Room for Innovation – Hotel Technology
By Hanna Falko, Consultant at PKF The Consulting House and Florian Kriechbaumer, VP for Operations & Development for INTEREL
Travelling has become an essential component of our everyday business and leisure life. Thus, the more the "habit of traveling" sets in, the more efficient room layout and smooth fruition of both services and facilities in a hotel are taken for granted and are not noticed, unless the hotel gets them wrong.
What are the recent technology standard additions and what is now common in hotels? Where is technology leading hospitality service and room features? How do hotels adapt to changing demands in worldwide travel patterns? Which practices can enforce efficient and environmentally sustainable operations?
It is all about the experience
According to a study conducted by Cornell Centre for Hospitality Research in 2014, it is estimated that the Millennial generation will represent 50% of all travelers by 2025. This clearly emphasizes the importance to attract Millennials among others by meeting and exceeding their travelling requirements. If this is true for them, then it will also apply for other target segments (i.e. Generation X and Baby Boomers) who are sometimes also as tech savvy as Millennials
Millennials are known to have redefined the parameters of traditional luxury consumption giving more importance to experiences than material products. As such, there is more prestige attributed to travelling and generating memories, than buying expensive items. Millennials also characterize by their high concerns for and awareness of the environment. Being constantly online through their social media channels, they gather a large part of the information on which to base their travelling decision from online resources and friends' experiences. At the same time,they are also very fast in posting bad reviews, thus exposing the service provider to quick and major reputational risks.
An astute businessman would therefore reach out to these travelers and gauge their attention in order to influence the booking decisions. But the efforts are not finishing there as it is also important to actually maintain Millennials' satisfaction throughout every interaction during their stay. The interactions that happen between the customer and the hotel are at the basis of the guests' overall experience and therefore online reputation of the hotel.
How are hotels around the world using technology to keep their guests engaged for the duration of their stay?
Experience 1: The Booking Process
The first interaction between a guest and a hotel usually takes place during the reservation process: this is when the decision-making process actually materializes; hence, it is critical for the hotel to provide the most accurate and up-to-date information about the property and its amenities / services. Whether it is an online travel agency or a direct booking channel, hoteliers aim to maximize conversion for their properties. As such, they supply websites with quality visual impressions, facility description and contact details, making the User Interface (UI) and payment procedure as smooth as possible.
Some brands, such as Loews Hotels, go as far as introducing an option of making a room reservation using a hash-tag on Twitter. Hilton's HHonors app, on the other hand, allows its loyalty program members to select the exact room location and configuration (king bed versus two separate beds) a day before arrival.
Experience 2: Sense of Arrival
Traditionally, guests that have arrived at the hotel approach the reception desk in order to check in and receive a room key. However, the trend is now leaning towards automated registration techniques. As more online traffic to the hotels' websites is now driven through mobile devices rather than computers, hotel operators continue to innovate their reservation systems and checkin procedures. Ultimately, the goal is to minimize the amount of time guests spend, from the moment they arrive in the hotel lobby, to the point they reach their selected room.
As such, hoteliers have introduced a mobile check-in option, which enables guests to use their mobile devices as a key, through mobile applications and Bluetooth. For example, Starwood have rolled out the Starwood Preferred Guest (SPG) Keyless initiative across some of its Aloft, Element and W properties. The program members are able to access their rooms, skipping the reception and related paperwork. As this option is only available for the SPG loyalty customers,guests are incentivised to book through the company's direct channels, which is a win-win for both customers and operator.
Keyless entry experience has been introduced to not only high-end properties, but also to budget hotel chains. For example, the reception desk in Formula 1 is only open during 4 to 6 hours a day, while all the remaining time visitors can open the hotel room directly by swiping their credit card. For a budget hotel, this represents a dramatic saving in costs, as there is no need to maintain receptionists for more than one shift per day.
Another aspect of the front office that is seeing an impact of increased mobile utilization is the concierge desk. As more hotel brands – and also attractions typically booked by a concierge in the past - introduce mobile applications with an online concierge service, the need to interact with the hotel employees is kept at a minimum. For example, Marriott Hotels have launched a digital concierge service called Mobile Request in May 2015. The app allows guests to request any service they would have otherwise had to contact a concierge for. Not only does this advancement have an impact on the customer experience, but it also positively affects the hotel's bottom line.
The above are just few examples of the limitless possibilities of good interactions which could extend to knowing when your client is approaching the hotel and making sure their selected room is ready on time, mentioning the name of the client if the client's profile has a picture and so on.
