To leverage technology to its greatest potential in the hospitality sector will require thought leaders who are open to seeing it from a different point of view.
Ask any hospitality executive about technology and their thoughts are likely to jump to distribution, sales and marketing, automation and organizational effectiveness. Our sector has done well in using technology to improve processes and to achieve greater efficiencies. In short, we have succeeded in effectively applying technology for, predominantly, transactional purposes. But there is so much more that could be done.
Arguably, technology and innovation have the potential to truly transform the sector—to strengthen the positioning of “traditional” players (the providers of the actual service and the creators of the actual hospitality experience, on the floor of a restaurant, or in the lobby and the guestrooms of a hotel, for example). To achieve this, we need to cease the rigid thinking and obsession with automation. Technology should not be regarded as a lifeless software of ones and zeros. Instead, it should be applied to facilitate change, to provide true personalization of products and services, and to help engage with customers and transform them via experiences.
Thought leaders and researchers keep pointing us to a broad variety of adaptations of smart technologies. The problem is, no one appears to be actively listening. A shift in mindset is thus needed to leverage technology to its fullest potential.
Thanks to the emergence and significance of enhanced cloud computing, artificial intelligence and increased mobility (the internet of things), futurists and industry research groups such as the Future Laboratory or the Javelin Group advise us to be mindful of the following three shifts in consumer behavior and decision-making:
- A last-minute mindset: Younger generations of consumers are increasingly defined by a mentality of “I-want-it-here-and-now.” Businesses need to deliver to and satisfy such expectations. The purchasing behavior of customers has shifted from purely cost-driven decision-making to one where choice and convenience have become significantly more important.
- Customization vs. personalization: Until recently, we thought “choice” was king (giving customers as many options as possible to choose from). However, researchers now tell us that control and quality play a bigger factor in the decision-making process of today’s consumers. Having the option to customize an experience or product in 18,000 ways does not equate to value. Instead, the consumers’ mindset has shifted to pay greater attention to truly personalized offerings. Customers are looking for a relevant choice of a tailor-made selection of products or services, specifically appealing to individual preferences.
- Exploration vs. Transformation: In the past, people wanted to venture into the world and explore, seeing as many sights as possible. Today, the focus is to immerse oneself in a specific location. Authenticity and engagement are hereby the buzz words. Additionally, consumers also seek meaningful interactions and ways to be transformed by the experience. More often, this is linked to wellness and health of both the body and the mind.
So, who has been listening to what the researchers and futurists are saying? AccorHotels, which has become the reliable innovator and disruptor in the hospitality industry, has openly talked about its intent to transform itself into a digital lifestyle travel platform.
Steven Taylor, chief brand officer at AccorHotels, recently spoke about the AccorLocal app which “breaks out services traditionally reserved for hotel guests … and serves it to the local neighborhood.” He also highlighted the AccorHotels Customer Digital Card, designed to enable hotel staff to personalize guest experiences.
Like many of the online travel agencies, some hotel companies, including AccorHotels but also American operators, Hyatt Hotels Corporation and Marriott International, have ventured into curating experiences on behalf of their customers. AccorHotels, then, is a positive example of a company that has been actively listening to what researchers and futurists have been saying. But, is that even enough?
AccorHotels’ initiatives are encouraging, but it remains surprising that many hospitality players are still thinking predominantly in terms of “platforms”—applications, systems and software which are ultimately add-ons to enhance an established business model. This fails to recognize that the sector is in a prime spot to deliver smart products and services that in themselves can better speak to the transformation-seeking individuals.
After all, let’s not forget that at the core of every hospitality product or service is the catering to the consumers’ hearts, minds and souls. Why, then, can restaurant or hotel companies, for example, not create customized meal plans or fitness programs for their consumers, based on their DNA makeup and health history? Some very high-end medical retreats do in fact offer such services. But is it not time, as the cost of technology continues to go down whilst the amount of information the industry holds on its customers goes up, that such services become much more mainstream?
Despite all the controversy around recent security breaches, social acceptance of technology and “big data” has increased, and consumers are willingly sharing their data. The problem is, not many companies are using it appropriately. In short, it is time to change the narrative around hospitality and technology. The sector should embrace big data, but ensure that it is used in a far more meaningful way. Information should not be gathered to facilitate selling or marketing to the customer but to alter a product or service so that it is truly personalized to guests’ needs.
Thomas Mielke is a Founding Partner and Managing Director at AETHOS Consulting Group (www.aethoscg.com). He advises clients in all matters related to “Human Capital” and “Talent” and is a fully certified executive search consultant by the AESC, having worked on assignments across the globe and placing senior executives at leading hospitality companies in the lodging, restaurant, food service, cruise and tourism sectors.
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