In Newsletter #41: AccorHotels takes the platform approach | New management mindset needed to move hotel technology forward | Is technology ageism affecting your hotel?
For technology to progress in our industry there needs to be an evolution towards change in the management mindset of executives who run hotels. This was one of the most interesting comments made by Christine Warner, Head of Travel at Facebook and fellow panelist at ALIS. It’s for this reason we are so intrigued by a study that shows such a large gap between what guests expect from technology and what hotel managers are thinking will be implemented by 2020.
Highlight #2 below really embodies how much opportunity there is in our industry for forward-thinking hotels and executives. Happily, many hotels are doing exactly that. As the New York Times covered, hotel companies are increasingly looking to add to their technical ranks, recognizing the increasing importance of technology in all operations. In some ways, Accor is turning itself into a tech company (highlight #1 below).
Lastly and slightly off-topic, it has been difficult to sit by and watch some of the current proposed policies alienate so many nations. In the travel industry, we rely on other cultures and global diversity so much, so it's comforting to see so many hotel CEOs in open disagreement with these actions. There is a great piece on What Hotel CEO’s think of Trump’s Travel Ban in Skift. We hope to see hotels unite even more around this, protecting the desire from all corners of the world to travel to the US. Hotels are such a great emblem of diversity from their staff to their guests.
And - Congratulations to our newest hotel, Portrait Roma of the Lungarno Collection, for recently receiving the prestigious Forbes Five-Star!
HIGHLIGHTS FROM THE WEEK'S NEWS...
Accor activates the community
Why it matters: Accor Local is another interesting initiative from AccorHotels, moving the company further into hotel-as-a-platform territory. (We covered other recent Accor maneuvers - like its acquisition of luxury homeshare company OneFineStay and its strategic investments into vacation rental companies Squarebreak and Oasis Collections - in Newsletters #23 and #19 respectively.)
Accor Local - a pilot program across ten hotels in Paris - is an experiment in integrating the hotels into the fabric of their communities and then leveraging this integration for the benefit of both guests and locals. This is fitting - if you recall, it was only in the last newsletter we covered IHG’s big yearly report characterizing the hotel of the future as one that serves as a hub for its community and stakeholders. It’s not such a far cry either from famous hotels like the Ace, which as Ian Schrager likes to say, “activates” the lobby with its bar that hosts the community’s nightly socializing activities.
The idea, as Accor’s CEO, Sebastien Bazin, puts it, is that hotels have been too focused on hotel guests, to the exclusion of the local populace - one that has many service needs, but which has never thought of the hotel as a place for them: “Ninety-nine percent of what we have done for 50 years has been based on the guy coming from outside of town. A traveler, from a different city, from a different country, which I think is interesting, but not too smart. Because we missed a population which is 100 times greater and better and easier: The guy living next door. The local inhabitants. They live around the hotel, or they go to an office around the hotel, and 90 percent of them never dared coming into the property, because they’re fearful that we’re going to be asking, ‘What’s your room number?’ They don’t need a room, but they may need a service.”
To that end, Bazin suggests Accor will get into “zillions” of services, among them “having hotels assist locals with simple tasks and solving everyday solutions like holding packages or keys or recommending the best services nearby.” The hotel brand hasn’t divulged any details about how the Accor Local pilot will continue, but Bazin did say the Accor’s loyalty program, Le Club AccorHotels, will be the underlying platform for providing and managing all these local services. He’s also said Accor Local represents the third pillar of Accor’s business strategy going forward. (The other two verticals are the traditional hotel business and the travel space (accommodations outside hotels). Those three verticals, Bazin says, are all part of a “pivoting business model” for the 50-year-old hospitality company.)
Accor’s evolution and this “pivoting business model” are a synthesis of many things, including its recent acquisitions, as well as as a nimble response to the rise of digital and the encroach of Airbnb. Interestingly, one can see Accor Local specifically as a response to Airbnb’s threat in two ways: First, it’s a response to competition from Airbnb when it comes to Airbnb’s claim on authenticity and community (“Belong Anywhere”). But second, it’s also a response to Airbnb’s asset light and labor light business model. As Bazin describes, Accor Local is an attempt to turn a potential liability (a large amount of capital tied up in physical assets and labor) into a strength (community hub), by blending the digital and the physical: “Throughout these assets and addresses I’m already open 24/7 and I have 240,000 people. What can I do to improve the life of citizens?” Bazin rhetorisizes.
