How Technology Adoption Rates are changing the Hotel Business


How Technology Adoption Rates are changing the Hotel Business

Picture of By Doug

By Doug

In Hospitality, we always look to understand and predict the needs of guests and consumers. The luxuries and the consistency build deep guest connections in a hotel, brand or location. As dreamers and lovers of the travel and hotel industry, we all aim to know what it’s like to truly have a great experience with a brand. To feel like they care and that they want things to be personalized towards us, it all changes our whole perspective. 

As a technologist and someone who loves to travel, I wanted to write a little deeper on what I am seeing in the industry. It all starts with an understanding of where we have been and where we are going as consumers. I take the examples of Wi-Fi, Laptops, Smart Phones, Tablets, then to the next level of AI, personal devices, touch/kiosk, wearables and displays.

I love keeping my head in the clouds and thinking about the future. And figuring out what all of this holds for us, as well as bringing, real business principals and what it means to everyone as operators. I will walk through, a time lapse of 2004 to present, and define out what the risk and opportunity technology adoption have for us all.

In 2003 we witnessed the first hotel with Wi-Fi launch, while everyone was busy trying to see if it was relevant for guests and worrying about how they would make money with the technology. A few hoteliers took it upon themselves to quickly embrace the technology, and by 2005 laptops were outselling desktops. Within 3 years, Wi-Fi was no longer a ‘nice-to-have’, but a necessity for over 68% of guests. The point where adoption, technology, and market size connected, is definitely the axis point of change.If at this point businesses have not adopted to consumer required technology, you will lose bookings, loyalty and connection to the next generation. Adoption times were deemed to be up to 24 months around the mid 2000’s but is changing drastically year after year.

In 2007, the smart phone was launched, and the world changed as we know it. Within 12 months the world was connected and was on a journey to complete technological independence with personalized devices, applications and ecosystems to support it. By 2010, apps were prevalent, and most hotels were fast at work with a hotel app, although the impact wouldn’t be known for several months. One thing I hadn’t realized is as our consumer connected technology was launching adoption rates were increasing at dramatic rate. In as little as 5 years adoption rates increased by over 70% each year to the point that today it can be as low as a matter of months.

Now that we know adoption rates are increasing, where are we as an industry? So, I took the time to put together a maturity matrix based on over 300 hotels I had spoken or worked with. See matrix to understand more about where your peers are and where some of the most strategic and transformational brands have excelled.

To make this a little clearer, there are definable elements needed to move beyond Basic and Reactional where most brands live. The connection of this technology needs to be adopted quicker than you are thinking, as the best and most profitable brands are already there. Here are some of the top technologies, to help you think through some next steps as you consider your technology and guest experience goals. You should also understand some key stats, so I recommend a few different studies. If you are looking to build a case or educate the team around you, feel free to reach out and I will be happy to provide them.

Millennials will be occupying 50% of all hotels by 2020 and if you haven’t planned for them you may want to consider the changes and habits of the next generations to help motivate a strategy for competitiveness.

A speaker I find interesting, Mike Walsh used the stage to officially end discussions about millennials, since these consumers are now the present and not the future. The consumers that business owners need to think about today are the 8-year-olds, who are dramatically different from millennials since they have an intuitive relationship with technology.

“If you’re growing up today, you are living in a world of miracles,” Walsh said. “They’re going to want everything to be designed specifically for them.”

  1. Frictionless engagement gives your guests ways to interact with your hotel. If you don’t have a strategy for automated check-in, mobile key, and digital food ordering, you’re already two years behind.
  2. Data – To anyone in hospitality or retail: You are now a data company to connect with today’s consumers. You have to personalize the experience and you must know your customer.
  3. Mobile, Touch/Kiosk and Displays are now the defector. If you don’t have this technology, you are not listening to your customers.
  4. Guest to staff communication through IM, Text, mobile applications. People don’t want to pick up the phone, they want to use their device to customize and engage their travel experience.
  5. Social and UGC – To connect with guests, you need to connect to their social network. Allow them to engage, share, and communicate while onsite or in destination.
  6. AI, chat bots providing 24×7 text-based services to answer questions and make recommendations. It’s the future and you don’t have to be scared or spend a lot of money to implement.

I hope this helps guide some of us who are trying to move the ball forward, to educate staff and industry alike as to our past and our future. I have a personal endeavor to help traditional businesses, brick and mortar, and travel-related organizations that are losing traffic and engagement. If I can be of any assistance or if you want to learn more about options reach out to me or my company. You may just be surprised how easy it can be, for if you don’t do it, I can promise you your competition is already has.

“We are today at the dawn of a new age, an algorithmic age,” Walsh said, referring to AI. “The algorithmic leader of the future will need to combine a deep understanding of human complexity with a flair for computational thinking.”

How to think creatively

The most valuable people in the organization in five years will most likely be doing jobs that don’t yet exist, Walsh said. He challenged his listeners to ask themselves what the one customer or co-worker behavior is that they would love to change, then determine what data would allow them to change this behavior.

“Challenge your assumptions about the future,” he said. “Ask your people in your organization for ideas to invigorate your approach to the future. How do you make cultures your operating system?”

Many people enjoy seeing new technology, but not everyone thinks about how technology will impact the choices they will be making in the future. Airlines, for example, collect a lot of data about their customers, but how are they using this data to improve the customer experience?

Data takes new importance for retail

Retailers will use data to meet consumers’ needs better and faster, he said. One example that is already obvious is automated delivery of goods to the consumer. One that is not as obvious is being able to deliver products to consumers even before the consumer places the order, a scenario Walsh called “anticipatory shipping.” AI can analyze data to create customer profiles that can be compared to similar customers to predict preferences and make recommendations.

All companies, particularly those involved in retail, need to see themselves as data companies to deliver truly compelling user experiences, he said.

Written by Doug Ralston, an omnichannel technology pioneer, and hotel owner.


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