for a trip is something that gives long-term benefit. During the design phase, outline what you want users to be able to do and make sure it’s easy for them to accomplish the majority of things on your list.

Is your app boring?

Functional doesn’t have to be less fun or visually appealing. Give your guests what they want. Some of the top categories of apps by time spent are social networking, games, and radio/music. Messaging apps are among the fastest growing categories, up 203% year-over-year in 2013. Older users tend to prefer functional apps, such as Maps. While your app can’t do everything or please everyone, it’s not difficult to incorporate things users love about other apps into your own. Consider adding some leisure and entertainment features as an added bonus. It’ll give guests an extra reason to open up your app and use it, even when they don’t have a specific request or need for information.

Are you providing an incentive for people to use it?

This question ties in with most of the other points, but it can help to give your app a little extra appeal. Making special offers available exclusively through your app or running contests that encourage the use of your app can be a draw. It’s similar to a retail store offering in-store only discounts to increase traffic.

New research published by Software Advice, a software consultancy associated with Gartner, confirms what we here at INTELITY already knew: travelers love tech-savvy hotels!

Included among the key findings:

• A combined 60 percent of respondents are “more likely” to choose a hotel that allows guests to check in and open doors with a smartphone than a hotel that doesn’t.
• A combined 37 percent of respondents are at least “moderately likely” to choose a hotel with lobby technology, such as touchscreens and check-in kiosks, over one without.

We interviewed Taylor Short, Software Advice market research associate, to get his viewpoint on the research and the current state of hospitality technology.

What led your company to conduct research on guest preferences for technology use in hotels?

We frequently conduct research in the hotel management software and technology industry to better understand market and buyer trends. We’ve noticed statistics showing that hospitality brands plan to increase technology spending, but beyond that, we know that millennials are the top travel segment hotels want to reach today, and they’re the most tech-savvy group yet. Overall, hotels are experimenting with various technologies, like robots and virtual reality, to see what consumers respond positively to and what will set them apart from their competitors. So we wanted to gauge the interest and potential impact of a handful of the most current technologies in hotels.

How do you think hotels can find the balance between digital and human touch for guests?

Hotels can use technology in many ways to actually improve the human touch aspect for guests, such as facial recognition technology prompting a general manager to greet someone by name as they enter the lobby. This improves the guest experience, but the implementation of these things should be transparent to customers, and they should be given the option to opt-out if desired. This way, the guests who appreciate that sort of experience can have it, and those who don’t know the hotel respects their preferences and privacy.

Why do you believe a majority of participants in your research preferred smartphone-enabled hotels?

I think our results for smartphone-enabled hotels speaks to the saturation of smartphones in the consumer market. More than half of Americans have a smartphone and use it during travel. Hotels know this and want guests to use their phone during their stay as much as possible. This can benefit hotels in several ways, such as increasing revenue through notifications pushed to a customer’s phone or by guests posting about the brand on social media.

Do you think wearables, such as smartwatches, can truly be successful tools for guest engagement and satisfaction at hotels or is that still a long way off?

Based on their relatively basic functionality, I don’t see smartwatch implementation being a big draw for hotels, hotel guests or even most consumers. Once wearables become more useful and more widespread, we should see more interest from companies.

What’s your prediction for the next big technology trend in hospitality? Where should hotels be looking to invest right now?

While it’s the most controversial, facial recognition should be popping up in more properties within the next couple of years. How exactly it will be used remains to be seen, but it has the most potential to increase personalization for guests.

What are your thoughts on the recent use of automated intelligence (robots) in hotels? Is that the future for the industry?

It sure looks like something from the future, and it seems to be testing well for Starwood. However, it’s still quite an investment, and for many types of hospitality companies, it seems unfeasible at this point, either because of the cost or because the property itself isn’t conducive for a rolling bot. The idea of automated hotel service is certainly desired by some portion of travelers, as we’ve seen in examples of fully automated hotels. But whether this will take the form of a robot or something else is yet to be seen.

Right now, sitting around a wooden conference table, a team of global hotel companies executives is agonizing over what technology they should be investing in for their future survival.

In this ever-changing marketplace, they will inevitably choose to only invest on the safe bets that are already becoming industry standards or in areas that they easily understand, such as entertainment. This cautious approach will protect the return on investment on the millions of dollars required to roll out new technology throughout all of their key global markets and brands, but it will never change their business model.

Most people will look for almost immediate returns on this investment, so it must either place new customers into a sales funnel, resolve an existing problem, reduce costs, utilize resources better or automate inconsistent human processes before it is even considered. The downside to this thinking is that is just an adoption of only the tried and tested that will not lead to true impact on the customers.

Technology is being developed for what the hotels say they need to offer today rather than looking to the future to see what the business model will be like and working towards that. We should all be considering disruptive technology that may scare us at first, but will ultimately change our businesses forever. If we do not, others will quickly appear in our marketplace who can offer more relevant innovation for our customers.

