Let’s begin with a provocative question: “Has ‘Digital Transformation’ actually helped your guests?”
When looking at the Hospitality Industry’s technology landscape, we can easily see that it is highly fragmented. There are myriad solutions and providers popping up all the time, making it easy to lose oneself in a convoluted maze of systems and integrations as well as the reason we are looking to make a digital in the first place: improving efficiencies for the business, yes, but also for the guest.
Matthew Clark is an enthusiastic hospitality professional with skills in a variety of functions in F&B, Hotel Operations, and IT solutions. He is the Regional Director of Sales – APAC & Middle East at Shiji Group and has experience in both large companies and not-for-profit organizations. Read his take below on how technology is affecting the digital customer journey and the “digital transformation paradox” as it applies to hospitality technology specifically.
As reasons for this deep fragmentation, amongst many others, we can cite region-specific barriers to adopting technology from an end-user perspective, solutions targeting different segments of the consumer population and certain elements of the guest journey, brand or hotel chain-specific regulations, and security and data compliance barriers, all detracting from a seamless guest experience when not integrated thoughtfully.
If we compare ourselves to other industries, such as banking, travel, or shopping, we can see they are further along to a degree, with some players able to provide much better experiences to their customers than others. With retail, for example, a shop’s fully digital experience can be very seamless whereas another’s isn’t as good – it becomes almost a learned, behavioral experience in choosing what technology to adopt and what will work, not forgetting incentives such as loyalty programs or rewards to encourage desired behavior.
We are still in a period of transition that is quite protracted and there’s no way of knowing how long it will last, although my guess would be that it isn’t going to be much longer and that we can expect some clarity and consolidation soon – coming from two fronts.
On the vendor side – the ones providing the technology – there are acquisitions, mergers, and all sorts of things taking shape, with the same ringing true for hotel groups and hospitality operators.
These players are survivors or casualties of the aftermath of the COVID-19 crisis and are merging, acquiring, and combining their brands and operations. It’s a period of disruption that brings with it turmoil, but also new solutions and new tech to choose from. Some of it will work and be adopted, and some of it will be but a blip on our radars down the road. One thing that is certain, though, is that we are collectively recognizing the increasing need to focus on the guest journey and its digital steps in either business or operational decisions, and this will guide the choice of partnerships and vendors.
The days of monopoly vendors are gone, and so are the days of international hotel groups being able to mandate only one or two tech providers across a portfolio of hotels in an entire region. The accelerated pace of expansion that hotel groups are undertaking today demands a diversification of stakeholders and operating models, making these strict mandates neither viable nor effective.
I see this period of consolidation of both hotel groups and technology vendors moving towards a balance where the options will be few, but will most likely have to be complete and partner well with other solutions to support the customer journey and business needs.
Where to Start with Digital Transformation Today
Amidst this fragmented landscape, disruption is an ongoing certainty. For a business looking to transition or even upgrade its technology stack, the first step is to look at the digital guest journey – the booking journey, a digital buying experience, or whatever your guest experience may be – and choose one step of it to focus on initially. Think of the parts of the journey that are proven to move well into a digital space and start there, especially when there are proven solutions or vendors in that space, as they will bring along integrations and are most likely to enable you to implement new solutions whilst maintaining legacy systems.
There are a number of solutions facilitating digitally assisted or fully digital processes, for instance, solutions for steps such as messaging automation for pre-check-in, electronic folios, paperless check-in, and check-out, and satisfaction surveys are mature and proven to work, thus a good place to start.
Available solutions vary greatly in format and degrees of newness. While some are more straightforward, such as the debate on using kiosk technology versus the guest’s own device, others can be less familiar to the hospitality world, but also offer opportunities, namely blockchain and the metaverse.
Other considerations include ownership issues of the solutions, like when we talk about API connectivity directly from vendors versus marketplaces that can be more self-service: some solutions may be marketed as plug and play but aren’t necessarily so.
Alas, the technology for the full digital guest journey is not in our hands yet. Regardless of whether it is one holistic solution or a combined number of integrated solutions, it’s imminent, but it’s not quite there yet. As hotel operators and technology providers are aware of it today, I believe that solid relationships and working together on the problems we want to solve pools our learnings and collective efforts brings us quicker to an ideal state where technology can actually help our customers.
Finding the Balance
Some of our most recent learnings that are guiding these collective efforts come from the COVID-19 crisis and where we stand now. We have noticed how people want to have quick but safe interactions that do not require physical contact with others or excessive touching of shared devices. We also know that our guests are increasingly reliant on their own devices and expect to have the same convenience when traveling that they experience back home, without the need for extra software or too many added steps to a process.
Additionally, we are also seeing massive pressure on resources, especially manpower, and the alleviation that technology such as automation of the digital guest journey allows is a quickly available tangible efficiency. Lastly, but not less important, is the peace of mind of fulfilling compliance, data security, and privacy regulations and expectations. A solution to the digital steps taken should hopefully be exceeding but certainly fulfilling those requirements. Although difficult to calculate, eliminating the risk of human error, manual mistakes, and fraud can result in actual dollar savings or benefits. Ideally, the totality of all digital steps adopted can result in a tangible bottom line, with either improvements, savings, or a combination of both.
It is vital to stress, though, the importance of mid- to long-term planning when selecting what technologies to adopt. I remember vividly when, a number of years ago, hotels leaped at the opportunity to sell distressed inventory on a website’s platform that facilitated the transaction at a potentially reduced rate. It offered hoteliers the option to lower their prices in order to fill rooms that would otherwise go unsold for that night, however, it cost hotels loyalty and their connection to the customer, while generating a pricing war. It took a long time for hotels to fight back and recover, to regain some of the capabilities they once had, and this is a lesson when implementing components of a digital guest journey. Always be mindful of the end goal and keep the ownership of your guest: you still want to look after your guests, be able to recognize and meet and greet them, keep the communication open, and maximize that connection.
On the other hand, we wouldn’t be anywhere today if there weren’t operators who want to be first to attack, to be early adopters. They want to be innovators in their space, maybe target a specific consumer, and may even manage to turn this drive into a marketing advantage. Some regions of the world, like here in Australia, combine a willingness to explore, investigate and give things a go with customer maturity and great infrastructure to allow for these experimentations, and that’s a good thing. Nevertheless, a balance is necessary: it can’t just all be about having the newest and shiniest technology, but your technology choices must also make sense for your business needs and positively impact the bottom line and digital customer journey.