Hotel companies are taking major steps forward in digital transformation, which promise to enhance efficiencies and improve profitability as businesses reopen.
The move has been accelerated by the pandemic, which provided thinking time, as well as an opportunity to test and implement upgrades that appeared too hard to introduce during busy times.
An insight into the new ways of thinking came from a webinar organised by Sabre, in which Carl Oldsberg, CEO of eBerry by Nordic Choice, explained how the last year has changed views. “We as an industry are typically not very fast at changing, I believe the pandemic has wiped all that away, the guest focus is there and we’re moving a lot faster as an industry.”
“We’re looking more now at hotels as a local asset, we need to rethink what future demand is going to be, and how to leverage that demand in a different way.”
Oldsberg said guests want to be more in control, and “we’re seeing a tremendous uptick in our app. The interaction with that digital touchpoint is just going through the roof.”
The more guests use apps, the more operators can collect data, and learn more, he added: “I’m looking forward to a situation where we can be more proactive,” based on exploiting the data.
“We have had a lot of success with AI, and we’ve had a few pilots with Alexa and the like, and I think this will only accelerate. In-room technology is where we’ll see things accelerate most.”
“The ecosystem in our industry is very complicated,” said Raul Gonzalez, EMEA CEO of Barcelo. “The main barrier is probably the workforce, and the company culture. We must be much more agile.” He pointed to examples in customer service, where smarter technologies are helping.
Barcelo’s call centres now use smart call monitoring. In place of the legacy system, which used to randomly check a few calls, “now, with technology, the machine is listening to 100% of the calls, and they move fast if the tone of the conversation moves, or the words used are out of line.” This, he said, is far better than trying to measure performance by average call length.
Barcelo is now moving to use AI “to try to understand before the customer’s stay, what is the score they will give us, in terms of satisfaction. That means we are trying to understand the behavioural style of the customer, and how we can increase their satisfaction.”
Frank Trampert, global managing director, commercial at Sabre Hospitality Solutions said the mood of his clients has changed: “Hoteliers have started to think differently about their positioning and their offering,” and about how to add additional revenue streams. “The concept that we like to refer to is the intelligent way of retailing.”
Also deploying more tech in Spain is Melia, which has spent the last few months testing “software robots” to deliver robotic process automation. Working with provider UiPath, the group has implemented systems that automate business processes and repetitive, rules-based tasks. “During the pandemic, we had to drastically adapt our way of working and interacting, and RPA technology is helping our employees manage a large number of transactional tasks automatically and remotely,” said Carlos González, strategic planning VP at Meliá.
Employees are encouraged to use the tools to take over tasks including invoice reconciliation, reading and extracting information, mass document delivery and internal requests; the results show a faster execution of tasks, and a failure rate below 1%.
Katherine Grass, CEO of operations technology specialist Optii Solutions, said hoteliers have moved from survival mode, to looking at how to optimise operations in a new world where rehiring may be tricky: “A lot of staff have left the industry. They are much more aware of being able to do more with less.”
Optii, says Grass, “works with the hotels as they deploy various tips and tricks – there will be a lot of experimentation, and trial and error. We’ve been onboarding hotels aggressively over the last six months.”
Optii’s technology is particularly useful at improving the efficiency of room cleaning, something that has been front of mind first as Covid-19 emerged – then as the big brands spotted an opportunity to potentially reduce fixed costs by eliminating daily cleans. Grass says something interesting has emerged, as hotels have replaced missing business travellers with more leisure guests: rooms take longer to makeover. “Data analysis has become very important – and things keep evolving.” In some cases, she says it is more time efficient to maintain daily room cleans, rather than cope with a far bigger job when a leisure guest departs.
At Amadeus, which provides technology support across the hotel sector, the company’s Rebuild Travel survey provided several pointers that led to changes in the company’s offering, to suit new demands. The company has combined its CRS and guest management tools, noting that hotels “see the sophistication of their tech stack as the path forward for recovery”.
Another big question for many hotels is when, and how, substantial meetings and conference business will return. At Nordic Choice, Oldsberg speculates there will be demand for a new, hybrid product that combines a series of linked, but physically separate in-room meetings: “Instead of a meeting venue, we’re becoming more of a meeting facilitator. Through tech we are able to cater to the needs that are going to sustain, where you’re going to want to have hybrid meetings.”
At Amadeus, a new Hospitality Diagramming tool has been created to help venues work out their socially distanced event capacity, while the company says feedback from its survey suggests many venues will want to retain some of the hygiene elements to counter Covid, on a long–term basis.
HA Perspective [by Chris Bown]: One old hand in the hotel industry famously likes to say that a chambermaid at the Savoy cleans the same number of rooms per hour today, as they did when the hotel opened in 1889, as proof that productivity in the sector has never really advanced.
So here’s a perfect storm. Guests are expecting change, and hotels will struggle to recruit enough people – the good ones have found jobs elsewhere during the last year. Time to get smart, use technology to do stuff – and move the sector’s efficiency up a gear or two.
Some of this stuff is time and motion efficiency; other bits of it are messier, such as working out how to collect, use and learn from data, to the mutual benefit of the guest and the hotel. Exciting times.
Additional comment [by Andrew Sangster]: The hotel industry has not had the best relationship with technology over the past few decades. Most obviously, the aggregators like Booking Holdings or Google have dominated customer relationships on the web.
But the next round of technological innovation, that centred around on-property experience, gives puts the hotelier in a much stronger position to compete.
With aggregators, hoteliers were too slow and then too small to fight effectively against the distribution dominance of the online specialists. Even today, most hotel bookings come in offline and it means hotels have to balance the needs of this majority business against the rapidly growing minority business of online.
Not surprisingly, at the start of the internet age, hoteliers outsourced online distribution to focus on what at the time – 20-plus years ago – was by far the biggest sources of revenue. It has been a game of catch-up ever since with hoteliers never quite getting back within touching distance.
With on-property tech, however, hoteliers ought to find it easier to control outcomes. I say ought, as there have been previous missteps even here. I remember the bitter complaints from one hotel CEO shared over lunch a few years ago about how the wifi service provider he had signed-up had him over a barrel. He’d wanted to switch to a free service, to follow the lead of an arch–rival, but the wifi service provider had a long-term contract which he was forced to buy out or pay over the odds for.
The best solution looks like being developing your own services. And Nordic Choice’s eBerry approach seems worth emulating. By steady experimentation, the company is able to work out what works with customers and what doesn’t.
An example of this testing was using personal digital assistants like Amazon’s Alexa in guest rooms to learn and understand how guests were prepared to use them. And beyond this is working on robots in customer service and using artificial intelligence to make better marketing investments.
An initial investment of USD30m back in 2016 and the establishment of a team that has grown to 150 for the 190-strong chain is a sizeable commitment. And then giving this team room to experiment on finding the best solutions for guest experiences must have been even tougher. But eBerry is creating a new platform, website and applications across the group.
In retail, the buzzword is omni-channel which is the multi–channel approach to sales to deliver a seamless shopping experience online or instore. The key is not providing different channels, but rather weaving them together to give customers the choice in how they move forward.
Hospitality is only just beginning to embrace this approach, particularly for the on-property experience. The key is going to be enhancing the customer relationship and retaining control of that customer relationship. The latter being something that went awry for hoteliers as the internet became established as a distribution channel.