Time flies when you are having fun, so as the lunar New Year
is almost upon us, I better add my two fifth to the canon of opinions and
predictions that have so far poured out for the New Year of the Horse.
1. Integration, not Innovation
As I said many
times before, technology should be the conduit for a smoother guest
experience, not the raison d'etre. The "hotel room of the future" has
reared its head again with a follow up of what was launched last year at the FITUR
hotel conference in Spain. Now, a full one year later (a lifetime in technology
these days), apparently people can finally try it out. Judge for yourself here,
but I very much doubt that this will "take the hotel experience to the
next level" as the people behind it want us the believe. Given the fact
that the hospitality industry in general has to bridge a large generational gap
at any given time, it cannot and will never be the hotbed of technology
innovation. So rather than putting more technology into the room (like all
those screens in the supposed hotel of the future...), hotels should focus on
looking at how to better integrate what's already there to deliver a smoother
experience - for guests AND hotels. This is where the ultimate expertise lies -
not how many clever gadgets you can throw out there, but how you can
intelligently integrate them into the overall ecosystem. As for the gadgets: to
paraphrase Publicis chairman Maurice Levy at the Davos
World Economic Forum last week, nowadays participants at Davos carry
smartphones, tablets or both, whereas 10 years ago delegates were handed Palm
Pilots (remember them?), and more recently it was Second Life that was predicted
to dominate our lives, and is now of course almost never heard of. Enough said!
2. Bridging the Generational Gap
Having made the point about the challenges for hotels to
serve multi-generational guests, hotels nonetheless are in danger of failing to
adapt to a new breed of guests whose needs and demands are entirely different
to those of previous generations. All too often we see hotels do nothing out of
fear of alienating their not so tech savvy guests. This is a big mistake. A new
study in the changing nature of hotel guests undertaken by global hotel
consultancy HVS called ‘A
New Breed of Traveller’ says the impact of rising affluence, globalization
and technology has led to modern hotel guests valuing experiences and the
feeling of ‘being connected’ over traditional hotel luxuries. So what about the
not so modern hotel guests you may ask? Well, offer both experiences. If you
have interactive In-room Dining on your TV, make sure you also have a hard copy
of your dining menu in each room to facilitate the transition from one
generation's habits to another's.
3. Airbnb is NOT 'crushing' traditional hotel brands
Plenty of articles over the past year took aim at Airbnb and
its imitators and how they are 'crushing traditional hotel brands'. I tend to
think this is a tad overblown. Airbnb will definitely continue to grow and
disrupt particularly the extended stay market, but 'crushing' the hotel market?
I doubt it. The numbers may look intimidating, and there was much hoopla over
the company's swanky new headquarters in San Francisco, but if you take a close
look at what Airbnb is actually offering in terms of experience it puts those
numbers in a different light. Let me share my Airbnb experience when I traveled
to Tel Aviv last year. I booked a lovely looking penthouse in a funky part of
the city. There were no elevators, so we had to lug our luggage up four flights
of stairs - no porter in sight. The apartment didn't have a coffee machine as
the owner apparently drinks tea. We were leaving during the Shabbat, so finding
a taxi was a challenge as we couldn't ask the front desk to organise one. Don't
get me wrong, these were not deal breakers and in terms of value for money it
was absolutely alright for the holiday nature of this trip.
But would I book Airbnb for my business trips? Not a chance.
And that's my prediction: Airbnb will grow within the extended stay and
backpacking demographic. But I think the business and medium to high end
leisure travelers will stay well clear of it.
4. ... but OTAs continue to disrupt the market
Rather than worring about Airbnb, hotels should focus on
OTAs. OTAs are here to stay, and I think hotels have pretty much accepted this,
but the challenge is how to wrestle some of the distribution channel
control back from OTAs. So in the coming year we will see hotels ramp up their
efforts to do just that, employing all channels available to them, including
the in-room TV.
But that's not all of it. A recent article covered the challenges
posed by the fact that despite the seeming ubiquity of credit cards and pay
pal, a surprising number of countries still prefer different payment methods.
In Brazil, paying in instalments is the norm and OTA Hotels.com has responded by
allowing this form of payment since last year, as well as allowing guests to
pay when checking out, rather than checking in, which is the preferred way to
pay in southern Europe and Russia. According to the
article in the FT, the online room retailer had to renegotiate 250,000
hotel contracts, but the potential upsides are evidently huge, given that, for
example, Brazil's ecommerce market is set to grow from $18billion to $26billion
in the next four years. So if hotels want to go head to head with OTAs they
have little choice but to do the same.
5. The Labour Crunch will Increasingly Squeeze Operations
As the Asia-Pacific continues to plough ahead as the region
with most growth potential, a dearth in qualified staff is starting to become
an issue in some markets. Specifically in places like Singapore, where hotels
suffer serious manpower shortages since strict new immigration laws have come
into place. While there are no overnight solutions, a number of our hotel
customers are seriously looking at how technology can assist with streamlining
their backroom operations and ease the reliance on manpower.
But we are not talking about new technology, mind you. This
is an issue of looking at existing technology in hotels and how it can serve to
increase productivity, rather than jumping at new technology innovation. For
example, a hotel's IPTV system can do much more than just infotain the guest.
With the right programming and integration work it can easily become a crucial
tool for streamlining backroom operations such as housekeeping. In the coming
year we will see a much greater emphasis on this area, which proves again my
first point: it's integration, not innovation that has the upper hand at this
point in time.
And on that: Kung Hei Fat Choi - Happy Chinese New Year of
the Horse!
