If the ongoing COVID-19 shutdown has taught us anything, it is that consumers want to regain control of their travel experience as soon as possible. Similarly, hotels want to be able to activate their properties as efficiently as they can as the market recovers—and beyond.
The growing challenge facing the industry, on both sides of the front desk, is the lack of control guests have over many aspects of the hotel experience, with pricing chief among them. Guest expectations are evolving, and the hotel of tomorrow needs to be prepared to meet them. For this reason, and many others, the industry will benefit from a shift toward the adoption of attribute-based shopping (ABS).
Every hotel today operates using a select number of pre-set room categories, but not all of these rooms share consistent attributes. Some rooms offer impressive views, others are located near attractive hotel amenities such as pools or fitness centers, and others still are technically larger based on their location within the property. These are all attributes that guests value, but they are unable to choose them during the booking process.
ABS is a buyer-led process focusing on consumer choice, whereby hoteliers break down their product bundles into individual attributes to allow hotel guests to build their ideal room during the booking process.
If a property were able to offer ABS, guests would be able to specify the attributes they desire for their stay and choose from a list of guest rooms that meet these requirements. The possibilities for guest-room configurations are potentially endless, but in the short-term hotels could organize a selection of pre-made packages for guests to choose from to ease operations behind the scenes.
The vision is to provide several meaningful benefits to both travelers and hotel operators. For one, guests would no longer face concerns that their expectations would not be met prior to arrival, such as booking a guest room with a tub pictured on the hotel website only to find a shower after check-in. This negatively impacts the guest experience and often results in lower review scores.
Second, hotels would be able to up-sell guest rooms based on the demand for specific amenities. Some properties could even improve purchasing techniques by focusing on the products guests demand most, all based on data gained during the booking process. This would allow operators to obtain the greatest return for their investment in certain amenities, while simultaneously allowing them to test new offerings and see the value guests place on them in real time.
Envisioning an Operational Solution: Hands-Off Control
Over the past decade, hotels have worked to provide guests with greater control over their hotel experience through investments in new technology. ABS is the next step in that direction, particularly considering the potential lasting impact of COVID-19 on travel.
It may ease a traveler’s mind to know masks and sanitizer are waiting for them when they arrive at their destination, in case they were unable to travel with them. Other guests may prefer à la carte breakfasts, fitness equipment, and more delivered to the room, all of which can be priced differently based on the property.
Imagine if a hotel were able to track guest booking preferences down to the most minute detail, including the location of the rooms they prefer on your property and the amenities they desire the hotel to provide for them. With national hotel occupancy down and slowly recovering having just recently reached 36.6 percent in May, hoteliers are searching for ways to operate using as few rooms as possible in order to manage overhead. Using ABS, operators would have a greater idea of what their best on-property assets are, fueled by data gained directly from guest purchasing decisions.
Ultimately, hotels will incorporate ABS into their revenue management strategy in order to extend the right offer to the right traveler at the right time, based on data gained through customer relationship management tools. When these technologies work together, they have the potential to bring hotels closer to the magic formula that makes ABS such a powerful tool for both travelers and hotel operators.
Travel is unquestionably on track to resume at some point in the near future, and could possibly exceed prior levels, but the manner in which guests will choose to resume traveling and what their future preferences will evolve to encompass remains unknown. ABS would allow hotels to better understand their guests as they prepare to re-segment their properties for the next wave of travelers post-COVID.
How Do We Get There?
Given the benefits of ABS, what is required technically to enable hotel owners to sell this way? It is not an easy, or simple, answer.
The current booking model in hospitality is efficient for hotel operators, but only because property management systems are currently engineered to favor it. This is the greatest hurdle facing the adoption of an ABS model. In order to offer such technology, a hotel’s central reservation system, global distribution system, and customer relationship management tools must all work in concert. However, no such system currently exists due to the fragmentation of back-end technology platforms used throughout the industry.
In addition, there is the potential for a kind of data logjam—while hotels have diligently collected guest data for the past decade or more, much of that data is irrelevant to the activation of ABS. Hotels interested in offering a more targeted booking experience will need to ask their guests more pointed questions, particularly regarding their preferences in amenities and services. After this, hotels will then have to identify a value for each of their desired attributes and price them accordingly, and then categorize them into relevant packages for travelers to choose from.
Each of these steps will require new kinds of technical solutions, new implementations, and—likely—bringing down some of the technology silos that currently constrain hotel decision makers, at the property and the brand level.
This is a long road into uncharted territory for the hotel industry, but it’s not one without a road map. COVID-19 has led many consumers to familiarize themselves with ordering food from supermarkets ahead of time to be picked up on arrival, and shoppers are well versed in ordering clothes from online stores. Both of these are examples of a kind of ABS implementation, and the airline industry has also achieved success using similar strategies.
Furthermore, and perhaps most importantly, guests seeking to take advantage of ABS would be locked in to making direct bookings as online travel agencies would have little to no access to the necessary data used to make such a booking possible. This, combined with an improved overall guest experience, shows the technology’s potential to disrupt many established booking patterns, replacing them with new modes that stand to benefit hoteliers.
Guests are demanding more of the hotel and travel experience every day. Occupancy levels may stabilize soon, but there will come a time when it is necessary for hotels to elevate the booking experience.
Consumers already prefer ABS to any other alternative when shopping online, and hotels stand to gain everything by giving them the experience they want. The time is now for the industry to carefully weigh the benefits of attribute-based shopping, begin calculating the investments required to make it real, and start down the path.
IDeaS partnered with Hudson Crossing to explore the often discussed but perhaps inadequately understood concepts of attribute-based shopping and pricing and seek to establish a lexicon to help guide hoteliers and technology providers as the industry pushes toward these novel solutions. Read the white paper to learn more about what attribute-based pricing is, why it matters, and how to pave the path attribute-based shopping in the unforeseen future.