Hotel Technology During Crises, Does it innovate?

Question

Last year I participated in the research and illustration of the last 100 years of hotel technology in our series "The History of Hotel & Travel Technology" (read article). In many cases, we've seen hotel distribution and technology change during or after a global crisis. But is this a trend that will continue? And what could be the innovation from these crises?

Up until the early 2000s, managing the guest experience was still a very human to human experience, yet today the experience happens primarily through technology. Human interactions still hold value, but with the incredible growth of the internet, smartphones and an always-on lifestyle, people are no longer willing to wait very long for their desired outcome.

Hotels have so many touchpoints where customers interact with the property and staff, and this is what has set a hotel experience apart from a retail experience, hoteliers recognise this. They excel at delivering guest service. Yet more so than ever in today's climate, we need technology to facilitate many expectations that guests are not only used to but also expect. Today's hotel guests expect a quality experience from before, during and after their stay.

We all agree that people will want to travel again as soon as possible for holidays and business trips. Until travel resembles anything to pre-covid times we have a chance for innovation.

Looking beyond the obvious needs to support health concerns, 'contactless technology', how should we prioritize the data and innovate from what is available - what innovation will/should come from the current crisis?

Max Starkov · Answer

Post-crises, only those hoteliers will succeed who a) understand that we are dealing with exceedingly tech-savvy customers who are even more tech-demanding compared to just a year ago - the pandemic has accelerated digital transformation by as much as 7 years (McKinsey), and b) invest in technology to ensure contactless guest experience and improve operational efficiencies via automation, AI, IoT and robotization to lower labor costs, now consuming as much as 87% of RevPAR (CBRE). Whether we like it or not: next-gen technologies like AI, robotization, and automation are coming even to our technology-averse hospitality industry. Robots already are being used at thousands of hotels worldwide and will continue to replace in greater numbers hospitality employees in performing dangerous, repetitive, and mundane jobs like housekeepers, porters, and baggage handlers, concierges, security guards, line cooks, room service, bartenders, waiters, etc. Next-gen technologies like AI, robotics, automation, mobility, and IoT are called upon to solve a number of issues in our industry: Solve labor shortage of entry-level and unskilled workers, which plague the industry in “normal” timesSolve high turnover of trained employees (20%-30%)Solve dull, repetitive, dirty, or dangerous jobs.Solve problems like poor discipline, lack of motivation, etc.Lower labor costs, which are especially burdensome nowIncrease productivity The robotization and automation of our industry are inevitable. I believe that within the next 10 years many hotels will operate at half the pre-coronavirus staff level and we will be seeing more and more examples of semi- and fully automated hotels. The savings from labor costs and technology-derived new efficiencies will be more than sufficient to pay for the next-gen technology required for hotel robotization and automation.

Jos Schaap · Answer

Adding digital interaction guests should continue to come more and more to the forefront for hotels, as that is what guests want. Guest, like any other human being, like to be in control. With their phone, they can. A simple innovation is converting the offerings of an early arrival and late departures from often complimentary last-minute front desk discussions to pre-arrival digital offerings. Guest love it, and the hotel has immediate easy ROI revenue. While offering early arrival and late departure as an up-sell item is easy, if not managed, they can become an operational hazard. Hotel up-sell software applications should ensure they have algorithms that guarantee fulfillment and front desk automation around room product up-sells, especially for early arrival and late departure. When they do, they can become great tools to increase ADR and guest satisfaction.

