How the IoT Will Shape the Hospitality Industry

By Andy Ellicott Chief Product & Marketing Officer, Crate.io | January 21, 2018

Every company is becoming a technology company, and players in hospitality industry are no exception. While friendly service, quiet living quarters and a comfortable bed will always be the cornerstone of the hotel industry, technology already permeates a hotel guest's experience. From the keycards guests use to enter their rooms to the WiFi they purchase during their stay, spending the night at a hotel has become a digital experience - and will only become more so.

The transformation has been happening for quite some time, and bookings were the first area of the hospitality industry to be impacted. By letting guests check for room availability on their own, hotels reduced staffing expenses. By pairing that experience with algorithms, hotels began to automatically optimize pricing depending on availability, helping them sell more rooms at maximum profit. And it wasn't just the large hotel chains - by listing with an online travel agency (OTA) like Kayak or Travelocity, smaller hotels reached a larger audience. And now, thanks to newcomers like Airbnb, even amateur hotel hosts are able to put skin in the game.

Technology led to more choice, a quicker and easier experience for the consumer, and a thriving industry. Annual online-travel spending grew 55 percent between 2012 and 2016, spurring competition between hotels and OTA's - the latter which accounted for two thirds of online spending in the U.S. in 2015.

More recently, mobile devices have begun to disrupt the way consumers book hotels. Consumers use mobile devices about as much as their laptops (46 percent vs 48 percent), which has impacted the way they browse for and book hotels. Dimension Date reports that most hotels and restaurants have adopted mobile-first strategies and increasingly deploy mobile apps, with new mobile offerings like iPhone apps up 61 percent year over year. Marriott alone booked over $1 Billion in revenue through their mobile app in 2015.

But technology can to go much further and deeper in improving a guest's experience than a mere bookings website, or a shift from desktop to mobile. One of the biggest ways the guest experience in hotels will change will be through technologies associated with the Internet of Things (IoT).

IoT is rapidly becoming a trillion dollar market. People already leverage IoT through devices like smart watches (FitBit, Apple Watch), smart home devices (Nest, Canary, Alexa), and connected cars (OnStar, Tesla). By connecting these devices centrally, people can control the temperature of their homes, order a refill of washing detergent using just their voices, or unlock their cars from hundreds of miles away.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.