Bringing the digital advantage to bear
The hospitality industry is using digital technologies to increase efficiency, drive down costs, and enhance the customer experience in sometimes quite unexpected ways
“Customers sit at a table, download an app, order and pay and wait for their meal or drinks to arrive.” Photograph: iStock
At a time when the world’s largest accommodation-provider doesn’t own a single property, it shouldn’t be all that surprising that technology is having quite a profound impact on the hospitality industry. From a customer perspective, the most obvious manifestation of the digital revolution is the booking process.
“From a hotelier perspective, the way hotel rooms are distributed has changed enormously,” says Keith Slowey, founder and chief executive of Irish hotel management software specialist company iHotelligence. “In the early years, it was quite boring. Rooms were still booked by phone or fax and the booking was entered into the software afterwards. Now, they are mainly distributed by the likes of Booking. com">Booking.com.”
He says Booking.com is now the world’s largest hotel booking service. “They are Google’s biggest customer and 60 to 70 per cent of hotel rooms are booked through it now.”
Despite the hefty commissions of up to 15 per cent charged by such services, Slowey says they are a benefit to the industry. “We are telling hotels to view these platforms as their friends,” he says. “They offer another sales and marketing tool. When a person is looking for a hotel, they often find what they are looking for on Booking.com and then type the hotel name into their internet browser to book directly with them. Our booking software allows them to manage both the rooms booked through the platforms and directly with them and we don’t charge commission.”
The changed distribution model has brought about changes in the way hotels are managed, he adds. “The role of revenue manager didn’t exist 10 years ago, except in the very largest of chains,” he points out. “It’s all about revenue per available room now. That’s the key metric. There is no point in having 90 per cent room occupancy at an average of €100 per night if you could have got €300 per night for 80 per cent occupancy. They are using all the data and metrics available to them from the technology to maximise revenue. We have developed complex algorithms to assist with this.”
The other big development he sees is the increasing level of self-service, and not just at the point of booking. “Customers are increasingly using their own devices for self check-in,” he says. “They walk straight past reception to their room, where they use their phone to open the door either with a barcode read by a scanner in the door handle or using the NFC capability of the phone. The cost savings at the back end by this technology can be pretty huge.”
Hotels are also starting to make use of the “free” Wi-Fi services offered to guests. “When a guest logs on to the Wi-Fi service, a page comes up on their phone asking them to agree to terms and conditions and so on,” says Slowey. “They can also use this to ask the guest if they would like to order room service or something from the bar and add it to their bill straight away. Also, the guest manuals in hotel rooms are being replaced by tablet devices. These cut down on paper and so on and also offer opportunities for upselling by alerting guests to special offers on spa treatments available within the next few hours or by advertising early bird offers in restaurants. That’s a big win for hotels.”
And it can get quite esoteric. He cites the example of the Citizen M international hotel chain which uses technology to guarantee one-minute check-in and check-out times, 24-hour food and drink availability, and free high-speed Wi-Fi and has now gone one step further with the room décor. “A guest can use a tablet device to change the colour and hue of the walls in their room, pull the curtains to a desired setting, set the lighting and air-conditioning and their preferences will be remembered for next time they stay in one of the hotels.”
And this could only be the beginning, according to John Brennan, chairman of international hotel investment and management company Amaris. City hotels with small rooms staffed by robots are already a reality, he told senior hospitality managers in Dublin at a recent event organised and hosted by hospitality industry recruitment consultants The Firm.
A Japanese company, he said, opened its first hotel staffed by robots in 2015 and plans to open 100 more.
“The trend appears to be towards smaller rooms, less human service and comfortable lobbies at the lower end of the hotel market and increasingly around amazing locations, style and, critically, a sense of destination and authentic personalised service experience at the luxury end,” he added.
Hotel companies are leveraging technology to extend their operations into hostels, home-stay, extended stay and micro hotels in response to a need to intensify activity on expensive land, to reduce operating costs and to offer a lifestyle product for younger travellers.
“The digital world is also impacting hospitality with services such as mobile marketing, smart appliances, personalisation via artificial intelligence, chatbots, virtual reality, beacon technology which sends messages to smart phones in specific locations, big data predictive analytics, facial recognition to speed up check-in, and driverless technology in resorts,” said Brennan.
Hotels will embrace these technologies in an environment of slow revenue growth, and rising costs of labour, insurance, distribution and energy, including carbon taxes. “Making back-office functions more efficient and improving labour productivity are the keys,” according to Brennan. “We will see more self-service in food and beverage. Already in the US, room service has disappeared in mid and upper mid-scale hotels.”
The future is where AI and personal service will complement each other, according to Olivia Byrne, owner of the Eccleston Square Hotel in London. “Our phones will sync immediately with the in-room technology, for uninterrupted, comfortable and seamless facetiming, television, streaming and viewing. Guests will use dining apps available through the hotel property to seamlessly order exactly what they want, when they want it. Voice assistants like Siri or Alexa will lose their identities – instead their universally available knowledge will be integrated into our own personalised intelligent assistants. Interfacing will be highly personalised, but less personal.”
At a more basic level, the use of handheld devices connected to tablets in bars and kitchens by wait staff is driving down costs and improving efficiencies for hotels and restaurants. “They cut down on steps and allow staff to spend more time on the floor serving customers,” says Slowey.
The next step is where customers do the ordering themselves on their own devices. “We are moving to a situation where customers will be able order on any device, anywhere at any time. Customers sit at a table, download an app, order and pay and wait for their meal or drinks to arrive.”
And right down at brass tacks level, stock control is greatly enhanced. “Everything is accounted for,” he says. “Nothing comes out of the bar or the kitchen without being ordered on the handheld device and someone paying for it.”