Mark Fancourt · Answer

I am of the view that a significant technology shift is on the cusp of the broader hospitality industry. The catalyst, as Martin points out, is the customer/guest and the world that they are living in. The further we progress the overall hospitality experience, in a digital sense it will become an extension of the guests' life as compared to a step away from their existing lives. Experiential travel will exist, but it will not be driven as much by the nuts and bolts of the traditional hospitality product and service.I'm a disciple of high touch hospitality and the art of service. The beautiful human gesture of looking after other people encapsulated in the term 'hospitality'. I lament that this is disappearing from our industry at the expense of self-service driven tech experiences when that same technology presents the opportunity to return to high-touch service. Although I also appreciate the underlying drivers of this sweeping change.The coming change is the big end of technology delivering the hospitality experience in this new world. A couple of simple examples.Restaurants currently look more like retail - order or delivery with the dispensing of the traditional meal service. It has become a retail transaction.Connected home tech permeating the hotel environment - this is driven by big tech heading down the industry vertical for audio, visual, control, access, etc. I foresee a time where the hotel room is just a different environment to control your own preferred tools from the 'comfort of your device'.Voice-driven initiation of communication and request - reassuming its traditional role at the top of the communication totem - less button-pushing and switch flicking and more talking to 'intelligent things' (and hopefully still each other?).The continued migration from operator-led hospitality experience to real estate asset values and financials - the unspoken truth that for the most part no one wants to deliver high touch service and the option to hop on the self-service tech experience bus that is tacitly justifying this shift.Global technology providers opening up the hospitality marketplace to a non-industry specific technology - speed of development, similarity of process, and self-service are dictating generic non-industry tools. I see this particular aspect as a major opportunity for the industry from the possibilities of mainstream technology systems, business capability, and commercial advantages.The current crisis has accelerated some of this behavior, but there have been greater factors prior to 2020. Everything is emerging from the haze to present a different type of hospitality business environment.

Carson Booth · Answer

It is very apparent that a sizable consumer behavior shift towards contactless/mobile-first guest experiences has accelerated as a result of the pandemic. Airlines, banking, and nearly all industries have already embraced these shifts, however, the hotel industry has significantly trailed in adopting a mobile-first self-service strategy - some of this is due to archaic rules about identification, whereas most of this is due to archaic beliefs that guests only arrive in the afternoon and leave in the morning. Right now, hotels should embrace all solutions (tech and operations) to getting guests back in the building and prepare to service the guest with mobile-first experiences, for example allowing check-in on their schedule by mobile phone at any time and driving greater room revenue by selling rooms by partial day. Apps and technology have long existed... mindsets are slow to adopt.

Juanjo Rodriguez · Answer

Innovation should come from moving from a room-centered view to a guest-centered one. Look at the full guest journey, since the person starts thinking about traveling (and therefore much earlier than the check-in date). Don't optimize for room prices, optimize for guest value, which requires deep personalization across that guest journey.

André Baljeu · Answer

Now more than ever, it's critical to not only understand what customers want but to use data to help customize and tailor experiences to each guest. When talking with any solutions provider requiring data to streamline the customer journey and guest profiles, an ongoing challenge is accessing clean data from other platforms or locations to collate that data and build the ultimate guest experience based on a true single guest profile. One could argue that the four most significant challenges faced by the hospitality industry that not only affect overall guest satisfaction but also impact hotel revenues are. The lack of automatization and customer-centric processes (Interoperability between systems) Data ManagementSecurity & PrivacyResponsiveness – both digital and human Perhaps future innovation can be guided by these four pillars. We all agree interoperability is crucial between systems in a hotel tech stack. Data management does not only include hotels ensuring they have clean data running through their primary system, whether that be the PMS or CRM, but that that data can be shared across platforms by different service providers with no limits or barriers. Innovation could flourish once a solution to data barriers is derived.

Floor Bleeker · Answer

During the Covid crisis we have seen an acceleration of contactless technology that already existed in some shape or form. We have not seen many radically different innovations. The frictionless or seamless guest journey (how it was called before the crisis) was on many hotelier's wish list and is now, thanks to Covid, a reality in many places. Now that we have online check-in, mobile keys, and other mobile services in place, we also have a platform and that's where it will become interesting. On the one hand we will collect a lot of data related to the in-hotel guest journey and this data can be used to personalize the stay and offers. With the hotel app being more prominent we can also use it to push services and experiences while the guest is staying with us and this could significantly change the way we interact with our guests.

Klaus Kohlmayr · Answer

Over the last five years, margin pressures have been increasing dramatically for hotels – increase in labor, increase in food costs and increase in system costs for franchised hotels. The pandemic has forced the industry to rethink its approach to technology – how to serve, interact with guests and how to provide great hospitality “at a distance”. I believe we have already seen a substantial acceleration of innovation over the last few months, from touchless customer journeys to ordering at restaurants with QR codes or through digital menus to the quick emergence of hybrid meetings. Customers and guests are being educated and are increasingly embracing technology to enhance hospitality. I believe many of the digitization of customer interactions is here to stay. As this happens, we will continue to see innovation in the “back of the house” of technology – the connections, integrations, and data exchanges necessary to enable a smooth and seamless customer experience. New, platforms that provide easy and efficient ways to connect data and provide unparalleled insights into guest needs and behaviors will enable hotels to serve guests efficiently and more profitably than was possible in the past.

