Industry leaders will surely agree, 2019 was an exciting time for hospitality. On what seems to be an unrelenting path to innovation, hotels around the globe are implementing critical operational make-overs, while guests are leading the charge for enhanced convenience and personalization.
Modern guest loyalty is earned, not given, and despite any initial challenges associated with ever-evolving traveler demands, the momentum felt across the industry is undeniable. In fact, it’s now been a decade since the economic recession, and over the last decade, US hotel gross bookings grew from $116 billion to over $185 billion. According to the World Travel and Tourism Council, travel and tourism is one of the world’s fastest-growing industries.
As emerging technology and trends continue to transform our policies, processes, and platforms rapidly, we can’t help but notice that the hospitality industry of today is a far cry from that which existed decades ago. This positive momentum begs the question, which of today’s technologies will shape tomorrow’s hospitality? Which pivotal shifts, have positioned us to reach heightened standards of service? What key trends have steadily reshaped our industry, and will continue to do so as we head into a new decade?
The 3 Most Influential Tech Trends
The Era of Mobile Connectivity
The demand for mobile functionality, across both guest-facing and staff-facing hotel platforms, has reached a fever pitch. The convenience and autonomy associated with mobile applications is paramount to a hotel’s efficiency, success, and approval. That being said, digital technology that simply scratches the surface, isn’t enough. Guests have high expectations for all interactions spanning across their travel experience, whether delivered through offline or online channels. Let’s consider the following:
- 81% of travelers want greater digital customer service from hotel brands
- 66.7% of millennials (who will account for more than 50% of all global hotel guest by 2020) plan their trips on mobile devices
- Up to 64% of millennials book hotel rooms on their smartphones and 97% of millennials post their holiday pictures on a social media platform
- 60% of consumers are more likely to choose a smartphone-enabled hotel
Even further, Skift reported that the most important conclusion from the J.D. Power and Associates North America Hotel Guest Satisfaction Index Study was for hoteliers to “pay more attention to mobile.” Hoteliers are tasked not only with the responsibility of providing guests a unique, memorable travel experience; but also an experience that is closely intertwined with each guests’ accustomed lifestyle. Ultimately, this should come as no surprise. Technology has long since disrupted our lives, and as such, it becomes a vital component of the hospitality experience. Hotels that utilize mobile apps and functionality have higher guest satisfaction.
The same proves to be true for staff experience. Although historically, the emergence of new technology has made hospitality staff nervous, it’s increasingly imperative that hotels provide their employees with the technological support required to keep pace with guest expectations. Staff members who are accustomed to navigating user-friendly, convenience-driven mobile apps are likely to adopt mobile-centric technology that serves to simplify their job and enhance productivity with ease. After all, if we have abandoned manual, cumbersome processes across all other aspects of our lives, why should those still apply within the context of the hospitality experience? The use of mobile technology can truly streamline the guest and staff experience in equal measure.
Artificial Intelligence and IoT
As our industry becomes increasingly influenced by emerging technology trends, hospitality requires a unique mix of person-to-person interaction, tech-supported automation, and self-service formats. Considering the many repetitive tasks and operations at work behind the scenes, it comes as no surprise to witness the proliferation of artificial intelligence (AI) and IoT (Internet of Things). As described in a recent report by Deloitte, robotic and cognitive automation (R&CA) processes can range from simple bots that perform high-volume, repetitive tasks to machine learning functionality that helps hoteliers to automate subtle, complex, and often broken processes.
IoT, in particular, refers to internet connectivity within everyday devices and appliances that have not typically had such capabilities. Leveraging IoT functionality, hoteliers can turn standard hotel rooms into ‘smart rooms’ that offer guests a variety of connected devices, including thermostats, voice-activated assistants, and more. This breeds an environment of personalization and preference-based service, as the guest can control many of the room’s features from their mobile phone or a provided tablet. It also means that every electricity-powered device in a hotel will be able to provide information on its health, durability, usage, and efficiency.
AI technology, on the other hand, can not only help to automate operational tasks (such as answering frequently asked questions), but can also engage in meaningful conversation in the form of digital chat-bots, or AI-powered concierge. Studies show that 70% of guest requests are now handled automatically by AI-enabled technology in hotels where it has been implemented. Even further, AI-enabled technology has shown to improve guest response and problem resolution by 33%. Not only that, but 89% of hoteliers agree that AI significantly reduces operating costs in the customer support function.
Beyond service improvements, this technology also provides hoteliers unprecedented access to valuable, data-driven insights. With the increasing demand for hyper-personalization, getting to know each guest on a more personal level through their digital behavior is undeniably essential.
Blockchain: An Emerging Advantage
At seemingly every hospitality event this year, industry leaders exhibited a vested interest in the discussion of blockchain technology. Blockchain is a public ledger, or list of encrypted digital records, where transactions are recorded anonymously and permanently. This technology allows the highly secure transportation of information from one point to another. In short, it’s a way to move information from one point to another in a highly secure manner. From a hospitality perspective, the use of blockchain could empower heightened security standards and fraud protection for hotels while helping to eliminate third-party costs.
