The focus on automating hotel operational processes will intensify due to the industry labour crisis. Contactless check-in/check-out and automation of day-to-day room rate setting are just two examples of technology that will be increasingly adopted and refined in response to the lack of staff to complete processes manually.
Upgrading operational processes to modern tech will not only allow hotels to operate with fewer staff; it will also help them recruit essential team members, commented John Burns, president, Hospitality Technology Consulting.
“Extreme difficulty in attracting and retaining staff to do their jobs using computer systems whose displays and work flows are complex, non-intuitive and unfriendly will propel new hotel technology entrants who offer systems, screens and processes with 21st century designs and techniques. These new entrants will threaten legacy system suppliers,” said Burns.
“Loading the grunt work onto machines and off the shoulders of team members has the benefit of freeing them up to deliver better experiences, as well as making their jobs more pleasant and improving staff retention,” added Richard Valtr, founder, Mews.
Pricing and payment
Revenue management systems with automated price optimization will continue to play an important role in hotel operations. Solutions now have the ability to react to sudden changes and automatically change booking forecasts for the next 365 days for each night and room category.
Tristan Gadsby, CEO & founder, Alliants, said: “We have seen revenue management become increasingly sophisticated during the pandemic, learning to cope with full property closures and the travel spikes caused by rapidly-changing restrictions. Hotels will feel the benefit of these learnings.”
Valtr added: “More advanced revenue management systems have meant that hotels can start to think about more sophisticated payment models, including subscription. Extending guest stays and allowing the tech partner to enlarge the revenue potential of the hotel is also a big thing.”
Several hotel and aparthotel groups including Freehand Hotels, Citizen M, Selina, and Zoku introduced subscription payment models early on during the pandemic.
New ways of paying are also making inroads into travel and hospitality. Several startups are competing for business with their ‘buy now pay later’ technology - names like Klarna and Scalapay in Europe, Affirm in the US, and Zilch in the UK.
Scalapay, for instance, allows customers to pay in three monthly instalments at no interest, with the merchant receiving the full amount – minus a commission - immediately. Speaking at the Hospitality Innovation Conference (HICON) in Bologna, Scalapay’s CEO and co-founder Simone Mancini said Covid had accelerated the popularity of Scalapay and claimed that it drives new custom, increasing average basket sizes by 48 per cent and conversion at checkout by 11 per cent.
Only a small proportion of guests are willing to download a hotel app, particularly for a single stay (typically just one in five guests, although this has risen to nearly 50 percent during the pandemic).
The simplest way around this is for hotels to communicate with their guests via the messaging apps they prefer and use every day, whether WhatsApp, Facebook Messenger or WeChat (tech vendors can provide messaging services with instant translation).
Until now, most businesses have held back from using these popular messaging services in the belief that they are reserved for chatting with friends and family. However, recognition of the convenience of real-time text chats with hotel guests is growing.
Hotels will need to have the necessary resources in place to handle real-time texts in order to ensure acceptable response times or that a chatbot can answer the most common queries. Messaging is an area where artificial intelligence is helping. Gadsby commented: “We have seen AI used in a number of ways, from translations to automated responses, suggested responses, as well as routing conversations to the right departments.”
The benefits are likely to be increased customer satisfaction levels and upselling opportunities.
At Four Seasons Hotels & Resorts, for instance, hotel guests who used the chat service were found to spend on average 15 percent more on in-room dining.
AI and guest data
Hotels are realising that loyalty is not necessarily about discounts but more about the whole experience. How can global hotel groups with tens of thousands of guests deliver personal experiences? With the help of machine learning and artificial intelligence.
Hotels are increasingly adopting the personalised offers sent by companies like Amazon and Netflix. Customer data platforms (CPDs), already widely used in retail and ecommerce, have attracted the attention of hotel groups such as Wyndham Hotels & Resorts and Citizen M. CPDs collect and organise first-party data about guests’ online and offline behaviour which is then used to activate personalised offers at scale with the help of machine learning.
“Artificial Intelligence will become more prominent, particularly in the interpretation of guest activity data and honing of processes to better leverage new understanding of guest interests,” said Burns.
“AI can also help optimise customer satisfaction by helping identify the key drivers and identifying dissatisfied customers before issues escalate,” added Gadsby.
The transition to the cloud
Two of the main benefits of cloud computing are cost and scalability. Studies have shown that compared to on-premise systems, IT costs can be halved by moving to the cloud.
With cloud systems, there is no software or hardware to purchase initially. Once the application is deployed, the tech vendor manages operational maintenance as part of the service with minimal demands on a hotel employees. As a hotel group opens new properties, the same operating system can essentially be ‘copied and pasted’ from one property to the next.
Valtr noted: “Hotels are starting to appreciate that by using the cloud, implementing new and more effective technology is not an arduous, lengthy process, but can be done quickly and the benefits felt fast.”
Florian Montag, business development manager at cloud platform Apaleo, said: “We are witnessing an increasing number of mid-sized hotel chains finally transitioning from their proprietary systems to a cloud-native environment, ideally with an open-platform approach, allowing them to easily connect to a variety of third-party applications. This transition is driven by the hotels’ need for faster time-to-market and time-to-implementation.”
2022 will be a year of M&As and opportunistic growth for hotel operators, who will aim to turn around new properties quickly. Montag observed: “They cannot afford to have their technology providers creating bottlenecks. This is why many are looking for solutions which will enable them to set-up and go-live in no time.”