In Newsletter #19: Hotels move into the vacation rentals business | Make smartphones an extension of your hotel | And don't neglect the reservations line!
At the beginning of the year, we reflected on 2016 being a big year for the hospitality landscape, especially as it relates to technology, and so far we have not been disappointed. As a manager, an owner, an hotelier or even a startup like us, you constantly need to think about how to improve your business. Most of the improvements we see are through technology or through processes enabled by technology. Yet the pace of technological change is sometimes so fast it is sometimes tough for hotels to navigate. As I am sure any technology vendor reading this can attest to, these negotiations in B2B technology sales can take so long that by the time you are close to signing, the group you are talking to has already changed management and wants to start over in their technology competitive assessment. While it is frustrating, how can we blame them? We started speaking over six months ago and in that time so much has progressed. Even our own companies have improved significantly during that time.
With all this technological change, one hotel group recently asked me how to keep up. To help them out, we compiled a list of all the news we read last year relating to guest and staff tech. 77 pages in total. Please reach out if you’re interested.
Lastly, Dmitry (our CTO) and I are going to HTNG Conference next week. If you are joining us please contact me at email@example.com to setup a meeting.
- Alex Shashou
“Technological innovations, new competitors, substitutes for your products, evolving social or political changes, shifts in consumer behavior - it’s huge, big-picture changes like these that have the potential to truly shake up your world.”
- Citzen M
HIGHLIGHTS FROM THE WEEK'S NEWS...
Hotels make lateral moves.
Why it matters: In the past year there has been a lot of movement from the hotel side into the vacation rental side. Most notably the Expedia acquisition agreement for HomeAway, but now Choice Hotels launches a Ski Platform and AccorHotels invests in holiday rentals through SquareBreak and Oasis Collections. We are about to release a big piece on what hotels can learn from Airbnb, but what else can we learn from these moves?
First impressions are that these moves are a recognition that the boundaries of hospitality have changed. Millennial travellers today see hotel rooms as synonymous with rentals and as these hotel companies are becoming platforms, they are moving in the same direction. Think of the customer experience here. When you want to travel, you might first go to look at hotel options and then you might also look at Airbnb options and then decide. These hotel companies are setting a long term foundation for having upside on either decision. We have written before about how the future of hotel chains is as a marketplace or ecommerce platform, and this story lines up.
Make the smartphone an extension of your hotel.
4Hoteliers | Smartphones Transform the Travel Experience
Why it matters: We talk a lot about digital and online technology, but let’s not forget that a big piece of business still comes from the traditional phone lines (except for CitizenM of course, they don’t have a phone number).
Although, according to the author Doug Kennedy, many hotels discount phone reservations as the “poor stepchild” of the more in vogue online booking channels, there are many reasons why phone lines have retained a certain popularity. Kennedy buckets these reasons into four main categories of caller. The first and second categories are over-informed (or misinformed) callers and overwhelmed callers, both of whom are products of our digital era, in which information about your hotel (and your competitors) comes from every possible channel and sometimes in contradicting fashion (reviewers on TripAdvisor, for example, could have very different reactions to the same hotel amenity). The third type of caller is the value-driven deal seeker, who wants to negotiate the best rate possible in person (negotiating with a website is harder to do). The fourth type of caller Kennedy identifies is the multi-tasking caller, who wants to plan their trip while also doing other things, like cooking, garden work and driving.
It’s important to note there are opportunities in all of these scenarios for hotels to convert the caller to a customer in ways that might not be possible if phone reservations were neglected by your hotel (indeed, Kennedy provides helpful advice in this post for how your reservations agents should best close each type of call). Fortunately for hotels, a study last year showed that for the first time in years, offline bookings were holding steady at 45% share of spend after years of decline in the face of the rise of online booking. As both the authors of the study and Kennedy note, preference for offline booking correlates with higher levels of emotional investment individuals have in the trip they’re planning: “In other words, the longer the stay, and the higher rates being paid, and the more likely they are to call vs. just book online,” writes Kennedy. This suggests calls not only remain an important revenue generator for hotels, but also an important category of customer for your business. This is a correlation that defies demographics, with Millennials - assumed to be driving online booking trends - similarly drawn, in these circumstances, to making reservation inquiries on the phone.
Hold the phone.
Why it matters: Earlier this year, Expedia research codified what most of us already know to be true - that we, as travelers, would rather leave home without our toothbrushes than our smartphones. Researchers pointed to categorical improvements in the quality of travel that mobile devices provide as the reason why smartphones also beat out deodorant and drivers licenses in that poll.
This study, from the School of Hotel and Tourism Management in Hong Kong provides more context to Expedia’s findings, revealing ways in which the smartphone has transformed not only our travel behaviors, but also the ways in which we plan before our trip and share our experiences afterwards.
There are some important takeaways here for hotels still looking for how best to incorporate guest mobile use into the hotel experience. “Perceived convenience” was typically the first response study participants gave when asked about the rationale for using a smartphone. If travelers prefer to plan and access information about their stay on their smartphones, hotels should meet them where they are - either with a dedicated app or with opportunities to communicate with their hotel via mobile, be that over SMS or with another messaging platform. So too, travelers’ demonstrated preferences for spontaneous and on-demand activities and services facilitated by smart devices should be similarly facilitated by hotels. Hotels would be wise to provide their own amenities (or third-party services) on-demand.
Researchers also found the use of smartphones in the context of travel was strongly related to their use in everyday life. The takeaway here, although perhaps paradoxical at first blush, is that, as far as mobile is concerned, a hotel should feel like home. Hotels therefore need to be keenly aware of the ways in which mobile devices have become indispensable to our everyday experiences and curate the guest experience accordingly (providing toothbrushes and deodorant to their guests, if need be!).