In Newsletter #26: Don't confuse discounts with loyalty | The great front desk debate | The hotel of tomorrow will be all about choice.
Yesterday, CBRE put out an article on “U.S. Hotel Revenue Growing, But Slowing” with a fascinating statistic that “from 2014 to 2015, what stands out as a concern for hotel owners and operators was the 4.7% increase in expenses, especially during a year when inflation was just 0.1%.” To me, this should be the title of the entire piece. In a world where we are all so focused on revenue, it is easy to forget how equally important costs are in the profit equation. As competition increases from all sides for our hotels, reigning in operating costs without negatively impacting your guest experience is vital. Think only as far as the emerging threats from the vacation rental and sharing economy industries who are undercutting our hotels’ prices as they don’t have the expenses of running an entire hotel to realize that operations is the new black.
Now despite this, let’s not jump to eliminating our front desks just yet (see below), as the crucial element here is to lower expenses without negatively impacting the guest experience. The below pieces highlight the fascinating front desk debate that will bring out many opinions as we look at other industries such as airlines, which have successfully shifted the transaction onto the guest’s devices. Keep in mind though - checking-in is just one responsibility of your front desk, and hotels are not airlines: the more you can engage with your hotel, the better your experience can be (I find it to be quite the opposite when I have to interact with an airline!).
As Mark Read explained to me over coffee recently, it is important for us to offer choice. There will be guests wanting the latest and greatest technology has to offer, but we must never do so at the expense of the rest of our guests who enjoy the hotel experience just as it is today. I have to agree. It is not as easy as it is for Apple, who can force you to use your iPhone the way they see fit. There need to be many ways to experience a hotel, since, at the end of the day, true luxury is in essence, choice.
- Alex Shashou
HIGHLIGHTS FROM THE WEEK'S NEWS...
Stop relying on discounts! Make the effort to WOW your guests instead.
JLL Real Views | The Big Tech Drive to Encourage Loyalty
Why it matters: Have you ever switched between two apps when comparing similar products? Maybe, but it is undoubtedly harder to do on mobile than it is on the web. For this reason (among others) the fight to win consumers through the latest mobile technologies is fiercer than ever. This article takes a very interesting look at how technology is both driving and hurting guest loyalty.
Technology is making it easier for guests to engage with their hotels across every channel. Hotels have much to gain because of this, although the primary method of attracting customers - dropping rates - is potentially harmful to the brand as it cannibalizes the existing product. Buying at a discount is in many ways not true loyalty. As the author points out, loyalty is an emotional connection with a brand, so it is important to find ways to drive this connection outside of price.
As Henry Harteveldt explained at the HTNG Conference, you must use your hotel’s individuality and uniqueness to inspire your guests. In this case, this means inspiring loyalty rather than forcing it through a discount. This same message is as pertinent in the context of technology as it is when talking about room design or your staff service. For Hilton, for example, this means offering Sumo lessons for its loyal customers visiting Tokyo. For the rest of you reading, what this really translates to is personalization. Use the data your technology is collecting across your hotel to understand what drives your guests and what particular effort you can make to give them the “wow” moments that will keep them coming back.
The great front desk debate.
Why it matters: Check-in does not necessarily mean a long line. Sure, it happens on occasion, but does that mean every single one of us wants to find another permanent route? With advances in mobile technology enabling guests to perform most transactions from our phones, we often ask ourselves, “What does the future hold for the front desk? What evolution is to occur?” Yet, in all these exercises, we never predict the extinction of the front desk that Mr Chipkin does in his article on “Goodbye, Front Desk”. Quite the contrary.
Hospitality is at its very essence, service, and true service requires a human touch. Fortunately, our Customer Success Managers are former front desk managers, so in coming up with our own response to this front desk debate, we were able to ask them their thoughts. “The front desk creates loyalty,” says one of our managers. “The front desk agent knows what room you like and is the face of the hotel. Guest don’t know who the hotel managers are but they know the front desk.” Supporting this line of thought, another on our Customer Success team explained, “The front desk team makes or breaks the experience. They provide the first impression, the guest recovery and the Goodbye, come again.”
Doug Kennedy writes a very sound rebuttal to Chipkin’s article questioning whether guests want to deal exclusively with machines. When there’s a set outcome, like a seat on a flight, then perhaps. But that same reliance on mobile technology makes us question whether brand loyalty exists when it comes to airlines. As we cover in the story above, personalization and emotional connection are the foundation of loyalty and what emotional connection are you going to have to a kiosk machine?
Now, the front desk is not immune to evolution. As Doug writes, certain tedious processes can and should be eliminated through technology, and as the third article in this great front desk debate addresses, it seems sound to us that there is an evolution happening in the design of the desk itself. However, the importance of human interaction will continue to flourish (as highighted below) and your front desk agents are vital in using this increased freedom to improve the guest experience.
The hotel of tomorrow is all about choice.
Why it matters: This overview of recent implementations of hotel technology at Hilton’s Union Square location in San Francisco is a satisfying synthesis of many of our favorite themes. In discussing the launch of the chain’s Digital Keys initiative, which allows Hilton HHonors members to book a room, check-in and access their room using only their smartphone, TravelPulse assembles a compelling selection of soundbites from Hilton executives and hospitality insiders, who extol the virtues of technology to provide guests with options for how they want to interact and communicate with their hotel, all while freeing up staff time from repetitive tasks to deliver better service. If we were reading this through with a highlighter, we would have highlighted the whole thing.
The rise of digital check-in, now live at Starwood, Marriott and Hilton hotels, just to name a few, is fueling the great front desk debate, which we discuss above. While the inclination of many is to position the issue of the front desk as a clear dichotomy -- front desks OR mobile apps -- it looks like Hilton understands the sweet spot is in using both: “The hotel of tomorrow is one where guests will be able to choose how they go about their stay.”
Regardless of whether or not the front desk remains a permanent physical fixture of the hotel lobby, this piece reinforces the idea that front desk agents aren’t going anywhere - even with all the new technological tools at hotels’ disposal: "The human element is critical to our ability to deliver best-in-class hospitality experiences to guests for decades to come and our digital tools are not changing our long-term staffing strategy."