Essentially, hotels have to serve more customers while knowing less about them. One reason that kiosks have historically been expensive is that the integrations are challenging to deploy and maintain. Now, contactless includes mobile experiences that further complicate the integration requirements.
Thankfully, there is an opportunity to capture additional guest information needed for the check-in, especially email address capture to allow direct communication in the future (with the opt-in required to comply with privacy regulations such as GDPR or CCPA). Mobile key is getting traction, too, and some brands are more advanced than others. The hotel groups that started before COVID-19 are continuing their journey and at times accelerating these projects as owners are more demanding.
Newcomers are looking at cheaper and more efficient alternatives than changing locks, including Accor with its recent announcement of selecting STAYmyway.com as its global mobile key provider. Reducing contact also means spacing out the time between occupied and unoccupied rooms. While hoteliers see the value, no one was ready to commit to this outright, especially where there is an opportunity to sell more rooms. Some airlines implemented seat spacing and burnt
their wings when a peak in travelers was filling up their planes. Despite this, initiatives including often manual operating procedures are being implemented and some PMS are adding room distribution features to help hoteliers plan their available space, including built-in room distribution algorithms that favor room rotation. These capitalized on a feature that was built years ago to limit the risk of legionnaires’ disease. If available, adjusting and using the automatic room allocation from the PMS can help manage room allocation.
Another component of contactless service is the opportunity for guests to interact virtually with hotel staff. As these are easier to implement, these solutions seem to be the first to be rolled out and we have witnessed an increase in the number of contracts that are signed by companies like Go-Moment or Monscierge, the latter also offering remote front desk solutions. Those solutions are relatively inexpensive and, as pointed out by Doug Rice in the “HU - Definitely Doug”, even an opportunity to save money. Hospitality tech vendors have an opportunity to contribute to the contactless journey in hospitality, from mobile keys and kiosks to e-concierge services and data integration platforms.
Other innovation solutions may also have an opportunity to penetrate the industry beyond their proof of concept stage: voice-activated devices and mobile room automation. Hoteliers can increase stickiness to their brand by looking holistically at the whole guest journey.
3| Optimize
As many hotels struggle with low occupancies for a prolonged period of time, optimizing organizations will be
needed to keep the doors open and the lights on. In a survey by the American Hotel Lodging Association (AHLA), half of the
hoteliers responded that they are in danger of losing their property due to foreclosure by commercial real estate lenders.
In previous downturns, we saw the consolidation of services “above property level” such as accounting and outsourced services like housekeeping. In the economy segment, clustered engineering in hotels is already a common practice. Consolidation of IT services is another common practice among almost all brands. This crisis could result in new
levels of staff consolidation. In many instances, this will be driven by owners.
Large ownership groups may push for consolidation across multiple brands and systems. Although this brings challenges, this could be required to survive those difficult times. This consolidation may include functions such as hotel management and front desk operations, which with proper technology can be as efficient behind a computer screen miles-away as behind a plexiglass shield (note to self: reconsider possible career switch). Hotel consolidation will probably be another impact of this crisis. It is yet to be seen at the time I’m writing this article, but this will be a bold move for companies that can afford the risk and benefit from bargain deals. I won’t be surprised to see Accor playing in that field after hearing CEO Sébastien Bazin recently say, “If you accept a crisis it becomes an adventure” right after having said that Accor has a €4B cash reserve. The integration of acquired brands will have to take a lighter path though and acquisitions will have to have a fast-accretive impact.
This means a lighter integration for the brand and for mandating a PMS change to meet brand standards will most probably not be an acceptable option. Brands will have to find new ways to connect properties to their core systems. Using a third-party cloud integration hub could be the fastest and most economical way to achieve this. As a CIO from a major hotel group pointed out: “The other side of the coin is that these small chains are dry and ruined and will have no money to invest in “IT
standards”. Come as you are will certainly be the tagline for those who want to embrace this opportunity.”
Optimization can also be achieved through the consolidation of IT systems, the most obvious being PMS – the same PMS -preferably cloud- in all properties is a significant advantage. From my perspective, the cost of migrating PMS is hard to justify even well before this global pandemic. It looks like this migration will take an even lower priority now. The cloud integration hub I mentioned is a low-cost alternative to achieve almost the same outcome. Two brands I spoke with are still
planning to continue this journey in 2021 and hotel companies are shelving less critical projects such as cloud migration (PMS and PBX) that are not showing short-term benefits.
The traditional revenue management that strongly relies on historical data has limited value in the recovery from COVID-19 and must become more agile. Some hotel companies are extending their contracts with companies like STR and Amadeus/Travelclick to better monitor the recovery whilst newer players such as Intelligent Hospitality/ HotelIQ and Focal revenues are getting stronger traction. Optimizing also means considering how vendors are pricing their services. In an HTNG panel, CIOs were asked if they think this is the right time to implement occupancy-based pricing for technology? The majority answered yes with one CIO adding “this could be a good option that can help management to decide faster instead of waiting for recovery.” Accor’s CIO Gilles De Richemond said, “We will challenge providers to obtain variable pricing models.” Among those who disagree, one of the top groups considers that it can lead to difficult financial planning and one smaller UK-based company indicates that it does not work with the current ownership thinking. It is important not to lose track of the overall priorities despite the crisis. Rosewood CIO Micah Friedman said, “We are moving to capture more business to our platforms as a strategic imperative – COVID-19 has changed some of the tactics but not the mission.”
Before this crisis, brands were losing momentum. The key brand promise of consistency, quality and security was challenged by customers already reassured by millions of online reviews and ravelers looking for an “experience” instead of a cookie-cutter stay. If brands can deliver on improved cleaning, health and safety initiatives this could help in rebuilding brand value. A crisis generally creates a sense of urgency that is a strong driver for change. As one CIO told me, “We have been able to implement solutions in a much faster and more efficient way than ever before.” De Richemond said, “It’s also a momentum to reduce the technical debt inside a run saving plan in a period when top line ROI is highly uncertain.” Although no one can predict the length of this crisis, everyone agrees that 2021 will be a particularly challenging year with limited budgets and a lot to achieve. Some companies are anticipating recovery in less than 12 months, while others don’t forecast results to be back to pre-COVID-19 levels until 2024; it varies by market segment (leisure/business) and geography, Asian hotel companies are the most optimistic.
The post-COVID era is also a big unknown. On one hand, it’s still too early to assess the true impact of video-conferencing and virtual trade shows on business travel but a survey for Ketchum indicated that 88% of frequent business travelers agree that virtual meetings have proven most business travel unnecessary; on the other hand the impact of remote working on office space rentals is still largely unknown but could present an opportunity for hotels to provide a solution to remote-workers for regular meetings and a place to socialize. This may be hosting a small work seminar in a hotel or in a private residence as advertised by Marriott with its Homes & Villas. Workers who need a more convenient office than theirs at home for one or a few days may consider the day use of a hotel room. It will be interesting to monitor the Hotel Office initiative aunched by Accor. I could have quoted President John F. Kennedy: “The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity,” but this popular meme is actually incorrect despite how meaningful it is. Hospitality CIOs are not losing track of their priorities. On the contrary, this global pandemic forces a laser focus on what is going to make a difference in 2021.
LAURENT IDRAC is the COO of hapicloud.io.