China hotel market set to recover within five years...

…and other dispatches from the China Hotel Technology Alliance’s Annual Conference

Jing Zhu, Chairperson of the CHTA
at the opening of the conference

Well attended and organized, CHTA’s third annual conference was held last month in Macau. The overall theme was ‘Creating Value’ and while there were the occasional dull spots, overall the event delivered on what it set out to do.

China Hotel Market is set to recover within Five years

One of the first keynotes dealt with the China market recovery which was pinpointed to occur sometime within the next five years (let’s hope it is earlier rather than later…). Singled out as one of the key factors to set the scene for recovery were international brands, which need to be more flexible in terms of brand standards in China, rather than pursuing a cookie cutter approach to be successful.  

Talking about Millennials - again

Chinese Millennials -
not so different

There is of course no event worth its money that would not bring up the mystical Millennials, and at CHTA’s conference, it was Sunny Wang, Executive Director at HFTP’s Asia Research Centre – herself a Millennial – who took the stage to give us Baby Boomers and GenXers a lesson in all things Millennial. The most interesting for me was her assurance that Millennials are generally happy to play with technology in the room as a novelty factor, even if the technology is not essential. While this shouldn’t tempt hotels to over stack their rooms with gadgets, it is an affirmation that IPTV, second screen, Airplay and Miracast do matter, and will matter even more in the future.

But unlike the Millennials in the Middle East which are unexpectedly brand loyal, Chinese Millennials don’t seem to have a specific trait that makes them different from their peers in other geographies. However, speaking with one delegate from Singapore on the sidelines, he professed that unlike Millennials elsewhere who are generally lone wolf travelers, Millennials in Singapore like to travel in small groups of friends. This type of information has great value to hotel developers as it guides what types of rooms they should cater for, so I hope that someone in due time will make an effort and dissect Millennials likes and dislikes a little more granularly along the geographic divide, rather than just focus on general habits.

With Millennials gradually coming into force, some predicted the hotels of the future will be more like real estate that happens to have some hotel rooms, with rooms being re-purposed as offices, meeting and events spaces and the likes, and sometimes as a place to rest your weary head. While this may sound far-fetched now, one cannot help but wonder what our world will look like once the Millennials have well and truly taken over. As I said before, the 5-star hotel as we know it, for one, will be a thing of the past. And so perhaps will the hotel as we know it, who knows…

Creating Value in a Hotel with IT

The 'Creating Value' panel at the

3rd Annual CHTA conference in Macau

Hotels are run in a very old fashioned way, forcing people to speak to staff for requests rather than fulfilling them through self-serve options. This was the consensus during a panel discussion featuring eminent speakers from the likes of Peninsula, Banyan Tree and Westin hotels. So whatever happened to the coveted ‘personalised touch’? Again, blame the Millennials, but it is undeniable that there is a push away from person to person interaction to self-service – and thank heavens for it, too, if you ask me.

But the far more interesting question posed at the panel was what is stopping hotels from implementing IT to create value? While cost of course is a major factor, blaming the rapid evolution of technology is somewhat less convincing. 

We are on a kind of plateau at the moment when it comes to underlying technology developments. The one thing that’s continuing to change fast is consumer electronics, so as long as hotels underlying technology infrastructure is robust, enabling guests to interact with the hotel’s technology using their own devices should not be a major undertaking.

Finding the right talent to implement and support technology and getting staff to embrace technology rounded off the list of challenges identified by the panel. Nevertheless, the audience vote on whether IT can be a direct source of revenue at the end of the panel was an encouraging 75% yes.

Millennial Brand Loyalty and how to not use Social Media in Hotels

Last week’s Hotel Show in Dubai was again a well-attended event, although the conference was a little underwhelming, or at least the TecSec Summit, the technology focused branch of the conference program was.  Generally I believe that great expos have average conferences and vice versa for the

simple reason that each format attracts different types of attendees, so inevitably the part with lesser emphasis will suffer. This was the case for the TecSec Summit which had a great program but suffered from bad accoustics and a lack of a dedicated conference manager who would keep time and more effectively moderate the audience-speaker interaction.

Millennials in the Middle East are different – buy why?

