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An Emerging Digital Divide in the Hospitality Arena?

For the past several years, many major hotel brands have been focusing much of their PR efforts on showcasing the latest innovations – from smart guest rooms that leverage the Internet of Things (IoT) to robotic butlers and beyond.

Several brands have also been developing new incubator locations to help fast track the latest innovations into the marketplace. This cross-section of cutting-edge design and new technologies will certainly pave the way for the hospitality industry to be on the forefront.

However, when it comes to bringing these innovations to life, will we see this tech adoption only at key properties in major cities on the U.S. coasts? These are typically the locations that ideally serve as the test markets for the new innovations – further supported by the tech talent, companies and early adopters who tend to live and operate in these regions.

But what may occur is that only properties in these regions will have the latest innovations, with many others in the middle of the country lagging behind. This could result in a new hotel digital divide, which could rapidly widen based on how quickly new innovations are adopted.

Of course, since this is a new frontier, larger hotel brands hopefully will be developing tech expansion plans that could stretch across the entire country. Although effectively implementing this expansion could be a costly proposition for any hotelier. And once this goal is achieved, a new batch of technologies could quickly emerge, which would require even further investment for another round of expansion. And, so the cycle continues …

If hotel brands are challenged with making this investment cycle, this digital divide may continue to grow, and since this is a new frontier … nobody really knows how it will all play out.

Hospitality Loyalty Program to Learn from the Decline of “Daily Deal Mania”

As our economy climbed its way out of the “great recession” of 2008, companies like Groupon and LivingSocial quickly emerged by providing much needed daily deals to consumers.

For a period, these types of companies performed well, but since they were built on only providing short-term loyalty to brands, they did not translate into long-term revenue opportunities. The consumer took advantage of one discount opportunity, them moved onto other things – without remaining loyal to the business that offered them the “latest deal.”

Fast-forward to today, and Travelzoo, a newsletter-focused daily travel deals, is finding itself in a similar situation. According to this recent Skift article, many of the company’s challenges come down to “daily deal mania” declining due to a stronger economy where consumers are no longer seeking short-term travel deals. In other words, consumer confidence is high right now, and seeking deals is not a priority when many have extra money for leisure travel.

For hoteliers, perhaps this could be a lesson in how to best maximize their loyalty programs?

Rather than focusing on providing last-minute deals, it might be a good time to shift the strategy to target the buyer with the goal of helping them to plan a trip out in the future – based on their previous purchasing patterns and personas.

As we have highlighted before, this approach looks not only at the persona, behaviors and experience ratings of the guest, but also takes into consideration the same data points gathered from guests with similar personas. It can also create an intelligent query for the guest’s persona that can be triggered on demand.

It’s not a huge surprise that companies like Travelzoo are experiencing some challenges right now, which could certainly turn around when/if the economy takes a downturn.

The key right now is to take these business lessons learned and develop loyalty programs that are specialized, leverage data, and are designed to create lasting guest loyalty.


When Will OTAs Offer Bundled Packages to Counter Hotel Efforts?

Without a doubt, the travel sector is highly competitive and many of today’s players – whether it be OTAs or hotels themselves – are quick to shift their strategies to drive more revenue.

This concept was recently brought to life by new efforts by hotels and resorts to divert revenue from OTAs by offering bundled vacation packages. With packages that include airfare, it’s much easier for hotels and resorts to enhance direct bookings, and ultimately increase conversions with a “one-click” effort.

Since OTA’s are very nimble and competitive, it is only a matter of time before they start to offer similar packages, securing guaranteed rates from airlines, hotels, car rental agencies and much more. In addition, if these packages are presented as a “single-click” package, we may see travelers quickly swinging back towards using OTAs.

The primary driver for this? Most travelers want and demand convenience and simplicity. Everyone is overwhelmed with data and information overload to the point that we will often take the easiest route to get what we want. The same happens when booking travel, whether it is for pleasure or for business.

So, with the pendulum between hotels and OTAs rapidly swinging back and forth, what should a hotelier do to counter this? The key is to continually make guest loyalty about loyalty, and not just about targeted discounts.

As we have highlighted before, the core focus in the hospitality arena should be about fostering relationships with guests that truly matter. Hotel guests want to have an emotional connection with their preferred hotel brands. This concept is critical for developing high-level strategies that build loyalty.

Hoteliers also need to understand what is important to the customers of their hotel, and its market segment, in order to develop and offer specific products and services that matter most to guests and ensure that their staff members know how to deliver on those guests’ preferences.

Of course, hotel brands often have complicated relationships with OTAs, where they often compete, yet try to play well together in the sandbox by developing the right channel pricing and approaches. For this latest battle over bundled offers, hoteliers can certainly emerge on top if they continually focus more on fostering true guest loyalty.


Hotel Loyalty Programs and Brand Ambassadors

While there have been many hotel industry articles about how to turn guests into “brand ambassadors,” large hospitality providers may want to consider ways to ensure that all staff also play this vital role.

