Industry Update
Opinion Article16 June 2017

How the digital world has affected the luxury hotel industry

By Indrajeet Banerjee, Associate Vice President - Sales & Marketing at The Leela Palaces, Hotels & Resorts

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The increasing standard of living, high disposable income and a growing hunger for excellence among global travelers has given the luxury hotel industry a list of erudite guests, who have traveled the world and understood what luxury stands for. There is not just a high demand towards service excellence, but hotels are also noticing that their clientele is younger than ever before. With the boom of the start-up culture and the corporate world grooming younger leaders and CEO, people are reaching the height of their careers at a much younger age. The millennials, who are champions at social media, come from an age where luxury is no longer seen as rather as a constant endeavor to raise the bar of every aspect that touches the senses. This has placed great responsibility on hotel companies. The bar is no longer to "exceed customer expectation" or meet "customer delight." Rather the new wow is "customer ecstasy – the unparalleled!"

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Technology has brought drastic changes to our lifestyles, and the hotel industry sells exactly that, it brings in an experience and an expectation where every aspect that touches the senses of a guest is perfectly groomed. The lights are never dimmed - the show is always on.

In this digital age, nothing is left untouched by technology. It has the power to make or break your global market. It strokes the traveler's journey right from the decision-making process to expressing his experience post his departure. Technology has given every guest his voice to share with his fellow global traveler the breakdown or the wow in the hotels CSP – Customer Satisfaction Philosophy. Processes have been altered, and hotels have been revamped to give way to the digital age. Moving past the basic in-room necessities, it is indeed not uncommon to see a digitally controlled stay experience with IPOD control panels, interactive mirror TVs, IPAD menu selections, bookings apps and new age tech-TVs. The industry has welcomed technology with open arms and has set about trying to incorporate it in a manner that guarantees the highest quality of experience for its clientele and a competitive edge.

Competition is arduous when it comes to the top tier of hotels, with every hotel trying to up their game with the latest technology as well as the most inviting online presence. The aggressive transformation of the hotel selection and booking process from human touch to digital touch has today placed the hotel companies in a scenario where there are great opportunities to reach the global traveler as well as bigger challenges to convince a client on the digital platform on the USP that the hotel has to offer over the competitors. The contribution of online hotel reservation has seen a massive increase in the last 5 years. Hotels have invested big dollars in revamping brand websites which stand as a direct reflection of their values and beliefs to the world traveler.

With this paradigm shift towards luxury hotel company's sales & marketing approach, in the times to come, perhaps hotel companies are likely to review the need to engage large sales force whose primary job was to focus on field acquisition strategy backed by tools of market mapping, product presentations, site inspections, preferred rate contracts, objection handling and entertainments to build one on one relationships. The aggressive increase in the last few years of the online contribution to the top line of hotel companies has made the chair that drives digital and online distribution the hot seat. Enhancement of brand website to reflect the hotel's ethos, a digital tour of the property, effective rate and inventory management in the online platforms like the brand website, OTAs and Global Distribution Systems are the new mantra to meet revenue demands. Ease of the booking process, search engine optimization, tactical slicing of the online data by markets and segments to understanding the buying behavior of the online customer and arriving at an online strategy to manage this diverse demand of the global online traveler forms a substantial part of the KRA of Revenue and Distribution Managers today. Not surprising, that to support these process hotel companies are investing heavily towards subscribing independent research and reports that record customer online buying behavior, pattern, and online market dynamics to help themselves maintain the competitive edge.

Digitization has certainly helped ease the challenges of maintaining guest history & understanding customer preferences. The information forms an integral part of a hotel company's global strategy. Effective slicing of the guest records to deliver and understand the customer needs at a micro level and personalize stay experiences based on country, segment, the length of stay, food & beverage preference, room category preference and channel of booking determines how efficiently the hotel tailor makes a wow experience.

Reputation Management in this new digital world makes or breaks a brand in the global market. Customer recommendations, reviews, and ratings on social media are equivalent to a print advertisement in a lifestyle magazine. Managing social media reviews form a crucial part of a company's digital strategy – a substantial percentage of the global traveler refer to online reviews and rating before deciding their preference of stay.

An interesting era indeed, where the hoteliers are tirelessly attempting to understand, approach and ultimately delight a digitally driven customer segmentation. We have perhaps entered an age, which demands an effective "Digital Relationship Management" as the winning edge of a hotel business. A strong and engaging online presence is crucial and staying relevant means staying up to date with the latest innovations in technology.

Hence, chocolates on the pillow aren't enough anymore. The way business is done, truly evolved. The world has moved on from the human touch, the age-old mantra of customer satisfaction and the concept of a service with a smile. A guest is no longer a room number, and one service philosophy no longer fits all. The world traveler today are empowered through technology, they are informed, they research and form an impression, cultures are diverse, speed is of the essence, decision making is experiential, they demand a stay which is tailor made to their expectations and personalized to their needs. Above all, they are well traveled, hence can differentiate between the digitally carved screams of opulence and appreciate the genuine whispers of luxury that touch their senses.

Indrajeet Banerjee

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