The present and future of hotel technology (Hospitality Leaders podcast)

Hotel owners and operators are at a fork in the road. Chris Cano and I discussed why on a recent episode of Hospitality Leaders as we talked through the latest research on hotel technology, including:

  • How operations is driving performance today (2:17)
  • The wide range of outcomes when it comes to tech use (5:30)
  • The pursuit of effectiveness instead of just efficiency (7:25)
  • An opportunity for technology providers (8:37) and everyone in the ecosystem (9:08)
  • What tech providers need to be thinking about now (10:18)
  • Hotelier frustrations with tech (10:35)
  • The software trend aligning the interests of all stakeholders (11:32)
  • How tech is helping with recruiting & staffing challenges (13:01)
  • The UK hotel chain using tech to assist with training (14:31)
  • The fork in the road we’re at today in hospitality (16:37)
  • What technology is moving the needle for hotel owners/investors (17:33)
  • The tech+operations combo hoteliers are using to drive pricing power (19:03)
  • Why you don’t need to be a hip lifestyle brand (20:41)
  • The funny thing one hotel in Austin is doing so that nobody waits more than 60 seconds for an Uber (21:50)
  • Where hoteliers are turning to learn about technology now (24:33)

If you prefer to read what we discussed, here are a few selected excerpts of our conversation below…

What led me to hotel operations today

Throughout my career, I’ve had the chance to see the hospitality industry from many different perspectives, including marketing, revenue, investment, and operations.

One of the big learnings through each of those experiences is the role of operations really underpinning all of that. Operations is what drives successful hotel businesses and operations in the broadest sense. Thinking about the way that you attract and retain the right people in your business, the way that those people and you inspire them to lead them, to empower them to deliver great experiences.

When you think about the technology that underpins all of that, that’s what creates raving fans, gets people coming back and gets people telling their friends that they should stay at your hotel. That gives you extra pricing power. And then depending on where you are in the ecosystem, it’s also a huge way to unlock value for investment.

Whether you’re a brand or you’re a management company trying to win contracts from owners, if you crush it in operations, you’re going to do well in your business.

Why I conduct research

Through my work at Benchmark Research Partners, I try to dig deep into the topics that are top of mind for people collectively in the industry.

Right now there’s a lot of focus on how we attract and retain talented people and run our businesses. The good thing is that there’s more demand than in recent history in terms of people wanting to travel. So you have a lot of this demand that sort creates some new problems though in terms of how do you service that demand? A lot of those people are paying a lot of money to stay at your hotel. How can you create a good enough experience so that you don’t burn those relationships and your business suffers in the long term?

If you look at a lot of analysis from different firms like McKinsey and they look at technology adoption across various industries, hospitality is often a laggard compared to other industries. There are a lot of factors that cause that. But technology also presents a really unique opportunity for hotels today to distinguish themselves from their competitors, to attract guests, to attract the best people to grow the value of the real estate or their business.

There’s a pretty broadly understood belief that technology can help you today. The thing that I wanted to know more about though, going back to my 12 years working at technology companies serving tens of thousands of hotels around the world, there’s this observation that there’s actually a really big difference between the hotel companies that use technology, even the same technology and the results they get out of it.

I wanted to figure out: What are the top performers doing that’s different?

If you are running a hotel or a brand executive or someone at a management company, you may have the opportunity to select which technology provider you use for your category. And so I wanted to try to understand that a little bit more in terms of how should I think about shopping for technology. Having been a provider for so long and now being an independent voice I wanted to take advantage of that neutrality and try to dig into what are the best companies doing in each of those areas.

The gap between efficiency and effectiveness

Our technology survey showed more than 80% of people say technology makes them more efficient, but only a little over 50% say it makes them more effective.

You could do something that’s maybe not super effective, just faster, and you could just do a lot of it in some parts of hospitality you need to. You need to check in guests and do that in a welcoming, hospitable way, but keep it quick, keep it snappy.

But as you go up in seniority within a company or you’re a management company that obsesses around operations, doing the right things is really important. This informs everything from your brand standards to how you train your teams.

The big opportunity in technology is to become more insightful about what could we be doing that’s different or where we should focus our time, attention, and resources.

Making technology easier should be the goal of everyone in this ecosystem.

