Food for thought: When distributors replace brands, a battle for customer ownership and more
By Martin Soler, Partner at Soler & Associates
There are a couple of big changes coming to the hotel distribution space and hotel tech industry. AI will affect many of them, I think we're coming to an end of what is humanly possible to do in terms of connecting dots with the huge amounts of data we have. CRM is something that is becoming increasingly important (and complex). It is a great time to be in hotel technology. Best, Martin. PS: Don't forget to sign up for Tell. Trends
Food for thought.
Is Making Easy Travel Booking Wrong?
In theory booking travel will become easier through assistants. In fact it might become so easy it could be commoditised just like buying (really expensive) light bulbs. But maybe that's wrong. Maybe spending time browsing, searching, looking for the best deal etc is the whole point. It could be. I don't think there is an absolute answer. The trick will be finding the right balance between the satisfaction of having found the right deal while avoiding the remaining frustration.
When Pipes Replace Brands
We've witnessed the change. A few decades ago Brands were the power of distribution. Branded hotels have an incredible distribution advantage over non-branded hotels. Branding a hotel was like plugging into a power line. Distribution systems were hardly known. Today things are quite different, travellers are more aware of distributors (the pipes) than the brands. But what happens next? Do these pipes (OTAs) get replaced by newer pipes (AI providers)?
The Battle for Customer Ownership
We understand the problem. But there are two concepts that need a bit of work. First "customer ownership" is really a concept from the 80s (ok maybe 90s). In today's world, I don't think anybody owns customers. Customers don't marry brands anymore, they have affairs. And if we replace the concept of ownership with seduction it might work a bit better. The second is the battles, of course, we like to talk about battles. But rather than battling within the industry let's try to work on battling the innovation inertia that we need, to build better relations to guests. Hospitality is the best industry at caring for customers. How do we take those skills and grow them beyond the hotel walls? To the before and after experiences?
The Next Hotel Tech Phase is CRM
There have been three major technology advances in hospitality, the first was PMS, then came channel managers to manage the online distribution change, then came reputation management tools followed by revenue management systems (still a lot of work to be done there). The next big technology advance at hotel level is CRM. The question is where does the definition of CRM begin and end for a hotel. Repeat buyers in individual hotels are only about 10% of the business in most cases. Does the CRM pick up on first interaction? Does it end on check-out? All this and more needs work, but the fact remains, interacting with the guests, helping them arrive, helping them during their stay and following up afterwards is interesting for experience and revenue.
Demystifying AI for Hotels
I had the chance to work with Avvio and try and understand AI for hotels. What is hype, what is real and more. A lot of it is hype. In many many cases, tech companies throw the AI word behind anything that the customer can't see which is mildly complex. And technically it might be true. But does that mean it will improve results for hotels? In many cases no. I don't think AI will change everything on the flip of a switch. But as Booking recently said, in a few years there will be AI behind just about every touch point on their funnel. One designer once told me the emotional impact is in the big things, but the experience is in the little things. I think AI will affect the little things.