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How Recent Technology Developments and Transformations in Travel and Hospitality are Impacting your Business Environment?
By Nayan Peshkar, SVP Digital, Distribution & Revenue Strategy, Millennium Hotels
Internet of Things
The growth of connected smart devices is revolutionising the way hotel businesses interact with their guests. Hotels are already allowing their guests to order services, control the temperature of their room, and book a table for dinner or a massage at the spa all from their mobile app. As the march of the Internet of Things (IoT) is taking over the customer’s smart-homes, they are starting to expect this adoption in hotels as well—after all, hotels have traditionally marketed themselves as the home away from home. The scenario of a guest walking into a hotel lobby and being prompted to check-in right from their own mobile device and being able to unlock their hotel room from their phone is helping in creating a new mode of communication with guests—and the wow factor of this technological capability will quickly fade and become a standard. Guests are already seeking more and are willing to connect their personal choices to their hotel stays—for example being able to link Spotify playlists to smart speakers at the hotels, media content to connected televisions etc. Guests are no longer looking at only the comfort and facilities provided by the hotels—instead they are looking to be empowered and self-provide to personalise their stay experiences.
This is where advancements in technology can enable the hotel industry to deploy facilities that empower guests to self-serve. IoT helps in creating a network of smart connected equipment which not only allows in the collection and exchange of data, but also in their communication with each other. The IoT not only provides a platform for guest to create their stay experiences, but also helps the hotels in improving their operational efficiencies by automating some of the internal processes. For example, IoT will allow for communicating with the operational or housekeeping teams to seamlessly keep track of and replenish supplies for the in-room bar, replacing malfunctioning in-room facilities such as lighting, HVAC, televisions, remotes etc., in addition to personalising the setting of temperature, lighting, and curtains remotely per the CRM information the hotel may have from these guests.
From IoT to Blockchain technology, hotel groups need to continue to modernise the way they think, do business and interact with their guests
While guests are looking to enhance their stay experiences themselves, they are also increasingly concerned about the security of the information they share to personalise these experiences. Biometric technology is going to play a major role in making personalisation secure in hospitality. For example, biometrics saved within hotel CRM’s or within the mobile app are starting to serve customers looking for a seamless check-in experience. Having said this, biometrics can only go as far as the customer is comfortable with using them—although guests want to take the frustration out of their arrival and on-site experience, they are increasingly concerned on how secure their information is. Advancements in awareness through programs such as transparent GDPR adoption help in mitigating these customer concerns, though the near future will continue seeing the equation see-saw between the benefits of personalisation and the perceived downsides of sharing personal information.
New Age Loyalty Programmes
An average guest gets exposed to multiple loyalty programmes not just in the travel space but also with other products or services they interact with. Retailers, financial services, airlines and even the local laundry offers loyalty options leading to a web of programmes where redemption is complex and cumbersome simply due to the fact that guests have to keep track of all the programmes they have enrolled to.
Within the travel accommodation space, loyalty programmes are no longer an offering exclusive to hotel groups as the OTAs too offer loyalty rewards in the form of discounts, free night stays, upgrades etc., creating competition for the same product offering and ultimately increasing the cost of acquisition. Traditionally, hotels have been expected to own the guest’s experience not just during the stay, but before and after too—the current proliferation of loyalty offering from travel intermediaries is however taking guests away from this direct engagement with the hotel brands.
Loyalty programmes—once a success story for hotel groups, are fast-becoming non-beneficial and not easily redeemable for guests, due to increased complexity of tracking points and rewards. The value of accumulating points for redemptions through hotel room upgrades, stays and add-ons is reducing for the simple fact that they seem unobtainable for a large number of guests. While the top-tier loyalty guests based on their frequent hotel stays have higher lifetime values, the large proportion of hotel guests who fail to accumulate sufficient loyalty points for redemption often feel neglected.
Specifically, with the millennial audience, it is important that the loyalty incentives are based on small and easy to obtain rewards. To achieve this, it is crucial for the hotel industry to focus on a loyalty programme that is not just specific to the brand but also with partner brands within the travel sector to prove the value of instant rewards. Partnerships with similar brands within the travel sector will be mutually beneficial for the hotel brands as well as its partners. Interoperability of loyalty points with airlines, tours, attractions, F&B outlets, and retail stores will not only help in reducing the operational costs for managing a loyalty programme, but will also create a stronger base of engaged guests.
Blockchain technology has the potential to create loyalty programmes which are seamless, interoperable and cost-saving while providing greater opportunities for personalising, thereby enhancing guest affiliation. Blockchain technology has the ability to help hotels save money with reduced transaction costs while helping guests redeem loyalty points easily. Adoption of the technology by hotel groups will help in developing programmes which are guest friendly and frictionless without adding operational costs or complexity to the existing programmes. It will also provide hotel groups with the ability to offer redemption options which are truly personalised to their audiences.
Historically, the hospitality industry has been slow to adopt technological changes, and only over the past five years have travel and hospitality companies really started to talk about and to incorporate those changes into revolutionising their businesses. From IoT to Blockchain technology, hotel groups need to continue to modernise the way they think, do business and interact with their guests. What ultimately is required to be done involves using technology to enhance the “humanness” of the hotel brands.