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Elon Musk Wants to Make Hotels Obsolete -- Newsletter 53

Elon Musk Wants to Make Hotels Obsolete -- Newsletter 53

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In Newsletter #53: A 20% decrease in the number of concierges at luxury hotels sparks concern | The role of regulation in Uber's London ban | Elon Musk's latest travel technology proposition raises questions for hotels. 


 

This hasn’t been a great month. The continent has been hit by natural disaster after natural disaster, and now an immensely tragic event happened in Las Vegas this past week defies explanation. I won’t try to.

With this tragedy come some probing questions about hotel security. It’s a tough one. Yes, we should always be looking to improve security, both physical and digital. But I for one do not want to see us having to walk through airport-type security to walk into a hotel or restaurant. Our hearts go out to the families whose lives have been destroyed by the actions of one.

On another sobering note, please join us in donating and supporting one of our team members, Alejandra, who is running the Chicago marathon this month in support of Mexico after the devastating earthquakes they have experienced.

We hope the pieces below can provide a distraction. This week, we have insights on the changing reality of the concierge, a look at the Uber ban in London and its possible ramifications for Airbnb, and a discussion of Elon Musk’s latest transportation fantasy - the BFR - and what it might mean for our industry.

On Uber, they haven’t helped themselves, but I do feel bad for Londoners. I was in London last week and losing Uber would be a big loss to people in the city. There are not many affordable non-public transport alternatives (my Ubers were half the price of a black cab, sometimes 3x cheaper). The drivers themselves said they feel that this is simply an unfair result of Uber being an American company that doesn’t pay taxes like the London black taxis do. I hope the decision is reversed.

- Alex Shashou

 


 

HIGHLIGHTS FROM THE WEEK'S NEWS...

 

News Works | With Nearly Magical Touch, Concierges Grant Hotel Guests' Wishes — But Numbers Diminish

Why it matters: In the past two years, there’s been a 20% decrease in the number of concierges across luxury hotels. This alarming statistic has captured the attention of Les Clefs d'Or – a group of concierges who pride themselves in their rigorous training and qualified experience. Members of the elite group are stepping up to market the human value of concierges, as concierge staff worry about being replaced.

Despite technology’s potential, there’s a reason why hotels aren’t completely automated. Humans require the human touch; we are at our core social animals. “The impact a Concierge has on the guest experience – on TripAdvisor and other review sites – it’s not enough anymore to just have nice rooms and a beautiful lobby. The Concierge creates “magical moments” for guests during their stay and the extra service excellence is what resonates with guests when they leave,” says Adam Isrow, founder and Executive Vice President of leading concierge software company GoConcierge, recently acquired by us here at ALICE. This is clearly exemplified by the success story shared by Robert Marks in this piece, in which he describes leveraging personal connections to rescue a bride’s wedding gown. It is when these “magical moments” are shared on social media and review websites that the ROI is truly astounding. And such moments are only made possible by relationships that no app or robot can possess. For this reason, the Concierge is here to stay.

However, this is not to say that the Concierge should remain at status quo. It has been brought to attention that travelers are experiencing what Skift has termed the State of Permanxiety, which stems from feelings of uncertainty. The fact that traditional concierge staff sit behind “imposing marble desks that look like altars” does not help their case, and may be the very reason propelling the decline in the value of the Concierge.  

With advances in artificial intelligence, and technology encroaching onto the sacred space of the Concierge, what is the human’s best response? The tree that bends with the wind will not break. The Concierge that adapts their role to the rapid adoption of technology will survive. Afterall, such technologies exist as a tool for concierge staff to do their jobs even better. Instead of being discouraged, the Concierge should take the opportunity to revamp the system they operate in to exceed guests’ expectations. By familiarizing themselves with the relevant technology and adapting their roles to becoming a “purifier of information,” the Concierge can strike a balance between service efficiency and personalized curation to create the perfect situation for the best of both worlds. Much like the travel agent has become the travel advisor, lets keep innovating and reinventing ourselves to fit today’s guest experience.

The role of the Concierge is changing, yet it remains paramount. While we may see overlaps with the front desk role, the key is to offer the human touch in experiences that technology alone cannot achieve - to be “the Curator of Experiences,” in Isrow’s terms. While mobile applications can provide a robust list of the best dining spots in town, it is the Concierge that gets guests through those doors.

 

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The Guardian London’s Uber Ban Is A Message To A Reckless Tech Ethos

Why it matters: This Guardian op-ed by NYU professor and sharing economy scholar Arun Sundararajan provides an interesting perspective on the role regulation played in Transport for London’s (TfL) ban on Uber, which went into effect September 30. While the ban is widely understood as yet another regulatory confrontation for the embattled company, Sundararajan takes a look at why the company - not the business model - is incompatible with today’s regulation (even though much of it, in London, was molded in its favor).

