Hotels 2020: welcoming tomorrow's guests

The hotel industry has lagged behind other sectors in adopting technology to meet customer led demand, according to a new report from Grant Thornton. As a result, hotels must now put mobile technology at the centre of their customer experience as they race to catch up with and compete in the ‘sharing economy’, where services such as AirBnB are challenging the traditional business model. However, the report cautions against de-humanising the hotel experience, stressing that the most successful companies will be those that master the balance between using technology to respond to customer preferences and keeping the personal touch.

Launched at the International Hotel Investment Forum in Berlin (2 March 2015), the report, Hotels 2020: Welcoming Tomorrow’s Guests, highlights the changing nature of hotels and their guests. This is in part due to the increasing spending power of millennials, digital natives looking for local, authentic experiences when travelling. This demographic group is set to outspend baby boomers in hotels by 2017 and expects increasingly tailored services, such as mobile room customisation and special in-app offers.  With the number of Chinese tourists alone expected to double to over 200 million by 2020, rising numbers of travellers from emerging markets mean hotels need to change their services to cater for new needs and preferences.

Tantra Tantraporn, Partner of Management Consulting Services at Grant Thornton in Thailand commented, “Technologies and their impact on society change continually, and at an increasingly rapid rate. Customer expectations on the balance between services that are needed while away from home, and those that are simply nice to have, need to be evaluated by hotels on a regular basis. Features such as Wi-Fi access, which used to be considered a premium option, are now such a ubiquitous part of everyday life that travellers rely on them to be as readily available as a telephone service. As a result, the inability to provide Wi-Fi access, especially free in-room Wi-Fi access, has become a competitive disadvantage in the selection of hotels for many technically savvy guests.”

Tantra continued, “That said, hotels also need to shift their perspective from application to applicability. The process should never start with an attempt to figure out what to do with new technologies. Instead, hotels should start with a clear understanding of functions that make travelling difficult, and then scan for technologies with capabilities suited to making those functions easier. This sets up a framework from which to rationally assess and select between technologies that are more appropriate and relevant to those on the road. While 4G bandwidth may sound like a wonderful selling point to marketing, providing a simple, prepaid courtesy phone with suggestions and maps in the traveller’s native language may be valued far more. The rule to assessing technologies, mobile or otherwise, should always be function before feature.”

The report also points out that the hotel industry has been lagging behind other industries when it comes to mobile personalisation; from retailers and personal finance providers to travel companies and restaurants, mobile technology – and especially apps – are being developed at a tremendous rate to provide accessible, customised customer services. The report urges hotels to consider apps that personalise elements of the entire guest experience, going beyond the simple logistical processes of room booking and check-in to allowing guests to truly tailor their stay through their smartphone.

Some hotel chains are already using technology well to personalise the guest experience. For example, during the London 2012 Olympics, Holiday Inn partnered with Samsung to enable guests to control their rooms’ TV, air conditioning and lighting with their smartphones. Hilton Worldwide is developing a mobile check-in and checkout service, and the Ritz-Carlton app, launched last year, provides concierge services including booking reservations, local city guides and special offers.

Gillian Saunders, Global Leader for Hospitality and Tourism at Grant Thornton, added, “Hotels need to work to understand their guests’ requirements, making the most of big data to analyse and establish where personalisation through better use of mobiles can really add value. It’s all about striking the right balance between apps and technology, as well as human interaction, which is still hugely valued. Get it wrong and you risk alienating your customers. Get it right and you can reap the rewards.”

“The battle for tech talent with other industries is fierce, and the sector will need to think creatively and work with external strategic partners to get it right. This could include technology providers, app developers and existing services such as Uber, as well as local hosts adopting the home-from-home aspect of the sharing economy. With millennials and tourists from emerging economies set to dominate future reservations, tomorrow’s guests will expect tailored services that break down language and cultural barriers, whilst still offering an authentic, personal touch that gives travellers the unique experience they value. Hotels must act now to differentiate themselves. They must make a reality of mass personalisation – whilst keeping the human touch – to surprise and delight guests. The way to implement technology to help support your business is an important issue you need to be concerned about,” Gillian concluded.