Ian Millar · Answer

The ultimate crystal ball question! A we have seen the industry has reacted quickly to the contact less situation, from QR codes to mobile. And as we are seeing a good progress in the vaccination situation in a lot of countries some sort of “normal” is starting to make sense. Where we should be concentrating now in hospitality is the “data” aspect of our business. For far too long we have been bad with data as a concept, however being proactive in collecting guest data and preferences before and during their stay will help hotels operate better. This is where I believe mobile messaging is a real must going forward. It's not about the contact less element, but constant and real time communication with guests. These systems are getting better at analysing and answering guest enquires and answers as well. So really shifting the “concierge” element into the pocket of the guest. Not just as a communication platform but as a data gathering service for the hotels.

Simone Puorto · Answer

As I said several times, in terms of technological adoption, the global COVID-19 pandemic has forced many hotels to jump 10-years ahead in only a matter of months: just think about the growth in contactless tech, self-check-in kiosks, and keyless entry over the last year. This reveals the fact that we are not only a "people" industry but a tech industry, too. And we've always been. In hospitality, we tend to perpetuate the myth of "high touch vs. high tech," especially in luxury destinations, but it's just that: a myth. There is still major friction during the most critical touchpoints of the hotel journey, and that's mainly "human" friction: think about check-in, check-out, and what I like to call the "logistics" of travel: there's no real added value in having a human employee rather than a machine scanning our passports, is it? Technology can and should facilitate the experience of our guests, and we are now in the perfect moment to implement it. Now is the time. As the old saying goes, let's make sure this crisis doesn't go to waste.

Timo Kettern · Answer

I'm currently engaged with our HR Teams to plan online-staff-trainings for the re-launch of our hotels. After many months on furlough away from the hotel, we want to give our teams a boost of their technical, procedural, and social skills. We know that our teams have a big impact on guest satisfaction and want to accelerate here. So for me, (social)-distance-learning will be one of the areas where I expect a great deal of innovation.

