A Look Back on Our 2020!
As we are coming to an end for 2020, our CEO, Deniz Tekerek shares his thoughts and reflections on Portier Technologies' year. It has been a challenging year met with pandemic-related hurdles and obstacles, but, nonetheless, we have persevered and we were able to grow significantly. Read on to find out more in detail.
As you can imagine, 2020 has been a challenging year for us at Portier Technologies, as it would have been for many other startups and established companies serving the travel sector.
We concluded 2019 with record numbers in terms of growth, revenue and client engagement, and we launched our service in 6 additional countries, showcasing our platform’s scalability and relevance beyond the boundaries of our home market in Thailand. In many ways, 2019 played out like a startup fairytale. As we looked towards 2020, we were ready to increase our footprint in new markets, elevated by the fact that our sales department had been the busiest part of our business.
Unfortunately, 2020 happened. What had been relevant in the previous year quickly started to become less important, with each month of the new year passing. I can’t even recall the number of conversations I had, which included phrases like when travel resumes, or when we go back to normal. With every rerun of these phrases, we came to understand how a swift recovery would no longer be a realistic outlook.
Having said that, our company managed to find several pockets of positivity within 2020. We still ended up growing our revenues by a factor of 3 – which was below our expectations, but something to be proud of nonetheless. Below, I’ll highlight some of the things we did, in order to achieve growth through the worst experience the travel sector had to endure in modern times.
An Emotional Connection to our Clients
We had always been keen on emphasising the value of hotel staff. As opposed to many other tech startups looking for efficiencies in the hotel sector, we were adamant – and still are – that a good and a great stay at a hotel is differentiated by the hotel staff, rather than the efficiency of service. When was the last time you came back from a hotel stay and said to yourself: “Oh my God, how efficient was that hotel?” That would be classed as an anomaly, based on hotel guests' public reviews.
The Portier Platform
In this context, the Portier Platform was built to be an enhancer of hotel staff abilities, as well as a service – a digital concierge that empowers hotel staff to “explore” the destination and the hotel alongside their guests. In other words, Portier is built upon the notion of “emotionally close, physically distant”.
Consequently, in these times of uncertainty caused by the COVID-19 pandemic, the spotlight turned towards the ability to deliver service excellence at a distance. In previous years, we had to highlight the need for hotels to digitise, but the pandemic has accelerated the reduction of hotel touchpoints, while increasing guest engagement at a distance.
A Strengthened Emotional Connection between Guests and Clients
In other words, the emotional connection that we want our clients to have to their guests, has seen itself flourishing beautifully into an emotional connection between our potential clients and ourselves itself. What used to be quite a hard sell and difficult thing to imagine, found itself receiving a lot more open understanding, and the idea to deploy our platform was no longer undermined by thoughts like “but I'm worried I'll lose the personal connection with my guests”.
In many ways, the pandemic has given the emotional aspect of our business some significant tailwind, and hotels including the Banyan Tree Krabi understood that. If anything, Portier helps amplify the personal connection. Now, with the pandemic in play, we also deliver an emotional connection, despite changing guest behaviour.
It’s a Two-Way Street
The Undeniable Value of our Connections!
At Portier, we have never doubted the value of the connections we formed with our hotel partners, and we have always been keen to do our utmost to help our partners deliver distinguished services. We were happy to take the backseat and be almost completely anonymous and invisible when it comes to the end-users – the hotel guests.
Despite our hidden role in implementing the newly digitised guest journey, we experienced a period of extreme cooperation and a sense of community when our hotel partners started temporarily shutting their doors. On the one hand, it was a humbling experience to be able to offer our partners flexibility, so they can get through this period. What was equally impressive was how our partners reacted, highlighting the importance of Portier (and Smart Hospitality) in the process.
Feedback Helps All of Us Move Forward
This feedback empowered us to focus on our platform’s benefits more than ever before. The Portier Platform, which we initially built as a service enhancer, has become a critical component in delivering the most basic hotel services. As such, it was very humbling to see the likes of Hotel Continental Lausanne, one of our Swiss hotel partners, utilise our technology to overcome the challenges the Swiss tourism authorities had thrown their way.
Part of the regulations put in place by the Switzerland Tourism Council stated that housekeeping services could only be deployed once every 24 hours, to minimise face-to-face interaction between guests and staff. In addition, hotel rooms would have to be aired for at least an hour a day – something which is usually done by housekeeping staff. This meant the legal responsibility now fall on guests as well. Hotel Continental Lausanne automated the push messaging feature on the Portier Platform to remind guests every day to comply with the new regulations. This exemplifies how hotels can still deliver the best guest experience, despite the physical barrier between the staff and guests.