In other words, to transform guests into loyal advocates, the foundation needs to be in place – with every staff member on a property at the hotel first. One way to achieve this is by making loyalty programs truly about loyalty.

As we highlighted before, the core focus in the hospitality arena should be about fostering relationships with guests. Hotel guests want to have an emotional connection with their preferred hotel brands.

This concept is critical for developing high-level strategies for building loyalty. And this goes beyond what many highlight about the value of education and hotel loyalty programs. A guest should have an experience that feels completely personalized, which can increase chances that they will sign up and take advantage of the actual loyalty programs.

In a recent Marketplace interview, Arne Sorenson, CEO of Marriott International, discussed the importance of providing guest experiences. “We’re delivering experiences which people can count on and where they want to come back to us and have those experiences,” said Sorenson. This includes catering to guests’ needs both on- and off-property.

By focusing on providing these experiences, as well as pushing for all staff members to be brand ambassadors, it is possible to achieve the highest level of loyalty – where the guests themselves actively advocate on behalf of your brand.


Dry Hotels Point to Need for Niche Personalized Guest Experiences

“Dry hotels”, those that do not serve alcohol, are growing in popularity, even with guests that do drink. In fact, the dry hotel market is growing at between 4.5 percent and 5 percent per year, and will be worth $200 billion in the next three years.

For hoteliers, especially in predominantly Islamic regions such as in the Middle East, alcohol is just not a relevant part of profitability for their hotels, a statement said by the panelists at the recent Gulf & Indian Ocean Hotel Investors’ Summit. They know how to make a hotel successful, even without a bar.

Mohamed Awadalla, CEO of Time Hotels Management, which has four brands, said dry hotels simply make good money.

“They are profitable. The (food and beverage profits) might be lower than 25%, but other than that we have seen no discernible difference across our hotels, and we have between 82 percent to 88 percent occupancy,” he said.

What do dry hotels know that non-dry hotels don’t?

That today it is more important then ever to provide highly personalized experiences to guests. And since dry hotels are in competition with non-dry hotels and guest apartments such as Airbnb, they must not just provide these services, but at excel at them.

Awadalla added that in the current economy, an accurate profile of your guests is what counts. “You have to know your market [guest] in order to provide the relevant returns to owners,” he said.

Continually being able to please the traveler in ways that are highly personalized is key. A plan to implement and use guest recommendation solutions that support very niche needs and dive one layer deeper on the usual recommendations – such as local restaurants – is a very important.

Hoteliers should consider taking it one step further such as recommending the perfect yoga studio, church, marijuana dispensary, or even the best place to get a growler of kombucha. It could also mean a specialized recommendation for guests who are in town for a wedding – not just where to drink after the rehearsal dinner but, the one place to go bungee jumping at midnight.

Non-dry hotels should take note that guest retention goes well above and beyond alcohol and their bar area, but requires leveraging deeper guest persona data to understand their wants and needs. It’s clearly working for dry hotels.



Cornell Study: Top Hotel Amenity is Free Bottled Water (is it that simple)?

For many hoteliers, providing unique amenities can help drive differentiation and long-term guest loyalty. While many luxury brands tend to focus on things like private cycling guides, VIP shopping assistants, even a “soap concierge,” the simplest of amenities can sometimes stand out.

For example, a recent Cornell University study found that offering free bottled water translated into a the highest ROI for returning guests, when compared to Internet access and fitness club use. One of the interesting aspects of this report is it focused more on upscale and luxury brands.

While this study is limited to just high-end brands, it speaks volumes about what guests actually want, and provides insights into the drivers that motivate guests to return. In addition, the many publications that covered this study were more interested in one key data point: that hotel gyms actually don’t get much usage.

From a larger perspective, this report reinforces how illuminating it can be when we actually mine hotel guest data. We often make assumptions about guest preferences, which can only be truly validated by the data itself.

Based on this study, we imagine that many hotel brands are now focusing on providing more free water in guest rooms, which is a sound data point. However, the real motivator should be “how can we glean these types of insights on guest preferences”? On top of this, if hoteliers are mining guest data, are they using this knowledge to quickly develop the right amenities that truly resonate?

Of course, providing bottled water is important, but this is only the tip of the iceberg. When taking a deep and analytical look at guest data, hoteliers may find something surprising. This new-found knowledge could then ultimately be used to develop amenities and offerings that are truly wanted.


Making Hotel Guest Loyalty Programs Truly About Loyalty

A recent study showed that U.S. travelers are shunning airline loyalty programs. The core driver for this change is that travelers seek out the lowest fares, rather than having a relationship with a particular airline.

In addition, there’s a perception that these loyalty programs don’t offer any true benefits, which has been reinforced by airlines like Delta reducing the number of perks for frequent flyers.

For hoteliers, there are some parallel lessons that could be learned from this study.

First, the core focus in the hospitality arena should be all about fostering relationships with guests that truly matter. Hotel guests want to have an emotional connection with their preferred hotel brands. This concept is critical for developing high-level strategies for building loyalty.