Marco Correia · Answer

Let's start with a controversial statement. During the crisis there has been little to no innovation in our industry. Chatbots, mobile keys, self-service kiosks were all existing technologies, slowly being embraced by the market. The pandemic brought much swifter adoption of those technologies, motivated by a combination of safety requirements and a change in consumer behaviour and expectations.Note: John Burns and Marco Correia are co-authors of this viewpoint. It is the result of one of our regular brainstorming sessions about the status of technology in our industry.It is this change in consumer behaviour that will drive the real innovation that we expect to see in the next months/years. The consumer has become mobile-centric – and increasingly “mobile-only” – in their acquisition of goods and services. Mobile devices are front and centre of their activities. They come with expectations of customer recognition, simplicity in use, and breadth of choice, all accompanied by excellent service delivery. Think about food ordering, Uber, newspaper access, music, or anything from Amazon. Hospitality will not be exempted from these performance expectations, and at the moment, we are very far behind.“Digital Darwinism” (a phrase now a decade old) will finally impact the lodging industry. The hotel and hotel brands that innovate will prevail; those who don't will become commodity products in the hands of the OTA's, “alternative accommodation” operators, and the meta-search giant, Google.Let's analyse some of the battlefields where the struggle for the new generation mobile-first consumer will take place.First up, the mobile experience per se. Will we in the hotel industry be able, as the airlines already are, to aggregate and digitalise in one single interface, the processes related to the pre, during and after stay? Some of the larger hotel groups (e.g. Wyndham) have already expanded their brand apps to the degree that converts the customer experience into a single mobile-centric one. But what about the large majority of the industry, those smaller groups or individual hotels without the money or the expertise to do so? Will we see a rush to join the more prominent brands? Or will we see the new philosophy of open API's aggregate all those microservices into one single platform with two storefronts, one for the customer, another for the associate? Oyo's experience has shown that this is possible and achievable. Will this innovation find traction? Will it represent the end of the myriad of systems that we use now and the relevant functions' aggregation into deeply integrated, app-accessed platforms?Innovation will have to address the issue of data. There is much talk about data, big data, AI, machine learning, to mention just a few of the buzzwords we hear repeatedly. A 100-room hotel generates approximate 5,000 data events daily. It is great if we can capture, analyse and act based on the data sets we are collecting. Yes, we are making good progress on “capturing' but arguably less on analyzing, on extracting lessons and formulating plans, and less still on translating those plans into action.Data sets to be relevant need volume, and in this industry, the larger hotel groups have already gained an advantage. However, we question if this advantage is a competitive one. Discussing this subject is out of this article's scope, but we strongly recommend reading the excellent article “When Data Creates Competitive Advantage” ( Harvard Business Review, February 15th 2020). A hint; data is not synonymous with a competitive advantage.Loyalty and business travel is our last point. It is widely agreed that leisure will recover faster than business travel. In our opinion, the figure of the “road warrior” is extinct. When business travel returns, it will be based on the concept of “travel with purpose”. No longer two days on the road for a couple of meetings or sending a squad of people for a product demo. This new reality of travel with a clear purpose (and an identifiable ROI) will have a profound impact on the loyalty programs designed for frequent business travellers.For the leisure market, both Booking and Expedia have already launched aggressive membership programs to earn the new customers' patronage and loyalty. They are mobile-centric, brand-agnostic and hyper-focused on hyper-personalization. Yes, these OTAs offer important lessons to hotel operators. That said, we are reminded that leisure travellers' patronage and loyalty also depends on the quality of the delivered product, the depth of available on- and near-property experiences, and the potential for happy memories.What about the corporate segment? How will it change? How will our industry react and innovate to satisfy new expectations while maintaining member loyalty? Maybe before any innovative or disruptive initiatives emerge, we need to get our act together. It was stunning to see the results of a recent study by h2c where hoteliers reported that integration between their CRM, Booking Engine and loyalty program was mostly low or non-existent. This disconnect is an invitation to lose engagement with customers. The new customer that we described earlier in this article is mobile-centric, impatient, demanding and adamant about personalised and meaningful experiences. Our challenge in the hotel industry is to refocus our mindset and retool our technology to address the evolved traveller and the expanded marketplace.

Saikrishnan Ranganathan · Answer

With every crisis comes valuable opportunity to innovate and improve. As much as the pandemic has paralysed the hospitality industry, we have witnessed our hotel clients optimising their operational efficiencies and enhancing guest experiences with smart technology and leveraging big data during this period. Reshaping new guest expectations, the COVID-19 outbreak is directing hospitality technology developments towards contactless services due to health and safety concerns. However, the path towards contactless technology and innovations is certainly what hotel guests are demanding sooner or later - the pandemic is simply accelerating the process. With convenience at the centre of people's lives in the current digital era, the future of guest experience in the hotel industry will be focused on automated and seamless services, personalised to every guest. The key to providing seamless and personalised services lies in the hotel's agility in collecting, analysing and interpreting data from all aspects of their guest-facing operational functions. Reducing lead time for service recovery, advancing towards predictive maintenance, and streamlining manual processes for an optimised allocation of resources so staff can focus on guests are some benefits of implementing IoT technology across hotels' operational departments.Additionally, hotels can also implement technology to automate decision-making gained from these insights to maximise operational efficiency. For example, HVAC systems can be automated to energy-saving mode when rooms are unoccupied and switch back to the guest's presets when they return. In fact, reports have shown that automating a building's HVAC system can save up to 40% of energy expenditures. There are available AI-driven HVAC automation solutions in the market that hotels are starting to adopt that maintain guest satisfaction while saving energy costs and operating more sustainably - a core value that travellers and guests are increasingly expecting from the hotel industry. It is a growing and prospective hospitality tech innovation that would come out from this crisis to help hotels stay competitive and afloat. Ultimately, these smart technologies will shape the future of the hotel industry.