Although the technology is still in the early stages, 2020 will represent a pivotal time for the implementation of blockchain solutions.
The 3 Most Impactful Partnerships/Acquisitions
2019 was also a momentous year for partnerships and mergers which directly influence the hospitality sector. Following a rather tumultuous 2018 for M&A, leaders expected the focus would shift towards more private deals with smaller platforms.
1. Shiji is Leading the Acquisition Charge
Since 2016, Shiji has spent $141 million on acquisitions and investments across ten tech companies, including StayNTouch, Snapshot, ReviewPro, MyCheck, and more. Most recently, Shiji paid $13.5 million to wholly acquire IcePortal, which helps hoteliers manage the digital imagery of their properties and display them correctly on distribution partners like online travel agencies.
2. Ctrip & TripAdvisor Partnership
Trip.com Group Limited, which was formerly known as Ctrip.com International Ltd., and TripAdvisor recently announced an expanded partnership and joint venture. The two companies have also reached an agreement to offer TripAdvisor’s content on Ctrip’s major products, including Trip.com, Ctrip, Skyscanner, and Qunar.com.
3. Airbnb Acquired HotelTonight
In May, Airbnb made its biggest purchase to date in order by acquiring HotelTonight, a last-minute boutique hotel booking platform. This marked Airbnb’s effort to branch directly into the hotel space and cover more ground. Airbnb also achieved a record milestone in 2019, exceeding Expedia in booked nights.
Airbnb also made headlines recently by partnering with the International Olympic Committee to expand the availability of housing in host cities. The deal means that Airbnb housing will be made available for visitors and workers, reducing the need to build new hotels in anticipation of the worldwide event. The Olympic Village, however, won’t be replaced with Airbnb housing.
The Tipping Point for the Experience Economy
2019 marked the onset of a hospitality landscape that is largely dominated by experiences. Around the globe, prospective travelers are actively seeking out one-of-a-kind experiences, and it is now the responsibility of hotels to provide guests precisely that. Ultimately, guests expect more than merely a bed to rest their head; they crave a complete, unique experience within the destination they’re visiting. However, the trend doesn’t end there.
On the heels of the experience economy, we realize a new, ever-relevant shift in the guest perspective: the expectation economy. Within this new economy, we are introduced to an influx of experienced, well-informed and undeniably empowered travelers, made unique by their increasingly high expectations from those brands which they frequent. When it comes to industry-wide norms, guests hold the power to move the needle, and they’ve inspired a customer-centric approach in which hoteliers have to manage their service quality closely.
This is where service quality optimization and management technology comes into play. As hospitality collectively shifts away from dated, legacy models which were often used as a limiting ‘one-size-fits-all’ solution, hoteliers are instead building comprehensive technology stacks. With a shift in standardized infrastructure, hoteliers are aptly recognizing the benefit of utilizing management applications and platforms that are specific to each service department. After all, what good is a modern check-in platform if the housekeeping department is still relying on processes that date back decades ago? In this regard, the age-old ‘divide and conquer’ approach is effectively delivered through the enhanced functionality of new-age technology applications built specifically for each subset of the hospitality experience.
Finally, hoteliers can compile a suite of hotel optimization software applications, specific to each department (housekeeping, service, maintenance, etc.), that boost efficiency and enhance guest service across all aspects of the guest experience. These applications are hosted on an open API, ensuring seamless integration across other hotel platforms, cross-department communication, enhanced data aggregation and reporting, and timely response measures.
At Knowcross, we are committed to playing a pivotal role in the ongoing innovations set to transform the hospitality experience and help hoteliers to meet and exceed demands. Even further, we empower our clients to remain ahead of needs and trends by leveraging cutting-edge applications that streamline the process of monitoring guest service requests and complaints, enhancing service and guest engagement, and so much more.
Hoteliers, the future of hospitality is here. The only question that remains is this – Are you ready to embrace it?
Karen O’Neill is President, Americas for Knowcross, a trusted partner to some of the world’s most well-known global brands, with a focus to grow and manage the company’s operations and sales initiatives in the Americas region. Knowcross’ game-changing products for housekeeping automation and workflow management are a must for hotels globally, to meet the growing needs and expectations of customers. She spent fifteen years with MICROS Systems where she held various positions in project management, major account management and sales and strategies. In her last role as Vice President; Hotel Sales and Strategies, Karen worked closely with leading global hotel chains, independent properties and management companies on their technology strategy, system selection and deployment. Karen also founded KnockOut Hospitality Consulting, LLC. to assist hotel clients in streamlining and managing key operations. In October 2015, Karen joined StayNTouch, a leading SaaS property management system provider as the Vice President of Sales and Marketing.
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