Definitely Doug 6/18/21: The Apple Changes its Stripes

6.18.2021
by Doug Rice
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Four weeks ago in this space, I published comprehensive thoughts on the need to reimagine the guest arrival process, and the many challenges hotels have faced trying to do that. Guests want the journey from the porte cochère to their room to be simple, fast, and personalized. Hotels, facing the most severe staffing shortages of modern times, want to minimize the need for staff, but also enable them to focus on things that can impact guest satisfaction.

Technology is constantly evolving and changing, so most everything I write eventually becomes stale. Usually, it remains relevant for a year or two, sometimes more, sometimes less. That article, however, set a record, becoming seriously outdated just 17 days after its publication, based on a major change in direction from Apple. It is all good news for hotels, but it means that this week, rather than moving on to a new topic, I need to revisit the issue and discuss what has changed.

A major conclusion of the original article was that current-generation mobile keys, a major potential contributor to a better arrival process, simply do not work well. For guests, they required downloading an app, logging in and using it to obtain a mobile key, unlocking the phone and activating it each time they need to use the key, and (in most cases) waking up the lock by holding the phone in front of it. All of these either create barriers to usage or provide an experience that is in most respects inferior to using a traditional keycard. Mobile key usage at hotels that offer it is still mostly in the single-digit percentages. While the need to download an app is one major barrier, it is also problematical that a mobile key is much harder to use than a traditional RFID keycard.

In the article, I identified the biggest issue as Apple’s unwillingness to make Near-Field Communication (NFC) capabilities, built into all iPhones since the iPhone 6 launch in 2014, available for use in hotel key applications. This was a business decision by Apple, not a technical one; Apple already supported the use of NFC in other environments such as access control for college dorms and paid entry to transit systems.

Much of this is now changing. At the Apple Worldwide Developers Conference on June 7, Apple announced that it would be launching hotel keys into the Apple Wallet with iOS15, and deploying it first with Hyatt in 1,000 properties this fall. It uses the same underlying NFC technology as Apple Pay. This should not be confused with QR-code based credentials that can also be stored in the Apple Wallet, such as airline boarding passes or membership cards, all of which can be easily copied and shared. NFC enables high levels of security and further guarantees that the credential can only be used by the intended device.

While there is still much that is not yet publicly known about how this will work, we know enough about Apple devices and NFC as it is currently supported in hotel door locks to be able to sketch the general outlines of what is likely. It is possible that implementation protocols will differ in details, but I do not expect that they will have a big effect on the outcome.

First, unlike the current generation of mobile keys that mostly use Bluetooth Low Energy (BLE) communication, using a mobile NFC key does not require the guest to have or use a mobile app. The key can be delivered to the guest via a web page link that is sent to the guest via email or SMS, by scanning a QR code, or via a mobile app or progressive web app. This means that the large percentage of guests who will never download the hotel or brand app can still be invited to do online check-in and obtain a mobile key, and bypass or minimize their interaction at the front desk. Just as important, the ones that do use the hotel app can continue to do so.

Second, using an NFC mobile key is much easier than a BLE one. Just like with traditional NFC keycards, you simply hold your phone or paired device (e.g. Apple watch) close to the lock, and it opens. Once you have retrieved your key, the phone does not need to be on, unlocked, have the hotel app installed or running, or be held in a certain way. It can be in airplane mode; Bluetooth can be turned off; in most cases, it will work even with a dead battery. To the lock reader, an NFC mobile key looks just like a plastic keycard, meaning it will work with readers in common access doors, club lounges, and hotel elevators. In short, it acts just as if a physical keycard was taped to your iPhone or watch.

Third, because most modern hotel locks support NFC, the mobile NFC keys will work without any hardware or software upgrades – not for door locks, and not for elevator cardkey readers and control systems. This is good news for hotels that have not upgraded their locks for BLE, an expensive upgrade that will lose most of its value if NFC mobile keys become dominant, which I expect they will. It is maybe not such good news for brands that already forced owners to do BLE upgrades that never achieved significant usage and may soon be unneeded.

Fourth, the same technology is supported on most Android devices carried by hotel guests. Some low-end Android phones lack NFC chips, but those models are mostly found in lower-income countries and are not commonly used by hotel guests. Mobile NFC keys have already been proven out on Android, but because Android devices vary significantly in implementations, there are more technical barriers to getting to a seamless experience with every NFC-enabled Android phone. I expect that will take some time – but I also expect that many mainstream Android devices will be supportable by the time the iOS rollout gains steam.

To be sure, there are some unknowns. Apple typically charges a fee to use the NFC chips in its phones. While the commercial arrangements for hotels have not been publicized, I would not assume it will come for free (although that is a possibility). For Apple Pay, the fee for using the NFC chip has been estimated to be in the range of 0.15% of the transaction value, paid by card issuers, or about 10 to 15 cents for an average credit card transaction. For hotels, any fee would be offset by savings on physical keycards that most guests will no longer want, as well as any labor savings at the front desk.

If we factor in the number of plastic keycards that would be saved (allowing for some guests who will still want plastic as well as mobile keys) and the fact that even lone guests often request two keys, it seems like a fee for using an NFC mobile key in the range of 40 to 50 cents per room per stay would be roughly cost-neutral to hotels, before accounting for any front-desk labor savings. For Apple, this would be a lower cost-per-use than Apple Pay (since a key might be used 10 times per average stay), but as the transaction is simpler and the key only has to be loaded once regardless how many times it is used, I would expect it would still be financially attractive to Apple.

It is also possible that Apple’s agreement with some of the major lock providers that will be supporting the new capability may give Apple a period of exclusivity during which the locks will not interoperate with Android devices; this could delay an Android launch but also give manufacturers more time to work through the varying NFC implementations in Android devices.

The same Apple announcement included support for house keys (if you have a smart lock) and corporate access control badges, meaning that the general public’s familiarity with using a phone as a key should grow, further spurring usage in hotels. The home aspect is interesting in that it is unclear how Apple would be able to charge a usage fee – meaning it is conceivable that there, and perhaps by extension with hotels, there might not be one.

The only fly in the ointment will be for hotels that use keycard switches to control the lights in guest rooms. This is not too common in North America, but much more so in other parts of the world. Without plastic keycards, there is no way to turn on the lights. I have never been much of a fan of keycard switches as an energy-saving measure because too many guests override them; if you want to reduce electricity usage, heating, and cooling, occupancy detectors almost always have a better ROI than keycard switches. But hotels that already have them will need to upgrade in order to move to the next generation of mobile key. This may be a barrier in certain locations where local regulations require keycard switches.

To be sure, NFC mobile keys are new to the hotel market and will take some time to roll out and fine-tune, but I have very little doubt that they will ultimately be successful. I expect this will dramatically increase the use of mobile key, from single-digit percentages (where available) today, to perhaps 50-75% in a few years. This will save front desk staffing costs, improve the guest experience, avoid the need for hardware upgrades, and reduce the use of plastic keys. As long as any fees are reasonable, it is a big win for the industry.

This solves a big problem, and it’s about time!

Douglas Rice
Email: douglas.rice@hosptech.net
LinkedIn: www.linkedin.com/in/ricedouglas

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