Technology touches every aspect of the hospitality industry,
from outward-facing systems for distribution, reservations and guest engagement
to internal operations such as accounting and security.
Naturally, the topic of
technology and how it can be used effectively now and into the future is a
priority for hotel executives.
At HITEC, the Hospitality Industry Technology
Exposition and Conference last week in Minneapolis, a panel of hotel leaders answered questions on this topic from William Rogers, president and CEO of the
American Hotel and Lodging Association.
We have edited the
discussion for length.
What is the most important technology change our industry
has seen over the past five years?
Greene: I think looking back over the last 25 years, companies
were really focused on creating strategic platforms that were very internally
focused. With the proliferation of mobile devices and other new things... I think
the big change in the last five years has been companies looking at creating strategic
platforms that are very externally focused and creating different ways that we
can communicate with those consumers.
Mount: I think really the mobile world that we live in now has
really, in our industry particularly, created an opportunity to connect 24/7...
to personalize that connection in a way that we never have been able to do
before. And I think it’s really following the consumer trend on a global basis.
Strebel: I have to go along with mobile. I think mobile is
just taking over everything and very few people use their desktops to make
reservations and do research, so it’s a mobile world.
What will be the most significant technology change in our
industry in the next five years?
Strebel: I think voice activation. I think it will be wearables.
I think people will be less texting and just talking all the time. That’s what
I think the future’s going to be – search through speech.
Mount: Distributed ledgers will be what drives a big part of
our industry. It’s really going to connect more directly the consumer with the
hotel, and it’s going to be very important for brands and other organizations
to understand how that connection is going to occur. And quite frankly it could
be as big or bigger than the internet.
Greene: I think there is so much technology and innovation
happening... so I think most important for organizations is to pilot and test those
things that are exciting and innovative, to makes sure it’s a trend and not a
fad.
Given the implementation of technology into the lodging
industry... is it accurate to claim that hotel brands in many ways are now part
of tech industry?
Greene: I wouldn’t say we’re part of the tech industry, but
I think the tech industry has been a game changer for hospitality. The way we
deal with guests, the way we operate hotels now, technology plays an
overarching role in both aspects.
Mount: We just recently created a subsidiary called RLabs that
houses our technology... I think brands have an obligation to really be on the
cutting edge both of where technology is going and understanding it and being
an innovator and part of it. The ways that we’ve done things in the hotel
industry for the last 30, 40 years are about to change, and if you are not part
of that then you are probably going to be left behind.
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Strebel: I think it’s an ingredient into our business. Many
things go into a hotel, and one of the biggest ingredients today is technology.
But bottom line it’s a people serving people business, and people today use
technology. So... they go together.
Do you worry sometimes that an over-reliance on technology
takes away from the people to people aspect, which really forms the core of hospitality?
Strebel: I think different customer segments have different
needs. I think the business traveler... in and out really quick and doesn’t
want to interact with people... I think people that are going away on vacation...
still prefer to talk to somebody about making a special dinner reservation or
making a special spa appointment. So I think that it’s always going to be, in
some cases, people serving people.
Mount: I think technology really becomes a tool for the
folks in the hotel to really help interact with the guests on a meaningful
platform, in a way they want to interact. So I think it’s really more of a
support and a help, and it moves things through the process more efficiently, providing
those one-on-one interactions that are so important. So I don’t think it really
usurps it, I think it just enhances it.
Greene: I would agree it’s an enhancer to the experience. I
think the thing that is important... is making sure your team at the hotel really
has the right training on how to use that technology in a consistent manner... Getting
your team across the globe in a consistent way to deliver that technology to
consumers... is really the most difficult piece.
What are the best examples of technology enhancing that
guest experience at your hotels?
Strebel: The most important thing our customers really want is
great Wi-Fi. That’s kind of like the basics today – it has to work, it has to
be fast. I think entertainment in the room is key as well. We are going to all
of our TVs being casting so they can cast their own programs and use the TV as an
educational tool to find out about the hotel. We are also testing text
messaging right now with customers that have a dialogue before they get to the
hotel and during their stay.
