4 Key Digital Transformation Trends in Hospitality

As new technologies evolve and market disruptors reach their critical mass, every industry faces the need for a core transformation. The hospitality industry is no exception. Modern guests expect to have a customer-centric hotel experience starting as early as choosing a destination and learning more about accommodations and property. Guests also want more comfort, features, convenience, faster customer service, new experiences, and the list is growing.

Most of the customer-focused features offered by most large and small hotel operators and various chains are quite rudimentary vs. the possibilities brought by cutting-edge technologies. Therefore, hotel operators need to be aware of the looming offerings of competitors and play catch-up, and/or pioneer some of the newest features their clients will welcome and perceive as premium. Given this need for a rapid change to sustain the pace of the fourth industrial revolution that is upon us, demand for technologies that help address the challenges in an effective and meaningful way may seem overwhelming.

As Intellectsoft has been working with leading hotel operators, helping them implement the latest technologies, we share our expertise on what to expect in the hotel industry's technology landscape in future. From Internet of Things (IoT) based smart room features allowing guests to control all amenities, to autonomous artificial intelligence based chatbot solutions enhancing response time and automating basic hotel experience, let's explore four main technologies underpinning digital transformation trends in the hospitality industry — IoT, artificial intelligence, augmented and virtual reality, and mobile.

Internet of Things (IoT): Smart Rooms, Beacons & Tablets

As in any other business today, customers expect seamless experience shifts between their home, car, airplane, and chosen hospitality amenities. The level of technology adoption at each instance should be more advanced — or at minimum on par with what customers have at home, i.e. the ability to stream subscription-based content or control devices like air conditioners without moving about. Guests expect to extract maximum value from what they paid for — a demanding target in the age of market disruptors like Airbnb. Enabled by the combination of IoT and mobile, hotel rooms are already adopting smart features to partially address those expectations of their end customers.

A smart room enables guests to control amenities and order any guest services via a hotel's mobile app or voice assistant application based on Google Home or Amazon Alexa. In smart rooms, air conditioners, media sets, lights, window shades, and other amenities are all supplied with ultra-compact IoT hardware and embedded software that has the ability to communicate with the hotel app and speech recognition driven voice assistants, allowing guests to control key room elements easily. The application serves as a universal remote where everything is just a few clicks away. On top of that, such an app can include additional features, like ordering in-room services, chatting with staff, and accessing important information (i.e, local flight schedule and hotel food and entertainment options).

If a hotel offers multi-bedroom suites or villas, smart room apps are adaptable to a variety of layouts and accommodation types, ensuring users can control different amenities in different rooms in an easy and intuitive way. In villas, for example, beacon technology needs to supplement other technologies that are present at smaller premises. Beacons are small devices that can send messages to mobile devices, providing navigation and location-based tips. For example, beacons can remind a hotel app a real-time location of the guest to pinpoint the exact room in which a user attempts to control the amenities.

Smart rooms provide a foundation for another hospitality sub-trend — hyper-personalization. The data gathered by the entire device ecosystem will allow hotel operators to fine-tune their guest experiences and address (or even anticipate) specific demands of each guest at every corner — an invaluable capability in the time when hotels need to forecast sudden fluctuations in customer demand.

Plus, both beacons and tablets provide another avenue to drive sales of guest services with personalized offers. For example, Fontainebleau Miami uses its beacon data and property management systems to generate early guest check-in and late-stay personalized promotional offers. While capturing and constantly accessing guests' data, every hotel needs to ensure this data is secure by creating comprehensive privacy policies and giving guests the ability to delete most of the data at check-out.

A leading luxury Asian hotel chain operator is transforming its business model with the help of the latest technologies as we speak. One of their top-tier properties has a slick tablet in each guest room, enabling guests to control room amenities (air conditioning, lights, windows, media centers), chat with staff, order room service, access hotel information, and more. This cloud-based solution that integrates with other systems has a number of additional benefits, including driving sales of services; solidifying its luxury brand and speed of service through a stunning UI & UX feature design and well-built software; allowing the hotel to learn more about their guests, and other.