These examples lead to a conclusion that both reception desk and concierge service will soon become obsolete, as more hotel companies will adopt the electronic versions of these services, especially in the middle and upscale tiers.
Experience 3: Hotel room
One of the main draws of any hotel is the room. The basic expectations of room amenities have changed dramatically over the last years while the physical aspect of the room has in fact not changed at all. Going far beyond just a clean and comfortable bed, guests now want the room layout to be user-friendly and accessible for multiple digital devices.
Regardless of whether travelling on business or leisure, connectivity is nowadays the most valued feature of the room. In fact, many travelers make their booking decisions based on the availability of free Wi-Fi. Yet, brand standards are still based on characteristics such as rooms' size and type of furniture rather than connectivity. Hoteliers who treat their customers "as kings" by providing large room sizes but then forcing them to spend all their time in the lobby because internet in their rooms is not working properly will not survive – nor will charging for internet access.
As anyone who has travelled extensively would know, sometimes rooms lack the amount of electricity plugs that any traveler would consider basic as well as energy adaptors for different sockets. The result of the inability to instantly connect devices to a (sufficient number of) power source is immediate irritation and frustration to the customer.
Similarly, the position of furniture within the room can be a nuisance to the traveler if placed incorrectly. We have all had the annoying experience when a room's function was inaccessible due to the poor layout. It is not unheard of, for a guest having to move the bed in order to access a power socket. Worse still is when the next day the housekeeping staff returns the furniture to itsoriginal position, complying with the Standard Operating Procedure Manual but not with any guest's common sense.
It strikes that, despite the use of ultimate technology, hoteliers still fall prey to simple mistakes such as impracticable room layouts – likely because infrastructure changes in rooms are CAPEX intense..
Despite the negatives however, there is increasing progress for in-room technology. Hotels often offer tablets in the rooms, enabling guests control the room features, including TV programs, room temperature and such. Some hotel companies go as far as establishing their own techfriendly hotel brands, usually in a 4-star lifestyle positioning. For example, Carlson Rezidor has set up their Radisson Red brand with a focus on art, music and technology. The brand intends to tap into the tech-savvy market by introducing an app that will allow guests to skip the reception desk upon arrival, access the online concierge service and adjust the environment within the room in accordance with their moods and preferences. A hotel on the Seychelles for instance completed abandoned in room phones and instead provide PDAs to use all room and hotel features.
Going beyond WiFi and applications, one of the recent primary drivers for the technology sector is the Internet of Things (IoT), which in 2015 was ranked number two by IT research firm Gartner in their world renowned strategic annual technology trend list.
This development promises the ability for any object to be connected to a network and thereby gain some addressable intelligence. It is expected that 50 billion ''Things" will be connected to the Internet by 2020, and we foresee that more and more hoteliers will be looking for IoT solutions that enable them to innovate and enhance the guest experience in their hotels.
IoT as an enabler to improve Service and Efficiency
A number of hotel companies have already recognised the benefits IoT can bring to their hotels and are now piloting initiatives around the Internet of Things as an opportunity to improve guest service, efficiency and revenue.
While adoption of IoT in the hospitality sector is still in an early stage, promising use cases already exist; ranging from the application of iBeacons for targeted location-based guest marketing and enhanced guest convenience, to mobile key solutions, wirelessly-connected appliances in the rooms to automate energy saving and operations, and real-time staff and asset tracking in hotels.
For example, most hotels currently employ dedicated staff to check and replenish the mini-bar in each and every room in the hotel on a daily basis. According to the Carniege School of Hospitality Management, however, only 20-25% of mini-bars are used daily. Through an affordable and simple wireless retro-fit door contact, operations teams know in which rooms the mini-bar has been opened since the last check. This means only these rooms need to be checked, allowing staff to focus on other services that enhance the guest experience.
This is just one example, and while not all applications can be anticipated at this point, we do know that the majority of these IoT use cases are based on Bluetooth communication, with the ability to provide a flexible, upgradable and maintainable infrastructure in a hotel.
The advice to hoteliers is to ensure they put systems in place that are ready to leverage the Internet of Things in the future. When building or renovating a hotel, the right, flexible and scalable infrastructure should be put in place to allow for IoT technology to be deployed. A number of providers of Guest Room Management Systems have recognized this and provide upgrades to their existing products to offer future-proof solutions that are ready for this development.