Mount: From a mobile standpoint... something we’ve focused
on is not only connecting our guests with the hotel pre- and post- and during their
stay but connecting them to those departments directly. So no longer is it
about guests in a hotel texting back and forth to one individual in the hotel,
it’s really about providing that capability and that technology through the mobile
app to be able to connect directly to housekeeping, directly to engineering,
directly to the concierge and using those services in a way that provides the
guest a meaningful opportunity to request what they may want.
Greene: We’ve created and are rolling out something called
Emma that’s a PMS/loyalty/revenue/reservation platform all in one. So it allows
us to use that data to deliver an experience real time to the guest. So communicating
within an ecosystem that is all in one, that allows the data to communicate
with speed and delivers a great experience based on that, I think is the most important
thing for us.
What role does technology play in loyalty programs?
Greene: It’s huge... the challenge is - particularly when you
look at bigger brands that have grown through acquisition – you piecemeal the
systems together and you have nowhere that connects it and so I think that’s
been a challenge to create this technology ecosystem... The challenge is
collecting that data and being able to communicate it globally live in real
time... For us, it’s really important to have transparency with our guests and consent
in terms of the data. And once we have that, they expect us to utilize that in
a way that create a better experience.
Mount: I think that first and foremost... loyalty programs
are really shifting more towards rewards and recognition, and I think they almost
have to. If you look at a large portion - almost 80% - of repeat business that’s
consumed in North America are people that stay five to seven nights, which
means ultimately, they never become worthy enough to stand on the red carpet versus
the blue. And I think it becomes incumbent upon the brand to understand that
consumer and start to understand that the millennials and the Gen Zs are
looking for convenience and transparency in the experiences. And so for us, the
process really starts at the point of booking and that’s being able to go out
and immediately look at their online social media, learn something about them, start
to build a CRM profile on them and then price them accordingly... it’s creating
that ability to market to them one-to-one. And that’s really where the data
comes in handy and that capability to do that.
Strebel: We are a little bit of a different brand – we only
have 60 hotels and we own and operate all of them... We’ve had a loyalty program
that started probably 35 years ago called Select Guest, which is basically tracking
consumer behavior and tracking consumer preferences. So our program is not based
on points, it’s based on what you like to do at a hotel and providing that at
the next hotel. Recognizing you. If you want a feather pillow versus a foam
pillow or a high floor versus a low floor... We can do that because of training,
and we’ve set up our systems that way. We’re all on the same property management
system, so it makes it a little easier for us because we’re not a franchise
network. But I’ve done a lot of research, I’ve worked with brands that have
points programs, and I don’t know if they generate real loyalty. People go
where they feel respected, where they feel safe and where they have memorable experiences.
I think at some point, points aren’t really emotional connections.
What are some of the challenges or worries you have surrounding technology in our industry?
Strebel: We’re never going to be a brand that’s on the
forefront of technology. So we balance high touch versus technology. Because we
think our customers really do like knowing people that work for us. So we are
overstaffed in most of our hotels. Our biggest challenge is how much technology
to introduce. And that’s probably what I think about every day. We never
adopted the kiosk check-in. I wonder now also... about the keyless entry and do
people feel good about that, not having a key and the safety of can someone else
access my room... All the surveys we’ve done, it’s the simple things – high speed
[Wi-Fi], a lot of plugs, a good TV, a good key system that works... so we
really try to focus on the basics.
You can’t state you will deploy this innovation through this technology and have it fail.
Greg Mount - RLH Corporation
Mount: For me I think it’s understanding technology is a
term we use but also a big part of that is innovation. I think we’ve seen in
the industry that there have been a number of innovations deployed that still
don’t work. I can’t tell you how many times I go to some of these larger brand
hotels, and I get the message to check in and I do it and then it says I have to
go to the desk. That’s a complete failure. For us, our check-in and keyless
entry actually works. So for me it’s not so much over deploying... but what
worries me is it has to work. You can’t state you will deploy this innovation
through this technology and have it fail.
