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Hotel Technology

Guest Customization is King for Luxury Travel in 2018

As a more robust travel economy has taken hold over the past several years, the luxury sector has been leading the way with guest personalization and empowering hotel employees to provide the best service possible.

According to a recent Skift article, luxury hotels will continue this evolution in 2018 – with guest customization continuing to rise to the top.

“Customization is the next big innovation in luxury travel,” said Chinmai Sharma, chief revenue officer of Taj Hotels Resorts Palaces and Safaris, in the Skift article. “Every traveler has his or her own requirements. Companies that differentiate themselves will treat each customer as his or her own segment.”

The article also highlights how Marriott will be at the forefront of the customization trend when it launches its new loyalty program that combines Marriott Rewards, Starwood Preferred Guest and Ritz-Carlton Rewards. Part of this vision is to have guest-facing apps that serve as a central repository for everything from controlling room temperature to unlocking rooms to incorporating guests’ music playlists.

However, per the article, there is one elephant in the room – the ability to use innovation to bring this customization vision to life. In addition, many hotel CTOs are tired of launching technology for the sake of technology – meaning that new innovations must be tied to overall strategic imperatives.

This will require a balance between providing innovation and “human warmth” that comes from providing top service for guests. Many hotel leaders believe that luxury travelers have a “millennial mindset,” and are seeking out the right experiences, which will not be fully grounded in just technology.

Moving into 2018, it is clear that guest customization will be king for the luxury hotel arena. The challenge will continue to be how to bring the vision to life in ways that mix innovation and old-fashioned service to be truly personalized for each guest.

 

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.

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.

 

 

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.

The Connected Generation and Messaging with Hotel Guests

In the travel arena, effectively communicating with guests is one of the biggest challenges. From having stretched internal resources to guests threatening a brand’s reputation on social media, the hospitality arena is fraught with many communications pitfalls.

In addition, a new study found that 87 percent of U.S. travelers have never messaged with a hotel brand. In today’s text-messaging world, this seems like a confounding statistic. However, this comes down to the reality that not all travelers are part of the connected generation, and would view a message from a hotel as being intrusive.

This is especially true if the messages are completely unsolicited offers that have no connection to the guest’s interests. Of course brands can look into developing the right strategies that leverage guest data to provide more customized offerings. For example, you can offer a fitness enthusiast information about your exercise facility, or nearby yoga classes.

However, as highlighted in the recent study, the playing field for messaging with guests is still very nascent. As such, hotel brands should consider developing guest communications strategies that are iterative and grow over time. The connected generation will continue to increase, as more and more people view a text from a company or brand as not being intrusive.

It won’t be too long until receiving a text message from a hotel will be as normal as the messages that we all receive from Airbnb when we book a stay. Of course, with Airbnb, the guest is being connected directly with the property owner in advance of the visit – a vital tool for discussing and accessing the property and other “house rules.”

This all comes down to offering the guest real/actionable information that can help enhance their trip – not just providing an offer. People no longer want to “be sold to,” but sales can increase when the messages are customized and provide a path for smooth traveling.

 

The New Emerging Traveler Category: Generation Z

For many years, there has been plenty of hospitality industry media coverage about how to best cater to the Millennial traveler through innovation and more. We have learned that this demographic seeks out unique experiences, prefers a communal atmosphere in hotel lobbies, and wants to use technology to be best connected to brands.

But now, just as we have begun to fully understand the Millennial traveler, another emerging generation is beginning to capture the attention of larger hospitality providers. Generation Z, also known as Post-Millennials, the iGeneration, Plurals or the Homeland Generation, has come on the scene. But the good news is they are very similar to Millennials.

This demographic has completely grown up on technology, and many believe seek more security, since they grew up during the Great Recession.

According to a recent Hotel News Now article, these guests are looking for an authentic experience that “feels like it is high quality without feeling pretentious.” In addition, a 2015 study about Generation Z showed that 77 percent of them feel that it’s important for brands to reach out to them with offers, promotions, and messaging.

These insights show that hotels will need to continue building authenticity into the DNA of their brands. This will include everything from creative content marketing to appeal to this generation, as well as developing programs that are truly “experienced-based.”

In fact, Marriott’s Innovation Lab in Charlotte, North Carolina, was developed with Generation Z in mind.  Designed as a testing ground for new products and services, this program found that while baby boomers expected consistency at any Marriott hotel around the world, the next generations are more interested in unique, culturally specific experiences.

By taking a page from Marriott, hoteliers have the opportunity to gain long-term guest loyalty from this demographic. It will involve many of the same strategies for appealing to Millennials – just with more of a focus on innovation and experiences.

 

An Alternative to Limited Websites for Individual Hotel Properties

There’s been a wide-range of articles highlighting the desire to design hotels that attract locals, as well as capture the attention of multiple generations. However, to do this, there is an enormous need to develop stronger websites for individual properties.

