Alexa For Hospitality is a seminal moment in the industry (despite challenges)

The launch of Alexa for Hospitality is a seminal moment for hoteliers, as well as the ecosystem of vendors that serve them. In recent years, Amazon has made natural language understanding by computing devices affordable, fun and mainstream.

This past week’s announcement - which includes Volara’s work with Marriott’s hotels - promises to bring efficiencies, scalable personalized service and a measure of differentiation to hotels that are facing competitive pressures from price-transparent marketplaces - i.e., online travel agencies - and inventory that is not limited by the same constraints such as AirBnB.

It will open up opportunity for the vendor ecosystem to create, deploy, enable, maintain, support and even fix the new solutions that will soon be found in guest rooms across the globe.

What is Alexa for Hospitality, and why is it notable?

In June 2016, Volara began deploying small pilots of Amazon Echo and Dot devices in hotel rooms. We knew it was early, but also knew that success in this frontier technology would only come from iteration and lessons learned from actually deploying it.

The potential is obvious and even a bit magical, but the challenges ahead remain immense.

David Berger

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In December 2016, we deployed the first voice-enabled hotel, using the Amazon Echo in each of the property’s 120 guest rooms. During this deployment, we leveraged early developer tools from Amazon that were not yet released to the public to provide a - at the time - rudimentary set of enterprise functionality to that first hotel. It was the early days of a set of technologies that thereafter progressed rapidly.

In November 2017, those rudimentary tools were much improved and ready for public release. Alexa for Business launched - for the first time bringing the market-leading Alexa platform formally into the enterprise. Alexa for Business enabled developers to location assign, manage and monitor the status of Echo and Dot devices - effectively making this hot consumer hardware enterprise-ready.

Since launch, Alexa for Business, in collaboration with its partners, has developed tools to voice-enable conference rooms and provide professionals with frictionless access to business data that previously required way too many keystrokes. Alexa for Business is focused on making the enterprise more efficient through voice interfaces.

This past week, leveraging our 45 hotel deployments of the Amazon Echo across the United States, Amazon launched Alexa for Hospitality - for the first time acknowledging the power of Alexa as a customer-service agent. The potential is obvious and even a bit magical, but the challenges ahead remain immense, including but not limited to:

• Guest education. Unlike employees who are financially incentivized to adapt their speech patterns to prompt Alexa, customers - particularly hotel guests - do not meld their behavior to the demands of a technology. To the contrary, the technology in guest rooms, where the average traveler is present and awake for less than an hour per day, is competing for limited time and attention. To succeed in this environment, this technology must be easy, engaging and provide measurable value that exceeds that of the device already in the guest’s pocket or briefcase.
• Data protection. Hoteliers have a special obligation to protect their guests’ privacy, take that charge very seriously and in large part don’t trust the large platforms providing natural language processing with it. The news media’s often unfounded but downright serious stories about breaches - whether physical or technological - of trust have left hotel compliance officers wagging their fingers while their technologists seek safeguards.
• Integrations. The disparate, some might argue disjointed, hotel technologies deployed today are an impediment to the scale required by major platforms like Amazon. Middleware will be required to voice-enable each technology that would benefit from this new interface.

What’s the opportunity for vendors?

While it makes a good sound bite, it’s intellectually lazy to limit Alexa to being a “digital concierge,” as voice interfaces can provide much more value through integrations across the hotel technology stack. The opportunity this presents to those in the ecosystem of vendors that flocks to HITEC each year is worth noting.

The APIs and developer tools provided by Alexa for Hospitality to the industry empower the hotel technology ecosystem to reduce the friction in accessing their technology, while enabling guests (and staff) to engage in a new and enjoyable way. Those vendors that heed the call and use these tools to address the opportunities and challenges created by this tectonic shift in communications will thrive.

Hotel technologies that provide voice interfaces will benefit from increased engagement rates, stickier features and a tie up that has already proven to raise net promoter scores. But the opportunity extends to others in the ecosystem as well, including but not limited to:

• Content management partners. Akin to other media platforms, each hotel has the opportunity to extend its brand to this new medium and bring their unique creative touch to hotel clients.
• Technical deployment partners. This, by definition, geographically expansive industry requires trusted partners experienced in installing highly technical and integrated solutions like this to scale most any new technology, and voice is no exception.
• Change management partners. As integrations become more complex and the processes impacted become more central, hotels will leverage partners to manage the changes to business processes and personnel responsibilities.
• Advisory services. Voice is just a medium for communication and an ancient one at that. Used well, it can have a positive measurable impact. Used poorly, it can have an adverse impact, or none at all. Many hoteliers will engage business and communications advisors to consider how to use this new medium to achieve their business objectives.

Overall, we’re seeing the development of an ecosystem - not dissimilar to the ecosystems that have been built around other technologies - that will support this new technology.

What’s the opportunity for hotels?

Personal service has traditionally been at the heart of hospitality. Yet as the business environment has become more price competitive, hotels - not dissimilar from other business verticals - have sought to leverage technology to drive efficiencies and augment their staff. These new technologies will enable personal service to scale resulting in measurable benefits aligned to key hotel KPIs, including:

• Total revenue per available room. Voice-based marketing funnels can consistently drive hotel guests to on-site concessions, whether restaurants, spas, bars or golf courses.
• Average daily rate. The early adopters of this new technology will be offering a differentiated product to the market and be in a position to compete on benefits rather than price.
• Net promoter scores. The TripAdvisor reviews from the first two-plus years of deployments are clear as day.  Guests love engaging with voice agents in their guest rooms and are telling others about it.
• Labor cost as a percentage of sales. While Alexa is nowhere near taking someone’s job, it is absolutely making hotel staff more efficient. Integrations into the incident management systems have proven their value at hotels across the country, removing the potential for error in manual entry of work orders by staff and quite simply getting guests what they want faster than ever before.

Conclusion

In the coming months you’ll learn more about how our data is improving comprehension of guests and how our software is allaying the concerns of hoteliers who are trusted with protecting guests' personally identifiable information.

Together, Amazon, as well as its peer natural language processing platforms, in collaboration with hotel clients and the hotel technology ecosystem, will bring the power, convenience and sheer technological delight of voice-based engagement to millions of guests.