IoT as an enabler of Sustainability
Aside from the guest experience benefits and operational efficiencies, hoteliers are increasingly looking for sustainable in-room technology that enables them to optimize their energy consumption and reduce their carbon footprint, without impacting guest comfort and experience.
For a number of years, this was limited to a focus on reducing their properties' energy consumption in terms of heating and lighting, and we are seeing measurable results in this space. However, water consumption remains a huge challenge for hotels, particularly for resorts in the warmer climates of the world. On average, an overnight guest staying in a luxury hotel consumes between 300 and 1,400 liters of water, significantly more than the typical local population in the same area.
Both operators and guests are becoming more conscious of this challenge, and we expect systems that allow hoteliers to effectively manage water heating and consumption in the room in an intelligent manner to become commonplace in the near future.
For instance, with an online configurable water supply infrastructure, operators could specify the maximum temperature for hotel guest use. At the same time, the system would know when housekeeping staff enters the room and could allow them to use water of a higher temperature for cleaning purposes.
Such a system could also provide an additional guest experience differentiator, as designers can take advantage of modern digital control interfaces to combine light and water for new experiences or make it easier for guests to set their preferred water temperature rather than struggling to find the correct hot and cold mix and wasting water in the process.
This kind of approach is expected to resonate well with the millennial generation, therefore having a double advantage: making the hotel stand out from competitors and enhancing its overall onand off-line reputation.
Customer loyalty and Social media exposure
Customer loyalty and feedback is now more important than ever. So is the ability of hotel staff to handle guests' complaints in a timely manner. This is because Millennials are characterized as being extremely quick to react to certain experiences, positive or negative, thus they request an immediate fix to their problems by the hotel. The adverse impact of a property failing to do so may be severe.
Public perception of a hotel is largely formed through the digital channels, especially now that social media platforms are perking up in popularity. Hotels dedicate staff to monitor their social media profiles, run campaigns to engage the audience and increase their international awareness. These campaigns also form the 'personality' of the hotel, which in turn serves as a competitive advantage to differentiate the property. The new potential guests get an impression that they are familiar with the place even if they have never been there, while the repeated customers strengthen their loyalty, as they remained engaged with the hotel.
Another implication of heavy social media exposure on the hotel industry is the fact that customer feedback, positive or negative, frequently goes viral. It happens quite often that an upset client decides to penalize the hotel by making sure potential future customers avoid the place. And all he has to do is to post a note on his social media page describing his recent bad experience. It is also not unusual that customer feedback has been picked up by so many internet users that it went viral and got published in international news articles as well. It is important to acknowledge however that this trend can work in hotel's favor if excellent customer service is delivered. It is also true that customers get impressed when the hotel goes an extra mile to take care of the guests, as when they face arrogant service. However, the old adage still stands: a bad experience gets relayed 10 times more likely than a good one…
Gone are the days when hotel's employees tried to recognize the mystery shopper among the guests: equipped with a mobile phone and social media access, each customer now has the power to become a brand ambassador, if the hotel delivers outstanding service, or a brand murderer, if the service fails to comply with their basic expectations.
To conclude, hoteliers cannot afford to miss out on the latest consumer behavior trends, which largely rely on utilization of technology devices. From the perspective of customer service, these innovative solutions help speed up the traditional procedures and reduce the guest's input otherwise required to facilitate their requests and preferences.
From the perspective of hotel management, the trend towards the connected room and the proliferation of the Internet of Things will be a main driver for technology related improvements in the guest experience and hotel layout / operations in the coming years.
Hoteliers should therefore act smart and use the technological advances in their favor: if applied efficiently, despite the initial capex, hotel technology is a powerful tool that can strengthen the public image of the hotel, smoothen the operational efficiency of the standard procedures, increase loyalty to the brand and, what is more, considerably minimize operational costs. Is it not the right time to embrace the technology challenge?
Managing Partner, In2 Consulting
Phone: +971 44558499
At INTEREL we power the modern hotel through our Hotel of Things™ ecosystem by connecting people, devices, and data. With our award-winning Guest Room Management System, the world"s first online Water Management System, and our connectBsmart™ IoT infrastructure, we revolutionize guest experience, increase operational efficiency, and drive sustainability in the hospitality industry. INTEREL is backed by European technology investor, Jolt Capital SAS. With offices across four continents, INTEREL"s solutions are deployed in over 30 countries and have been used by over 20 million guests.
To learn more, please visit: www.interelme.com