The challenge is that individual properties often have to conform to the web standards of the parent company brands. Unfortunately, this limits the ability to provide specialized information and offers to attract locals, new travelers and those from varying age groups.

However, there are new guest personalization mobile apps and web pages that can actually serve as the property’s own website – without breaking any branding policies. These solutions are originally aimed at providing personalized information about on- and off-property events and attractions.

But, they can be much more …

First of all, they are very easy to implement and use, and do not require massive IT budgets or build outs. They are essentially plug-and-play, and provide the right information to allow guests – and even locals – to have the insights they need to become loyal to an individual property.

In addition, these types of solutions allow the guests to completely disconnect by attending an event or an attraction that takes them away from the day-to-day use of technology, whether on- or off-property.

While many properties deal with the challenge of adhering to brand standards with their individual websites, there is a light at the end of this tunnel. With the right guest personalization app and web page, it is possible to achieve the mission of making your property a destination for everyone.

 

Authenticity and Independent Hotels: General Managers Driving Force

While many hoteliers strive to offer truly authentic guest experiences, they tend to make the technology elements the driving force. Of course, technology can play a key role in providing enhanced guest services but, there’s much more to authenticity than innovation.

For example, for independent hoteliers, the key to truly providing authenticity comes down to the property’s General Manager (GM). The person in this role needs to consider expanding relationships with virtually every restaurant and attraction in the vicinity of the property.

By establishing these relationships, it is possible for GMs to develop co-opted offers that are specialized and can meet the needs of any guest. This coupled with the right innovation can help anticipate guests’ needs before during and after their stays, and help advance authentic experiences.

In addition, when it comes to larger brands with more resources, it is possible to hire a Local Experience Manager. This person plays a similar role as the GM at independent hotels – where they create the relationships and the platform for special offers throughout the region of their properties.

The combination of the Local Experience Manager, and a highly engaged GM, will help larger brands to provide the differentiated services that are required for achieving long-term guest loyalty.

Clearly, this is no small challenge. While most travelers want authentic experiences, they also enjoy predictability in their stays. This puts more of an onus on the brands to deliver the right experiences— it all comes down to GMs who are motivated and understand the true mission of authenticity.

 

Advancing Hotel Guest Loyalty for Soft and Independent Brands

At the recent Hotel Data Conference, a number of lodging leaders discussed the challenges and opportunities that both independent and soft brands have when it comes to innovation.

For independents, there is often more creative freedom, while the soft brands have a mix of brand standards combined with the ability to experiment more with technology.

For soft brands, there will always be corporate-driven solutions like uniform PMS systems, which have become very mature and somewhat commoditized. Conversely, we will see the application of some newer technologies like keyless entry become standard, which will continue to push all brands to find some differentiation.

Every brand needs to advance their identity through the creative use of innovation, which can be challenging in today’s commoditized technology arena. However, by focusing on new innovations that please the guest – both on and off property – it is possible to strengthen the overall brand.

For example, by leveraging systems that provide customized guest recommendations for restaurants and other events, it’s possible to standout and create lasting guest loyalty. For independent brands, these systems are very important, because guests have come to expect a high-touch experience during their stays.

In addition, for soft brands, these types of recommendation systems allow them to offer a customizable solution that will please the guest – and will not be considered a risky tech investment that offers minimal ROI.

Of course, pleasing the guest – whether face-to-face or through innovation – should always be considered a priority. By taking advantage of solutions that build out customized restaurant and attraction recommendations, it is possible to build long-term loyalty that will keep guests coming back, whether it’s an independent or soft brand.

 

The Balance Between Pleasing Hotel Guests and Charging Extra Fees

In the travel sector, many companies have significantly enhanced their profit margins and earnings by charging for extra fees. Whether it’s for baggage fees for airlines or parking or room cancelation fees for hotels, there’s plenty of space for adding on guest surcharges.

According to this recent Skift article, 2016 is set to be another record year for U.S. hotels in terms of the amount of money they will collect from fees and surcharges. In 2015, hotels collected a record $2.45 billion, and this number is expected to increase in 2016, according to a NYU study.

The surcharges began to increase between 2002 and 2009, when travel demand decreased due the economic climate at the time.

However, this rise in revenue brings up the challenge – and need for balance – when it comes to charging extra fees. It goes without saying that travelers are not too fond of these charges.

Southwest Airlines has been the purveyor in gaining traveler loyalty with its bag-fly-free policy, which has helped to create a beloved brand. This, along with the discounted fairs and the “fun and lively approach” they take towards travelers, allows the brand to standout.

For hoteliers, the brand – including everything from implementing QR codes for offers at the front desk to design elements – come from the corporate headquarters, and trickle down to the franchises. This also includes the strategies behind the development of programs to charge extra fees.

In an era where it’s hard to quantify guest loyalty, hoteliers need to take the appropriate steps to help build the brand, and not risk the loss of mindshare amongst guests by creating new fees. And, ongoing guest loyalty will ultimately result in more revenue in the long-term, as opposed to one-off fees.