As we had experienced crucial product inputs from our hotel partners in the past, this rather unexpected period helped us further fortify this two-way street between ourselves and our clients. It's a street that continues to deliver product and roadmap input that’s more valuable than the cash that exchanges hands for the service being utilised. This notion will simply continue to fuel the growth that we aim for, powered by our highly valued clients.
Hotels are Less Receptive to Change
We can debate this topic all we want, but the ultimate reality is that the hotel industry is among the world’s most traditional and arguably less receptive to change. Whilst holding on to traditions in some areas can be a net benefit, allowing the digital revolution to pass by has certainly had a damaging impact on the hotel industry landscape. The emergence of Airbnb for example is thought to have reduced hotel profit margins by as much as 10% by supplying the market with additional short-term booking capacity.
Many hotels tried to fight the emergence of alternatives by lobbying governments and essentially fighting the contenders in courts instead of tackling the issue head-on. This attitude made it hard for companies like ours to argue for differentiation via technology, as hoteliers were preoccupied with battles focused on discrediting others, rather than improving their own product in an ever-competitive marketplace.
Exploring the Changes brought about by the Pandemic
What’s more, when the pandemic hit, many hotels felt empowered to highlight their advantage over the likes of Airbnb when it comes to sanitisation protocols and such. In many ways, this would have been another setback for hotel technology, had travellers reacted to such appeals, but instead, Airbnb and competitors like Vrbo started recovering a lot faster than hotels, disproving the hypothesis of hotels being the “safer” choice. This is the perfect example of how the hotel industry often reacts to changes in the world instead of being proactive. Most of them wait till something happens before realising they have to act on it - which often leads to a visionary change in the industry.
As a result, we started experiencing some strong digital tailwinds in the final quarter of 2020, with hotels genuinely beginning to see the need for differentiation via technology platforms like ours. In that regard, what felt like a highly educational selling method in the past, has now begun to turn towards something that sells itself to some extent, especially as the need for technology is becoming a lot more apparent to hoteliers who have to react to changing guest behaviour patterns faster.
What does the Future hold?
What’s quite apparent is that the hotel sector will certainly see some permanent changes to its dynamics, given the fact that it’s been ripe for an overhaul for a number of years now. Post-pandemic recovery strategies could also accelerate the adoption of digital solutions in the hotel landscape. Whilst we see Portier Technologies in a strong position to align with the growth of hospitality technology, we also want to ensure we make the right contributions to a sector we have come to love over the years. Let’s look at this critical crossroads between the past and future in more detail.
Brands and Owners: their long-term relationship
With more brand consolidation on the horizon, the long-term relationship between brands and owners is certainly moving ever so close to potential conflict, as oftentimes, shareholder interests of brands and the more urgent bottom-line focus of owners don’t align so well. Given this conundrum, we might see a more prevalent need for customisation and personalisation at scale because owner portfolios tend to be more diverse than brand portfolios. In other words, the tailwinds that digital hotel solutions are experiencing in 2020 will likely be further empowered by a stronger digital and direct appetite from owners who might no longer be in position to rely on their brands for differentiation.
As we have experienced, owners have always been more interested in a conversation around increasing hotel revenue, an area in which the Portier Platform does better than most. Again, for technology providers that help faster recoveries, the “owner chat” will certainly be accelerated over the next few years of recovery, given the owners’ need for strong financial performances from each physical asset.
The Expanded Hotel – what does it include?
Our team has covered the topic of hotels needing to think beyond the property at large during 2020, and for obvious reasons, the pressure for hotels to engage guests beyond the physical limitations of the property will only grow in 2021, with revenue recovery being one of the items at the top of the agenda for any tourism business.
Targeting the Whole Travel Journey – not just one section
If revenue recovery is to happen sooner rather than later, hotels must focus on the traveller wallet during a guest’s whole travel journey, instead of simply getting people to stay at the hotel. A “beyond the property” concierge experience will be more critical now than ever before because firstly, guests will likely need and want more guidance, and secondly, hotels will be subject to significantly fewer guests than in the past, fuelling the need to monetise each guest more than ever before.
If hotels limit their influence on the guests’ time spent at the hotel, the opportunity for differentiation and increased income is limited in the same way. British travellers, for instance, only spend about 3 hours at the hotel each day.
How to make the most of the Travel Journey
Assuming the average human sleeps for around 8 hours, that is 13 hours spent outside of the hotel. Why is this an issue? Those 13 hours spent by an average British traveller represents the amount of time they spend without any connection to your hotel or your staff. This might simply not be good enough for hoteliers wanting to play a bigger role in the traveller journey when it can be as simple as offering promotions for a Happy Hour drink in your hotel's bar. If hotels fail to engage with travellers, and as time goes by, travellers might no longer see an added advantage of hotels over alternative lodgings.
