The hotel industry, like so many other business sectors, is on the cusp of profound change.
Connectivity, artificial intelligence, the Internet of Things and the data all these new innovations produce are set to change the way hotels function, according to Bret Greenstein, VP of IBM Watson, Internet of Things.
Presenting at the third annual Revenue Strategy Forum in London in early November, Greenstein noted that a forecasted 30 billion devices would be connected to the Internet by 2020, contributing to a 160-zegabyte datasphere by 2025. In a presentation filled with big figures and even bigger statements, Greenstein told the audience that the Internet would generate $1.29 trillion in added value by 2019.
But how will all this impact hotels?
Three ways IoT will impact hotels
Greenstein outlined three reasons why hotels should invest in IoT:
- Improved operations and lower costs – Greenstein pointed out that when you connect a device mostly it works just fine; but sometimes, when something starts to go wrong, there will be some indication of a failure coming. IoT reads these indications and can alert the hotel in advance. Knowing a piece of equipment is going to fail beforehand can help a hotel deliver a more seamless guest experience. If you can fix the air conditioning in a guest room before check in, or replace the television while the guest is out, you are improving service.
- Enriched and personalised experience – Greenstein talked about how IoT can help improve guest engagement. He gave an example of how when a company ships an appliance, the relationship with the unit often ends as soon as the appliance is delivered. However, with IoT its different because the appliance is connected to WiFi and the company has a relationship with that unit and the user for the life of the appliance. From this connectivity, the company can learn a lot about the customer and how they use the appliance, and how to serve them better. The same is true in hospitality. Devices such as in-room voice-activated personal assistants can give hotels a wealth of information on what the guest wants and needs.
- New services and business models. By knowing more about the customer, hotels can identify new services and business opportunities more easily. Greenstein identified the changes coming to drivers with the development of automated vehicles. He explained how the cars of the future will suggest exits, where to refuel, where to eat, etc. “The car will anticipate needs and understand you better. It’s a voice driven intelligent experience, with a sole purpose of delivering better service so you don’t have to plan ahead,” he said, adding that hotels can emulate this by anticipating guest requests and tailoring services.
Customer expectations
The expectations of customers are changing. The guest wants to interact with its hotel world in the same way it interacts with the world at home. Those who are used to voice-based systems, who have Alexa in their homes, now expect the same from their hotel room.
“Guests have expectations on voice interaction. People really don’t like picking up the phone to ask someone. They would rather just ask the room,” said Greenstein.
“People just want to be helped. They don’t want to learn new commands but just say what they want: ‘I’m feeling thirsty’, ‘I need another pillow’,” he said.
IBM Watson is developing products to better serve the guest and provide hotels with a new level of data. New product innovations include smart mirrors that offer customised content and media on a touch-screen display; intelligent speakers that respond to voice commands to control in-room functions; and robotic lobby concierges that provide location-relevant information to guests.
According to Greenstein, hotels should question: “How does the data from IoT change what you learn about your customers and your services, and how can you engage with them better and deliver higher values of service?
“We’re at the age of the intersection between man and the machine, the physical world and Internet world coming together. Everything is going to be connected.”
It’s about making the hotel the centre of expertise on the destination so that you can build brand loyalty while creating new revenue streams, he said.
“Consider where you would like to push people towards that might create a new revenue stream for you? There is an opportunity to build relationships with the merchants around your venue to benefit you and your partners. I may love Mexican food and if you have a strong relationship with a particular Mexican restaurant you will suggest that one to me. The guest walks away feeling good rather than frustrated,” Greenstein said.
Technological innovations are re-shaping the hotel industry. Those that embrace these changes will benefit from streamlined operations and better guest engagement. Those that don’t will find themselves left behind.
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