The Changing Face of the Business of Hotels And the Role of Technology Therein: Part Two

To bring the old way of hotel business up to the demands of hospitality today involves a radical change in the role of the CTO and IT staff inside of hotel companies. Staff can no longer be sequestered in the basement in the cold air conditioning of whirs and whizzes of computers, switches and routers. The CTO should be an acronym for chief transformation officer. Some companies are even hiring chief digital officers. The IT staff must play the central role in any company’s digital transformation; to do this they must have operational experience. This staff must combine excellent digital specialist skills with deep, functional business knowledge. The new CTO must oversee transformation of every business process including how the hotel sells, markets, communicates, collaborates and innovates. The new CTO must adapt a governance model on the efforts towards digital maturity which will require the convergence of marketing and IT as the primary drivers and this new initiative should share staff, budgets and objectives. (Daniel Burrus, Harvard Business Review)

This initiative should include:

• Transformative vision: understand what former assumptions may no longer be valid
• Digital governance: effective investment rules and coordination mechanisms
• Engagement: employees engaged in a shared vision
• IT/business relationship: redefine major parts of the business with IT being an essential part; to gain a shared understanding between IT and the business executives (Capgemini Consulting Group)

(The Digital Advantage: How digital leaders outperform their peers in every industry; by the Capgemini Consulting Group)

Generally, it will be customer engagement technologies that drive the experiential factor sought by the consumer. Customer engagement technologies could be defined as technologies or applications that create deeper connections with customers to enhance experiences that drive loyalty and lead to increased revenues and profits. Simply, these could include, separately or in combination, BYOD/BYOC strategies, social media and mobile.

Making this more specific to hospitality, one could include a list like this one below. Perhaps the new sales model equation depicted previously could include this list as multipliers in the experiential factor:

• Technology as a whole – the hotel using technology as a differentiator in its market
• Customer service
• Guestroom amenities
• Location and leveraging the community and surroundings to create new and different experiences
• Experiential – developing an “experience concierge” to create new experience packages based on specific guest preferences
• Individualization for each guest
• Web/social presence
• Loyalty, recognition, reward

• Instant guest feedback, perhaps combined with rapid response
• RFID/NFC door locks
• Energy management
• In-room touchscreens
• POS with biometrics
• Wi-Fi
• Hotel lobbies, business centers, meeting rooms and public space (Nancy Trejos)
• Gen Y hotel staff
• Gen Y customers
• PMS and check-in kiosks
• Social media combined with CRM to provide “wisdom of the crowd”
• Mobile
• Digital elite (Esther Hertzfeld, www.mmgyglobal.com/research)
• Loyalty programs – personalization (Patrick Mayock)
• Digital signage that is both static and interactive
• Service levels with more than four human contacts after check-in (2013 JD Power North American Hotel Guest Satisfaction Index Study)

In essence, the equation for a superior return on investment could be broken down into Domains of Excellence.

1. Social media that monitor reputation, promotion, sales, customer service, build community
2. Customer experience with cross-channel consistency, personalization to the customer experience, and self-service
3. Mobile channel to promote products and services, sales and customer service

Operational processes:

1. Analytics to target marketing, personalize marketing communications, optimize pricing, and identify better sales prospects
2. Process digitization to automate processes, monitor operations in real-time, and can adapt to external changes
3. Internal collaboration with active knowledge sharing, internal social media and video conferencing, to allow work anywhere at any time on any device.

Data Integration – customer data, business data, external data

All of this effort is to drive more relevant and satisfying experiences for the hotel customer. In so doing, two of the outcomes of our equation are advocacy and sharing. In that vein, the following should be considered for every process designed under this new initiative:

1. Social currency – make the customer look cool, smart, rich
2. Triggers – provide things that make people communicate
3. Emotion – offerings must evoke emotion
4. Public – let other people see the customer using your product
5. Practical value – people like to help other people (wisdom of the crowd)
6. Stories – people like to share their stories, enable this (Contagious: Why Things Catch, by Jonah Berger)

1. Have a common vision communicated by senior staff
2. Understand both the threats and opportunities in the digital world
3. Assess your current state of Digital Maturity
4. Define a transformational digital vision
   -- Operational effectiveness (inside-out)
   -- Superior customer experience (outside-in)

• Put the organization in motion early on
• Have continuous 2-way communication
• Encourage employees to identify new practices and opportunities

• Fill skills gaps, redesign training programs, partner with vendors for cross-sector experience
• Quantify and monitor progress
• Look for opportunities to iterate and improve (Capgemini Consulting Group)

Heads in beds is not the science of hotels anymore. Creating experiences is the art of hospitality today. Skill sets at the hotel level up through the hotel company level must all be enhanced. At the core of all of this change, in the middle of the effort to secure today’s traveler is the new IT staff. The company’s technologists must have hotel operational experience and must sit on and actively participate in the committees setting the priorities of change. IT and marketing need to become best buddies and create new mechanisms for experience creation for their guests.