Is the Implementation of Mobile Technology Commoditizing the Hotel Experience?

By Mark Heymann Chairman & CEO, Unifocus | January 01, 2017

Mobile technology has pervaded virtually every aspect of our lives, and travel is no exception. As people turn to their mobile devices for assistance with an increasing number of daily activities, the hotel industry has responded with apps designed to streamline processes from checking in to accessing one’s room. Starwood Hotels & Resorts pioneered mobile room keys with its SPG Keyless product in 2014 and since then several other major brands have followed suit. There are also apps today that enable SMS two-way communications between guests and hotel staff, facilitating a wide range of interactions, including late check-out requests, room service orders, and restaurant recommendations.

The efficiency factor is clear, with benefits to both the guest (convenience) and the hotel (lower labor costs). But with automation increasing, and a corresponding decrease in face-to-face interaction, is the hotel industry, like the airline industry before it, destined for commoditization? And if so, what, if anything will drive guest loyalty? At the lower end of the market, as long as a basic standard of cleanliness is met, a hotel room is a hotel room, and price is usually the key deciding purchase factor. As one moves up the scale, however, service becomes more of a differentiator. And as it does, technology that reduces staff interaction can be a potential detractor.

The Commoditization of Airlines

As hoteliers consider the effects of automation on the guest experience, they would do well to consider the example of the airline industry. Compare flying today to the early 1980s, when Jan Carlzon took the helm of the struggling SAS Group. Within a year, the CEO had turned around Scandinavian Airlines through a focus on customer service that centered on what he called “moments of truth.” In fact, Carlzon has been famously quoted as leading his First Wave seminars with “We have 50,000 moments of truth every day,” identifying those moments as every interaction airline staff had with a passenger, and what would have to happen in that moment to create a positive experience.

Fast forward to today, and those moments of truth are few and far between unless one is flying first or business class. Travelers book their flight online, sometimes via a third-party site, check in and get their boarding pass online as well. Once on the plane, an economy passenger is offered a drink at best. The opportunities to change the experience for that passenger, therefore, have become more limited. So with service removed as a differentiator, the key driver of airline repeat business has become the miles one gets to travel for free as part of a loyalty program.

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Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.