In addition, hoteliers need to understand what is important to the customers of their hotel, and its market segment, in order to offer products and services that matter most to guests and ensure that staff members can deliver on guests’ preferences.

Leveraging the right innovations that allow hotels to gather guest data to develop the right programs that best meet their needs should also be considered. This extends well beyond offering various perks and discounts, which fall more into the tactical side of building guest loyalty. In today’s commoditized era, hotels should seek additional value for guests by using software applications, guest-specific data, and a vision for tying them together to better understand guest preferences.

Travel loyalty does not need to be a thing of the past. And, by taking the right strategic approaches, it is possible for the hospitality arena to avoid the current fate of the airlines – where price trumps everything else.


Independent Hotels: Own the Local Tourism Landscape

According to a recent New York Times article, many large hotel brands are embracing the concept of training their staff to have a more personalized touch with guests. This includes a switching their philosophy to realize that hotel workers are an integral part of the local “tourism landscape.”

While this concept seems highly intuitive, creating a more personalized guest experience – with the service level to match – may be a bit more challenging for larger hotel brands. Much of this comes down to training and a cultural shift within large organizations, which is no easy task.

However, for independent hotels, Inns and B&Bs, this article paints a different picture – the opportunity to further differentiate themselves by truly being part of the “tourism landscape.” Of course, for many small property owners, this is a day-to-day reality that they fully embrace.

Though, thanks to new innovations, it’s possible for independent hoteliers to be even more critical players in the local tourism arena. For example, new mobile applications allow Inns and B&Bs to offer truly customized recommendations for restaurants, events and other local attractions as no two guests are alike. This creates an opportunity to make the guests’ stays more memorable, and build long-term loyalty.

In addition, independent hotels can play a larger role in the local tourism economy by referring business to the area restaurants and attractions. This often results in a positive feedback loop where those businesses then recommend and promote the hotels themselves.

In the end, an independent property will become a trusted resource that is a pillar of the local “tourism landscape,” without training or a massive culture shift within a large organization.


Hotel Brands: Millennials Are Not What You Think

One of the biggest demographic trends in the hospitality arena is targeting millennials, a generation that seeks out “experience-based” travel opportunities.

From leveraging new mobile innovations to offering more dynamic lobbies for networking, many hotel brands are wisely investing in a new technology and marketing efforts to influence this generation.

Of course, the perception of millennials may not always be what hotel brands think. Although what we often think of millennials as a cohort of people who continually pursue, and invest in authentic experiences, this can reinforce a one-dimensional perception of this generation.

Reality is much more complex.

As highlighted in this recent Marketplace article, millennials are the largest and most diverse generation of Americans, with about 19 percent of them identifying as Latino or Hispanic, 13 percent as black or African-American and six percent as Asian-American.

Adding further to this complexity, a new study shows that many minority millennials lack financial security, and most are actually “losing confidence in the American narrative of pulling yourself up by your bootstraps.”

With this new information in mind, hotel brands may consider new approaches to actually getting to know – and more effectively targeting – millennials in ways that meet their lifestyle and financial expectations. This could include creating more offers and discounts, or even barter arrangements with the more influential millennials on Instagram.

The core takeaway is that everything is not always what it seems. With this in mind, it’s best to invest in strategies that can you help you to better understand this diverse group, then developing the right approaches to influence their booking behaviors.

Shining a Light on the 2017 Hotel IT Visionaries

In the hospitality arena, there’s no shortage of innovation visionaries. With hotels embracing everything from cloud-based PMS solutions to streamlining front-desk activities, the new area of hotel IT is here, and the most forward-thinking hotel brands often drive these paradigm shifts.

To recognize these companies, for the past 13 years, Hospitality Technology Magazine has been honoring hotels for outstanding leadership in customer-facing and enterprise innovation. Following are this year’s winners of the publication’s Visionary Awards:

  • Hyatt International: The leading global hospitality provider won the “Enterprise Innovator” award for re-imagining the front desk experience to turn transactional experience into personalized experiences for all guests.
  • La Quinta Inns & Suites: By creating the Redeem Away! Program, an industry-first benefit strategy that allows loyalty members to redeem points anytime for many everyday purchases with a linked Visa credit card and mobile phone number, La Quinta Inns & Suites was bestowed the “Customer-Facing Innovator” award.
  • NH Hotel Group: To overcome technology integration issues, NH Hotel Group was named the “Enterprise Innovator” for developing and deploying a unique, innovative, single and centralized solution: the Digital Core Platform. The solution is accessible from the cloud, and was based on open technologies that would reduce the hotel’s dependence on outside players while at the same time offering avant-garde technology. 
  • Watermark Luxe Cottages: David and Susan Barton transformed an old fishing campground into a deluxe getaway: Watermark Luxe Waterfront Cottages. What makes this property unique is that it leverages a technology ecosystem to maintain efficient operations while servicing guests all without a staff present. This effort garnered them the “Customer-Facing Innovator” award.

We would like to congratulate all of these 2017 Visionary Award winners. To read more, please click here.