The hospitality industry is transforming at a breakneck pace as new competitors pose threats to business as usual and the customer demands the best experiences available. Technology investments pivot to those that enable both consistency and responsiveness in world-class experiences throughout the discovery, booking, stay, and support phases of their trip. To be successful, within the hospitality industry must transform their organization’s mindset from the industry traditional “risk adverse” strategy to one that looks to the future of technology and imagines how it can transform the guest experience. To help navigate this journey, we have outlined three best practices and recommended guidance for ensuring an effective execution of digital transformation for long term success.
- Implement First-Mover/Fast Follower Tech Adoption Patterns - The hospitality industry has traditionally been characterized by low margins and relatively predictable demand. As a result, organizations that put themselves at the front end of the technology adoption curve faced more risks and fewer benefits. But today, with digital disruptors from Airbnb to TripAdvisor changing the competitive landscape and digital transformation everywhere changing consumers' expectations and behaviors, a conservative approach to technology adoption is no longer viable. Hospitality organizations that do not transform to ensure speed, agility, and accuracy in their systems will quickly fall out of favor with prospective guests and will struggle to stay competitive.
- Build executive sponsorship for a "first mover" or "fast follower" mindset and use this as a guiding principle.
- Evaluate technology initiatives from a capex versus opex viewpoint to determine whether on-premise or cloud makes the most sense for your organization.
- Consider collaborating with other organizations (including those outside of your own industry) that have already implemented similar initiatives.
- Work with your team to brainstorm more advanced use cases that can build off foundational technologies like cloud, big data and analytics, mobile, and social.
- Use guest data combined with survey feedback to check whether the initiative is having the desired effect and to understand how to effectively course correct if it is not.
- Don’t Forego Back-End Improvements to Complete In-Room Technology Enhancements -Multiple hotel brands often exist under one umbrella. As hospitality CIOs determine where best to spend the organization's money, time, and resources, they must consider that customers may expect or require different experiences depending on the brand. Hotels also often operate under a franchise model, sometimes requiring buy-in from thousands of decision makers to make a change. Legacy systems that may not adequately support the desired in-room technologies compound this problem. Together, these issues make it a real challenge to implement new in-room technologies, such as keyless entry, across an entire hospitality organization.
- Ensure that your website is up to date and mobile optimized and that the booking process is as smooth as possible -- this is often the first impression prospective guests have of your brand.
- Extend the use of foundational technologies to frontline staff to allow them to quickly and effectively answer guest questions while freeing them from more manual tasks.
- Consolidate your data into one central system. This is the first step to generating a holistic view of the guest across brand, franchise, and property lines.
- Prepare for Increased Privacy Concerns with Improved Transparency and Security - In November 2018, Marriott disclosed that hackers breached its Starwood guest database reservation systems, exposing the data of an estimated 383 million customers spanning the past four years. The cyberattack is currently considered one of the largest in history, and the data stolen included approximately 5.25 million unique unencrypted passport numbers. With breaches of such magnitude come a new awareness and concern by consumers about how much of their data is being collected and how it is being used and shared. Hotels are already the keepers of vast and growing stores of personal information about their guests, from credit card numbers to home addresses to length of stay. As hospitality organizations consider how best to implement this data to personalize their guests' experience, it is more critical than ever to secure that data with the most effective technology available. How you treat your guests' data is how you treat your guests, and breaches can be the "silent killer" of brand value. An excellent guest experience begins and ends with trust.
- Ensure you have implemented basic security measures such as MFA and single sign-on but continue to look ahead to the future of technology where these may be eliminated.
- Communicate proactively and openly with guests about how you are securing and using their data.
- Consider moving key applications to the cloud for enhanced security.
- Conduct regular security audits of policies, procedures, and operations, even if you are on the cloud.
Consider how the leading CIOs at Anschutz Entertainment Group (AEG), G6 Hospitality, Vail Resorts and Wyndham Destinations, effectively approached digital transformation to help guide you through the journey. Innovative technology and proven best practices can help overcome the industry’s traditional challenges -risk adverse, complex business models and the constant threat of breaches – to deliver an improved seamless guest experience, lynchpin to long term success.
As Vice President for IDC Retail Insights, Leslie Hand is responsible for the research direction for IDC Retail Insights, and leads research related to the digital transformation of retail omnichannel operations. Hand works with retailers and technology providers on developing best practices and strategies, aligned with where they are, and where they want to go, leveraging IDC quantitative and qualitative data sets.
Before joining IDC, Ms. Hand spent 28 years in the retail industry, with 5 years in operations and 23 in retail information technology and technology strategy