Hotels and digital transformation

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22 April 2019
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Why it is so hard for independent hoteliers to embrace technological innovation and how to change that

Hotels and digital transformation aren’t exactly moving hand-in-hand. Many hoteliers live on the wrong side of innovation. They embrace choice only when it is absolutely impossible to ignore any longer.

Hoteliers do not buy dreams

Most hoteliers are very slow to adopt new technologies. This is partly because, in articles and conferences, we spend way too much time selling dreams about the next big thing: AI, VR, blockchain or smart toilets. We need to start addressing the real issues that prevent hoteliers from embracing technological innovation. Else, our industry will have a very hard time keeping up with technological evolution.  

Most new solutions pitched to me solve problems I don’t have in my hotel

I am often invited to conferences on artificial intelligence (AI). Here, people often ask me to speak about how revolutionary voice-enabled AI and IoT in-room will be…5 years from now. While I’m convinced that these things are going to be amazing, being 2 steps ahead is sometimes a disservice to hoteliers. We take them for a 2h space trip to the moon and send them back home where they see old technologies and processes. These are nowhere near what they saw at the conference. So, they just feel that the innovation they heard about is not for them.

If we really want our industry to overcome its resistance to change and become much better at innovation, our main focus should be practical. Regarding hotels and digital transformation, how do we get there and at what cost?

AI is the perfect example of great innovation that a majority of hoteliers see as the future. However, they don’t have a clue about how to implement it. Mostly, because they have the wrong expectations. They are looking toward the voice-enabled room assistant of the year 2050 that will help customers adjust the room thermostat. They should, instead, think of the basic chatbot that they could use to boost sales today.

It is sometimes puzzling to see hoteliers that don’t even have a cloud PMS tell me that the real revolution will be voice assistants in rooms and blockchain. They clearly have been to the conferences I just mentioned and are missing the steps. It’s as if they were going to switch from a technological stone age to 2050, with nothing in between.

It is OK to have a long-term vision. However, the only way to get there is to pave the way with quick wins. When pitching an innovation we should always be practical and have the Maslow pyramid in mind. Progress is just about finding new, easier, more addictive ways of satisfying a handful of timeless basic needs. So when you think about AI, focus on solving today’s basic problems. These would include selling rooms, optimizing staff performance, and automating repetitive tasks. We’ll get to voice assistants and more, but step by step. It starts with simple chatbots automating basic tasks.

(Hotel Maslow Pyramid)

Innovative technologies with huge potential should first be applied to basic problems because everybody faces them. The lower in the pyramid it is applied to, the more people will immediately benefit from your innovation.

A great hotel technology is nothing without a proper strategy

Some hoteliers think that turning on a new tool will solve all their problems. Technology is not a quick fix. It’s about helping your organization change. Innovation is particularly demanding because it transforms your organization. In short, you can’t implement new technology and expect your processes to remain the same.

The kind of change that AI is bringing is customer centricity. So far, the hotel had processes that customers had to follow in order to access its services. Take, for example, the traditional direct booking experience. Customers were expected to go online, look for the information they needed, and place a booking via the hotel’s booking engine. The hotel would only start caring about them once they inserted their credit card. Of course, only 2% of online visitors would complete the process.

AI can help you increase that percentage today by reversing the process. Chatbots are a scalable way to start interacting with customers even before they buy. Before, you only had one kind of customer – those that could book a room on their own. Now you’re going to open to the majority of lazy customers that expect you to help them. So your sales processes will become much more proactive. You’ll be able to see customer conversations and help them go through the sales process.

Let’s say, a customer asks for a room, gives his dates, and contact details. But when the chatbot sends him to your payment interface, the customer leaves. Then what do you do? What process do you build to follow-up and close the deal? How do you get back with the customer if a conversation derails?

Technology just brings you the assurance that now you can do something. It won’t do things for you; it is merely an enabler. Your strategy and commitment to change are the ultimate success factors.

If you’d like to discuss more about hotels and digital transformation or have questions about artificial intelligence, please visit our website or contact Benjamin Devisme at bde@quicktext.im.

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