Tech is the Answer in this Modern Age!
The answer to this conundrum: technology! Guest-facing technology will become more central to those who understand that differentiation starts now. If your hotel’s belief revolves around the notion of “but we really like the personal touch,” guess what? A “personal touch” has become a very sensitive topic and now, it’s technology’s turn to deliver that personal touch for you and make you bigger than the building you provide.
Guest Engagement trumps and will continue to trump Guest Acquisition
This is an interesting one. From the perspective of a rather neutral technology provider like Portier Technologies, the hotel sector seems to be repeating historical mistakes again and again, and that is seemingly always driven by panic.
Looking back at the years following the 2008 financial crisis, this Tnooz study from 2014 highlights the fact that, while luxury hotel revenues had recovered by 23% over the six years following the crisis, the acquisition cost of each guest had risen by the same factor. In other words, getting the same amount of people to stay at your hotel via “direct acquisition” became significantly more expensive.
The Importance of Guest Engagement
Why is this important for 2021? Well, we’re seeing a reversion to the same type of behaviour from hoteliers. Indeed, the focus continues to be on “heads in beds”, rather than beginning to take advantage of a much more captive audience, the guests that are and will be on-site. If the mistakes from the years following the 2008 crisis are repeated, and given the ever-increasing pricing power of Google and Facebook, we will likely see a significant rise in guest acquisition costs, unless hotels become more focused and creative.
The most obvious and most easily deployable strategy to counteract these hikes in cost is a focus on guest engagement, not guest acquisition. We have talked about this a lot in 2020, and to repeat the numbers from a 2014 study, an engaged guest spends 45% more on ancillary services at a hotel than a disengaged guest. That is a hotel’s captive audience, and that’s where hotels have to learn to enhance guest interaction at hotels. 45% of ancillary revenue - these numbers could make a world of difference for hotels working on revenue recovery.
How Portier steps in
Luckily for us and our existing partners, that’s our bread and butter, and we have helped most of our partners achieve significant spending increases from guests over the years. One such example is the Banyan Tree Samui, a high-end resort in Koh Samui, Thailand. We deployed the Portier Platform here in late 2017, and by the end of our first year, we helped the property to an 8X return on investment and spending increases from ancillary services including the spa which drove an incremental $48,000 of income in 12 months. This wasn’t a question of “heads in beds” but simply, the hotel’s newfound ability to do more with their guests and claim a larger share of the traveller wallet via engagement-focused technology.
Our Blog and Other New Ventures this year
On another note, this year, we have placed immense focus on our editorial and visual marketing departments. Our Portier Blog and newsletter have garnered a loyal following and readership, and we have been publishing our thoughts and reflections on the travel industry on a regular basis. Over the last year we have discussed concierge improvement, digitisation of hotels, direct bookings, sustainable travel, travel preferences, domestic travelling, and a wide range of COVID-19 related issues.
A COVID-19 Editorial Focus
As we aim to provide refreshing, succinct – and above all, informative – resources for our readers, it was only natural for us to design many of our articles in light of the pandemic. We have explored the vaccine, bounce-back strategies, as well as examples of travel bubbles in relation to the hospitality industry and offered our predictions and projections. Even in the articles, we made sure to include considerations of the pandemic and the upcoming post-pandemic era.
At Portier, we aim to always be one step ahead, so that our reports and stories help hotels and guests alike to prepare – and subsequently, avoid and improve in advance – rather than be late to the scene and only be able to analyse what has already happened. While it is important to pinpoint recovery strategies and explain the most effective ones in our posts, we want to help you, our readers, to eliminate the hurdles in the first place.
In case you missed it: we launched the Portier Explorer!
What's more, this year, we have also launched the Portier Explorer, a weekly travel guide encompassing food reviews, café and restaurant recommendations, art exhibitions, tourist must-visit landmarks and sightseeing areas, as well as general travel tips. Our Explorer, which is published weekly on our re-vamped Instagram page, accompanied by detailed reviews on our Blog, spans from East Southeast Asian cities like Singapore, Hong Kong and Bangkok. We will be furthering the range, and reaching out beyond that to cities in the Middle East and Europe in 2021.
As per my words above, 2020 has certainly been a year of extreme challenge, a gut check on our company’s ability to cope and continue to push for growth, and, perhaps most importantly, an ability for every person and business to take a step back and look at things from a more neutral viewpoint. We experienced a number of things that made us feel as though we had always been on the right trajectory, but given that no business is a secluded island, the industry’s suffering has spilled into our path as well.
What’s important to note is that we do what we do for the benefit of our partners, and in some ways, those that don’t work with us yet have been put under a lot of pressure when it comes to digitising their offerings and operations. In that sense, we will always stand by to support hotels on the journey to accelerating digitalisation to new heights.