Greene: Four things. One is there is no shortage of
technology we can roll out, so is it a fad or is it a trend? Making sure we
pilot whatever technology thoroughly to make sure that there is a return on
investment and that we think it has a lasting life. Number two for us would be
security. Actually I’d put that number one on the list. Making sure we have the
right privacy rules and technology in place, the right security on all our systems,
data integrity. The third thing for us is training. Technology is great but you’ve
got to make sure that the team members at property level can utilize that
technology in a very consistent way, so we are delivering consistent experiences
to guests across the globe. And then the fourth thing I think just as an
industry, we have to really make sure we understand what’s happening in other
industries, particularly in today’s world where millennials, for instance, they
use their experience in other industries and expect that in our industry.
What role does Google play in that interaction between
hotels and guests looking to book hotels over the long term?
Greene: We have a good strategic relationship with Google. That
relationship allows us to pilot things with them that are unique, that have not
been rolled out industry or worldwide yet. It gives us a voice at the table. It’s
important to note Google is not everywhere, most notably in China. Google’s not
there, that’s Baidu...And you start to think about 150 million outbound travelers
from China today and that number goes to 450 million in the next decade. Think
about that.
Mount: Understanding the landscape is really important here.
And knowing that the disruptors, who we now call the OTAs, of 20, 25 years ago,
are about ready to get disrupted. I think Google is one part of that. I think
that Facebook and Amazon - Amazon just recently announced a few weeks ago that they’ve
started airline ticketing in India. I think you’ll see these folks come in and disrupt...
For us, I think that Google - really as they step out of Trip and they move
more into real time with their maps and other searches as it relates to hotel
stays – it’s just understanding that and it’s understanding how to utilize that
to be closer in the funnel to the point of booking... Google’s been aggregating
information for anybody that has a Gmail account for the last 10 years... and
they continue to do it. So they know a lot about you and they will utilize that
in this booking. And instead of getting 25, 50 or 100 hotels popping up on your
screen when you put in a search, you’re going to get two or three that are directly
correlated to your preferences and what you like to do. And I think understanding
that is going to become really important going forward for hotels and creating
and having their fair share of demand.
Strebel: I kind of do see Google as a disruptor, because I
do think they may have the ability to bring down the cost of distribution. If you
think about it, businesses survive when they offer a good product and a good service.
And now as labor rates are going up dramatically, as distribution costs are
going up dramatically, our products and services are going to start suffering,
and then people are unhappy and don’t like the services being delivered and don’t
like the buildings getting old and not renovated... I think Google is probably
big enough to maybe come in and rethink the whole platform and look at how to
make a reservation and bring down some of those distribution costs.
Data privacy – it’s so important to have that information to
have that guest experience but what if tomorrow that permission was no longer
available to you? There could seismic shifts in how you do your business based
on this one issue of data privacy.
Greene: It’s a big issue. GDPR for us was sort of a non-event because
having a data mapping, a data management mentality in our company... so when
GDPR came out, we were already pretty well complaint. It’s important for companies,
brands, anybody in the industry to be tuned into what’s going on in government,
what are the discussions, to have a voice at the table. And you can never fully
predict what the government’s going to decide, but you can certainly be
educated on what the conversation is and which way the leaves are blowing at a certain
time and anticipate that as a company. But privacy always has to be number one,
security of data has to be number one.... particularly in this business where consumers
are looking for an experience every time they walk into hotel... and the best
way to do that is to take the data collected and utilize it in the right way...
Once you lose that trust, then it’s over.
Mount: I think we saw a great example of when it can go
really bad recently with Starwood and the transition to Marriott. And I think
it shows the importance of... the need to protect that data on a daily basis.
In our own case, we have thousands if not tens of thousands of attempts daily,
and so it’s becoming very, very important. I think understanding what you can
do, understanding how you can protect it, moving away from not just
tokenization but putting that tokenization at the point of the CRS reservation
can enhance that even more so than I think we’ve done in the past. From a
perspective of an organization, I think it’s getting to the point globally that
if you are not doing it and even if you are, if you have that breach it can be significantly
meaningful to a company, and in some cases it can cost the company dearly.
Strebel: I think when you go back to basic psychology 101,
where the biggest needs a human being has is to feel safe and secure, I do think
that at some point there may be somewhat of a revolt, because every day our safety
and security is being threatened.