In Newsletter #45: How driverless cars will affect hotels | The customer experience is the next competitive frontier | Modeling your booking experience on Amazon
We couldn’t send a newsletter last week, because honestly there wasn’t that much great stuff crossing our desks. So, we waited, and thankfully so, because below are a few incredible pieces/data points that invite a lot of thinking about the future of our industry.
We start with a great piece from venture capitalist Benedict Evans, which looks at how technological innovations, like driverless cars, could impact cities as they become mainstream. As Design Hotels’ CEO points out in a video that Skift put out yesterday, hotels are a “brick and mortar business,” and, as such, their fate is very much entwined with that of the city. Anything that changes how people engage with cities will ultimately impact the hotel business (as Airbnb and the sharing economy have proven).
The second piece and third pieces we highlight are further proof the guest experience is finally starting to take center stage. The notion of hiring Chief Experience Officers is relatively new for our industry, but with OTAs increasing their strength, we now expect the guest experience (during the stay and at booking) is going to become more important in the booking war that is going on in our industry.
This isn’t in the highlights below, but I really enjoyed this quick 2 minute video from Duetto’s CTO, Craig Weissman. In it, Weissman gives a brief overview of how hospitality technology got to the complicated state we find it in today. He correctly points software complications compound overtime, and you cannot change it all overnight. So, hotels should continue looking to companies like theirs and ours to help them upgrade over time.
HITEC is getting to be top of mind again. This is my favorite show of the year. I highly encourage you join us both to educate yourself as well as have fun with our community. As an exhibitor, we can apply for free tickets for our hotel partners. If you want to join us in Toronto (June 26-29), email back and we’ll send you a quick form to fill out.
Join us in Toronto,
HIGHLIGHTS FROM THE WEEK'S NEWS...
The next big thing.
Benedict Evans | Ten Year Futures
Why it matters: In a vision of the future where cars drive themselves, Benedict Evans poses some thought-provoking questions about how this reality would affect the dynamics within a city. He provokes thinking around what happens to parking spaces and the how access to public transport becomes deprioritized amongst criteria for choosing where to live.
We can ask the same questions when it comes to driverless vehicles and hotels. If transportation is door-to-door, then do hotels start to rethink their location needs? If guests don’t need to park, what could hotels do with their parking spaces? Perhaps the need to start embracing shared spaces and communities replaces the need to have parking for your guests.
The same hard questions that are being asked of retail will affect hotels too. If people no longer go to shops physically, then does New York, a shopping heavy traveler destination, become less attractive? Hotels like Four Seasons, The Mark, and Grand Hyatt all currently enjoy being located next to some of the most iconic shops in the city. The same can be asked of those hard to get to, remote destinations. If “mixed reality” allows everyone to own “a pair of glasses that can place something in the world in front of you as though it was really there,” then does it make financial sense to travel to the Taj Mahal or even to the World Cup Final? You’ll argue that being there in person is an irreplaceable experience. We don’t disagree. But if you can enjoy even 25% of that $10,000 experience for $0 from your couch, without taking any time off work, you have to think demand will decrease.
Benedict goes on to remind everyone that while we have “hugely important new technologies coming…[they are] not quite here yet.” We’ll add though it never hurts to start thinking about these shifts and how to embrace them when they do become mainstream.
Is the customer experience the next competitive frontier?
Why it matters: Despite the major direct booking pushes made by hotels within the last year, CBRE recorded a 6.8 percent increase in commission payments made to travel agents, OTAs, and other intermediaries in 2016. Put simply, it's not working.
It seems that no matter how hard hotels try to win in the direct booking fight (remember Hilton’s “stop clicking around” campaign?) the OTAs are a step ahead as they simply have the bigger budget for paid search and, in some cases, the better loyalty proposition (think Hotels.com book 10 nights... anywhere... and get 1 night free...anywhere). So what’s next in this fight?
If you can’t win the fight on better prices or booking propositions, then you must assume the next battle will be the experience. For example, while a guest may not care too much about which method of booking gives them a $10 better price, they may enjoy a superior experience if the chains are able to offer front desk communication through messaging at the time of booking (so that a particular guest can ask their questions about service, gluten free menus and other particular requests) or perhaps a guaranteed upgrade.
Looking longer term, the repeat business is one to be fought over and won. In any business, it is cheaper to keep an existing customer than to win a new one. Hotels that provide superior guest experiences, like the boutique sector, will continue to retain their guests and build a relationship over time that can be used to encourage a direct booking relationship.
As we wrote about in our HT-Next summary, we are starting to see a new job appear; that of the Chief Customer Experience Office (CXO). Let’s see how this focus on experience can help shift the battle of booking to the holistic offering of the guest journey from booking to rebooking.
And just when you thought taking photos of your room was enough, think again...
Next Big Thing Travel & Hospitality Technology | Selling Room Features is the Future
Why it matters:
The market is competitive; supply continues to increase, and occupancy is beginning to shrink. How can we give travelers more of what they want in order to drive up occupancy and rates?
Pierre Boettner, Founder and CEO, hospitalityPulse
Pierre’s question is one we’re pretty preoccupied with at ALICE. We write often about how better service - what happens when you prioritize staff technology and streamline operations - can set you apart from your competition. In fact, just this past week as you can read in the below highlights section, TrustYou published a study confirming “service” as the number one driver of positive online hotel reviews.
But your hotel can wield a competitive advantage in other ways too. Another way to give travelers what they want is by appealing to prevailing consumer trends. Guest messaging, something else we’ve written a lot about (and built), is one of those consumer trends that seems like it’s here to stay, with guests really taking to communicating with the front desk and other departments in much the same way they communicate with their friends (effortlessly, and without downloading an app).
But there are other consumer trends hotels can capitalize on as well, which brings us back to this article by the hospitalityPulse founder and CEO. In it, Pierre notes that today’s guests are seasoned eCommerce consumers, accustomed to coming to websites and getting what they want when they want. He writes, “[The current] way of booking hotel rooms goes against everything that travelers want. They want control…. What will set one property apart from the next is the ability to drop features into a shopping cart; choosing a hotel room based on a whole different spectrum of options than they’ve been offered before.” It’s an intriguing notion. As Pierre observes, improving the booking process to resemble an Amazon checkout has many benefits. As guests select features, like what view they want, what floor, or whether or not they want a balcony, they quickly become more invested in the booking process, and less likely to change their mind. The hotel can also upsell at this early point as well, asking whether or not guests want wine in the room when they get there, or asking guests to select from a choice of bathroom amenities. So too, this early experience of personalization increases loyalty, says Pierre - something that’s crucial in an era where guests are more fickle - and have more choices - than ever before. “Being competitive in selling rooms is about more than distribution channels and Google rank….When it comes down to deciding between hotel A and hotel B, travelers care about a lot more than just price point. They care more about relevant choices and designing their own experience... The opportunity to capture travelers is right there in the empty shopping cart space that hotels have not begun to use. Yet.”
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