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Hotel IT

Massive Hotel Sector Growth Reinforces Need for Right IT Investments

Late last year, IBISWorld issued a report about the state of the global hotel industry, which has been experiencing a period of significant growth. The study stated that of the 709,000 hotels, resorts and casinos worldwide, they collectively have over $1 trillion in revenue.

RevPAR now also surpasses the peaks in 2000 and 2007, according to Smith Travel Research, with all indicators showing that these numbers are growing at record levels.

For any industry that is going through such a robust rebound, many capital investments into IT and other innovations becomes a major priority. When IT budgets rapidly increase, hotel technology leaders are faced with a special challenge – ensuring the right solutions are procured.

It is also very easy to make innovation investments in solutions that, while they may seem ideal from a PR perspective, are not practical for guests. For example, one of the biggest hotel IT story this year is the big “robot concierge takeover.”  Robots certainly make for great headlines, but do guests actually want to interact with machines? It remains to be seen.

This is why we recommend investing in innovations that truly enhance the guest experience – throughout the entire stay cycle.

In addition, before making any significant IT investment, it is worth the time and resource to gain insights into guest preferences. These insights may surprise you: great Wifi and a free breakfast are often what guests really want.

While we have covered the need for developing truly guest-centric many times in this past, it is always good to re-remind ourselves of this strategy – especially as the hotel sector continues to experience massive growth.


Hospitality Gets Agile: How to Get and Find an Edge Before Going All In

NH Hotels recently opened its NH Collection Madrid Eurobuilding, which is becoming a case study for true hotel innovation.

From LED vault screens in the lobby projecting digital art and “special sound” to “Living Lab” rooms showcasing the latest technologies, there is no shortage of “wow-factor” innovations that reinforce that this could be the hotel of the future.

NH Hotels is an example of a brand taking bold steps. However, there are some issues, challenges and opportunities that come with taking this tack.

One of the issues is that larger brands tend to go all in on a big technology project from the start. This involves perfecting the innovation from the beginning, then rolling it out to different properties. On the surface, this development method seems like a sound strategy.

Here’s the issue: it’s costly and there is no guarantee that guests will flock towards the technology. By piloting smaller programs, it is possible to test out the technology and receive early guest feedback – to see if it’s a worthwhile investment that truly enhances the guest experience.

In addition, internal IT departments at major brands have a mentality of “if I build it, then I will have a job.” However, this approach should be countered by looking externally to partners to help build the solutions. By doing this, IT departments can focus strategically on the guest needs – while the partners help in the actual development.

It is all too easy to choose the latest “shiny object” such as Google Glass (which is facing it’s own internal challenges at Google, by the way), which may not be what the guests actually want. Often times, going for more utility solutions that provide a frictionless guest experience is the best way to go.

By taking this value-based approach, hoteliers can focus on meeting core guest needs, then worry about the revenue later. Large brands often make the misstep of trying to develop solutions for engaging the guest, as opposed to meeting true needs.

NH Hotels is certainly paving the way for an innovative future for hotel technology. Many brands can follow this lead, but should take one critical component into account: focus on meeting guest needs first.


In-Stay Considerations: Pleasing Millennial Guests

As we highlighted in our previous posts, capturing the attention of millennial travelers is a highly nuanced challenge for hoteliers. So, then what happens once a hotel succeeds in booking this type of guest? What is next?

The reality is that booking is only the beginning of the digital experience for the Millennial. And since digital devices serve as a comprehensive resource guide to help them maximize their stays, hoteliers need to develop the right strategies for keeping Millennials’ attention focused.

As such, we see the need to create a publishing and resource platform that acts as a digital brand ambassador to augment the hotel’s concierge to capture additional behavior metrics. The more the guest uses the app, the more the hotelier can understand their preferences through analytics, which will greatly improve the conversion rates of in-stay and future targeted offers.

