The Role of the Hotel Technologies in a post-COVID world
Almost one year after the Covid-19 pandemic hit our daily life, it is a no-brainer that the development and use of technologies played a crucial role in our adaptation and recovery to this global crisis. It is our entire way of living that have been disrupted, from the way to do our businesses, to our ways to travel, to shop or even to interact with each other. Indeed, how many people lose their habits to hug their colleagues when entering an office? Or how natural wearing a mask became when going to shop? It is revealing to see how fast cultural behaviours can shift, and to what extent those, which appear first as restrictions, can become the new norm. This is the case with the use of new technologies.
According to the McKinsey Global Survey of executives, the Covid-19 has accelerated by three to four years the digitization of customers, but as well as of the business supply chain. Also, the survey highlights an acceleration by seven years of the share of digitally enabled products (McKinsey & Company, 2020). This is the same source that revealed in 2015 the boundaries of technology usage among the different sector of the US economy. Based on its Industry Digitization Index, the hospitality sector was, back then, classified into the low digitization category compared to other sectors highly digital such as Media or Finance (McKinsey & Company, 2015). However, being among the hardest hit by the Covid-19, the hospitality industry is expected to adopt digitalization faster than ever, and set aside its conservative image.
The 4 Technology Trends To Look At
Virtual and Augmented Reality
Virtual Reality (VR) is a simulated experience in which a person can interact within an artificial environment, whereas Augmented Reality (AR) adds digital elements to the real world. Those technologies became more popular for the Hotel Industry to find solutions to its intangible services and to tackle the Covid-19 impact. The augmented reality market size is expected to grow up to 198 billion U.S in 2025 (Statista, 2021). Indeed, even though travellers rely more on online guests’ comments, it is complicated and almost impossible to see the product and service before booking a room. That is where virtual and augmented reality have emerged as an important concept for hotels to emphasize the physical environment they are selling. Guests could take part in a virtual tour through the VR headset to discover all the hotel’s facilities.
Virtual reality became a real marketing tool to promote through a unique and entertaining way the best-selling point of a property. VR and AR can allow hotels to reach new audiences and to be aligned with the new digital market expectations. Moreover, adopting those technologies makes even more sense when considering the social distancing rules enforced by the pandemic. Once the restrictions would be lifted, travellers are expected to still be cautious when booking, that is why providing them with more reliable information during their purchasing process can encourage them to finalize their booking. The hospitality industry understood to what extent those technologies could enhance the guest experience at a different level, such as providing AR menu.
The recognition technology gives the ability to identify a person or verify her identity by capturing, analysing and comparing the person face’s details. Put back into the pandemic context, facial recognition sees a bright future in the hospitality industry to create a more contactless experience. In the beginning, such a concept can appear reluctant for an industry that always promoted personal interactions. However, it can help hotels to be present on devices on which customers spend most of their time, and to find solutions to the new hygiene and security standards. Recognition technology can strengthen the customer experience added value by providing faster and more convenient services. The survey shows that 71% of travellers would be more likely to stay at a hotel with self-service technology in the future (Skift; Medallia Zingle, 2020). Facial recognition technology can be used along the whole customer journey and provides:
- Faster check-in/out
- Reliable payment system
- Dematerialized experience
Guest staying at one of the Alibaba’s FlyZoo Hotels have now the possibility to avoid the traditional check-in thanks to facial recognition. There are no key cards and everything is cashless.
The next step would be to merge both recognition technology and Artificial Intelligence to create Emotional AI technology. By detecting customers feelings and mood, businesses could connect with their audience on an emotional level, boosting client satisfaction and loyalty.
Artificial Intelligence technology exists for a decade, but it is only recently that the stronger reliability of computers and machines allowed to integrate it into businesses. The purpose of this technology is to perform tasks that usually require human cognitive function. Its purpose can be associated with those of automation. However, while contactless experience would become the new norm, the hospitality industry needs to carefully balance the impact of automation and the need to deliver a unique experience. According to McKinsey & Company, artificial intelligence would have the possibility to create around $400 billion value across the travel industry or to impact up to the equivalent of 7.2% to 11.6% of the industry revenue (McKinsey & Company, 2018). This industrial science is expected to enhance each stage of the travel life cycle and offers the most potential for:
- Chatbots: Intelligent chatbots are programmed to create simulated conversation in the native language, thus interacting with the customers in a more consistent, efficient and personalized way during their stay. Reports say that 80% of consumers think it is easier to communicate with businesses via text or mobile app, and 62% would communicate more if they could text message with them (Skift; Medallia Zingle, 2020).
- Voice control: make guest voices heard with a voice control system. Aligned with the hotel objective to deliver personalized services, a voice search and control system can give guests a new way to interact with their rooms and allow hotels to boost other revenue streams. Customers can make requests for room service or book a taxi from their rooms, without the need to go to the reception. Finally, creating a ‘smart’ hotel can help to reduce operating costs by focusing on sustainability and energy efficiency
- Data Analysis: Revenue manager can now rely on Artificial Intelligence to collect relevant customer data and feedback to build a stronger customer profile. With a quicker data collection system, revenue managers can take decisions based on real-time data. For instance, Accor invested €5 million in the content analytics platform Travelsify. The platform uses AI to collect and analyse online content in order to better connect hotels and restaurants with the guests’ tastes.
Internet of Things and Blockchain Technology
Both Internet of Things (IoT) and Blockchain technology are raising excitement due to the potential tremendous impact they could have on our life. The IoT technology aims to connect any objects or devices via the Internet, allowing them to collect and communicate data with each other. This technology can allow guests to stay in a total automated room and provide businesses with better customer insights. However, there are still technical and security issues that remain challenging. On the other side, blockchain technology allows dealing with a large amount of data at once by duplicating and distributing them across an entire network of computer systems. This technology shows to increase trust and improve traceability thanks to its reliable network and decentralization. That is why the idea of using those technologies together could accelerate the adoption of smart and contactless technology. Customers are not the only ones to benefit from the IoT as hoteliers could limit operational costs through automation and data-sharing. What about adjusting a room temperature according to its occupation? What if technology could predict when to call maintenance before unrepaired equipment become an issue?
While such innovative technologies seem to have a bright future in the hospitality sector, their uses need to be carefully balanced to not forget the core nature of this industry. Technologies should support human interactions and the creation of meaningful experiences whether than standardizing them. Hospitality is about people.
- Alexa in Hotel Rooms. (2019, 04 05). Daffodil Software.
- Go Inside Alibaba’s FlyZoo Future Hotel. (2019, 03 11). Alibaba Group.
- HoloLamp AR menu. (2019, 08 28). YouTube.
- McKinsey & Company. (2015). DIGITAL AMERICA: A TALE OF THE HAVES AND HAVE-MORES. McKinsey Global Institute.
- McKinsey & Company. (2018). NOTES FROM THE AI FRONTIER: INSIGHTS FROM HUNDREDS OF USE CASES. McKinsey Global Institute.
- McKinsey & Company. (2020, 10 05). How COVID-19 has pushed companies over the technology tipping point—and transformed business forever. Retrieved from McKinsey & Company: mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever
- Skift; Medallia Zingle. (2020). Five contactless Hotel Technology Trends for 2021. Skift; Medallia Zingle.
- Statista. (2021). Augmented reality market size worldwide 2017-2025.
- Travelsify Co-founder & CEO Bruno Chauvat at Skift Forum Europe 2019. (2019, 06 05). Skift.
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