Nonetheless, there were a number of interesting presentations worth battling the ambient noise for. Millennials featured in more than just one presentation and while the general consensus is that this new dominant demographic is picky and demanding, a presentation from Google pointed out that unlike their peers elsewhere in the world, Millennials in the Middle East are very brand loyal.

Why? According to Google, the Millennials in the ME are not quite as sophisticated when it comes to brands but will catch up soon. 

Really? In a region that has become synonymous with brand shopping and conspicuous consumption and boasts large membership of social networks it seems a little far-fetched to blame a lack of sophistication. It would be welcome to get a greater perspective here, as the results may also provide a better understanding of brand loyalty in this demographic in general. I hope the good folks at Google take up the mantle and dig a little deeper here (the essence of the Google presentation can be found here).

Big Data or Big Brother?

Another big topic was Big Data and how hoteliers can use it to their advantage. It’s a topic close to my heart, as IPTV systems by nature can reveal a lot of information about guests through their in-room entertainment system usage. However, most hotels today tend to just look at general statistics, rather than ‘customising’ a guest’s experience.

Copyright Pauline Siebers

Social media is at another level of course and it is tempting to look at the data available surrounding travelers on the net as this big, easily mined pot of gold, ready to be exploited. But just how dangerous it is to approach this topic without a sound strategy and thorough research was evident in the TecSec panel discussion on this topic.

It’s all fair and well to engage with guests on Twitter and Facebook but what about using guest data from social networks to customise his/her visit? Where to draw the line between usefulness and invasive creepiness? Sadly, the panelists only had shrugs rather than enlightened answers, which is a shame, as this question had come up in other sessions of the conference (it does help to attend some other sessions than just your own to get a feel for what is top of mind).

While some people may find it a ‘wow’ factor when the hotel spots from my various social media sites that I like Hello Kitty and stacks my guest room with references to them, an equal amount may find it very creepy and will feel they have been stalked and run a mile, never to be seen at that hotel ever again. The problem is that you may not glance from my online profiles to which camp I belong.

The rather limp response from the panelists was to adopt a ‘trial and error’ approach, which I doubt any hotelier would risk, less a bad experience not only repels one guest, but also presumably his/her 10,000 twitter followers.

Those advocating these purportedly ‘tailored’ initiatives really want an algorithm that neatly takes care of seeking out the info and delivering the right call to action to the hotel for fulfilment. But, as much as culture, conditioning and commerce have forced us into certain stereotypes that behave more or less predictably, there is a core individualism inherent in us that spoils the party for those who want us all to ‘like’ the same thing. And thank heavens for that, too.

Don’t get me wrong, I think data mining could play a much bigger role, especially when determining which pages/services/offers are more popular than others, what content is looked at how often, to better the experience etc. But hotels understand very well that there is a creepiness factor and are mindful of not straying too far into their guests’ privacy.

Beware the 'Beacon' Effect

For now, and unless there is a more solid, empirical approach to this, I believe the most productive way to mine the social media data is to look out for broad trends, rather than individual targeting. Yes, it means business cannot use all that fabulous data out there but as even Facebook learned with their disastrous ad platform Beacon, which resulted in a class action law suit and was eventually scrapped, we are not quite ready yet to accept being completely manipulated.

A sad Sayonara for the Hotel Okura

Much has been written about the upcoming demolition of Tokyo's landmark Hotel Okura's main building ever since it was announced in May last year. Widely met with incomprehension that a hotel generally described as a "modernist masterpiece" would be so cruelly dispensed with, it even prompted a "Save the Okura" online petition by Monocle's Tyler Brulé. Sadly, all outcries were ignored by the owners who are pushing ahead to make way for a 38-storey mixed use development which will include a 550-key hotel, re-imagined for our times and in time for the 2020 Tokyo Olympics.

I was fortunate to have stayed at the Okura many times over the years, and again last week, which gave me the opportunity to reminisce and for one more time enjoy the totally unique atmosphere of this soon to disappear landmark.

More images of the Hotel Okura below.

