Technology must serve customers

29 Mar, 2018

Applications of technology to the hotel industry, including: AI (artificial intelligence), voice commands, chat bots, are being widely discussed and debated.

While there are numerous tech products targeting the hotel sector in the market place, the question must be always be asked as to what extent they enhance the hotel guest experience.

In order to get some answers to these questions, I was able to catch up with Arthur Chapin, Chief Products Officer for Brand Expedia Group at the recent IHIF (International Hotel Investment Forum), held in Berlin on 6-8 March.

There he outlined his vision about how technology will transform the hotel sector in the coming years.

Hotels are very important for Expedia, generating the great majority of commissions for the company.

 How technology will transform the hotel sector in the coming years

For Arthur Chapin, the approach to implementing technological solutions in hotels begins not with examining the various new gadgets, programmes, devices available in the market, but rather with a careful analysis of what customer needs are.

For him, the focus should be on how to solve customers' problems, or how to ease their 'pain points' in order to make their hotel experiences from searching and booking to check-out as seamless as possible.

A simple, mundane example would be for hotels to provide phone charging plugs at bedside.

Other examples include: online check-in and rooms selection, as well as mobile phone-based room keys.

Chapin notes Steve Job's definition of innovation which was for him all about 'connecting the dots', i.e. not some radical departure from current practice, but rather piecing together already existing elements to create something new, but useful.

A virtual concierge

Arthur Chapin sees potential for harnessing augmented reality (technology that superimposes a computer-generated image on a user's view of the real world, thus providing a composite view) to enhance the guest experience.

For instance, through an app, guests, on arrival in a hotel property, could use their mobile phones to get a vision of what amenities are available in the neighbourhood, such as sightseeing landmarks, restaurants, or transport links.

He sees the possibility of replacing –at least in part– the traditional services of a concierge.

In fact, according to Chapin, many guests nowadays prefer to avoid human interaction for routine questions and tasks, e.g. checking-in or out or enquiring about where to eat in the vicinity of the hotel.

This is apparently particularly true of the younger millennial cohort.

Chapin notes that, according to a recent study, 80% of consumers less than 35 years of age don't seek out human interaction for routine tasks, such as ordering fast-food.

How technology will transform the hotel sector in the coming years

Voice commands have a future      

Chapin notes that Amazon's Alexa with its voice interaction capabilities was already launched in 2014.

He believes that voice applications will soon be part of the hotel guest experience.

For instance, voice commands or questions from guests could be transmitted to hotel staff either via their mobiles devices or a dedicated apparatus in the room.

Such a system would personalise guest service, while at the same time avoiding the need for guests to address a human being directly.

Leaning from failures

Regarding investments in technology Chapin notes that 80% of what a hotel or chain does is likely to fail initially.

What is important is to learn from such mistakes, which requires a corporate culture that accepts failure as a learning experience.

Nevertheless, initial investments must be small scale in financial terms so as to avoid overall losses. Adopting such an approach allows the hotelier to experiment before making a major commitment to an investment programme.

Thus, he favours an iterative approach where success comes as a result of 'trial and error'.

The trick is to identify what works and then to "double-down or triple-down" on that approach, notes Chapin.  

How technology will transform the hotel sector in the coming years

Orbitz, Travelocity, Wotif and HomeAway

Expedia acquired Orbitz and Travelocity, as well as the Australian platform Wotif, over the last 3 years or so.

Since they all basically offer the same services as the mainstream Expedia site, the question could legitimately be asked as to why they continue to be maintained as separate platforms.

According to Chapin, they will continue to exist as separate websites since they each serve distinct customer segments.

For instance, Wotif continues to be specialised in domestic travel in Australia.

Meanwhile, Orbitz has its own distinct loyalty programme, Orbitz Rewards, which allows customers to earn Orbucks that have a purchasing value of 1 Orbuck = US$1. In addition, those who book on the Orbitz app can get a 5% discount on 200’000+ hotels worldwide.

Chapin sees further potential for applications of remote commands from mobile apps in the vacation rental space.

For instance, a property owner or manager, on receiving an SMS from a renter, could unlock the premises remotely just before the guest's arrival, leaving the key in a designated spot inside the property.