COVID-19: Catalyst for Tech Adoption at Hotels
It’s an arguably unanimous opinion that the hotel industry is a laggard when it comes to the adoption and application of technology. An openly discussed topic, industry experts and those involved in the operations of hotels have always been self-conscious about the state of hotel technology, and the conversation has often revolved around the conflict of interest between real estate ownership and the notions of guest engagement and guest experience.
As per Mark Fancourt of TRAVHOTECH “the hospitality industry is a real estate business. Most rental property owners like to avoid heavy continued investment into the asset, if at all possible. For that reason, any decision to make further investments into the asset is heavily considered. That includes technology.” In other words, many hotel owners are in the business of asset maintenance, similar to individuals who invest in, say, rental properties where the bare minimum will mostly be sufficient to maintain a steady stream of income. In this context, it’s all about making the asset work for you, not the other way around.
As a result, investments such as technology improvements can be regarded as a luxury rather than a need, especially when times are great and the “asset” is near full capacity levels. For hotels, 2019 was a record year, given the travel industry’s rise to its historically highest levels, with cities like Hong Kong and Singapore experiencing average occupancy levels well above the 80% mark. In such times, the “asset” (the hotel) was working extra hours and the dividends owners could command were unprecedented.
However, in an unexpected turn of events in 2020, COVID-19 somewhat inadvertently accelerated the adoption of modern technology across the hotel sector. Before the pandemic, guest behaviours went through change at a steady pace, and the “asset” was always good enough to provide for the needs of travellers. In essence, most of the technological changes were recorded in the back office, and more often than not, they were not even visible to hotel guests. In this sense, from a technology standpoint, the general guest experience was arguably deprioritised, and the focus was almost exclusively set on “things that happen at the hotel and relate to the property”.
With the post-pandemic period of travel looming, the hotel industry will likely have to go through the most radical shift in technology adoption, with the focus swiftly shifting to guest-facing solutions that can no longer be seen as a “nice to have” but a “must-have”. In other words, investments in smart hospitality will have to be made, simply to maintain what was once the status-quo of being able to receive guests in the first place.
When it comes to making a decision on which type of guest-facing solutions hotels should invest in, there are typically 3 key factors to take into account, namely revenue potential, applicability, and data security. Let’s break these down a little more.
As stated above, in the past, most hotel technology investments were focused on maintenance and back-office operations. In many ways, the flow of guests was baked into any of the above and there was an assumption that people would come.
If COVID-19 has done one thing to the hotel industry, it’s the fact that it significantly reduced the amount of “heads in beds”, and the expectation should not be that 2019 marketing strategies of getting more people to stay at a property will have the same impact. With fewer people scheduled and forecasted to arrive at hotels, the focus needs to shift towards making more income from fewer wallets.
This is where guest-facing technology will be most impactful. The role of technology will not only be to avoid touching surfaces or removing any guest-to-staff contact, it will be to optimise digital interactions for the greater benefit of the hotel’s bottom line. As a very basic example, if you continue to use printed materials relating to ancillary services or special promotions, you don’t get to measure the success of such campaigns. You don’t know how many people looked at your promotion, nor how many were close to booking it. If you can’t measure this impact, you can’t plan for any revenue-generating strategies.
In this respect, the technology that hotels decide to invest in needs to help optimise the reduced amount of upselling opportunities that hoteliers should expect in the months ahead. Such technology should give you the ability to measure your content and benefit from a captive audience that vastly differs from the audience you’re trying to target on search platforms like Google. In other words, these people are already present and ready to spend on your hotel’s services.
At a pragmatic level, the technology purchasing decision should take into account whether the targeted technology has high levels of guest engagement and as to whether features such as push messaging and marketing data reporting are readily available. Push messaging, for example, will essentially remove the need to print promotional material and deliver any promotions at the most opportune time, leading to more measurable efforts with a significantly higher degree of conversion.
At times, hotels seem to invest in technology, not necessarily the guest journey. What I mean by that is the fact that there is some cutting-edge technology out there, but just because it’s cutting edge, it won’t always be applicable in your environment. For example, if you want to make servicing rooms more efficient and you deploy housekeeping robots, you need to make sure that no stairs get in their way and that your property is built in a way that accommodates these robots and doesn’t end up making things even less efficient.
The same applies to your guests. Take the push messaging example above. While the use of push messaging is critical, the platform on which push messaging is delivered is the difference between success and failure. If you invest in an app, most of your guests will likely not download it, and of those who download it, most will disable push messaging. In today’s environment, only 1 out of 10,000 guests will end up opening a push message that’s sent via an app. This is a case of technology being available but clearly NOT APPLICABLE in your environment. If hotel staff put so much effort into creating promotions, you need to increase the likelihood that guests will actually see these promotions at a clearly higher rate than 0.001%!
When it comes to guest-facing technology, hotels must consider the guest’s journey to that technology and ensure that “making it there” is more important than the provided features. This will deliver a captive audience and the technology will be a lot more than checking a box.
With the repeated emergence of news surrounding the bad handling of data by apps like WhatsApp, consumers are becoming increasingly concerned about their privacy. As per Zain Jaffer, “the more that guests are able to be tracked and recognized, the more they deserve to know their data is safe.”
When it comes to guest-facing technology investments hotels are considering, it is important to assess the dangers of entering a guest’s private space, namely their personal smartphone. Data leaks have previously devastated hotel brands, and if anything, data security has become a much more sensitive issue during the COVID-19 pandemic. Think of it this way: if consumers barely trust the government with their personal phones and the associated data, why should they trust you, a hotel, considering they’ll only be at your property for a fraction of their year?
Going back to the aspect of applicability, take the example of Harish Pillay who was one of the engineers involved in creating a COVID-tracing tool for Singapore. “The problem was being solved by creating this tool, but there were aspects of trust and confidentiality which also needed to be addressed,” said Pillay, who has worked on Red Hat’s open-source software much of his career and fervently believes in transparent technologies. “We understand all of these things. Let the community help you do the right thing.” In other words, the tool is available, but obviously not applicable.
In the context of data security and the associated applicability to the guest’s journey and needs, hotels will have to understand the importance of either safeguarding guest data a lot better or simply staying away from guests’ personal data by avoiding their sensitive smartphone space. There are better ways to deliver guest engagement, without compromising guests’ security, as you can read here.
COVID-19 will continue to have an impact on the hotel sector, and despite the devastation that we have all experienced over the last year or so, the silver lining in our industry is an accelerated adoption of technology that will ultimately help the industry recover faster, deliver more relevant experiences and safeguard travellers better in the future.