A highlight of ITB 2023 in Berlin this year was the keynote speech by our COO, Kevin King, on how hotels can being their digital transformation while listening to their guests. Read on as Kevin lays out considerations for a successful transformation and draws a parallel between hotels’ and their technology providers’ journeys, all based on his 20+ years of experience working in the hotel and hospitality technology spaces.
Defining Digital Transformation in Hospitality
Bringing technology into the market is a responsibility that Kevin and Shiji as a company took on to ensure the industry gets what it needs, both at an associate level and as it relates to consumers and guests. He stresses that “to [Shiji], that’s digital transformation: being able to really change the industry as to how we communicate, not only as associates within hospitality but also with the guests that make us successful in our business.”
To Kevin, the industry is, now more than ever, ready for a true digital transformation, and after the past few years, many people – guests and hoteliers alike – have rethought how to engage, how to best involve guests in the way we do business, and how to understand what we can do to better cater to their needs at hotels. This acceleration of digital transformation can be attributed to advances in cloud technology, internet bandwidth, device size, market adoption, and regulations around the world. He states, “Digital technology is a buzz theme in many ways, but how you really transition the transformation into a reality is the hardest thing to do.”
One key point Kevin makes is that the efficiency of staff must be increased, as current challenges in obtaining, training, and retaining frontline talent continue to mount. He also shares that the majority of enterprise companies, which add up to $4.2 trillion worth of activities as compared to $1.4 trillion in 2014, are still using on-premise solutions, and only 22% have moved to true cloud environments. As an example, he cites housekeeping solutions that were not part of the core technology and had to be bought as an add-on, whereas today, many different tools that have such capabilities are available as part of the core product. Legacy systems, Kevin says, can’t deliver what a hotel needs if they are serious about digital transformation. It can’t happen overnight, it needs to be done in phases but must start with the foundation.
The Guest Journey
Guest expectations are changing, and today, being able to recognize a guest’s profile at your properties around the world is crucial, especially as it enables guests to use their own digital devices to interact with the hotel, a must today, despite this technology being more easily available in some parts of the world than in others. “Our guests have evolved just like you and me. On my phone, I can order a pizza, call a rideshare car, or do my banking. But what we sometimes forget is that our guests have these devices and do everything on their phones.” Thus, the way we provide service must adapt to this new paradigm.
Kevin advises against looking at digital transformation in hospitality as just a trend, because it is a reality. For years, the industry has been trying to adopt technology, albeit at different speeds or at different levels, and digital transformation is a journey that’s only at its beginning. With that said, he describes how to look at a digital transformation transition plan. Instead of suggesting to a particular technology provider and their tools, hotels should focus on the guests, which means listening to what their expectations are and what they need so that they can decide what tools can provide that. This can be done by analyzing the behavior of each group of guests, as they don’t all have the same needs – take budget guests versus luxury guests or even a business traveler versus a family.
Building Solutions for Digital Transformation in Hospitality
Kevin recounts how Shiji went on a process of listening to their clients as to what they deemed necessary to bring about their transformations, and what they needed to provide the services they wanted to offer their customers. Through partnerships with companies of different sizes, global and local, as well as taking stock of the available technology on the market and what would have to be developed, they learned what was needed and that listening and being consistent is the most important element. To provide their customers with consistent technology that would work for their guests across their portfolio and for different company sizes, acquisitions were made to create a platform of services.
Being able to offer a platform of services meant making changes to, among others, PMS solutions, which are often a full solution for many hotels, including Central Reservation Systems. These systems would need to interact with many other systems, also those from other providers, therefore one of their strategies was to have many products in their portfolio without locking users into one solution set, but rather be able to partner across the overall industry. “You can only have a digital revolution, a digital transformation to communicate with the guest, if you get the foundation right.” Deciding to build from the ground up, the company returned to the drawing board and, using what was learned in their discovery process, iterated and iterated again, tweaking things that didn’t work and keeping the ones that did, building towards the goal of having a platform that was going to empower the guest to control their journey.
5 Key Takeaways
- Focus on the guest experience, it is the key to all else
- Embrace data-driven decision making
- Have the best cloud automation, but also ensure your security and privacy are top-notch
- Train and empower your employees– they are key to your business
- Look, listen, and learn – at all levels
Kevin says the key takeaway for a hotel is that to serve guests as they choose their ideal experience and journey, they must have a consistent technological foundation. They must make sure operations are efficient to be able to scale them into the many countries they are present in and to follow the many requirements in each of them.
Another point Kevin brings up is ensuring that the technology and solutions are sustainable and have longevity. He then recalls the example of kiosk solutions 10 to 15 years ago, which the company built because their hotel group clients thought they were the latest and best solution for them. Those huge, clunky machines worked, but are no longer there because someone thought they were a good idea without considering the guest long-term. These kiosks didn’t remove friction for the guest.
He once again reiterates the point that the industry is struggling to bring people back to service guests. Therefore we need to be strategic in the use of technology, by looking, listening, and learning. And once we do, we need to have the ability to deliver on it. He adds, “Don’t just listen to the guest, listen also to your teams, the people who deal with the guests every day. Ask what will make life easier for them. The teams servicing the guests are just as important as the guests themselves.”
Listen, Then Act
Kevin cautions that listening is important, but so is properly thinking through the journeys of each guest group. This takes time, as there are dependencies that one needs to consider. He also advises to not try to do it all at once but to take one thing at a time and act on immediate pain points of the journey. Solving a short-term problem and working on the long-term delivery allows one to make an impact and shows customers that you’re addressing their needs.
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Citing the example of Uber, Kevin explores how this is the sort of journey we don’t currently have in our industry but are working towards. He recognizes technology needs to be embedded in people’s daily lives, including how we use it at hotels. “If a solution is available and we can deploy it, your team at the hotel could become a team of people who are servicing only your guests. Is that possible? Yes. Has this been delivered today? In part, in some countries but not yet in others.” He then cites the example of a partnership Shiji Group had with Alibaba to build a fully digital hotel in Hong Kong, where a guest didn’t need to see a person at any point of their stay if they didn’t want to. Despite going live just before COVID, it shows that we can move things forward in the industry.
Kevin also talked about how there are hotels whose guests crave more high-touch experiences, like the Peninsula, which balances the use of a very seamless digital environment that enables staff to be prepared for their guests’ arrival and take care of them throughout the entire stay. This is done consistently around the world because of the technology that enables it.
Ultimately, Kevin compares the process to changing the plumbing in a house. Just like your foundation technology, you don’t see when the plumbing is changed, but you notice the difference. You get the benefits of it but don’t actually see it until such time when you start building services on that.
