What Keeps Hoteliers Up at Night?

Q&A with Fred Deschamps, Carlson Rezidor Hotel Group

By Suresh Acharya Vice President of Product Development, JDA Software Grou | January 06, 2013

What are the major drivers of change confronting the hotel industry? To delve deeper into these issues and more, I recently spoke with Frederic Deschamps, vice president of global revenue optimization at Carlson Rezidor Hotel Group, about the issues that currently keep him up at night. His concerns are not much different from executives in other industries; like many others, he stays awake thinking about pricing and the impact of social media, mobile technology and big data. Excerpts from our conversation follow:

What are the business critical issues that keep you up at night?

First, price transparency's fundamental reshuffling of the transaction with the customer. We used to be able to rely on channels to target customer segments with distinct needs. Now customers have access to all the rates in real time so we have to rethink how we segment and what the customer is willing to pay.

Additionally, the meaning of brand has evolved. Brand is a way to convey product content and set expectations with the customer. Until recently, that's really all the customer had to go on, with the occasional magazine review and hearsay. Today, numerous websites aggregate customer feedback into satisfaction and product content indicators so the brand level expectations are supplemented with a finer, individual hotel level of detail and there is instant accountability on delivering these expectations.

Finally, the "now" phenomenon, the ubiquitous availability of information, is shortening the customer's decision cycle. There is instant access to ratings, comparisons, and opinions ‒ both expert and experiential - so customers research and decide basically when the need occurs. Electronic payment options further facilitate this. The specific impact to hotels is that the booking curve is growing ever shorter. This deprives the hotel of vital information on how to price a room night, as forecasting what ultimate demand will be is based on ever shorter booking curves and can become less accurate.

What are some of the dominant challenges facing the hotel industry in 2013 and beyond?

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Coming up in January 2019...

Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.