The overreliance of legacy technology solutions and the lack of data integration are possibly the single biggest constraints on the hotel sector today. The reasons for this are deep-seated in the history of hotel technology. Most hotel operations have built up their technical systems and applications piecemeal over the years. As a consequence the teams that were created to support them looked at things from a narrow viewpoint. These organisational silos limited data exchange between teams, and that has evolved into limited data exchange between technology systems. In order to drive revenue, hotels need to drive technological advancements in two ways:
However, their technological inefficiencies and organisational habits make it very difficult for hotels to break free. Things are changing, and hotel companies are seeing the benefits of using best-of-breed, cloud-based technology solutions that don't require a huge capital investment and can be replaced relatively easily. However, there is still a large level of fragmentation between the various technologies they are now employing. This is holding back the access to and analysis of customer data.
At the other end of the technology spectrum sit the online travel agents (OTAs). They occupy a walled garden environment where they have all of the data that they need in one place and organise themselves around analyzing that data to build the complete picture of online guest interaction in order to see the business opportunities.
Hotels do have two advantages over the technology giants - they have first-hand experience with the guest and complete knowledge of their inventory. From these they can reap valuable data insights, provided the right technology systems are in place.
By combining the information they gain through hardware and supplementing it with the softer data that comes from having the guest in-house, hotels can create a richer, more granular data pool.
Technological advancement, such as the Internet of Things (where hardware meets software), provides data insights into guest behaviour, likes and dislikes. Hotels can track what their guests do and where they spend. This is a huge data source that the OTAs and others don't have. By capturing that and using it when the guest comes to engage with the hotel online you can present something more relevant, appropriate and more unexpected, and that's where the hotels can start clawing back some of the imbalance of the relationship.
OTAs recognise this and they are investing in booking engines, property management systems and revenue management systems. They are trying to extend their reach with the guest beyond the "search and buy" process and understand more of what is happening on property. It would be a huge mistake for hotels to let that happen because then they are conceding the last valuable asset they have. If OTAs can understand guest spend and behaviour on property, then they will own demand generation.
Hotels need to link all the disparate pieces of data they hold on a guest and their properties. Thankfully, technological innovations such as the cloud make this easier than ever before.
Once you have created a fuller picture of your guest you can start to market to them both pre-stay and on-site. What's more, you can exceed on their expectations.
One of our young innovators at Duetto will always drink any mini bar dry of Coke Zero. For him, a tailored guest experience is arriving to find a mini bar stocked only with Coke Zero. If he has already stayed at a hotel, or another sister property within the same group, it should be easy to determine his soft drink preferences. The data is there, it is just a case of finding it, analysing it and then acting on it. The end result is an increase in mini bar sales on Coke Zero and a happy guest who feels like the hotel really understands his needs.
The hotels industry is an inherently conservative market, but in order for it to truly get ahead it needs to break the mold. The big digital companies will go through rounds and rounds of A/B testing. They are not afraid to test and fail, test and fail. Hotels don't do this because they are fearful of the capital expenditure related to testing - they want to be sure it will work so they delay decisions.
However, a new breed of hotel is breaking through. Citizen M, for example, has demonstrated that hotels can be innovative and risk-averse. They are willing to test and fail until they reach a solution.
Cloud-based solutions mean that hotels don't have to invest so heavily in infrastructure and can be more agile. While cloud solutions are doing a good job at collecting and exchanging data between solutions there is still a missing link: the free exchange of data with few limitations. Many good ideas don't take flight because the barriers to entry are too high. We need to be in a position where any bright idea can get access to this market data. This will enable new solutions to test and fail very quickly, rather than spending time and money on building solutions only to find that not all of the information they need is there to fully support what the hotels want.
There are so many good technology solutions out there that hotels can tap into - whether that's to do with up-sale, before the guest arrives, identify if a room is occupied or not so as to clean rooms more effectively, or know when to restock Coke Zeros. But many data points are lost because the exchange of information doesn't allow the hotels to be proactive in their engagement.
Bringing data stacks together can drive revenue, it can drive guest engagement and it can drive guest experience.
Guests want a seamless travel experience. Innovators are looking at ways to use technology to smooth the way.
For example, Changi Airport in Singapore recent installed sensors to check the flow of people from planes. If two planes arrive simultaneously the airport can check to see which is emptying faster and then work to get the baggage from that flight to the carousel faster. It's a great example of how you can use data to make the customer experience richer. Another great example of using technology to remove customer friction is the new Amazon Go supermarket concept; where shoppers walk in, take what they want and walk back out again. Using machine learning, computer vision and AI, Amazon has removed the friction of supermarket queues and checkout. Instead, you open an App on your Smartphone, fill your bags and leave. Your shopping is then charged to your Amazon account.
This makes me think of the check-in process at hotels. Why do we need to have a human interaction at this point? Often guests are travel-weary and just want to get to their room; they don't want to be asked, 'Have you stayed with us before?' Technology can handle the repetitive jobs, such as check in, while hotel staff should be there to enhance the guest experience.
Machines remove friction, analyse data and identify opportunities. Supplement that with human empathy and you have a powerful combination.
Amazon is not a poor service provider, just because you don't speak to humans. When you do, they are probably very empathetic and understanding.
The irony is that this inaction empowered the hotel industry's biggest competitors, the OTAs. If they had created a platform similar to what the OTAs are sitting on, then the hotels would be in a stronger position and competing on customer service and experience rather than at a technology level. Technology shouldn't be the advantage between hotels; it's the application of technology that should make the difference.
By accident hotels gave the OTAs their customer data when they gave them their inventory. This gave the OTAs the ability to dissect and analyse this data to further outwit the hotels at their own game. Hotel companies now have a responsibility to set aside their differences and open up the data lake in order to compete more effectively.
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An expert in the fields of hospitality and electronic distribution, Michael McCartan joined Duetto as Managing Director for Europe, the Middle East and Africa in 2014 to spearhead the rollout of the company's products and development of Customer Success teams throughout the EMEA region. Since joining Duetto, he has grown the European headquarters of Duetto in London, as well as establishing teams in Germany and Dubai. Mr. McCartan is adept at engineering creative solutions and then executing their delivery, understanding the exact needs of the client and the challenges surrounding the market. He is a valued member of the HSMAI Europe Revenue Management Advisory Board, contributing to articles and leading seminars and keynote sessions for the association. He is also a frequent speaker and panellist at major travel industry events across EMEA. Mr. McCartan previously served as Chief Executive Officer of eRevMax, a travel technology service provider, where he grew the operations to serve more than 8,000 customers, and capturing data benefitting more than 40,000 hotels worldwide. He directed product development, business development, and customer and hotel relationship management in more than 100 countries, managing offices and research development in the U.S., UK, Poland, Singapore and India, and sales representatives globally. Prior to eRevMax, Mr. McCartan held senior management positions at Pegasus Solutions and at UK-based Computer and Design Services, where he managed sales of software solutions for the civil engineering industry. Mr. McCartan has an engineering degree from the University of Cape Town and a business degree from the Open University.