Tech-nically Speaking? Technology is (already) changing the hotel industry in profound and transformative ways

By Robert Habeeb, President & CEO, First Hospitality Group, Inc.

Robert Habeeb, President & CEO, First Hospitality Group, Inc.

The impact of new and innovative technology on the hotel industry is a much discussed phenomenon. Online and mobile booking options along with new applications for both guests and hotel employees are no longer curiosities; they are familiar features on the professional landscape of the industry. There may be debate and speculation about how far tech will go and to what degree it will become more prominent and relevant. But, these conversations are already behind the curve—technology has already become a core part of the industry. From small conveniences to big innovations, the rapid adoption of new tools, systems and platforms is clear evidence that the fact that technology will be a key driver of our business is here to stay. When we consider what the future of hotel technology will look like, we are doing so in the context of something that will almost certainly be the single most influential factor shaping the hotel industry of tomorrow.

Let’s rewind. It makes sense to understand what came before, and where we are today. The rapid growth and ubiquity of the online travel marketplace and the influence of third-party agencies has perhaps been the biggest tech-driven story in the industry over the last decade and a half. That influence is unlikely to wane going forward, as a trend toward more mergers and consolidation in the third-party space (the Expedia/Orbitz merger is one recent example) may actually make it easier for larger organizations to throw their weight around. While the number of third-party players may decrease, the toolbox they utilize may be destined to expand: new creative concepts may join existing services and applications that offer big discounts and last-minute booking and robust loyalty programs.

" we are likely to see internal usage of social media continue to grow as more hotel professionals"

The inevitability of new developments is tied not to the strength of the entities themselves, but to the power of their business model, which is fundamentally about providing consumers with more options. The best prices can almost always be secured through best-rate guarantees on proprietary hotel websites, but the appeal of third-party options stems from the consumer desire to compare prices and sift through peer reviews. The popularity of review sites and the addition of direct booking through those same sites create a f ully commoditized “ecosystem” that presents an alluring package of convenience and flexibility. It’s no surprise there are discussions of giants like Google coming into the online booking business

The 500-pound tech gorilla in today’s marketplace is of course the non-traditional hotel portals like Airbnb. And while Airbnb–and similar concepts–have come under fire from hoteliers for a range of issues, the core concern remains an imb a l a n c e in the licensing, taxation and health and safety standards that are required for “traditional” hotels versus the almost total lack of any regu latory framework for Airbnb. Hotel owners and operators invest significant resources in maintaining high standards of sanitation, cleanliness and security, while Airbnb does not–and consequently lacks many of those basic regulatory guarantees. And while competitive pressure from start-ups like Airbnb may be at least partially responsible for creative new hotel concepts like Marriott’s Moxy, Hilton’s Canopy, and Hyatt Centric, the fact that a significant percentage of Airbnb proprietors in some markets are essentially just black market hoteliers operating under an independent umbrella (for example, in New York City, 6 percent of Airbnb owners control 40 percent of the inventory) detracts from the authenticity of the “independent” model. On the other hand, the popularity of Airbnb is a potent reminder that consumers prize a different kind of authenticity, and creative hotel concepts in untapped urban markets are likely to increase in the future.

While consumer-facing technology has been ascendant in recent years, hotel management tech tools will almost certainly be on the rise going forward. Temporary staffing apps are already gaining steam; enabling hotels to post one-time or short-term job postings and allowing certified employees to bid on those opportunities. The flexibility of this approach is already proving popular with workers and hotels alike. On the operations side, new apps and tech tools are being adopted that enhance communication between hotel staff to communicate alerts such as maintenance requests or room availability.

While social media channels will certainly evolve and new platforms will emerge, the role of social media as a way to communicate with employees and potential guests will remain undiminished. If anything, we are likely to see internal usage of social media continue to growas more hotel professionals begin to understand the importance of a connected team and a reliable way to communicate within the organization.

Perhaps the single most influential technology evolution in the years ahead will be the continued emergence of new tools and technologies that enhance the guest experience. Demand for hotel bandwidth is already skyrocketing, and fiber optic connections are a seeming inevitability in many hotels. With improved infrastructure in place, new possibilities will be unlocked–particularly with regard to entertainment options. Customizable content and the ability to view content stored on smart phones and other mobile devices through your room TV will become standard in the not-too-distant future, and new apps will provide a range of new service options for guests–including the ability to connect guests to local dining and entertainment options.

As many hotel owners and operators are well aware, a tech-heavy operation requires some very different management structures. Today’s IT, revenue management, e-commerce and reputation management departments are significantly larger than they were just a few years prior–in some cases going from one or two individuals to a team of a dozen or more professionals. Management strategies are evolving, as well. Inter-departmental communication and collaboration will be more important than ever, and some forward-thinking hotels are already making technology integration a priority. No matter how thoroughly you prepare for new tech tools and innovative ideas, the speed with which products, platforms and possibilities can enter the market makes optimizing your hotel’s response to new tech more of an exercise in adaptation rather than preparation. Consider for example, the extraordinary speed with which Airbnb has gone from a nonentity to an industry powerhouse.

Some new technologies will represent game–changing opportunities and welcome service improvements and efficiencies. Others will present challenges and require compromises and strategic responses to new competitive pressures. Hoteliers would be wise to position themselves to leverage the former and adapt and evolve in response to the latter, keeping an open mind and a close eye on this vital and rapidly changing sphere of the industry.