Hospitality X

THE SECRET REASON WHY DIGITAL TRANSFORMATION ISN’T WORKING FOR HOTELS AND RESORTS

By Robb Wagner

Even as world travel is on the rise, the US hospitality industry is facing more enemies than ever before. To survive, the entire industry will need a secret weapon in the battle to win the hearts, minds and bookings of today’s travelers. It turns out, there is no one-size-fits-all solution. Guests are complicated. But if there is a guiding light, it is that they are consistent in their complexity.

It wasn’t always this way. There was a time when all travelers expected was a bed, a phone and a writing desk. A television was considered a luxury.¹ Even as recently as the 1990’s, some travelers were forced to phone in their reservations because online booking wasn’t available.² But thanks to the growing affordability of travel, an unprecedented access to guest reviews, the increasing presence and utility of the IoT (internet of things) and the relentless demand for innovation, the entire hospitality landscape has changed and it’s never going back. “Digital transformation” is now table stakes. And in some cases, it’s failing miserably. C-suite executives must step up with bold solutions right now — or risk falling off the map forever.

A PERFECT STORM OF CHALLENGES

U.S. travel from abroad is down. As the U.S. Travel Association reports: America’s share of the international travel market declined from 13.8% in 2015 to 12.2% in 2017.³ And a recent Tourism Economics report shows that there is reason to think that growth will continue to slow throughout 2019.^4,5 Private rentals through platforms such as AirBnB and VRBO threaten to compete for the remaining business, and there is speculation that Google and Amazon are scheming to disrupt the industry further.⁶ Add to this the huge role online customer reviews now play into bookings⁷, and it is obvious why the industry is scrambling to use digital innovation to win the customer experience game.

“DIGITAL TRANSFORMATION” DOESN’T ALWAYS WORK

For hotels and resorts, turning first-time visitors into repeat guests is all about building relationships. But when it comes to today’s time-crunched, always-connected, experience-hungry traveler, the hospitality industry/guest relationship is best summarized in a two-word status update: “it’s complicated.”

Consumers want low-friction, high-access digital solutions like self check-in, keyless entry, smart rooms, etc. And in today’s economic landscape, the hospitality industry is eager to use automation as a way to meet those needs while cutting costs.⁸ For example, Hilton has been implementing a digital ecosystem that merges operations and service. Joshua Sloser, SVP, Digital explains, “The experience starts with allowing guests to select their room and use a digital key to enter a room they are able to personalize…everything from room temperature to content.⁹”

It all sounds wonderfully efficient and high-tech. And CMOs and CTOs are throwing money at technology, in hopes of finding the perfect formula for guest retention. In fact, between 2017 and 2018, the number of hotels with heavy tech budgets doubled.¹⁰ Technology is clearly part of the answer…but it isn’t the whole story.

As some early hospitality tech adopters start to show results, we’re seeing time and time again that guests don’t want technology for technology’s sake alone. They want technology that addresses needs, but that isn’t a substitute for human service. As a prime example, the world’s first robot hotel recently fired half of its android staff, admitting that it simply wasn’t working for guests.¹¹

THE SECRET X FACTOR

It turns out, what’s missing from digital transformation is the type of authenticity that only comes from human connections. According to a recent Skift study, high maintenance, highly connected travelers want more humanity in travel.¹² On paper, it makes no sense. Travelers increasingly want to be in control of their experiences, they want quick resolution, they want a digital experience that mimics their eco-system at home and at work. So what is it that real human connections are providing? That secret X factor is emotion.

According to PsychologyToday, emotions have far greater influence on customers than rational factors.¹³ It cuts both ways: if that new digital technology you’ve implemented throughout your hotel impacts guests in a positively emotional way, your brand will see the benefit. But if you’ve set your guests up for an experience that leaves them feeling disconnected — like insincere “welcome” text messages or in-room voice assistants that that offer more interruptions than help — then you’ve not only wasted money on technology, you’ve spent money to drive guests away

When thinking about any new digital transformation initiative, the C-suite needs to put down their spreadsheets and turn up the empathy. For every single piece of technology, ask yourself, how will this experience make our guests feel? Although it may be uncomfortable to dive into this emotional territory, it is the secret X factor that will determine which brands win and lose at digital transformation.

THE FUTURE IS EXPERIENTIAL TRANSFORMATION

Taking the bold step in thinking about guests’ feelings will ultimately allow the hospitality industry to transition to a digital age where a full staff of humans might be missing, but humanity isn’t. Here are three examples of how brands can think about implementing experiential transformation — a digital transformation that includes the type of emotionally-impactful experiences your guests will love.

1. BE THERE WHEN NEEDED

According to a recent survey, quick problem resolution is by far the most important aspect of customer service for today’s consumers (82%).¹⁴ For tired travelers attempting to navigate to their rooms after a long flight, well-placed intuitive technology can make all the difference between getting to bed quickly and happily…and a long, frustrating walk back to the front desk to ask for directions. But deciphering a confusing wayfinding screen or downloading a clunky resort map app isn’t the answer. Your guests might be digital natives, but that doesn’t mean they want digital-only solutions. They crave authenticity and efficacy, and sometimes help from a real human is the best way to solve their problems.What if a QR wall graphic was there to immediately connect guests to a real, live concierge who could help them find their room? Technology, meet humanity.

2. PROMOTE FEEL-GOOD SHARING

In an age where content is king and consumers are much more likely to post negative feedback rather than positive,¹⁵ hoteliers must be proactive in their attempts to spark genuinely positive feedback online. Creating on-site selfie opportunities can encourage guests to share photos of your destination, but surprisingly, it doesn’t always lead to positive brand experiences. Recent studies have found that people are less confident, more anxious and feel less attractive after taking a selfie, and the vast majority of their followers would rather look at other types of pictures anyway.¹⁶ Creating that type of negative cognitive link with your brand is counterproductive when it comes to establishing affinity and loyalty. So instead, try this at check-in: promote truly positive sharing by surprising your guests with a personalized, digital postcard that is formatted for all their favorite social platforms. This worry-free, brag-worthy content gift will trigger the release of the neurotransmitter dopamine, boosting their feelings of attraction and excitement.¹⁷ Now you’ve given that guest a great first experience AND a ridiculously simple way for them to promote your destination with gorgeous, professional photography. That’s a win-win check-in.

3. MAKE IT FEEL LIKE HOME

There are some ways hotels and resorts simply cannot compete with private rentals. But with technology and continually-evolving online entertainment platforms, the industry has a real opportunity to provide that “home away from home” experience. Imagine liberating your TV screens from the constraints of cable and timezones in order to connect with the guests on their own terms. For example, when a customer visits your lounge or restaurant, service personnel could tailor streaming content based on a guest’s favorite sports team or news program. With just a few clicks on their connected POS tablet, service personnel could use technology to cater to a guest’s entertainment preferences while sparking a real-life conversation. That’s the kind of digitally-assisted human experience that leads to lifelong brand loyalty.

Deloitte predicts that an economic slowdown looms and hospitality brands must prepare for a period of decreased demand. Customer experience initiatives are one important way hoteliers can stay relevant during a downturn.¹⁸ But they need to be emotionally-impactful to really make a difference. As the late Maya Angelou once said, “…people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Show your guests you care about their feelings. Design experiences based on positive emotional impact, and then figure out the technology to achieve them (not the other way around). That is the secret to successful transformation.

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Footnotes