In Newsletter #40: Ian Schrager's Industry Advice | Oracle Research on Creating the Coveted Guest Experience | IHG's Guidelines for 2017.
Loyalty isn’t dead! If that’s sounds surprising, it’s because we’re constantly surrounded by data showing how little loyalty this new generation of travelers has. I’ve always found myself conflicted when it comes to these stats, because I know that when I find a hotel I love, I always want to go back. So, when the report below (highlight #2) revealed 80% of business travelers returned to the same hotel for a vacation during the past 12 months, it was nice to finally have something to back up our suspicions that a great hotel experience counts for something.
This is a week of BIG reports. First, Oracle put out a great study on what guests want (hint: human hospitality), and then IHG published an even longer one on “The Age of I”... basically a primer on how hotels can address the next generation of travelers.
Looking backwards can often be a great exercise to give context to today’s thinking. In 2013, IHG’s report concluded the future of hospitality would be an economy of social relationships, not brand relationships, with guests wanting shareable experiences. 2014’s & 15’s reports expanded on this “kinship” economy and ways to build trust with their guests. IHG’s 2016 report challenged their brands to engage with consumers in a way that builds “membership communities,” recognizing the needs of the community. Now in 2017, IHG’s advice to hotels is to embrace the contradictions inside everyone of us: our desire to be both connected and disconnected, to be inclusive and yet individual.
What’s interesting, is that in some ways, they are all the same concept. Consumer expectations are evolving but not changing. We want and have always wanted our hotels to help us be social, authentic, local and differentiating, which is to say we want a multi-dimensional experience. I realize many hoteliers reading that last sentence will write back in frustration, asking us “What does that even mean...how the hell do we achieve that?!” Well, in short it’s to be three things:
(1) globally consistent in safety, currency and standards
(2) locally relevant in offerings, identity and flavour
(3) personally unique in recognition and understanding
If you read the reports, we’d love to get your thoughts and feedback. How do you think hotels should interpret the trends laid out?
HIGHLIGHTS FROM THE WEEK'S NEWS...
Why it matters: When Ian Schrager speaks, we listen. He has a track record of excellent judgement and far-reaching insight. As such, his concern for the industry, which he expressed to Skift at last month’s ALIS conference, should be a wake up call for all.
To counter what Schrager sees as a lack of industry innovation and an existential threat from Airbnb, Schrager says hotels should look to break the rules. Just like the music and film industries who “went out and associated themselves with smaller companies (Disney<>Pixar) and let the smaller companies go out and do things while they as a big company waited and soared,” hotels too can leverage the startup technology ecosystem to achieve great innovation. If you are too afraid of failure, then you miss the opportunity for success.
Schrager’s second piece of advice is to look at Lifestyle. That doesn’t mean copy what ‘lifestyle hotels’ are doing, but look at how people are interacting with the world today. There’s two interwoven trends to capitalize on here -- community (proven out by Airbnb) and co-working (as we wrote back in Newsletter #8, by 2020, 40% of the US labor force will work independently). With these new ways of living and working come new needs from a hotel.
Shrager cautions against hospitality’s tendency toward “me too-”ism. As he points out, hotels only started implementing free WiFi once everyone else was doing it and it became a disadvantage not to. Instead, it’s clear to Schrager, hotels have a lot more to gain from a “me first” mindset - something we can definitely get behind.
A study we can get behind
Hotel News Resource | New Report from Oracle Hospitality: Creating the Coveted Hotel Guest Experience
Why it matters: If we were to commission our own study on “creating the coveted hotel guest experience,” we’d be hard-pressed to get results we’re more aligned with than those in this illuminating report.
This Phocuswright study, commissioned by Oracle, polled thousands of U.S. and European travelers to better understand technology’s impact on the hotel-guest experience and gain insight into making technology a differentiator for winning new guests and increasing guest loyalty.
As Oracle summarizes: “Hoteliers are well aware of the competition they face to win the loyalty of guests. But the study’s many revelations point to one opportunity they may have overlooked and need to seize: Once travelers arrive in the lobby, their notion of a memorable experience can be shaped entirely by the deeds and words of hotel staff. And technology can play an integral role in helping them get the job done.”
Indeed, here are some pretty persuasive data points from the study to back up that assertion:
- Nearly two-thirds of U.S. guests said it was “very or extremely important” for hotels to continue investing in technology to enhance the guest experience
- 94% of business travelers and 80% of leisure travelers value the ability to use their smartphones to request service and message hotel staff.
In addition to identifying a clear need for technology to enhance the guest experience, the study also “provides hoteliers with several insights to deliver individualized service.” They write: “One of the most important takeaways: Give guests greater control over their stay. Survey respondents expressed in a variety of ways their desire for autonomy, ranging from gaining the ability to select specific room locations to contacting staff on demand via smartphones. By deploying the right technology, hoteliers can facilitate many of these requests.”
Lastly, the survey underscores, as Oracle puts it, “the importance of human connection in the hotel industry” - one that can “only be enhanced, not replaced with technology.” Oracle’s stat regarding guest preferences when it comes to the concierge couldn’t make this more clear. As they point out,
- 62% of guests used non-hotel sources such as the Internet for dinner reservations and activity recommendations, bypassing the concierge from whom guests say they would prefer to get such assistance.
As we wrote about last week in “The Hotel Concierge Role Has Changed: Why Your Concierge Needs a Modern Day Toolset,” and as this Oracle data point makes evident, the concierge role - and the human who inhabits it - remain more relevant than ever. However, technology (the lack of good concierge technology coupled with ever-more powerful consumer tools) is actually what’s holding the concierge - and by extension, the delivery of exceptional hospitality at your hotel - back. While that 62% stat is possibly alarming (because it indicates that many of your guests are underserved), it’s actually a wonderful opportunity for hotels to seek out technology that empowers their staff. As Oracle concludes, “By linking scale and enhanced service, technology holds the promise to generate greater guest loyalty – and revenue – for chains and independents alike.”
Creating an “and” experience
InterContinental Hotel Group | Addressing Paradoxes of 'The Age of I'
Why it matters: As discussed in the introduction, IHG’s report is a reminder that technology is leading guests to want a dynamic in-stay experience -- one that caters to both the connectivity afforded by technology, as well as our persistent desire for individuality or anonymity. This paradox creates a challenge for hotel brands, as an “either/or” experience is not sufficient today. Hotels are bearing the costs of creating an “and” experience, meaning they must offer a whole buffet of experiences to satisfy their guests.
IHG lays out six strategies to address these needs and it’s no surprise to see “communicate with conversation” as one suggestion. If you look back at our tnooz article on messaging, guests are communicating through chat technology at increasing rates. If you are looking to communicate with guests through messaging technology, let us know as we would welcome walking you through our learnings thus far.
- Hilton Inks Deal with Amazon as Part of Guest Loyalty Shift Tnooz
- Guests Embrace Hotel Messaging Tools eMarketer
- Airbnb is Buying Luxury Retreats for around $200M TechCrunch
- The Most Underrated Data Point in the Industry is Still the Perceived Quality Travel Daily News
- Why Hotels Should Reevaluate Their Tech Stack Lodging Magazine
- The Future of Hotel Revenue Management (Report) Cornell SHA