I’ve never felt that the hotel industry will go the way of the newspaper industry and just die – crushed by a disruptive force as strong as digital media.
The Internet did change the way travelers book hotel rooms and paved the way for third party distribution, which gave hotels larger reach but also slashed hotel profitability. But hotels weren’t – and still aren’t – going anywhere.
I will admit, though, that I expect a monumental change to hospitality is coming.
Setting aside the threats of the OTA duopoly for a moment, I would expect both Google and Amazon to soon have major impacts on the way hotels are booked. Someone will provide a way to reduce all the friction in the booking process and, similar to Uber, make it seamless and intuitive.
Perhaps even more disruptive will be Airbnb’s growth. The fact is: There are many leisure situations where booking an Airbnb just makes more sense than booking a hotel room, often at a lower cost.
The ‘Hotel of the Future?’
These changes are happening fast, and hotel brands that offer a cookie-cutter experience have the most to lose. As more alternative accommodations become available, hotel brands risk becoming even more commoditized than they already are.
Hotel executives are very smart, and most see all of this coming. An article in Ad Age this week says Airbnb is quickly gaining ground in the hospitality market because there is much less infrastructure cost involved than when running a hotel. In response, hotel brands are investing into “innovation units,” the article says, to test things like personal greeters and an immersive kitchen, declaring, “The hotel of the future is coming.”
Ad Age got half the story right. There are major threats looming and, unless hotels get innovative, the whole business model will be forced to evolve. But the type of hospitality innovation that we’ve seen over the past decade — cosmetic things like check-in kiosks, keyless locks, luggage robots or immersive kitchens — isn’t going to cut it.
Think Bigger Than Kiosks and Keyless Entry
To compete with Airbnb and Amazon, it’s time hoteliers push the envelope and really think about shaking up the entire hotel experience. It starts with removing friction in the booking process and extends to the right amount of personalized service at check-in and throughout the entire guest journey.
Because smartphones provide a digital component to each touch point along the way, customer experience has become your best marketing. Everything is riding on the quality of your guest interactions.
Instead of thinking about using technology to improve the guest experience with surface-level gadgets, think about how you can use technology as a framework to improve the guest experience. Instead of cosmetic touch-ups, use technology as the backbone of your operation to get data and departments aligned.
Foundational Hotel Technology
Analytics are key and should be at the center of innovation. Until hotels move away from legacy systems and change the framework — the way systems are connected and the way data is collected, stored, analyzed and shared — there is going to be no revolutionizing anything.
Think of it like putting 4K TVs in your hotel rooms when you don’t have cable or Netflix. Before you can add the shiny amenities, the pipes and the infrastructure need to be there first.
Look at keyless entry, which has been on the docket for more than a decade and still not widely implemented because the framework — the underlying hotel technology — is not yet there to keep it functional and secure.
Before hotels can modernize the booking experience or truly personalize any part of the guest journey, the architecture needs to be in place. Think about those technology investments before you leap ahead to keyless entry or a robot waiter.
Without the framework for hospitality innovation, hotels risk major disruption to their business model.
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