For years, hoteliers have been working on innovations to meet the changing wishes and needs of guests. But COVID-19 has turned everything upside down. As McKinsey & Company puts it, the crisis changed business forever. For one, digital transformation efforts accelerated by years in just a few months.
Technology has been a key player in accelerating innovation in the hospitality industry. But the industry is notorious for lagging behind others in technology. One of the main reasons for the slow adoption of digital tools is a highly fragmented lodging industry, which means lots of discussions, approvals, and integrations. However, to be competitive today, hoteliers must rely on connected technology as guest expectations rise and evolve faster than ever.
In this article, we discuss why an omnichannel guest experience must be at the heart of hoteliers’ strategy — and how technology can help hoteliers innovate and automate while continuing to face the Great Retirement, one of the most significant workforce shortages for many seen to date.
Loyalty no longer means loyal
Loyalty doesn’t mean what it used to mean. Over 75 percent of consumers have changed their buying habits in the last 18 months, and research shows they are increasingly willing to switch brands. However, according to McKinsey, about two-thirds of traditional loyalty programs fail to deliver value, and many erode value. It’s safe to say that the COVID-19 pandemic has transformed how consumers relate to points. As the lodging industry has had to adapt many facets of the business, the way we look at loyalty needs to evolve as well.
Simply put, points-based loyalty programs aren’t going to have the same appeal as they once did. Instead, hoteliers need to think outside the box and find ways to provide an immediate satisfaction, whether that be through personalized offers, upgrades, amenities, etc. Increasingly, lodging providers are asking: what will be the key differentiator of my property from the competition?
Guest experience will be a differentiator
The lodging industry has always had the guest experience in mind. After all, the guest experience is at the heart of hospitality. However, guest expectations are evolving. Today, more than ever, consumers are demanding more from brands. This means hoteliers need to focus on the guest experience at every stage of the guest journey. It goes beyond the experience on the property. A guest’s first impression of a hotel is formed long before they set foot through the front door.
And the data doesn’t lie: Customer experience continues to come first. A recent survey found that companies that made significant investments in their customer experience over the past year are 10x more resilient and three times more likely than their peers to have expanded their customer base in the past six months.
How do you keep an eye on the guest experience at every touchpoint? One answer is technology. Technology is the driving force to meet and exceed rising guest expectations. Hoteliers would do well to implement a guest experience management program. Data collected in such a program can give hoteliers the insights they need to make business decisions to move a company or brand forward. Hoteliers need to know what guests want before they even have a chance to ask the question. Technology can help with that.
For example, hoteliers have data about what consumers will do at different points in their journey, and the data shows what they will typically request. A guest experience management program can help hoteliers understand the trends, and they can then use those insights to improve the guest experience at the right touchpoints. Ultimately, data-driven decisions are the best hoteliers can make for their business.
To make the fastest, most informed decisions, hoteliers need to ensure their data is centralized across systems so it is accessible from one place. This makes it possible to quickly share insights with the teams that need them, when they need them. Without an integrated platform, hoteliers don’t have an end-to-end view of the guest experience. They need to know where the friction lies in the guest journey so they can fix what’s broken. Hoteliers also need to know where the opportunities lie to enhance touchpoints along the customer journey. Again, it’s important to remember that the guest journey doesn’t begin when guests step through the hotel doors. It starts at the very first touchpoint, often in the digital journey. As such, hoteliers need to ensure they deliver an authentic omnichannel guest experience, from digital channels like website and email marketing to on-site experiences and beyond.
For example, a recent study by Zendesk shows that 65 percent of customers want to shop from companies that offer quick and easy online transactions. But hoteliers need to go deeper than just delivering a great experience on one channel. The guest experience needs to be good — and consistent — across all channels, from the website to the app to the booking experience, the in-store experience, and everything before, in between, and after.
That said, just as hoteliers offer a quick and easy online experience, the on-site experience must match. For example, guests cannot wait 20 minutes at the front desk to check in. Likewise, they cannot wait hours for towels to be delivered to their room. Hoteliers can be as transparent as possible when their establishment is operating under staff shortages. Still, at the end of the day, minimum guest expectations must be met – especially when the industry as a whole avoids discounting. Hoteliers focused on building a foundation for enhanced guest experiences are best equipped to thrive through the remainder of the pandemic and then post-COVID.
Automation plays a big role
However, the elephant in the room cannot be ignored. Hotels are also tasked with doing more with fewer resources as the Great Retirement continues to tear the industry apart. A record number of restaurant and hotel workers are leaving the industry, according to the Bureau of Labor Statistics, and that doesn’t appear to be slowing anytime soon. To make matters worse, today’s workers are demanding higher wages. A recent study by the Boston Consulting Group found that wage growth of 7 to 10 percent can result in a direct impact of 70 to 300 basis points on a company’s profits.
This means that technology that enables hoteliers to automate formerly manual processes is essential for future success – for both cost and labor savings. Research shows that more and more companies are looking to automate. A McKinsey & Company global survey of 800 executives shows that two-thirds are slightly or significantly increasing their investments in automation and AI.
So what can realistically be automated? Back-of-house functions like manual data entry, data collection and reporting, to guest-facing tasks like checking in guests, sending out marketing communications, and responding to sales inquiries all make the list. Today, many hotel operations processes can be handled through machine learning automation. In return, teams can be freed up to multitask and focus on delivering a great guest experience – which we think will be a differentiating factor for success as the lodging industry continues to navigate the pandemic.
Hoteliers can’t, and shouldn’t, try to dehumanize hospitality. But neither can they compete if automation isn’t part of the strategy. Working hours can be saved each week by using a fully integrated technology solution. Hoteliers should look for solutions that increase revenue and increase guest satisfaction, while streamlining operations by automating mundane tasks previously done manually by staff. Historically, hoteliers and hosts have had to work with many different tools and vendors to achieve these goals. But more and more hotels today are opting for a platform approach, collaborating with a single technology provider that seamlessly integrates all the tools they need for reservations, distribution, payments, revenue management, marketing and guest experience into a single platform, accessible through one login features and is always in sync.
Innovation is critical to success
If the pandemic has taught the lodging industry anything, it’s that change can happen overnight. As more is learned about new and emerging COVID variants, hoteliers must remain vigilant and agile to adapt to a fast-paced world.
Technology will play a key role in how quickly hoteliers can adapt. It’s important to find partners who never stop innovating. Remember that hotel technology, like the industry, should not be static. The lodging industry is going through more changes than ever before, so technology needs to follow suit. It needs to anticipate what’s coming next, not just react to what’s happening.
It’s also important to note that the issues facing the lodging industry today, such as labor shortages and unpredictable demand, will continue as the pandemic progresses and the travel recovery begins. The technologies that hoteliers invest in must first and foremost make their jobs easier.
Above cloud beds
Founded in 2012, Cloudbeds is the hospitality industry’s fastest growing technology provider, serving global customers from over 22,000 independent hotels in 157 countries. The award-winning Cloudbeds Hospitality Platform seamlessly combines operations, revenue, sales, and growth marketing tools with a marketplace of third-party integrations to help hoteliers and hosts increase revenue, streamline operations, and deliver memorable guest experiences. Cloudbeds was named #1 PMS, #1 Booking Engine and Hoteliers Choice by Hotel Tech Report in 2021, and recognized by Deloitte’s Technology Fast 500 in 2021 and Inc. 500 in 2019. Visit www.cloudbeds.com for more information.