Tomeu Fiol · Answer

Crisis means opportunities and challenges; innovation and transformation are by far the best recipe to survive during crisis and get prepared to grow after Crisis. Yes, we are seeing innovation in hotel and hotel companies and, fortunately, is going to be with us for many years. The Pandemic has speed up the implementation of new technologies and this has just started. But, if we think “Contactless Technology” will be the main objective of all the investment and innovation projects the companies are executing or will be executing, we are completely wrong. After one year we have seen how all the hotels are implementing “Contactless Technology” to mainly driver trust to their guest by offering digital tools to minimize the human to human interaction. However, we are talking about hotel, and this, as Martin Soler states, means deliver experience, human experience. So that, “Contactless Technology” is circumstantial. The big change is next: as industry we have realized we are not nimble enough when a demand sinks or varies, even a bit. Though, the way we manage the hotel business needs to be transformed. We are in front of a turning point in hotel technology, the innovation driven by technology will enable the hoteliers to streamline each process and rethink each hotel department. If a hotel companies thinks that they can return the hotel business in the same way it was managed before the pandemic, it will struggle to survive for sure. Exiting and innovations times ahead!

Laura Calin · Answer

During the pandemic, hospitality leaders have had to make some difficult decisions in an effort to keep business running. As part of that effort, they've had to reprioritize project portfolios and strategically choose where to focus their time and investments. This has included making sure that innovations coming out of this current crisis be focused on increasing occupancy, improving efficiencies, ensuring guest and employee safety, and driving revenue or decreasing loss, all of which leads to improved guest experiences. Having the right solutions in place makes this all possible. We've seen hotels that were already using cloud technologies or migrated to the cloud during the pandemic realize significant advantages over hotels still running operations on premise based systems. Running operations in the cloud removes IT complexities, allowing limited staff to improve efficiencies and focus on guest needs. Even staff required to work remotely get full visibility into operations from wherever they are. In addition, with the availability of Open APIs, hoteliers have been able to tap into the technology ecosystem to enable integrations needed to adapt and launch new innovations to address changing market conditions and guest needs. Looking ahead, recovery and growth will be directly proportional to having a platform that allows hoteliers to quickly roll out new innovations to help them adapt to our new normal and meet guest expectations. Enabling technologies such as digital check-in and check-out solutions, bringing the status of room cleanliness to a guest's fingertips, delivering location-driven availability and rates, and offering upsells enabled by AI/ML technologies, a cloud-based system with an open architecture will help to accelerate innovation and recovery. Here at Oracle Hospitality we are committed to helping the hospitality industry get back to business. To support this effort we held an event called Innovation Week last June to accelerate the industry's recovery. Due to its success, we will be hosting another event March 22-25 to continue to explore new and innovative hospitality solutions. Find out more here.

George Roukas · Answer

It's hard to see a 'good' side to something as horrific as the pandemic, but exactly because it is so wrenching, it will be a catalyst for innovation throughout travel. Let's face it, travel has not exactly been a hotbed of innovation in the past. Nobody's going to mention us in the same sentence as fintech or genomics. While we can give ourselves a pat on the back for releasing new features on a chain or property level system, we still have a lot of very dated technology at the cores of our distribution networks (yes, I'm looking at you Mr. GDS) and we still see third-party hotel core systems claiming: "New and improved--we've got cloud!" It feels as though even third-party technology providers consider innovation as something costly and to be avoided rather than as an investment that can yield great benefits. But there's a real problem with that perspective because innovative technology and product management can be among your most effective competitive weapons.Where to prioritize? Given the realities of 2020, automation of key processes is likely a good place to start. Many companies in travel have followed the philosophy of: "If it's broken, don't fix it. Just throw bodies at it." While this was workable while revenues were expanding, it collapsed painfully last year. Some of the more disruptive new companies have been automating their processes as they build to keep overhead low and consistency and scalability high. But it's not just new companies that can take advantage of automation--it's incredibly valuable for mature companies looking to reduce costs as they emerge from the muck of 2020.