Designed to keep the guest interacting with the brand during the stay on or off property, an app of this nature uses algorithms to answer guest inquiries. This ultimately leads to increased guest loyalty and additional revenue opportunities by providing room service, access to support staff, ground transportation, directions, events at the hotel, offers from attraction partners, as well as electronic check-out.

Hotel technology is moving at a highly rapid pace. Most hospitality IT staff are continually challenged to develop and leverage the latest innovation, which should always tie back to the right metrics and enhance revenue. By creating the right mobile experience for the Millennial guest, through the entire stay cycle, it will be possible to develop a deep level of brand loyalty with the next-generation traveler.


Guests Prefer Using Technologies to Confront Hoteliers When Problems Arise

In our fully connected online social world, we have become used to dealing with problems through technology – as opposed to confronting an issue with someone face-to-face or over the telephone.

The same thing is happening with the hospitality sector. According to a new survey by AppyHotel.com, in an effort to avoid confrontation, almost half of hotel guests prefer using technology to communicate with a hotelier when an issue arises, rather than speaking directly with hotel staff.

The survey revealed that 49 percent of guests favor using technology to voice their concerns or queries and 23 percent would rather go online to chat with a hotel representative than do so in person.

“It’s a clear indication that technology is not only providing hotel guests with a variety of platforms to express their views to management, but is also becoming an integral part of a hotel’s customer service offering,” said Isabella Glendinning, Vice President of Marketing for Appy Hotel.

Thanks to the rise of mobile technologies and the empowerment that the Internet provides to users for expressing their anger and frustrations – such as the heated arguments that arise in the comment sections of article or on LinkedIn – consumers are simply more used to offering blatant commentary behind the safety of a screen.

What does this mean for hotels?  We believe that it reinforces the need to offer key innovations for both communicating with guests, and offering services that will enhance the travel experience.  It also underscores the need to use innovation to minimize any friction when a guest comes in contact with a brand online or in a mobile environment.

People simply don’t like face-to-face confrontations.  As technology has enabled guests to further express their true feelings in a digital environment, hoteliers have the unique opportunity to adjust their guest engagement approaches.  As always, this should be coupled with providing outstanding services, which can be also delivered and communicated in an online environment.

Innovation is the foundation for pleasing guests and by creating the right solutions and strategies for connecting with travelers, it is possible to work in a comfortable medium for guests so complaints can ultimately be minimized.

Pushing Innovation and Role of IT to Forefront of the Hotel Industry

In every industry sector, we are seeing the pace of innovation moving at fast speeds. Fully leveraging all of the mobile- and cloud-based solutions – in ways to help organizations stay fully ahead of the curve – can be tremendously challenging.

The hospitality sector is going through its own information revolution where new innovations make it possible to not only mine guest data more effectively, but also serve up offerings that please guests in highly individualized ways.

This is all very exciting, but how can large hospitality providers keep up with the pace of innovation?

According to a recent Harvard Business Review article, the new ‘digital title wave’ should cause organizations to move the function of IT from the ‘back of the bus to the front seat.’   The article also underscored how this hypothetical bus is moving very fast.

For many years, we have believed and supported client projects that only provide direct business value to an organization.  This new fast-paced digital frontier reinforces our long-held philosophy about IT being a business catalyst, but takes it to the next level.

Rather than just pushing for IT to have a seat the management table, it is time for this role to be the ‘bus driver.’ This requires IT professionals to have a strong business knowledge base, along with the ability to embrace and procure the most bleeding-edge innovations.  Simply put; IT leaders needs to wear many hats – some that will push them out of their comfort zones.

This is no small challenge for hotel IT professionals.  The stakes have become much higher for technology and everyday we are seeing new examples of how it can be the foundation for true business differentiation.

