In Newsletter #27: Messaging is the future of hospitality (and what to do about it) | Hotel apps are making inroads | Airbnb's threat intensifies in a downturn.
What a week it has been for Hospitality in New York! Coming off the NYU International Hospitality Industry Investment Conference and the Boutique Hotel Investment Conference, the industry has come together yet again to discuss and to drink to the opportunities and challenges that lie ahead. Boutiques continue to rule the roost as the industry embraces the fact that guests today demand original and inventive experiences.
It’s great to see companies like the Gansevoort Hotel Group launching a new brand, The Curtain, a membership/boutique hotel bringing exclusivity to such an inclusive industry.
One disappointment is that the bigger brands still seems to want to publicly ignore the impact of Airbnb. At the NYU Conference too many leading hoteliers were skirting Airbnb and yet, in contrast, at the BLLA, superbly mc’d by Glenn Haussman, all the leaders in the room were so aware and so responsive to the movement. Refreshing. Patrick Denihan went as far as to suggest that if Accor bought One Fine Stay, does Marriott buy Airbnb? Love the thought leadership, although given Airbnb’s size (double Starwood...), that might be tough.
First time hearing Ian Schrager talk! Everything he says is brilliant and when referencing hotels that inspire him, he used the term “activate.” Praising hotels that activated the day (The Ace), or activated the night (his hotels). Nice touch. How are you activating your experience?
Two weeks to HITEC, schedule time with us here.
- Alex Shashou
Boutique Leaders Panel: (From left to right) Michael Achenbaum, CEO, Gansevoort Hotel Group, Gerald Barad, Co-Owner, Triumph Hotels, Patrick Denihan, CEO, Denihan Investments Ben Seidel, Founder, President & CEO, REAL Hospitality Bill Walshe, CEO, Viceroy Hotels.
HIGHLIGHTS FROM THE WEEK'S NEWS...
Is messaging the future of hospitality? (And what to do about it).
Hospitality Net | Impact of Text & Messaging Apps on Travel Planning
Hospitality Technology | Do's and Dont's of Deploying A Digital Concierge
Skift | Hospitality Needs to Double Down on the Human Touch
Why it matters: “Is messaging the future of travel?,” asks Phocuswright in their most recent report on the impact of text and messaging apps in the future of travel planning.
Their answer - yes it is - won’t surprise those who have been following the industry conversation, and our newsletter, these past several months. Phocuswright’s research shows the significant growth in travelers’ use of text and mobile messaging over the course of last year in all aspects of the customer journey (research, booking, experiencing, and sharing) - a trend the company’s VP says “will only grow.”
If Phocuswright’s report is a look at hotel messaging at 20,000 feet, then this next article we highlight is a look at the realities of messaging on the ground. As more hotels adopt messaging to meet guests’ changing behavior, it’s imperative implementation be done in a way that actually improves the guest experience. In Dos and Dont’s of Deploying a Digital Concierge, Aspect Software looks at a number of ways text messaging with guests can actually result in worse service, from longer wait times, to having guests repeat themselves, all the while being subjected to misspellings and poor grammar. The article also calls out how poor implementations of messaging at your hotel can adversely impact guest service because of the operational burden it places on your staff and your technology. The article details the inefficiencies - and reduced guest satisfaction - that arise when messaging is treated as an add-on, rather than as a seamless integration. These include not being able to sync a guest’s telephone number to their room number, and not having access to a guest’s text history - or transaction history - with the hotel.
Indeed, It’s these kind of frustrating interactions guests are having - or that people speculate guests will have - with their hotels via messaging that prompt articles like the recent Hospitality Needs to Double Down on the Human Touch. We agree hospitality, like Skift’s Jason Clampet asserts, is all about humans helping humans. But humans helping humans without the help of technology has limitations if it’s not based on the preference of your guests. Indeed, for humans to help humans in the manner guests prefer, which as the Phocuswright report shows is increasingly via messaging, hotels will need to double down on technology that seamlessly integrates messaging with all their other guest and staff communication channels.
Are apps finally making inroads?
Wall Street Journal | Marriott's CIO Says Mobile Apps Are Changing the Guest Experience
Why it matters: A discussion of hotel technology got some valuable real estate in last Tuesday’s print edition of the Wall Street Journal, which is a welcome sign to us in the industry that a discussion of technology’s benefits in hospitality is reaching the mainstream.
Marriott has been bullish on mobile technology - the company now offers mobile check-in and check-out, as well as a mobile request feature in their app, and is piloting digital entry and mobile food ordering - and in this interview, Marriott’s CIO Bruce Hoffmeister talks about the many advantages mobile technology confers to his company and his guests.
Mobile technology means Marriott has many more touch points with its guests across the entire customer journey, and in particular, on- and off-property during their stay. The revenue and usage numbers Hoffmeister shares are very encouraging - mobile revenue from booking was up 25% year-over-year for 2014 to 2015, he claims, and 20% of the chain’s guests who have access to the Mobile Request feature, which is barely a year old, request items and services via the app (and 40% of this cohort choose to engage with their hotels even before they arrive!).
Hoffmeister also talks about how the company decides which technologies to adopt, how to scale them, and how to work with the “lot of...new unique things [that] come from smaller startup companies.” ;)
Well worth a read and welcome news to an industry that needs every push it can get to move technology forward and invest in innovation.
Airbnb's threat intensifies in a downturn.
Why it matters: When Airbnb started, the company claimed it wasn’t competitive with hotels, and every big hotel exec agreed. Both Airbnb and the execs argued that by opening up new channels that were previously barriers to travel, the platform created demand rather than shifted existing demand to a new frontier. This report we highlight here, based on some nice data work from 7Park Data, seems to reinforce this position. The authors conclude Airbnb’s impact to hoteliers is minimal and interestingly enough, so is its impact on the OTAs (many have speculated Airbnb will soon become competitive with the OTAs, ourselves included).
But let’s look at the data here and ask ourselves if we really believe this. When looking at preferences and arguing that more consumers still prefer hotels over peer-to-peer lodgings, has anyone thought of what that study would look like before Airbnb (or the homeshare category) existed? No, because there would be no study and no competition!
Airbnb is a threat, no matter how someone slices it. It is an alternative option to booking a room that never previously existed, just like how Uber compares to getting a taxi. However, unlike Uber vs. taxis, when the economy takes a turn for the worse (as everyone is expecting), then there will not only be more people trying to make money by renting out their places, there will also be more people looking to spend less on travel and opting for Airbnb’s cheaper prices. To Deanna’s credit, the article does end with the important point that hotels don’t have the luxury to cut prices the way Airbnb does, as hotels don’t make money from both the buyer and the seller, and they don’t have as much flexibility in their spending due to the running of their operations.