Mike Ford · Answer

Rather than consider the specific innovation we might see emerge from the ongoing crisis, it's important we allow ourselves to reassess what innovation even means to our industry, because that's exactly what the ongoing crisis has done. It's forced the hotel tech industry to redefine what really adds value to the lives of hoteliers, not only from a technological standpoint but from their service offering. Innovation over the past year hasn't come in the form of incremental enhancements or vanity metrics; it's had to be radical and meaningful, to allow all of us and the hoteliers we serve to survive and thrive in the most unpredictable, unforeseen landscape. 'Legacy' is no longer just a descriptor of outdated tech, but of outdated mindsets.As cases in point, at SiteMinder, we made the conscious decision last April to make our proprietary data available publicly for the first time, to provide hoteliers critical insights. And, thanks to the power of the cloud and an incredible team, we were able, within weeks, to produce the World Hotel Index, which has since become the authority on real-time hotel booking data and trends. However, the innovation didn't necessarily lie in the technical development of the product, itself; the innovation lay in the concept. It was about how we could all, as partners of hoteliers, use the immense data and capability we have readily available to us for the greater good of the industry that we love. It was also about challenging what we accept as the benchmark for success when we are all being challenged by a common threat. As I said then, traditional performance indicators around hotel performance have no relevance in a world where hotels have minimal business coming in, if at all.Similarly, in November, we launched the SiteMinder Partner Program to bring together the collective power of technology and hotel experts. Of course, providing technology to others isn't anything new, but learning how to work together so we can bring out the best in each other and leverage each other's individual strengths strangely doesn't happen often enough in our industry in spite of the fragmentation we've all spoken about for years. We've always discussed the value of world-class hotel experts, and the value of best-in-class tech, and yet the crisis helped us to see that bringing the two together could only benefit the hoteliers who need both so much.During and beyond this crisis, I believe we can expect innovation to come in the opening up of new and existing revenue streams, however that may come. We all need to be thinking beyond established models and metrics, and embrace such things as automation which aren't designed to replace people, but to bring out the best in the people that make our industry what it is and keep travellers coming back.

Uli Pillau · Answer

The current crisis in the hospitality industry is unmatched. Many experts expect a dramatic change regarding how people will travel and use hotels in the future. Traditional hotel groups and independent hotels will struggle due to the lingering effects of the situation. Either they will go out of business or will have to reinvent themselves. Notably, over the past years only AirBnB appeared as a serious disruptor in the accommodation industry. During the crisis, suddenly we've seen a number of new players pop up that are putting very innovative concepts on the market and are hugely successful. Among others - companies such as Limehome, Stayery, Sonder, Cosi Hospitality, Whyhotels - use technology platforms as the backbone to differentiate themselves with a fully tech-driven guest experience. These groups still maintain good occupancy levels and their degree of automation allows them to operate at lower cost while still offering a great service to customers. This proves that modern cloud open platforms can be intelligently used to operate accommodation concepts in a profitable way, even during challenging times. For example, Munich-based Limehome just received another funding round of 10 Million € to expand internationally, meaning investors value these innovative concepts and consider them to change the industry. At the same time, old technology is stopping traditional hotels to go be agile. Legacy PMSs and even the first generation of cloud PMSs are not capable of supporting these new players. The only way concepts like Limehome can make their concept reality is to use entirely open platforms. The 100% API-first functionality enables the development of customized features on top of the platform, required to provide unique guest experiences.

Christine Demen Meier · Answer

It's true that the hospitality industry is only now starting to adapt to the growing needs of the new generation of customer, and there are multiple opportunities for technological improvements to be implemented to engage, convert and retain digitally savvy consumers. There are already many innovations happening. For example, the fully digital hotel is already a reality. The Sinclair Hotel in Fort Worth, Texas is one of the first fully digital hotels using IoT technology to make hotel operations function more efficiently, and to provide data-driven business insights that enable management and staff to personalize each guest's experience. Because of the pandemic, there is now a growing need for digitalized hotel services which can reassure travelers when it comes to health concerns. Numerous hotels worldwide have already integrated innovative digital services and solutions, such as contactless check-in and check-out features, touchless access to the hotel room or digital concierge services, in order to guarantee the highest hygiene standards.Artificial intelligence, robotics and blockchain will also play a vital role when it comes to innovative solutions for the hotel industry to enhance the customer experience. Today's tech savvy traveler is exposed to digital media like never before. Without any doubt, the hospitality industry needs to adapt quickly to provide responsive, relevant and timely services for its customers.

Hotel Technology During Crises, Does it innovate?

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