Your focus should be shifted from what you want to achieve to what your customer wants to achieve, and then priority should be looking for ways to innovate around this. Life is no longer linear; our careers, our lives and our values have all changed. The question is has your business adapted to these changes?

Social changes of tech

Over the last five years, our society has been changed drastically by technology. The rise of mobile devices has integrated technology so deeply into our daily lives that it has effectively changed human behaviors. The way we think, the way we communicate, the shortening of our attention span, and the way we interact on a one-to-one basis has fundamentally changed forever. This is not limited to the Millennial generation but extends people of all ages, who also use these tools on a daily basis. From 8 to 80, we have all become part of generation ‘C’ – the ‘Connected’ society.

New businesses have been born overnight, built on the first wave of mobile adoption by the masses to feed the initial hunger for apps and social platforms. The second wave of business integration is passing, bringing with it an amalgamation of our social and work lives.

These changes have brought to the forefront an open exchange of ideas and values that have aligned us to others across the globe. The stand out change has been the almost addictive emotional need to share our lives with others in our groups: we share our photos, our private moments, and yes, we share a lot of our food.

This rise of the ‘sharing economy’ has allowed us to add our voice to the conversation. We cannot wait to add our two cents worth. We write our own blogs, and we receive more of our news from our social sites rather than traditional media. Even brand loyalty has been torn from the arms of the advertisers and placed firmly in the fingers of our social networks. To understand this seismic shift is quite hard until you actually analyze what you do on a personal level in a day compared to what you did in a day that occurred five years ago. What we need to do is take time to listen, watch, analyze and utilize what is going on so that we can align our businesses to offer a more emotional experience.

The hospitality industry had ignored this, so it was of no surprise to see market share disappear to the likes of Airbnb. They took couch surfing and made it into a multimillion-dollar business, purely by allowing people to connect and share experiences through their platform. Their business model is more about trust and sharing than it is about selling. They even have gone old school to produce a magazine called Pineapple so that they can penetrate the average consumer supermarket with their ethos, which will create awareness about their brand among a new demographic.

The bottom line, if you have not noticed – Today the sharing economy rules!

Quite simply, what gets shared gets attention, and what gets attention gets purchased.

So what direction should hospitality take with technology in the future?

That is the multimillion-dollar question, and no one really can predict the answer as there is constant innovation at every junction. One thing I do know is that the trust of your customers will, for the next few years at least, denote success.

I remember 15 years ago biometric fingerprints were going to allow us to bank, pay for goods, and open hotel room doors, but at the time there was a lack of trust, so traction was lost (although today a scan of my finger allows me to open my phone or computer, enter an office complex, enter countries, and even verify that I am the owner of a Disney theme park day pass).

Technology adaptation is measured as much by trust in the product as it is by the benefits it brings. Mobile has become a central point for many as we have learned to trust our devices because of the amount of time we interact with them, nearly every six minutes of our waking lives.

For the hotel industry, the focal point for investment is quite easy: EMOTION.

The next experience you create for your guests must be exceptional and emotional, so all of your focus should be on helping you to achieve this.

• How does this technology make a person feel?

• Will this investment invoke trust?

• What emotional state will this create?

Then you will have to go to look at every touch point your company has with its customers to see that every area answers these questions. This will be a huge shift for many, as the way we measure ROI will also have to change and not everything in this new emotionally driven society will be clear cut enough to organize in an Excel spreadsheet.

So what about the tech?

Future technological innovations will become smarter as devices become more capable to listen and record our interactions with them. In the hospitality field, this will be prevalent on many levels as we look to innovate and adapt success from other industries to place within our services.

The guestrooms will become personalized extensions of your guests

Guestrooms will become a personalized oasis of familiarity.

Computers will store the guest’s preferences based on previous visits in relation to temperature, decor, and lighting. As they check in, the room will automatically reset to their default previous settings.

A guest’s eyes will control their passwords. One flick of their eye across a screen sensor will allow them access to all of their social media channels through your screens. A playlist will appear so they can choose what plays in their room.

Voice-activated concierge systems will control the in-room amenities as well as answer guest questions and suggest possible solutions. This is ‘Siri’ on a grand scale.

Innovations in new fiber technologies will be adopted by companies such as Nike to create breathable, anti-bacterial, waterproof furniture fabrics, finishings, and mattresses that never need a deep cleaning.

New materials in bathrooms will reject debris, thus reducing the use of cleaning chemicals.

Simple charging pads that can suit all a guest’s devices will sit atop a desk. No more cables, no more adaptors, just a charging pad to leave the device resting on so it is ready for a guest to grab and go.

Back-of-house areas will go green

Biodegradable packaging for delivering foods to the hotel and to the guests will be standard. Property management systems will control everything from lighting levels to electricity usage, thus controlling the strain on global resources. Blank roofing spaces will be filled with mini-farms to grow usable herbs and flowers for the hotel. Payments will be accepted both in peer-to-peer virtual currencies as well as through traditional banking systems.