And, by all accounts, this hotel-as-platform approach is paying off for the brand. 2016 was a strong year for the company, with record operating profit that beat expectations. Skift reports net profit and system-wide revenue for the year were both up. Accor hasn’t provided a financial outlook for 2017, but we’re pretty bullish. As Skift puts its, Accor “is taking bold steps to bring the traditional hotel company into the future,” and, says Bazin, “We’re entering a new adventure where there’s boldness, innovation, and risk taking.”
Hoteliers stuck in the past on technology thinking
Why it matters: Research by Peter O’Connor, IDeaS, Revinate and SiteMinder reveals that while hoteliers anticipate highly sophisticated and ‘digital native’ hotel guests in 2020, their ideas about industry technology remain stuck in the early 2000s. That is to say, the hundreds of hoteliers surveyed could easily envision guests who want to rely primarily on mobile devices to engage with hotels before, during and after their hotel stay, but, when asked about which technology hotels could not be without in 2020, these same hoteliers named technologies already implemented in many hotels, including revenue management systems, CRMs, PMSs, channel managers and e-marketing solutions.
Indeed, it was only when hotel consultants and “operational managers” were surveyed (during a ‘visioning’ session held during World Travel Market (WTM) London in November 2016) that the things we think of as more “forward-thinking” technology, like middleware, artificial intelligence (AI) and machine learning systems, predictive analysis tools and management dashboards to have more integrated views of the guest, along with messaging solutions and Bluetooth beacons to drive deeper engagement, were brought up.
As Revinate summarized, “These results reflect the high degree of conservatism within the hotel industry, particularly when it comes to technology. It is as if the industry is still preoccupied with the same issues as ten years ago.” SiteMinder continued: “It is clear we operate in an industry that continues to look to outdated and often-costly legacy systems for technological support. The resistance among hotels to change and innovation hurts the advancement of our industry.”
To break this cycle, the consultants and operational managers agreed a new breed of hotel management is needed - one that applies a different set of skills and a mindset capable of pushing technology forward (AccorHotel’s Sebastien Bazin would be an executive worth emulating -- see above).
Look after all age groups!
Hotel Online | Is Technological Ageism an Issue in Hospitality?
Why it matters: It’s no secret this is an industry - when it comes to technology at least - preoccupied with the Millennial mindset. So, it’s interesting to see a piece by prolific hotel writer and consultant Larry Mogelonsky that suggests we might be taking this fixation on Millennials a step too far. As a society, he points out, we used to be biased towards those who were older and venerate them for their wisdom and experience. But now, with the rapid proliferation of technology, we’re biased toward the more technically literate, he says. Is technological ageism an issue in hospitality an issue? Quite possibly, he concludes, but there’s also some ways to reverse this trend.
(Before we summarize Mogelonsky’s advice, it’s worth noting technology adoption does flow from young to old pretty quickly. Who hasn’t taught their mother or grandmother how to use a smartphone or even email? But, in keeping with the 2017 Skift megatrend trend that celebrates 50s travellers as a growing target demographic for travel brands, it’s worth paying attention to Mogelonsky’s good recommendations below.)
Mogelonsky suggests ageism manifests itself across three categories of guest interaction: sales channels, relationship channels, and onsite. To make sure your sales channels appeal to the potentially less digitally savvy, he suggests doing some research into how older guests are finding your hotel and booking a room so you can design the best possible sales funnels for both customer satisfaction and upselling. When it comes to relationship channels, he also suggests understanding the differences in how each generation provides feedback.
Mogelonsky’s advice when it comes to on-site digital inclusiveness is most pertinent to our work at ALICE - both as pertains to how we build our tools for staff and guests, as well as to how we train our hotels to use ALICE. It’s also of critical importance to hotels using technology to help facilitate their guest experience. As Mogelonsky writes, the big key is to have empathy for those who are not digitally fluent and being patient. Staff should be trained to explain how devices work or how to setup the WiFi, and should be educated on how to attentively broach the topic of digital literacy with guests, in case there are some that are too embarrassed to ask for help. Lastly, should always provide their guests with options, including non-digital paths to a great guest experience.
As Mogelonsky writes, “Despite any technological differences amongst the generations, though, they still have a ton in common. Everyone is in search of new experiences and adventure, and we are looking to our chosen hospitality provider to treat us with the proper level of respect that dollars command.”
- Hoteliers Comb the Ranks of Tech Workers to Gain an Edge NY Times
- Marriott And Hilton Stay Ahead Of The Sharing Economy, Proving That Airbnb Is Not The Uber Of Hotels Forbes
- Choice Hotels Mulls Options for a Tech Division That Struggled to Break Even Skift
- What Marriott Learned From Starwood’s Loyalty and Digital Expertise Skift
- The Airbnb effect on hotels – experiences, tech provision and convergence Tnooz