Disruption in Hospitality: The Target - Customer Experience Measurement

By Janet Gerhard Founder, Hospitality Gal, LLC | June 12, 2016

The hospitality industry is constantly under attack. New technologies, new entrants, new regulations, and changing customer demands require hoteliers to be relentlessly vigilant. It is not merely a matter of loyalty. Today's fight is about relevance. In a world of digital transformation, no industry is immune. With every discussion on digital transformation orbiting around customer experience, is there an opportunity to disrupt how the hospitality industry measures customer experience?

A week in April with 250 global leaders from a major technology firm gave me new perspective on the uncertainty of digital transformation. The organization is midstream in its own digital transformation while rapidly positioning to enable its customers to embark on a similar journey. The undercurrent of the technology firm's two-day global leaders' event on digital transformation centered on the changing needs of its customers and the value it delivers through experiences --- a focus that is undoubtedly critical for today's hospitality companies.

Mobile check-in, wearables, artificial intelligence and predictive analytics are indicative of the digital transformation underway in the hospitality industry. EY, Accenture, and many others want to advise you on how to re-engineer the experience to better serve your customers. In truth, the digital transformation agenda is all about avoiding "digital Darwinism," a term that is often cited by Brian Solis, principal analyst at Altimeter Group. The hotel industry is being disrupted, and improving the customer experience isn't simply about loyalty; it is about survival.

In its recent report, The Six Stages of Digital Transformation, Altimeter's findings are not dissimilar to numerous other recent articles and white papers on the topic:

"Technology has empowered consumers to become more mobile, social, and connected than ever. This has changed how they interact with each other and with products, services and businesses. Digital transformation is your organization's internal equivalent of external consumer evolution. It opens the door to new opportunities for innovation in how to design, integrate, and manage customer (and employee) experiences."

Every discussion on digital transformation orbits around customer experience. My passion and work over the last 20 years has been on changing behavior – driving customer loyalty and improving employee engagement. I believe an argument can be made that digital transformation is applicable to how we measure customer experience. The question is where will this disruption come from? The sources I'll explore in this article are the hotel brands, their vendors and a few existing technologies that if applied in new ways could be disruptive.

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Coming up in October 2018...

Revenue Management: Getting it Right

Revenue Management has evolved into an indispensable area of hotel operations, chiefly responsible for setting forecasting and pricing strategies. Because the profession is relatively new to the hotel and hospitality industries, a clear-cut definition of what exactly Hotel Revenue Management is has only recently emerged - Selling the Right Room to the Right Client at the Right Moment at the Right Price on the Right Distribution Channel with the best commission efficiency. Though the profession can be summed up in a single sentence, that doesn't mean it's easy. In fact, it's an incredibly complicated and complex endeavor, relying on mountains of data from a wide range of sources that must be analyzed and interpreted in order to formulate concrete pricing strategies. To accomplish this, Revenue Managers rely on an array of sophisticated technology systems and software tools that generate a multitude of reports that are central to effective decision-making. As valuable as these current technology systems are, much of the information that's collected is based on past historical trends and performance. What's new is the coming of big, data-driven, predictive software and analytics, which is likely to be a game-changer for Revenue Managers. The software has the capacity to analyze all the relevant data and predict occupancy levels and room rates, maximizing hotel profitability in the process. Another new trend that some larger hotel chains are embracing is an emphasis on Booking Direct. For Revenue Managers, this is another new channel with its own sales and costs that have to be figured into the mix. The October issue of the Hotel Business Review will address these developments and document how some leading hotels are executing their revenue management strategies.