By Scott Dahl, Programme Director: Master’s in Hospitality Strategy and Digital Transformation, Les Roches Global Hospitality Education (www.lesroches.edu)
It is interesting to see how every economic downturn generates tremendous opportunities for growth. While being in the hotel industry may not seem to be particularly advantageous at the moment, hotels are going to become extremely interesting workplaces in the coming years. Since the start of Covid-19, technological development has taken huge strides forward. Facial recognition and augmented reality, for example, are set to generate efficiency gains for the industry. On the other hand, attempts at personalising the guest experience are clashing with issues of confidentiality, which if handled badly can undermine trust.
Below, I discuss some of the issues at stake with these new technologies and touch on a lesser-known occurrence: the new role that social media is playing during the pandemic for people searching for a getaway. More time is now being spent online dreaming about the experience of the destination, and therefore less time dealing with travel planning and purchase. This new reality offers many different opportunities for engaging with, converting, and retaining customers. By adopting a dynamic marketing approach that leverages social media, unaffiliated hotels can highlight their uniqueness in a way that people can almost touch and feel.
Facial recognition, artificial intelligence and virtual reality
When technological solutions are brought to our industry, there is generally a low uptake. Innovation is incremental: it takes time to catch on. It is also worth bearing in mind that technology for technology’s sake is not the actual goal, but rather how problems can be solved using technology. It is about understanding the business that you want to disrupt, rather than focusing on how great some new technology might be. Facial recognition is a case in point.
As an industry, we are heavy users of access-control solutions. In my opinion, facial recognition is the best technological fit on the planet for access control, although it will have to overcome the privacy hurdle. For a start, look for limited ways to implement technology in hotels, with a view to expanding the capabilities later on. One futuristic application could be to use facial recognition to measure customer sentiment so that we would know, in every single transaction with our customers, whether did we do a good job or not, while at the same time scrambling the data to protect customer anonymity. In this case, the technology would be a help for people rather than a hindrance as it would enable us to fine-tune our level of service.
At the Spark Innovation Center at Les Roches, we are partnering in a very interesting virtual reality (VR) project. Using the app that is under development, people can take ordinary 2D photos and then simply drag-and-drop them to create a basic VR experience. This could prove particularly beneficial for the hospitality industry considering that VR content is currently prohibitively expensive. Imagine guests who roam around your beautiful hotel taking pictures and who then create an immersive experience using this app, which all their friends could then view. This would be a significant step up from a panoramic photo taken using a normal phone.
In general, I think there is an opportunity to democratise VR in the hospitality industry by offering it for free. Keeping in mind that children can have a strong influence on vacation choice decisions, imagine how a child’s dining experience, for example, could be dramatically altered by applying VR to the children’s menu.
Social media: an opportunity for unaffiliated hotels
A shift in consumer behaviour has taken place during Covid. Although bookings tumbled, social media activity focusing on the travel theme soared to an all-time high. In a period where personal connections were forcibly kept to a minimum because of the various lockdowns taking place, it was natural for people to shift to social media. One of the main beneficiaries has been Google; instead of heading to Booking.com, internet users simply typed the name of a place in the search engine and went from there.
In regard to social media, the question is “who is going to tell my story better on Instagram?” Me, people ‘crowd-sourcing’ their own experiences, or some distant marketer working for a B2C platform? If you can, as the hotel operator, tell me a local authentic story, if you can sell me a future memory, you do not have to worry about selling me a bed and a toilet. Rooms and all their paraphernalia have become commodities. When people book a vacation, they are looking for experiences that will become engraved in their minds. If we were able to digitalise previews of those experiences, we could literally change where the point of sale is. In other words, the winners will focus on selling a future memory and no longer a bed and toilet.
In my opinion, the transaction, i.e., the point of sale, is shifting away from the online travel agencies (OTAs) and their expensive B2C marketing platforms to the individual hotel channels. Who knows more about the cute little wine festival in your tiny little town than you? Who is going to be able to negotiate good ticket rates with that festival? The local hotel or the Airbnb marketer? There is a niche for the personal touch right now, as well as for curated memories. There has never been such a good time for leveraging technology to connect directly with people and show them what they are going to get, up close and personal.
The hotels that will recover most quickly are those that do not forgot that the customer is reachable in a different place than 18 months ago. By reaching out to customers directly, you can dispense with the commission charged on top. By adding an artificial intelligence module to predict the profile of customers, you can customize their bookings. In order for digital to work, the chemistry has to happen before people show up, not once they arrive at the hotel with their luggage.
It is important to understand that in hospitality, like in most other industries, we do not just need technical people but rather we need technologists – leaders who can strike the balance between analytics and creativity.