While it is true that it is a specifically Asian trait to prefer new over old, you have to wonder why so many other major cities have managed to hold on to their landmark buildings, many of them hotels. Hong Kong's Peninsula, Singapore's Raffles, New York's Waldorf Astoria, Paris' Ritz  Hotel, to name but a few, have not only been refurbished over the years, but in many instances meticulously renovated to evoke the age these buildings were initially erected. A recent example that comes to mind is Fairmont's restoration of Shanghai's famous Peace Hotel to its former glory, preserving many elements of its historical 1920's and 1930s past.

So why not the Okura? Isn't it enough that it was the first 'international' hotel in Tokyo, that it played host to an impossibly long list of celebrities from all walks of life and - most importantly - that its architectural vision, inside and out, exemplifies mid 20th century modernist architecture in an accessible way? Well, apparently not.

But perhaps looking at the point in time when it was built provides a clue here. All the aforementioned hotels were built in the late 19th or early 20th century in that opulent, colonial style that we now associate with 'grand' and 'old world'. That there has not been another style that has similarly taken our imagination since is profoundly sad. The Peace Hotel symbolises a point in time in the past, the glories of the colonial empire long lost, but now brought back to glory in capitunist China, no less. 

Why the Hotel Okura should not be awarded the same respect is incomprehensible to me. Is the workmanship really that shoddy that it cannot be renovated? Tokyo, after all, is deepest earthquake territory which would have, even in the early 1960s, ensured quality workmanship (not to mention that we are talking about Japan here, the one place where workmanship to this day is taken extremely seriously). While the guest rooms have been renovated rather uninspiringly over the years, judging from how meticulously the interior of the lobby area has been designed and preserved, this hotel was built with longevity in mind. 

But perhaps people at large simply aren't that much into modernist architecture, Mad Men not withstanding. Nice to look at, but for my money please give me something else.

With the main building confirmed to be closing for the last time on 1 August, I guess it is futile to go on about it. The less spectacular South Wing of the building, which was added in 1973 and will be spared the wrecking ball (for now), is due for a quick spruce up from 1 July until 1 August and will serve as the hold out hotel until the new tower is finished in 2019, so you can still get a little whiff of the Okura magic until then. And if you can't make it, take a tour of the hotel below.

IPTV: The New PMS?

The recent China Hospitality Technology Alliance (CHTA) Reload conference in Shanghai was once again a great opportunity to catch up with technology developments  in the hospitality sector. There were some interesting presentations, too. One on wearables, for example, put the recent hype about Smart Watches and their applications firmly in its place by pointing out the current shortfalls, such as battery life, being tethered to a 'mother' device and, most importantly for the hospitality industry, the lack of standardisation and adaptability which is always the greatest impediment whenever consumer electronics enter the enterprise space.  

Needless to say that I found the presentation on IPTV the most relevant.

IPTV Slide Presented at the CHTA meeting

The message from the chair of the IPTV Standardisation group was clear: IPTV is a key customer service platform and as such is just as important for a hotel as PMS. This is quite an exciting shift from just a few years back when IPTV was seen as 'nice to have' as opposed to 'essential'.

The PMS system is of course the holy grail of a hotel operation as it facilitates hosting hundreds of different people, night after night, smoothly and efficiently - albeit by predominantly operating at the backend. IPTV on the other hand, being the connection between hotel backend and customer facing frontend, is the point where enterprise and consumer interface - the holy grail of guest communication if you like (post check-in, naturally). The two together are a powerful package that, if done properly, combine hotel operation and guest communication on one integrated platform.

Standardisation: walking a fine line

The important point with any attempt at standardisation is that it shouldn't curtail the inherent flexibility of an IPTV system. This is a very fine line to walk indeed. Network set up, cabling constraints, content and features - where do you draw the line?

Also, equally important as defining what IPTV should be is to define what it should not be. IPTV is not a computer, and it is not a mobile device - although it should interact and enable both, and across operating systems. But this is why mobile- and computer oriented services such as We Chat, Skype and social media sites should have no room on it, at least not in their original formats. A hotel we have deployed recently, for example, is curating posts from their Twitter, Facebook and Weibo pages and putting them as images on their IPTV platform on a monthly basis. That's perfect: it's entertainment and it has been customised to work on the TV screen.