Technology should almost be like this invisible behind-the-scenes thing that allows you to do what you can do best and optimizes for that human interaction that makes hospitality such a compelling business.

What hotel technology providers should be thinking about

If I’m a technology provider, what I should be thinking about is who are the people I’m looking to serve and how do I understand them as deeply as possible.

I’ve talked to a number of hoteliers about this and there is often frustration from technology providers just saying, “Here’s the way that things should be” – and they don’t understand operational realities. If I buy new technology, I’m actually just spreading that workload among people who have more than full-time jobs already. Hoteliers often feel tech providers don’t understand the effort that it takes to implement and adopt technology.

Part of how technology providers can address this is by hiring people who have worked in hotels or hotel companies. But even if that’s not possible, there’s the opportunity to maybe shadow clients or people that they are looking to help and think about what is the job to be done here? What does their day-to-day reality look like? Doing this would develop more empathy as a technology provider and it will help you become more successful because you’ll be solving problems in a way that the end users will benefit from.

How technology can help with recruiting and staffing challenges

Three-quarters of respondents in my latest study say technology makes their staff happier. But it goes beyond that. Half of them said technology actually helps them recruit more.

I think if I think specifically about companies I’ve spoken with recently, I think part of that is thinking what are the stressors or parts of the job that make people hesitant to work in hospitality and what elements of that might be automated away or just made more enjoyable?

From a frontline perspective, there’s an opportunity but the opportunity really scales up from there. On the brand level, respondents said great technology actually helps them attract staff even more. And so I think on the initial attracting people into the business, the opportunity there and then there’s the opportunity for kind of people in the business today.

I think this is a big opportunity and I think anyone running a hotel needs to be aware of the other places where people could work. And whether it’s an Amazon or pick your company, those companies are spending so much money on empowering their teams with technology. You need to be doing this just to be competitive.

Where we are today with hotel technology adoption

We’re at a fork in the road. There are some hotels that are doubling down on investments here and they’re pulling away from the rest at a very rapid clip. And then there are ones that are staying with the status quo, seeing how things shake out and they’re underperforming.

I think that gap is going to widen dramatically in the years ahead.

For a long time it’s been okay to just wait it out and see where things go, but the world is changing extremely quickly now. Every month that goes by that you’re just seeing what happens is a month that your competition is investing in this, they’re building the culture, they’re building the capabilities, they’re attracting the top tier talent.

Those companies are hiring people and they’re building this flywheel that is going to be harder and harder to catch up with.

What technology is moving the needle for hotel owners

At this year’s NYU Hospitality Investment Conference there were a lot of owners and brands talking about how revenue management technology provides a distinct advantage for owners relative to other types of real estate investment. It’s an inflation hedge because you can reprice daily and you can take advantage of quickly changing demand to maximize revenue.

Another broad category that I’m looking a lot at is operational technologies, and it spans the gamut from a property management system to guest experience software to staff management and engagement software that sometimes is a little bit less of a direct line to revenue, but if you look at it holistically, it’s about providing that great experience which gets people talking and creates demand and creates pricing power.

This was a big breakthrough for me when I was working at ReviewPro. Our customers were able to establish this relationship between higher guest satisfaction ratings and their ability to charge more so their hotels would move to different comp sets in their revenue strategy because they were providing an experience that was very different than it used to be.

Hotel owners and operators should be taking advantage of big data and machine learning for smart pricing today, but they also need to take a step back and look at what’s going to give them the ability to charge premium rates over time.

Where hoteliers are turning to learn about technology

One thing that I found in this technology research I was doing is that hoteliers want to learn about technology, but they want to learn about it from their peers and they want to figure out what’s working for them.

Case studies were the number one type of content that people wanted to use to learn about technology.

The reality is technology today isn’t just a one size fits all. It’s not just ‘invest in technology and you’re going to be fine.’ There’s a really big gap between companies that are going to help you succeed with their technology, with the teams that they have around that are going to help you implement that.

If you’re talking to a salesperson, you’re probably going to hear a great story about the company. You have to talk to their customers and talk with your peers to figure out what’s working. Get the real story.

The reality is there are technology providers out there that provide a material competitive advantage for you and there are ones that are going to bog you down with a ton of costs and wasted time and implementation.

Do your homework and have extensive conversations with potential technology partners, and with your peers in the industry.

Read more about the hotel technology survey here

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