It’s budgeting season: Every department head’s least favorite time of year. Never more so than now in the current climate of uncertainty when 2022 looks far from plain sailing. How on earth does one even begin to predict what revenues will look like and how can investments in new tech be justified against that backdrop?
Well, one thing both owners and operators can agree upon is the need to reimagine the guest experience for returning travelers. For starters, we can reasonably assume that, whilst guests have been demanding a frictionless experience since the dawn of time, the post-COVID consumer expects it to be largely contactless as well. Combine that with the relentless adoption of self-service and deep personalization in pretty much every other sector of travel and the case for investment becomes clearer.
Or does it? Even today, budgetary approval for tech investments can be a challenge to get over the line. There are myriad reasons for this, but perhaps three stand out.
First up, the assertion (particularly in full service environments) that technology kills human interaction and guest satisfaction. Well, this could be true if a receptionist spends more time staring at a computer screen than chatting with the guest, or if that guest reaches their room only to find their key card doesn’t work. We’ve all been there. But let’s not confuse badly implemented or integrated technology with that which actually enhances the guest experience.
As cloud-based solutions have matured, a plethora of new hospitality applications are being deployed in hotels that nail the brief. Instant messaging, online check-in/out, digital itineraries, mobile key, payment, automated upsell, all presented to the guest on their own device at the optimal moment. Smartphones are oxygen for the vast majority of guests these days, regardless of their demographic, so why not at least offer them the option to use it on property?
A second reason is the belief that all tech is “bad” because it will either a) make life more complicated for staff or b) make them redundant. The former is somewhat understandable, given the poor design and integration capabilities of legacy systems still widely in use. The latter cannot be entirely dismissed either because there are some systems out there that are built specifically to replace humans. But neither label should be attached to smart guest experience tools. In reality, these tools will automate mundane, repetitive back office tasks and also allow the guest to do some of the heavy lifting themselves. And most guests are perfectly happy to do so if it means a faster check-in or better personalization. The end result? Staff members are freed up to focus on what they do best: Providing great hospitality and maybe even upselling the occasional room in the process.
Finally, cost cannot be overlooked. This is particularly true when hotels are scrambling to recover occupancy and rate, labor shortages are impacting wages, and inflation is on an upward curve. But consider this, by providing guests with the means to engage digitally on their terms, interactions increasingly happen at optimal moments when the guest is most receptive. One renowned hotel group found that “digital” guests spend 94 percent more in ancillary revenue than their analogue counterparts, for example. A small group in the UK saw a 120 percent increase in direct booking conversion when they overhauled their guest journey, reducing OTA dependency in the process and proving that brand loyalty is not just the preserve of the big five.
While the benefits may now seem obvious, what of the price tag on these investments? It varies, of course, and the concern for owners is that the costs will all come at once, making it hard to consume in one go. This was the traditional model, but use of the cloud has meant that there are no hidden IT costs, self-learning tools, and no one time or upfront charges. Instead there are budget-friendly, monthly fees that are proportional to the size of your business. ROI can be achieved with just a handful of additional room nights per month.
And in addition to the immediate upside, there is the chance to create that which all hoteliers most want: a lifetime of loyalty. Delivering the service the guest wants, seamlessly, is what fosters repeat stays and great word of mouth. You could say one cannot put a price on a lifetime of loyalty, but one look at the drop in the cost of acquisitions tells you that one very much can put a price on it, and that long-term vision is enough to get anyone through the short-term trauma of budget season.