Innovative Hotels Focus on Frictionless Ops & Service

Hotels across segment types are hyper-focused on improving experience for guests, a trend that has persisted for several years. Hospitality Technology data charts the shift from technology investments focusing largely on productivity and efficiency to putting guest demands first. As the fervor for frictionless service has only grown, every department of a hotel brand is tasked with removing barriers for guests. Providing seamless interactions along every step of the guest journey more often than not involves enabling mobility and constant connectivity. To deliver on this, executives are leveraging a mixture of technology and data to find the balance between driving the bottom line and providing meaningful digital interactions with guests. Hospitality Technology’s 2019 Lodging Technology Study, queried hotel executives in the final months of 2018 to gather information on actual technology spend as well as planned investment and strategy for 2019. Respondents were asked to rate themselves against their competitors in a few key areas: overall technology innovation, analytics, and customer engagement. Those that rated themselves better than the competition in these areas are identified as “innovators.” Less than half of hotels identify as innovators in overall technology (47%). About one out of three hotels feel that they are leading in customer-facing innovation specifically. Hotels are least confident in how they’re leveraging data, with only 23% stating they are innovators in analytics. This aligns with the lack of confidence in customer-facing technology as often what makes for the most impactful technology implementation is when it is in lock-step with available guest data. If the data isn’t being utilized, hotels lose confidence in how they utilize customer-facing technology for greatest impact. Examining where these innovators are focusing, provides perspective to how leaders stay ahead – or plan to do so. This research brief specifically homes in on what innovators have identified as strategic goals for technology and how these align with broader trends in the industry to provide seamless, connected experiences for guests. This reveals five broader trends that are shaping the hospitality technology: the importance of personalization; the need for flexible technology infrastructure; data and analytics; seamless journeys require seamless integrations between systems; and the need for robust bandwidth to support connected property and guest systems. STRATEGIC GOALS BALANCE GENERATING REVENUE WITH CUSTOMER ENGAGEMENT Examining the strategic goals that hoteliers outlined for technology in 2019, there is alignment between the planned investments and strategies of the competitive set of technology leaders. This data was compiled as index scores, not percentages or averages. That means that they are all relational to each other. For this index, a score of 100 was used as the "average," anything over that was considered “more important” and anything below as “less important.” Holding the top position in the most important tier are: improving customer engagement, improving analytics and finding new revenue opportunities. This index does indicate that hotels are prioritizing products and service, even above cost cutting, illustrating the value to great products and services that can help them accomplish their more important goals. This also indicates that innovators are comfortable opting for solutions that might not necessarily be more advanced, as long as it resonates with guests and if they have other ways of solving problems. Innovators will also be placing importance on driving seamless reservations across channels for guests and enhancing guestroom technology. Cross-platform strategies will become increasingly important as the competition from OTAs and even Google becomes more robust. As guests want the ability to book rooms and additional services through the same channel, hotels that wish to remain leaders will need to enhance their omni-channel strategies and offerings. The strategic goals outlined here will rely on strong and consistent connectivity, however improving bandwidth comes in lower as a strategic priority. This is contrary to the fact that Innovators put a hefty amount of IT budgets on the network and connectivity (20%), second only to hardware (22%). Overall technology innovators and customer-facing innovators both prioritize driving direct reservations as the best way to improve guests’ digital experience. Analytics innovators however, put a much greater focus on mobile, personalized marketing. This represents the importance that connected, smart devices will have for both properties and the guests they serve. As Internet of Things (IoT) continues to gain traction, creating a world of connected devices and systems that constantly “talk” to one another, there will be a steady increase in the number of IoT devices in both homes and businesses. To support this, hotels will need more bandwidth and they will need managed service provider partners to integrate new technologies into this network to ensure seamless experiences. For Nathan Leitner of Beverley Hotels, mobile has become a key component of the brand’s mobile strategy. “We are seeing changes in how our guests and consumers as a whole interact and use mobile technology so we try to keep pace with this,” Leitner says. “For our staff we use of mix of iPads and phones for communication throughout the property – either through mobile-enabled web pages, apps, and email. We are still fine-tuning what this looks like for guests, but it is a priority on both the guest and employee facing side for us.” Leitner admits that this strategy has to be constantly evolving. He recalls that initially his team hypothesized that creating an app would be a key aspect to creating a tech-enabled guest experience. Instead, he and his team found that with the speed of mobile technology it might make more sense to focus on software and third party products to enhance the experience and allow the guest to choose what they use. “With smart home and IoT-enabled products we are now seeing this as a new area to explore,” he says. “Our Strategy seems to evolve as the speed of technology so we are trying to create more nimble and adaptive systems that we can iterate and build on.” INNOVATORS START WITH SMART ANALYSIS OF GUEST BEHAVIOR In order for hotels to build upon infrastructure successfully, having solid data and analytics into guest behavior and preferences will be key. This is evident in how innovators place much higher precedence to insights to guests and revenue management. If hotels are successful in their quest to drive more direct bookings, that revenue management data will be even more robust and help to create more complete guest profiles. A comprehensive view of guests will be key to creating end-to-end experiences for guests. Joshua Sloser, SVP, Digital, Hilton Worldwide, notes that the rise of computing power and the push to the cloud is driving better connectivity, making it easier for hotels and guests to be constantly connected and talking to each other. For Hilton, the rise of IoT has been particularly powerful for helping the brand build its digital ecosystem to bring together operations and service. Hilton currently has more than 3,500 Connected Rooms across 13 hotels and plans to roll out the technology to tens of thousands more rooms across hundreds of hotels, primarily in the U.S. but also in the first non-U.S. locations. The company has 4,200+ properties live with Digital Key in more than 30 countries around the world. Hilton guests have opened more than 44 million doors and counting, since Digital Key launched in 2015. “The experience starts with allowing guests to select their room and use a digital key to enter a room they are able to personalize to set preferences for everything from room temperature to content,” Sloser says. “From the owner/operator perspective, it offers an understanding what’s being consumed in room, how much energy being used, what content is important to guests. Those are all big initiatives for us – to drive value for guests and hotels.” INNOVATORS PRIORITIZE GUEST INSIGHT & REVENUE OPTIMIZATION With so much data available on guests, often the challenge is making sense of the information to take appropriate action. A common request among hoteliers of analytics and technology partners is for more robust dashboards to measure guest experience in concrete ways as well as monitor systems or issues guests might be having in order to address them in real-time. As guest experience technologies are intrinsically tied to available bandwidth, being able to monitor and manage this area could avoid negative sentiment from frustrated guests who do not have patience for slow Internet speeds. Bandwidth is a commodity for hotels as guest demands rise exponentially. According to Hospitality Technology’s 2018 Customer Engagement Technology Study, 85% of guests will choose a hotel based on the property offering free WiFi, but that WiFi must also be good WiFi. Data from the study reveals that guests will pay more if the technology they deem important is available. This leads one to the realization that raising room rates is more acceptable than charging for WiFi. Free, strong connectivity is an expectation for today’s guests. Consider that 35% of guests want to integrate their own mobile devices to the in-room television. This is a number that will steadily increase as guests will only become more tethered to mobile devices that “know them.” “Our strategy seems to evolve as the speed of technology,” says Beverley Hotels’ Leitner. “So we are trying to create more nimble and adaptive systems that we can iterate and build on.” COX Business/Hospitality Network LLC http://www.coxhn.com/

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