Conference services

Banquet rooms will all connect securely to all of the guest’s devices to allow presentation sharing straight from a phone, tablet or laptop. If a presenter is stuck in an airport lobby miles away, then they can still log in and join. They can interact with the presentation, add notes, and highlight it in real time just by moving their hands over their tablet as they sit waiting for their plane. Remember this is not an option; this will be a standard as these are already available in offices.

The value in every conference or meeting is never the technology on show; it is the connections made or ideas shared. The easier the technology is to use the better.

Virtual conferences will be turned into 3D visions as you allow conference organizers to sell more virtual seats. Your venue is limited by its physical size, so offering a virtual 3D platform will be beneficial for both you as a hotelier and the meeting or event organizers. I want to feel like I am in the room, not just watching on YouTube, so investment in 3D technology cameras and software that can link to a virtual headset on the other side of the globe will be beneficial. Questions can come in live form the 3D hub in the center of your meeting venue.

Health will be paramount

The health of loyal customers will take center stage as we are connected virtually to our health professional networks. Information, such as food allergies or disabilities, can be communicated automatically by individual guests and travel through your systems from property to property, which will populate in F&B POS systems upon check-in so no mistakes are made.

Updates on your guest’s fitness programs can also be sent from their phone to your fitness center. Their regime can then follow them as even fitness machines will adopt the resistance of the equipment to their personal settings as the guest swipes a smartwatch across a sensor.

Virtual marketing

Wearable tech is already here and will appear slowly within the hospitality space. Virtual product tours and guided show rounds through VR headsets, such as the Oculus Rift, will become the norm. You can take guests on a virtual tour of your hotel from the comfort of their home or office so they can make decisions about whether to book.

Social integration of your business

Honesty and integrity from businesses will increasingly be placed front and center in all areas of life as consumers rely more on social channels to publicly communicate experiences and resolve issues.

Hotel reviews should be featured on your websites, not on third-party sites. Guests who have to move to another site to read them may never click back to your hotel website. Keeping guests on your channels will allow them to see how you reacted to issues expressed in other guests’ reviews.

Guest comments should be monitored and flagged for response. Not just the ones sent directly to your staff, but also those sent off guest devices into the social universe. They will expect you to listen and answer even though they did not directly contact you.

How you treat your hotel employees is already being shared on social media channels. If employees respect the brand and deem you a fair employer, guests are more likely to spend money with you and view the brand positively.

Your future: The bottom line

The ways that hotels have traditionally attracted and served guests are changing, so look now at what you wish your business to be and how technology can help you get to this place faster. Your future business will be defined by the adaptation to and use of technology.

The decision you have to make now is whether your future will be a result of your proactivity or if you will passively wait until change happens to you.

Robin Hawksworth, Director of RDHawksworth Hospitality Consultants

www.rdhawksworth.com

This post is part of a new Guest Feature series that we will be posting to our blog. The views expressed here do not reflect those of Intelity and are intended to provide diverse commentary on a range of topics relevant to the technology, hospitality and travel industries.

Launching a new hotel app for your property brings a new set of challenges and items for consideration. We spoke with Megan Kelly, the Director of Sales & Marketing at dusit D2 constance pasadena, one of INTELITY’s newest hotel clients. She offered information on how the hotel plans to successfully leverage their new mobile app.

Do you have staff training at all levels to educate about the hotel’s app?

We’re a pretty small team, and most associates went through a staff training with INTELITY’s Client Services. One of the hotel’s key selling features is how tech-savvy we are, and the INTELITY mobile app is a big part of that. For future new hires, INTELITY training will be part of employee orientation. All hotel staff is invited to download the app to become more familiar with the functionality.

Which social media channels is the hotel active on and how do you plan to incorporate these into increasing guest engagement?

We’re on Facebook and Instagram and are considering Pinterest. We will promote the app through these channels.

What are some ways you plan to gauge guest response?

We have a comment card in the app so guests can provide feedback regarding their stay. We also plan to use INTELITY Staff metrics to gauge usage of the app.

Are you planning any targeted or direct marketing through the app?

We may use the app in the future to promote our Happy Hour or special events in the restaurant. The geo-targeting feature is helpful to ensure we are reaching current guests and not guests who’ve already traveled. We found this to be one of the more interesting features during our training with INTELITY.

What are some of your overall short- or long-term goals following the launch of the app?

Our short-term goal is to make sure the app functions correctly and is user-friendly. We have some features that we deactivated, for example, a store that was set up through a local third-party. We want to be certain all content is correct and easy to read, for example, making the map feature more targeted and reducing the number of places featured. We had no idea until training with INTELITY’s Client Services that it was better to have just a few places listed.

A long-term goal is to use the app to create great customer engagement. We want people to feel connected to us whether they’re a future guest, an in-house guest, or someone who’s already come and gone. I think an app is a great tool, even if people don’t use it often. Just having the icon on their phone is a reminder.