Is Hospitality Moving Towards Zero-Touch with Service Automation?

With each new technological breakthrough and innovation, what once may have seemed dystopian or impossible is now simply a modern-day reality. Let’s take, for example, Amazon Go stores, which allow patrons to select the products they need, and effectively check out by simply leaving the store – no cashier interaction or self-checkout kiosk required. The store uses an Amazon Go app for iOS or Android linked to individuals’ Amazon accounts for automatic billing to ensure a truly new-age, frictionless experience. Amazon calls this a ‘just walk out’ shopping experience, less the criminal charges that anyone who attempted this in a traditional store would face. This is just one of the countless digital transformations that have captured the interest of consumers and corporations over the last few years. It speaks to a larger trend for where technology and, in general, the consumer experience are headed.

During an interview with the winners of the 2022 Bay Area CIO of the Year ORBIE Awards, Ellora Sengupta, VP & Head of Business Technology at Procore, identified these frictionless experiences as imperative to business success moving forward. “For 2023 and beyond, designing and selecting engaging, connected, and frictionless digital experiences to attract and retain customers and employees will be very important for CIOs,” she shared. “Customers and employees have lots of choices, and the best of those choices will provide simple, connected, intuitive experiences that enhance productivity. We expect everything to be connected in our personal lives (smart homes, automated check-ins at airports and hospitals as we approach the facilities, etc.), and this is beginning to extend to smart cities and smart countries.”

Understandably, most businesses are now hedging their bets on a more automated and tech-driven future, and who can blame them? A resistance to digital transformation is often viewed as the Achilles heel of businesses that will remain needlessly tethered to the limitations of their legacy tech. As Deloitte shared in a recent report, “Digital doesn’t sit still, so neither can your business. To thrive in today’s ever-changing digital world, digital transformation is imperative.”

But in the world of hospitality, what does this mean? Does automation disrupt hotel operations and effectively take the place of human service? Is our industry following the suit of tech giants like Amazon and embracing a zero-touch future with service automation? Or is hospitality expected to strike the perfect balance between automated convenience and personal service?

The Case for Customer Service

First and foremost, it’s imperative to recognize the unflinching demand for great customer service. I use the term ‘unflinching’ deliberately because this is arguably the only consumer expectation that does not fluctuate according to industry trends and evolutions. Whether the service in question is tech-driven or people-driven, consumers expect every business across every industry to ensure a positive customer service experience. If a brand or service provider fails to deliver this, well… they’ll pay the price. Let’s consider some statistics:

The ROI of Good Customer Service:

• 90% of Americans use customer service as a factor in deciding whether or not to do business with a company. (Microsoft)
• 89% of consumers are more likely to make another purchase after a positive customer service experience. (Salesforce Research)
• If the company’s service is excellent, 78% of consumers will do business with a company again after a mistake. (Salesforce Research)
• A good customer service experience heavily impacts recommendations. 94% of consumers who give a company a “very good” CX rating are likely to recommend that company. (Qualtrics XM Institute)
• Consumers from The United States are willing to pay 17% more to buy from a company with excellent customer service. (American Express)
• Employee engagement is 1.5 times higher in businesses that thrive at providing excellent customer service than those that don’t. (Experience Matter Benchmark Report)
• Businesses that prioritize the customer experience see 4-8% better revenue growth than the rest of their competitors.

The Cost of Poor Customer Service:

• Nearly 78% of customers have abandoned a purchase after having a bad customer service experience. (Glance eBook)
• U.S. businesses lose $1.6 trillion in revenue due to customers switching brands because of subpar service. (Forbes)
• About three-quarters of consumers who give a company a “very good” CX rating are likely to forgive a company for a bad experience, but only 15% of those who gave a company a “very poor” CX rating say the same. (Qualtrics XM Institute)
• After more than one bad experience, around 76% of consumers say they would rather do business with a competitor. (Zendesk)
• A dissatisfied customer will anti-refer your brand and share their negative customer service experience with about 15 people. (American Express)

When we look at the hospitality industry, expectations for great service are – if anything – even more heightened. Travel is a big-ticket purchase for most individuals and families, and that ticket price comes with a host of expectations – it’s a high-stakes game, in that sense. Travelers want to feel that their money is well spent. Suppose their trip does not derive the positive customer service experience they expected. In that case, there is a high likelihood that the hotel in question will suffer from reputational damage, lack of loyalty, and lost revenue.

So when we consider the industry landscape for 2023, it’s essential to recognize that service must remain the first priority regardless of the medium in which it is delivered.

Striking the Perfect Balance

In the past decade, brands have invested heavily in digital and mobile experiences that reduce friction and let guests do more on their terms. Hilton’s 2023 trends report, titled The 2023 Traveler: Emerging Trends that are Innovating the Travel Experience, A Report from Hilton, revealed that today’s travelers are “looking for a balance of technological and human innovations, deeper connections and care, embedded wellness experiences and more.” While travelers are undeniably invested in the convenience and frictionless touch-points provided by digital automation, it’s crucial hoteliers don’t lose sight of the core reason so many travel: the creation of memories and opportunities for human/cultural connection. “Today’s hotel experience has evolved to reflect and complement its surrounding destination – from the design style and dining offerings to in-room amenities and on-property experiences – cultures and communities in which they are visiting,” shares Matt Schuyler, Hilton’s Chief Brand Officer.

Moreover, the report revealed that 40% of travelers will look for more immersive, personalized access to unique experiences and activities in 2023, such as performances, events, classes, or spa treatments. All these experiences directly or indirectly involve the human touch; this is a critical element of hospitality that will never be replaced by a digital tool.

Of course, this does not mean hotels should resist digital transformation or the power of automated or self-service tools. Instead, hotels should view these as a catalyst for enhanced, in-person service. If digital tools are leveraged appropriately, hotels can create a more efficient and streamlined operational structure that lends itself to more attentive and engaged hotel staff. When staff has the time and the energy to focus their attention where it matters most – connecting with guests, resolving guest issues, and helping to create lasting memories – magic happens. And if you ask me, 2023 should be a magical year for travel and hospitality.

Alan E. Young is the Co-Founder and President of Puzzle Partner, the leading marketing agency focused exclusively on the complex B2B initiatives of technology innovators across industries including hospitality, travel, healthcare, life sciences, pharma, media, and entertainment. He is also the Tourism and Hospitality Program Professor at Georgian College. Previously, Alan has held executive-level positions with start-up companies such as Newtrade Technologies, (acquired by Expedia), Hotel Booking Solutions (acquired by IBS Software) and TrustYou. Alan is past Chair of The Board of Directors of The OpenTravel Alliance and been very involved with other industry associations most notably AHLA, HEDNA, and HTNG. With over two decades of experience in the travel and hospitality technology world, Alan specializes in helping innovative companies achieve winning performance and dramatic growth.

Puzzle Partner combines strategy and tactical execution in a way that doesn’t just maximize a company’s potential; it redefines it. By delivering influential content, marketing services, and public relations rooted in the skills of our team and tested through real-world experience, we help our clients gain visibility, raise their profile and ultimately increase their sales revenues. We incorporate a holistic blend of paid, earned and owned media, along with creative services, into an integrated communications strategy to drive brand awareness ahead of competitors and deliver impactful business results. 

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