From the outside looking in, it appears hotels and the collective hospitality industry are doing just fine. We’re setting record occupancy numbers, learning more about our guests, and watching new hotels pop up left and right.
But Michael Levie thinks there’s more to the story. Levie sees the guts, the underside, the back end — and when he looks at factors like Airbnb and the future of hotel distribution, he sees an industry setting itself up for failure.
“We’re all doing and trying the same things,” Levie said during a presentation to owners, operators, asset managers and suppliers at last month’s Revenue Strategy Summit in Washington, D.C. “We all have similar digital and tech opportunities, and with the cloud we’re getting to the point where independents can do the same things as the big guys.”
So he’s suggesting a restart. Levie and his high-end-but-inexpensive urban modular hotel concept citizenM are trying to look at hospitality through a new lens.
“How can we go from the mint on the pillow to looking to systems that let us see in the room and make sure everything is functioning?” Levie said. “Let’s redefine what a hotel should be. Let’s start from scratch. Let’s redefine the category.”
He says that, until this point, hotels have only concentrated on two legs of a three-legged stool. We understand content and process but are lacking an understanding of context, he said, adding: “We often forget why we are doing things.”
The “why” is perhaps the most important to owners, who foot the bill for most new enhancements on property. For that reason, brands can’t throw everything at the wall and see what sticks.
“There’s always going to be a need for digital innovation, but as owners the cost always falls on our backs,” said Chris Nixon, associate VP of revenue optimization for Ashford. “When we installed digital keys, all the locks needed to be replaced. Direct bookings are the war right now, and we’re footing the bill.”
Nixon said he’d like to see similar investments from the brands on things like their CRS technology.
“The CRS is the backbone of our tech stack, and it’s built on 1980s technology,” he said. “As owners, we can be vocal about it. A brand is nothing but a logo, a loyalty program and a CRS, and one of those three is extremely outdated.”
Other hoteliers at RSS pointed to newer technologies that are driving change. Charlie Osmond, CEO of Triptease, said messaging and communication platforms will change the future, specifically pointing to Apple Business Chat.
“Hotels are going to have to man the messaging platform like they man the phones,” he said. “There’s ancillary revenue in these hotels that we’re just not tapping into yet. Let’s just nail the easy stuff first.”
Personalizing the Guest Experience
One area to start is improving the guest experience, which begins long before the guest arrives on property. Through messaging, hotels can interact with their prospective guests in a personal way.
“You’re not going to differentiate on product,” said Dawn Gallagher, executive VP of sales and marketing with Crescent Hotels and Resorts. “First-mover advantage has to come with technology and how technology enables the customer experience. What it ultimately comes down to is personalization.
“Now I know Chris, and I’m going to serve Chris this offer,” she continued. “Let’s give Chris the opportunity to choose his own experience.”
Brian Berry, senior VP of sales and revenue management for Host Hotels & Resorts, agreed, saying room choices and packages served up on brand.com sites could be much more unique.
“They’re pre-bundled but not terribly personal,” he said. “I should be able to say, ‘I want these amenities’ and the site should allow me to craft or curate an experience. That’s where personalization is going to come in.”
“Customers are willing to pay for an individualized experience, but hotels really haven’t moved down that path yet,” Nixon added.
The check-in process is ready for a major overhaul as well. While hoteliers may lose the opportunity to upsell right as the guest checks in, automating key delivery will soon be ubiquitous.
“Despite all the things we’re giving guests, currently OTAs are innovating better, and people go to them,” Nixon said.
Berry said when it comes to guest engagement operators often focus on the wrong metrics.
“We’re too focused on formulating our responses and the number of reviews,” he said. “We’re implementing incentive programs to increase the number of reviews, but we’re paying far too little attention on the issues underlying those reviews.”
With data and technology comes personalization, differentiation and eventually loyalty.
“True loyalty is not transactional,” Berry said. “Our guests will pay a premium to stay with us because there’s a connection there. That’s coming with digital innovation.”