BEACONS - A Ray of Hope?

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April 04, 2016
Amitava “Chats” Chatterjee


The hospitality industry has grown by leaps and bounds, especially when it comes to the growth of brands. Looking across six major U.S. chains, there were 47 brands pre-2000, and by 2015, the U.S. market was home to 74 brands catering to various guest types. Brand growth has not stopped and new entrants continue to be announced periodically with the intention of broadening the appeal to different demographic segments. While this approach may help capture different demographic segments, the retention of guests and affinity for a brand will likely be created by a judicious application of what a hotel company knows about a guest leveraged at various touchpoints throughout that guest’s stay, creating personalized interactions with the objective of anticipating need and creating delight. Evoking such emotive responses becomes all the more important given that the hospitality industry has had to contend with disruptive forces such as alternative purveyors of travel accommodations, which are giving guests additional options to choose from. Online travel agencies and third-party intermediaries are also doing their part to erode the brand awareness-building efforts of hotel companies. It is a tough environment that manifests the need for hotel companies to leverage CRM and preference data to create unique tailored experiences for guests, which could help build brand affinity, enhance stickiness and entice guests to convert to repeat stayers.
Before the advent of technologies as we know them today, hotels probably employed a simple system of index cards that were used to log observations about guests; if and when they returned, the cards were probably polled for relevant insights which were employed during the guest’s repeat stay. With time, given the advent of CRM and guest databases, such profile data was migrated over and made available to staff electronically. Some systems were also capable of storing guest preference information in their databases. More often than not, free-form text fields were used to store relevant guest details, and with the advent of time, the information grew and it became difficult to parse department-relevant information in a rapid manner. As such, structured databases have become the norm for storing and making guest preference information available. Various technologies can be employed to inject guest preference data into day-to-day interactions – these include analytics (which helps determine patterns and distill relevant nuggets), mobile (mobility is a key disruptor and was the talk of the recently concluded ALIS conference in Los Angeles) and event-driven architectures that can trigger the delivery of pertinent information when certain conditions are met (or certain events occur). Event-driven architectures, when tied into technologies such as those offered by beacons and other proximity-sensing/locating capabilities, can allow some sophisticated use cases to be brought to life.
Given the fact that these use cases can be context-sensitive, it makes for some powerful experiences. Such devices can enable companies to create an “always aware” network that provides details on where guests are situated within the physical walls of their facilities and in relation to other services (such as restaurants, amenities, pools, etc.). What does one need for a beacon-driven solution to work? Besides the beacons themselves, one needs a mobile application that is instrumented to be location-aware. Further, the application must contain business logic that triggers geo-proximity-driven events, which could include promotional messages, personalized offers and more. In addition, the ecosystem needs to be supported by a customer database that ties guest proximity with relevant events. Lastly, but not least, an event-driven architecture will help deliver messages. Collectively, these assets can help provide a beacon-driven experience for guests. There are bound to be several unique use cases for beacons in a hospitality environment and the following page shows a few of the more common ones:

USE CASE 1: Guest profile-relevant offers
Let’s take the case of a guest who has a propensity for wine, as evidenced by his buying patterns. An instrumented beacon-driven environment would use analytics to determine buying patterns and preferences (e.g., does the guest like to drink wine at a certain time of the day) and then deliver a targeted offer to the guest. A simple use case would involve presenting a coupon to the guest as he gets close to the bar (by tapping into the guest’s mobile device notification engine); the coupon could contain a discount offer (a “loss leader”) aimed at getting the guest into the bar. Once he has accepted the offer and is in the bar, bar staff can upsell additional items to the guest.

USE CASE 2: CRM-driven tailoring of in-room amenities
Imagine that a guest has a preference for sparkling water in her room. This preference is logged in the hotel’s CRM database. An instrumented beacon-driven architecture would utilize this data for customer service as necessary. A simple use case could involve alerting the housekeeper of a guest’s preferences as she gets close to her room; her mobile device could display room setup-relevant information (e.g., sparkling water) and this would allow her to efficiently stock the room per the guest preferences. This use case can extend to other preferences as well.

USE CASE 3: Directions to a guestroom (or any hotel facility)
A well-mapped beacon network within a hotel can offer directions to those guests who need to know where to go. Imagine a guest has checked into her hotel room; her mobile app can take advantage of her location relative to various beacons and direct her to her assigned room. A sophisticated mobile app could offer a virtual reality-based “monocle” view of the route she needs to take to get to her room. This could serve guests particularly well in large resorts sprawled over several acres. The same concept can be extended to other hotel facilities as well, and apps can be designed in a manner that allows for entry of destination information – directions would automatically be presented and the beacons can help ensure that guests get to where they need to go with the least amount of hassle.

USE CASE 4: Keeping an eye on children or pets
Wristbands and collars can be coded with chips that allow for geo-location. Again, an invaluable use case in a sprawling facility, a theme park or a cruise ship. Families with young children and pets would certainly welcome the peace of mind that comes with the knowledge of where their loved ones are situated.

Beacons probably aren’t for everyone. Where does one start? The journey to getting set up is best commenced with a thorough understanding of the business need that one is trying to fulfill. The next steps will involve determining the potential benefits that are expected, coupled with a business case to justify the expense. Lastly, it is important to create of a well-thought out and architected solution that brings multiple pieces of technologies together in order to build the value you seek. Whatever you end up doing, it is worthwhile to think of the one or two unique use cases that could add the most value in your business situation and figure out how a beacon strategy can help you achieve your business goals. Where this technology gets really cool is when cities start to employ these devices everywhere and create a geolocation grid that anyone can tap into; third-party providers can harness the power of the cloud and the presence of a network of connected devices that could make it possible for us to take advantage of these technologies. The implications for tourism especially are tremendous; visitors to a new city can tap into a network and use their mobile apps to learn all about the city that lies before them – hotels can feed guests with directions to merchants and restaurants with whom they have preferential relationships, and generally improve how a guest interacts with the area. It is not far-fetched to imagine that beacon technologies could transform multiple aspects of our lives, especially when we are traveling to the strange and unknown locales. Tourists may no longer get lost, or feel lost – all the necessary information will likely be at their fingertips and they could go where they want to, easily. Now all we need is for wireless charging of our smartphones, no matter where we are – that would be the icing on the cake.

Amitava “Chats” Chatterjee is a director with Deloitte Digital, Deloitte Consulting LLP. Siva Kantamneni is a principal with Deloitte Consulting LLP. Both are leaders in the firm’s travel, hospitality and leisure practice.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. Please see for a detailed description of DTTL and its member firms. 

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