Optimizing Hospitality Industry Mobile Apps

By Michael Kasavana NAMA Endowed Professor, School of Hospitality Business, Michigan State University | November 25, 2012

Forrester Research predicts by 2015 eighty-two million people will rely on mobile devices as a primary reference tool. Through the use of a mobile device, consumers are able to receive timely announcements, alerts, promotions, discounts, and location-relevant offerings along with access to reports of purchasing history, loyalty rewards status, and a host of concierge services. It is estimated that there are several hundred million active cellular network subscribers and with such a large number of users, it is critically important that hotels, restaurants, clubs, and casinos recognize the unparalleled competitive advantages that can be gained from location based applications (LBS), including guest check-ins, word of mouth broadcasting, and shared experiences. Gartner Research, which identified LBS as a top consumer application category for 2012, expects LBS application users to exceed 1.4 billion people by 2014. Jupiter Research estimates current market revenues attributable to LBS applications at around $486 million with 2014 revenue projections hitting $12.7 billion. Two key areas of mobile applications are location-based services and payment services.

Definition

A location-based service can be defined as an information and entertainment platform, accessible though a mobile network, based on the geographical positioning of the mobile device. In other words, LBS technology involves the use of device location coordinates to determine what directional or promotional information to transmit. Since 2002, LBS technology, primarily dependent on GPS triangulation, has been used to search proximity venues relative to a mobile device (e.g. “locate nearest hotel” or “find the closest Mexican restaurant”, etc.). In 2010 LBS applications were expanded to include additional identifiable features and provide a basis for two-way data exchange.

Recently, push and pull technology capabilities were activated that enable the user to receive information, either via opt-in registration or proximity-based messaging, or seek desired information through access to mobile-compliant websites. Basically, LBS applications allow access to mobile messaging based on two factors: location and time. According to comscore.com, in January 2011 there were 74.6 million smartphones in the US. Given that LBS applications involve push and pull technologies only available over smartphones, industry researchers expect a significant increase in location-based services downloading.

Push/Pull

There are two broad categories of LBS applications: push and pull. Push applications deliver information requested by the user in response to the user opting-in or triggering transmission based on entry into a specific location. In most cases, push LBS applications rely on pre-set content developed for the user (guest) by the host (hotel, restaurant, club, or casino). A push service is activated by an event (guest arrives in a targeted area or a time-dependent setting expires). Dunkin’ Donuts and Cold Stone Creamery, for example, are two firms credited with using push-based alerts, and/or promotions, to notify guests when they are in close proximity to a store location. A consumer who opted-in (i.e. registered) with either firm’s LBS application would receive such notifications whenever a registered mobile device was detected within proximity of a business location.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.