In the piece, the author describes the TfL injunction as an  “extraordinary decision,” one which stands, as stated, as an indictment of Uber the company rather than one of the broader ride-hailing concept or its controversial labor model. Indeed, what’s remarkable about the TfL ruling is that - at first blush - it has little do with regulation. He writes, “The discussion is not about a misfit between innovative business models and antiquated regulations. It has little connection to other familiar points of gig economy contention, such as whether Uber’s drivers are independent contractors or employees. Rather, like many cities around the world, London has already expanded its regulatory structure to accommodate ride-hailing services, adopting a now-familiar approach that delegates some responsibilities – setting fares, conducting criminal background checks, collecting data about drivers and rides and managing certain safety affairs – to the platform.”

Yet, Uber’s fate in London, does, in fact come down to regulation and the way in which Sundararajan believes regulation has changed. In this new sharing economy, he posits, there is more onus on the trustworthiness of the company than ever before: Indeed, Uber’s London experience holds an important lesson for Silicon Valley startups that take pride in asking for forgiveness rather than permission. As digital technologies continue to permeate our physical world lives, platforms … will increasingly be called upon to take on regulatory roles that government used to perform. The future of regulation is delegation. Nurturing a corporate reputation worthy of this public trust will be far more valuable to tomorrow’s tech pioneers than the short-term glory and financial gains that come from casting oneself as a rule-breaking disrupter.”  

This idea of corporate trustworthiness with regard to regulation is interesting, especially when considered in the context of the scrutiny Silicon Valley platform behemoths like Facebook, Twitter, and Google are currently under. It also raises interesting questions when considering the possible fate of Airbnb, which is no stranger to regulatory strife, but, in contrast to Uber, is, as a company, more favorably received.

 

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SkiftElon Musk’s New Plan? Travel to Any Destination In the World in Less Than an Hour

Why it matters: Travel technology impresario Elon Musk wants to make it possible to travel anywhere on Earth in under an hour. Musk unveiled his latest idea to revolutionize travel at last week’s International Astronautical Congress in Australia. “If we are going to places like Mars, why not Earth?” asked Musk, whose company, SpaceX, has already disrupted the aerospace industry with reusable launches. With this most recent plan - building a rocket ship code named “BFR” that can make the journey from New York to Shanghai in about 30 minutes - Musk once again sets up a potentially competitive challenge to the commercial airline industry, not to mention the current transportation paradigm. (Musk endeavors already positioned to challenge the commercial airline industry (as well as terrestrial transit enterprises) include the Hyperloop and the Boring Company.)

It’s clear Musk is a man who hates sitting in traffic, and, if he has his way (in any of his transportation technology endeavors), travel on planet Earth will become a lot less time consuming. While projections about technology’s impact on the hotel industry typically look at futuristic gadgetry like robots, voice-listening platforms, and virtual reality headsets, improvements in travel shouldn’t be discounted either. Indeed, the realization of any of Musk’s plans would have a profound affect on both the demand for travel and for hotels, particularly in remote locations or in areas proximate to the nodes of his new transportation networks). It’s even possible that improvements in travel will at some point threaten the hotel industry altogether. Indeed, it was with the rise of transportation that hotels came into existence and it’s with transportation’s advances that hotels flourished. If it actually becomes possible to travel anywhere on Earth in under an hour, what’s to compel someone to stay at a hotel, instead of simply heading back home for the night?

Even in the near-term, hoteliers should keep their sights on Musk, because there will likely be opportunities to be had before there are threats. For example, did you know that as part of Tesla’s “destination charging” network, hotels are eligible to receive their first two Wall Connectors at no cost? By offering charging stations for electric vehicles, hotels can use innovations in travel technology to their advantage and attract new and repeat guests. Become a charging partner here.

 

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THE ALICE TEAM RECOMMENDS
 
  • An Uber Mess Up Transport Futures
  • How Mergers and Acquisitions Are Accelerating Innovation in Travel Skift
  • Airbnb To Trial Branded Apartments Serviced Apartment News
  • This Is What Airbnb Should Do With Resy Skift
  • Expedia CEO Mark Okerstrom On Learnings From Dara, Continuing Expedia’s Culture And Global Growth Tnooz
 

TRAVEL TECHNOLOGY SPOTLIGHT

 

Avvio has announced the launch of Allora, the world's first direct booking engine, powered by artificial intelligence. Launching in October, Allora will be the next generation of booking engines for hotels and accommodation providers and will use machine learning to constantly improve the booking experience and increase conversions. Allora focuses primarily on driving direct bookings and guest loyalty by orchestrating better online interactions between hotels and guests. 
 
To register your interest and receive updates about Allora, head to www.allora.ai
 
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The future of guest communication

 

 

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