“The challenge for every business is to look across the enterprise to see how silo-based operations are impacting the guest experience,” said Tobias Bray, Innovation Strategist at NetLink Resource Group.  “Guest expectations are being shaped by the efficiency and innovation they find in personalized interactions on mobile platforms outside hospitality.  Brands are making the transformation, but have to walk carefully around the deep cultural expectation of high-touch services that are common today.”

We believe that this is one of the most exciting times in technology.  Yes, things are moving very fast, but it’s time for all of us to adapt and take a ‘smart, fast’ approach to implementing the most cutting-edge innovations.

Hotel Guests Are Happier Now, But There Are Many More Opportunities to Delight Them

Over the past several years, hoteliers have made tremendous strides in meeting the needs of guests. Previous issues that proved to be bothersome, such as booking reservations, check-in/check-out and other fees, no longer cause friction for travelers.

According to a new study by J.D. Power and Associates, guests are now more satisfied than they’ve been in seven years with their home-away-from-home experiences at the nation’s hotels.  In addition, since 2012, this happiness ratio has jumped 20 points, even with guests not minding that that are now being charged 5 percent more for their rooms and services.

The study also found that the happiest travelers are those who examined online hotel reviews and articles about their chosen hotels prior to booking.

However, it wasn’t all good news. One area where guests are still dissatisfied is Internet usage and availability.  Slow Internet speeds; lack of availability and spotty connectivity caused the most dissatisfaction for guests.  In addition, being charged for Internet usage, especially when it is free in so many public places, turned off many guests.

We would like to congratulate the top hotels from this study, which include:

  • Luxury: The Ritz-Carlton (for a fourth consecutive year)
  • Upper upscale: Kimpton Hotels
  • Upscale: Hyatt Place
  • Midscale full service: Holiday Inn (for a third consecutive year)
  • Midscale: Drury Hotels (for an eighth consecutive year)
  • Economy/budget: Microtel Inn & Suites by Wyndham
  • Upper extended stay: Homewood Suites
  • Extended stay: TownePlace Suites

While this news is certainly encouraging for the hospitality industry, we believe that it is a sign that more can be done when it comes to innovations.  From enhanced usage of mobile solutions to next-generation concierge services, it is possible to make guest even happier with technology.

Just as technologies evolve at a rapid pace, so too can hoteliers when it comes to being on the cutting-edge of delivering services that completely reduce all friction for guests and builds long-term brand loyalty – which is often hard to establish and maintain in the travel industry.

Bisnow Lodging Investment Summit Brings Out Brightest Stars in Hospitality

Without a doubt, the Washington DC area has become the cornerstone for the hospitality industry — with Marriott, Hilton and Choice Hotels, as well as many lodging investment players, calling our region home.

So, it was no surprise that the folks at Bisnow Media were able to pull off a spectacular national event that drew together the “who’s who” of the hospitality sector at its Bisnow Lodging Investment Summit (BLIS) on May 9-10 at the Ritz Carlton in Tyson’s Corner.

We had the unique pleasure of attending BLIS, which brought together 500 industry players to hear 32 speakers discuss the future of the hospitality industry. Some of the highlights included Arne Sorenson, Marriott’s new CEO, providing his vision for doubling the hospitality provider’s overseas portfolio, as well as political pundit Tucker Carlson’s enlightening and entertaining speech on the state of politics and what to expect from the upcoming Presidential election.

The event also showcased some of the challenges that the industry faces, such as what will happen to RevPAR as consumer confidence continues to decline, as well as managing growth in a global economy that is still in a state of turmoil.

At NetLink, we have always believed that the best way to enhance growth, in even the most challenging of economic climates, is to ensure that all IT investments support business growth. For example, be sure to check out this case study about how Marriott International developed its online gift card effort, which resulted in $35 million in additional revenue.

As the lodging sector continues to move forward, it is exciting to see that the industry is coming up with unique strategies for business growth. And, plenty of opportunities still abound for those selling solutions to hospitality providers.

Posted by: Diann Turner, Director, Business Development, NetLink Resource Group