INTELITY CEO and President, David Adelson, comments on hotel technology in 2017 and what trends the industry can expect to see on the rise.
A new day for the hospitality industry has dawned.
Hoteliers have finally recognized the significance of hotel technology and its correlation to the industry’s future success. I would say that 2016 was the year of awareness and planting the seeds for growth, with hoteliers testing the digital waters with widespread experiments involving mobile hotel apps, social media, and digital loyalty program engagement.
The future of hotel technology in 2017 will have to mark a progression in maturity for the industry. Conversations about the buzz phrase “high touch, high tech” have flourished for some time, and the next step is actual implementation in a more refined manner than we’ve seen in the past.
The move could mean a world of difference for the industry, separating properties and brands into the categories of innovative and fresh versus stagnate and out of touch.
Bigger Hotel Tech Budget
Hotel technology took a front-and-center position on the industry stage this year, with more investments than ever being made into creating a sound digital framework that extends from back-of-house infrastructure to guest-facing systems.
In fact, the average hotel technology budget in 2016 increased by 3.4 percent from only 3 years ago and now sits at about six percent. But as ROI reports come in showing the positive results of hotel technology upgrades on guest satisfaction and overall experience, justification of expanded tech budgets will become more fluid. This expansion will become more necessary to match rising guest expectations, competitive demands, and the required upgrades to support and maintain such a network of hospitality technology.
Adoption of Hotel Tech Across Lodging Segments
The primary early adopters of hotel technology fell within the luxury hospitality segment, but innovation has broadened accessibility and lowered price points, making cutting-edge hotel technology more of a reality for other segments as well. In 2016, it was actually midscale hotels that led in IT expenditure (7.3 percent), trailed by upscale hotels (6.1 percent) and luxury hotels (5.6 percent).
Overall more than half of all hoteliers reported increasing spending on hospitality technology trends and needs in 2016. Moving forward, it can be expected that all segments of the lodging industry will need to catch up to hotel guest expectations. Travelers have expressed a willingness to spend more on travel, but winning and retaining their business will be a matter of standing out and making them feel like they’re getting a quality experience. Surveys show that weak (or expensive) hotel WiFi and other digital limitations or shortcomings can hurt hospitality brand perception.
Even guests who prioritize price and budget when traveling will be looking into available packages of digital amenities with the expectation that limited- or select-service hotels will accommodate their basic needs with the same technologies so readily available in the average home. Most technologies, such as an app, are not considered to be a luxury frill anymore. They’ve become so common in the interactions between business and customer that they’re expected at this point, even from the hospitality industry.
The Rise of Hotel Guest Room Technology
A major area of focus in 2016 was mobile technology and the front desk, with hotel apps, in particular, getting a spotlight. A number of hospitality brands and independent hotels centered their guest technology strategies around the rollout of a guest engagement app. More than half of hoteliers reported having a mobile app available for guest use in 2016, and another 21 percent said they planned to develop one in the near future.
The next step for hoteliers will be to focus on improvements to the guest room experience, an area that is in dire need of innovation. Most hotel rooms still largely look the same as they did 10 years ago, but this doesn’t match up with guest expectations or desires. In the next year, hoteliers are going to need a reexamination of the hotel and its appeal to modern travelers (namely tech native Millennial travelers), and the guest room is key to this overhaul.
Hotelier surveys reveal the following sample of interests for 2017 and beyond when it comes to guest room technology:
- 14 percent of hoteliers reportedly plan to install or upgrade in-room tablets
- 39 percent plan to implement hotel room mobile key
- 31 percent have an interest in room controls (or hotel room automation) systems
- 28 percent would like to upgrade or install smart TVs in hotel rooms
Better Back-of-House Streamlining
One of the most unrealized capabilities of hotel technology, even guest-facing systems, are potential to increase back-end efficiencies in multiple departments, from housekeeping to food and beverage to marketing. Enabling staff with the technology to improve their performance, lighten their load, and provide more insight, in general, could help reduce turnover and increase hotel staff satisfaction. This could be critical to increasing guest satisfaction since staff members are the ones who have to interact with guests in a positive manner.
The industry has only touched the surface of how cutting-edge technology can be incorporated into hotel operations. The next year will be an opportunity for hoteliers to ramp up not only the surface of hospitality technology, those interfaces that directly touch guests but also the underlying framework that drives staff and procedures as well.