But with 72% of web page views now done on mobiles, why try and squeeze 

Share of webpage views, January 2015.
Source: wearesocial.net/blog

the square peg of (say) Weibo into a round hole like IPTV, specifically if the user experience can never be as good as on a mobile (think on screen keyboards...)? And let's not forget the myriad security and bandwidth issues that come with turning the TV into a web browser. Again, it may be ok at home, but a hotel is an all together different environment where rules are set by the lowest common denominator: the worst possible scenario, such as someone downloading masses of pirated movies, clogging the bandwidth for everyone else, or people browsing onto dubious sites infested with viruses.

Here IPTV plays a key role as the facilitator that fits the spare pegs into round holes by integrating guests' own devices, rather than trying to replicate them. 

No doubt these points, and many more, will be mulled over as the IPTV Standards group is preparing its recommendations. But no matter what the final document will look like, let's hope it will contribute towards drawing the lines clearer as to IPTV's role in hotels for all parties.   

Wearable Technology - In Search of a True Purpose?

Smart watches and the whole category of 'wearable technology' is nothing new but has been given a big boost ever since Apple launched its (rather underwhelming, in my opinion) version of  the gadget late last year. Like with their previous products such as the iPhone and iPad, it caused various industries to break into a frenzy to find an application for the gadget within their specific field.

Alas, what most industries have come up with so far is more gimmick than true improvement.

In the hospitality industry, some of the big hotel chains have introduced a smartphone app that lets guests unlock their rooms with a simple swipe - which is genuinely useful and even environmentally friendly. A smartphone does not count as wearable technology I hear you say? Ah yes, but when you load that app on your smart watch it is. Tick the box.

Westin's RFID wristband

But more wearable-centric apps are being launched as well. Westin provides sleep-sensing wristbands that, along with an app, track sleep patterns and provide virtual coaching. A Spanish hotel chain has launched what amounts to an updated version of the Club Med's Bar Beads. Their guest bracelets open guest rooms, pay for meals and automatically enter you in the nightly raffle. Useful? Maybe. Creepy? Definitely. 

Some enthusiasts have said that these new gadgets "utilise new technology and aid guests’ wellbeing".  What's worrying here is the order of importance: shouldn't the well being of guests come before utilising new technology?

The Innovation Dilemma

Every industry is grappling with the innovation dilemma: how much innovation do I need to introduce at what point in time to stay relevant and competitive without annoying my customers?

Take the automotive industry. It's not only Google's driverless cars that are set to radically change the way we view cars. All major car manufacturers have set up shop in Silicon Valley with the explicit aim to innovate the driving experience.

BMW's augmented reality glasses

A recent article on this topic pointed out BMW’s plans to launch augmented reality glasses that allow drivers to see through the side of their cars when parking. While this may be useful if reverse parking is giving you nightmares, the article warned that “the auto industry must be careful not to overhype the importance of some of these innovations and lose focus on what matters to consumers most." This specific device seems to be the equivalent of Westin's virtual coaching wristband — do you really need it?

Innovate it and they will come... but when?

It's not that innovation in itself is incapable of delivering the spark that turns the invention into something genuinely and ground-breakingly useful. But the cause and effect might not always be immediate - far from it.

Graphene: extraordinary properties - limited use

A great article in the New Yorker on graphene made this very clear. Graphene is a feted material that has amazing properties but aside from tennis rackets, no one has yet worked out what it can be used for. That article also quoted the graphene of the 18th century, aluminium, which had a lowly existence as the material pots and pans are made of before the advent of aerodynamic flight finally gave it its truly innovative  purpose.

What this shows is that innovation exists in a larger context that includes not only technical capability, but also socio-economic and cultural influences. It is only when all these stars align that true, groundbreaking innovation takes place - and it may take a very long time after the discovery is made for it to occur.

Meanwhile, there's nothing wrong with tinkering with all of these new technologies, as long as it doesn't compromise the core experience for the consumer.

Or, to quote Gül Heper commercial manager of Swedish hotel brand HTL in an article on wearable technology: “It has to be relevant; it has to be engaging; and it has to be something that makes the hotel experience much better and on the best terms. We try to remove all the gimmicks.”