Artificial Intelligence (AI) in the Guest Experience

AI solutions with machine learning algorithms analyze big data to provide precise estimates across various important industry and risk management metrics, enabling businesses to significantly improve their decision-making capabilities.

The simplest example of how AI is gaining traction in the hospitality industry is the rapidly increasing usage of chatbots, which aim at improving guests' stay at every step. Hotel chatbots analyze data from a wide array of sources (interactions with guests in a hotel app, purchase history, food preferences, stored payment options, spa and amenity usage, etc.) to provide a deeply personalized experience. The more data available to a chatbot's algorithms to learn from, the better is the delivered outcome and chatbot's suggestions. Furthermore, AI-driven chatbots have a very quick response time: guests can receive answers to their queries almost immediately, as if they speak with the knowledgeable person facing them.

Chatbots are positioned to dramatically alter the operational backbone of the hospitality industry, starting with something as simple as the booking process, and proceeding to streamlining workflows at call centers and other hotel support units. Machine Learning (ML) algorithms in chatbots will be trained utilizing historical calls with customers and their booking behavior on a hotel website, offering them the most relevant booking options, the ones they are most likely to use.

Augmented & Virtual Reality (AR / VR)

For better or worse, not all photos of a hotel's exteriors and rooms tell the full story about the hotel to its potential customers while they are booking a room online. Purchasing a right to use property should be treated as any other product purchase online. Ultimately, guests want and should be able to see exactly what they are buying, more so if the hotel is expensive and far from their home.

With AR and VR hotels can offer virtual tours of rooms and all property amenities. These tours should be simple to navigate in the device-agnostic environment: from a smartphone, laptop, through inexpensive glasses like Google Daydream, or sophisticated headsets like Oculus for more comprehensive and immersive tours. The latter option, to be offered by luxury hotels, would require clients to visit an office or have a headset kit delivered to a place of their choice.

Airbnb already prototyped similar experiences. The company showed a VR prototype that lets users explore properties from their homes with a smartphone or VR headset. As for AR, the company detailed a system that allows hosts to leave guiding notes in AR to provide useful information to guests, who will access them by scanning the property with a smartphone.

There are other exciting ways to use these technologies in hotels. For example, a few years ago Marriott surprised their guests with VR postcards, immersing them into headset-driven 3-D travels stories. If a hotel has a certain theme, it can use the concept of Pokemon Go, creating a hotel-themed AR quest for kids where they would explore the hotel by way of discovering items.

Mobile Remains Front & Center

Mobile will continue to be the backbone in the process of improving the technology behind the next-generation hotel experience. A branded hotel app allows for two-way communication between guests and the property: guests can access any hotel service and other information anytime (for example, order room service dinner while they are still in the spa), while the hotel can use the application to get in touch with guests at the right moment, sending important notifications, updates, offers, and alerts.

A hotel app can offer:

• Booking options
• Remote check-in/check-out
• Restaurant booking with in-app menus
• Chat with staff
• Guest services (in-room dining, laundry, etc.)
• Hotel map
• Other timely l information (flight schedules, hotel entertainment)
• Room key functionality

Today's smart room apps represent only the first iteration on the way to next-generation hotel rooms. So, there is still enough space for innovation, and any hotel can now help shape the future of the industry with fresh ideas.

Final Thoughts

Whether it is creating a smart room or implementing AI-driven algorithms, innovation is never easy, more so if core aspects of the hotel experience are in question. To help hotels make solid first steps in their transformation efforts, we have gathered our innovation leaders for a webinar to share unique insights and real-life case studies of Digital Transformation (DT) in the hospitality industry. The webinar will take place on July 18, and you can register for it here. Our leaders will talk smart rooms, blockchain-based loyalty programs, and expand on DT trends and use cases in the hospitality industry. The changes that are looming over hotel operators will not be easy to implement, but, ultimately, innovation is always an opportunity, not a challenge.

Kate Bayrachnaya
Senior Marketing Manager
Intellectsoft