Hospitality in the Digital Era

Samrat Sen Oct 04, 2017

THE HOSPITALITY industry has always excelled at sparking travellers’ imagination, riding the waves of rapidly advancing technologies and innovations to enhance and enrich customer experience. The way digital age customers purchase and consume hospitality services is changing dramatically, forcing the hospitality industry to transform its offerings, products, services and infrastructure. Today, several digital intermediaries have encroached on hospitality providers’ traditional territory, grabbing a significant percentage of the industry’s revenues.

What You See is What You Get

In the future, most conversions for the hospitality sector are likely to happen through experiences — physical experiences, curated and delivered through digital means. For example, tech-savvy customers exploring a prospective hotel room through a virtual reality (VR) headset will be a far more compelling sales pitch than browsing a static image or reading through a brochure. While VR is relatively new, leaders in the hotel space are already experimenting to understand best use cases. While most successful hotels have started to invest in such technologies, the stakes in the foreseeable future would have grown even higher as digital convenience and options evolve to top the list of mainstream consumer expectations. Views could be converted into purchases by means of a mix of experiences that blend technologies, and enable hyper-personalization.

Service That Never Sleeps

Chatbots simulate intelligent conversations through text and voice, enabling humans to converse with computers in their native language. Instead of the automated e-mails that hotels typically send out to guests to suggest amenities such as spa treatments, airport transfers and dinner reservations, over the next few years, chatbots might suggest these offers themselves, increasing offer relevance by asking guests the right questions, at the right time. Conversational software bots could soon be answering all basic inquiries.

Following the hospitality industry’s widespread adoption of in-house apps and instant messaging, chatbots are expected to flourish in the hospitality industry, winning over phone, email and just-in-time communications. Dealing with a chatbot feels familiar and convenient to customers. With chatbots on duty 24X7, guests could also explore options at their own pace.

Equally important is chatbots’ potential to integrate with booking and service recovery. Within less than a decade, chatbots will likely book new reservation and manage the check-in and stay experience. Modelled on text conversations with call centre agents and website navigation paths, bots may be able to not only fulfil reservations, but also upsell rooms and help with in-room service in line with customer preferences.

The Inevitability of Blockchain

Blockchain — a distributed ledger technology that is secured by encryption and works independently — holds great potential for helping hospitality companies manage the accrual and redemption of loyalty points and settling agent commissions in a transparent manner. By eliminating the need for third parties, the technology reduces transaction costs, making tracking points not only less expensive, but also more secure, instantaneous and visible to both the customers and the companies issuing them.

For a Secure, Hassle-free Stay

The straight-to-your-room experience looks poised to go mainstream, making check-in lines a distant memory. Once guests are in their rooms, safety is of paramount concern. This will lead to a bigger, more crucial role for biometrics in the hospitality sector. Facial recognition will help identify guests, and fingerprint scans will offer secure access to rooms and amenities.

Implementing biometrics enhances existing card systems, reduces card clutter, and makes customers comfortable while using the technology. Promoting facial recognition as an experience enhancer during check-in will result in easier adoption of biometrics.

Robots to The Rescue

Conversational artificial intelligence (AI) is already hard at work in the hospitality industry, taking fast food orders and helping travellers plan trips. While still in its infancy, robotics holds enormous potential in transforming booking and purchasing. More importantly, it will lower the cost of service via automation. Coupled with the industry’s growing operational costs, the immense potential of AI will drive hotels to adopt bots aggressively over the next decade.

Currently, fixed labour costs account for a large chunk of any hotel’s total expenditure. Hoteliers should examine how robotics and self-service options can enhance their efficiency and productivity without detracting from the focus on enhancing the customer experience.

Housekeeping, food and beverage departments are the most expensive to manage—and the best candidates for robotics-driven transformation. Staff-less hotels will make administration, recruitment and training frugal. In the future, hotels will increasingly leverage the Internet of Things (IoT) to manage utility costs and generate alerts for facilities maintenance.

As You Like It

In-room personalisation will reach new heights by 2025. Matching experiences to individual customer preferences is the ultimate challenge for any customer-centric industry, and in hospitality, it’s a powerful tool to retain customers and acquire new ones. Leveraging IoT will enable companies to gain impressive returns and command a significant share of the global market.

Beacons detect customer identities and their physical locations, which hotels could use to win hearts by targeting and offering tailor-made, thoughtful, just-in-time offers to customers that they simply cannot refuse. While customers’ smart wearables make the guest experience seamless, smart machines could analyse data and provide the best recommendations.

Companies that dare to invest in digital-era innovations such as VR headsets, chatbots, blockchain technology and IoT solutions are poised to lead and stay ahead of the competition in the coming years. It is imperative for the hospitality industry to act on the opportunities made possible in the digital era.