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Hospitality in 2018: The Year in Review - Part 2
21 December 2018, by Arjun Puri in Trends

This is part two of a two-part series. Check out part one here.

Part one covered some key trends that have shaped the hospitality industry in 2018. Part two looks at topics that are probably as central to hospitality today, as electricity was to the industrial revolution; Technology and data. The hospitality industry has cultivated a notorious reputation for being late to the tech-table. However, the last few years have seen the industry receive a technological face-lift if you will.

 

1.The evolution of ‘Tech-spitality’

From artificially intelligent rooms to robots, to simple in-room entertainment hubs; the industry is responding to something that’s becoming a fundamental human need. Think about it; we have Alexa at home controlling our lights, while we turn on TV’s loaded with applications from Netflix to YouTube, all while using an app on a smartphone to control the above. It’s clear that the increased inclusion of tech comes as a response to changing consumer behavior. 2018 saw the hospitality industry increase investment in technology in many guest-facing ways; think virtual assistants, IoT, robots, etc. It makes a lot of sense, with 60% of guests wanting hotels to invest in experience enhancing tech. 

Where is this increased investment going?

Smart rooms, powered by artificial intelligence were piloted by IHG in China earlier this year. These rooms would see a variety of connected devices all seamlessly interacting with one another while learning and optimizing based on guests' habits. IHG suggests that guests would be able to interact verbally with their smart rooms. Smart mirrors are another interesting technology hotels are adopting. They will allow you to control your room in a plethora of ways. It’s your TV, concierge, music player, computer, and even your phone. Imagine ordering room service and an airport drop-off by tapping a few buttons on your mirror; it's definitely something. It doesn’t end there. Smart carpets (yes that’s a thing) in the corridor will be able to register when a guest places a room service tray outside for pick-up and will notify hotel staff. In rooms, they can be used to optimize energy usage by detecting when a guest is in or not. Combine that with smart lights that will wind you down with an ambient sunset or gently wake you up by mimicking a sunrise, and you’ve got the hotel of the future. 

All this tech is great. For the first five, maybe ten times, it’s entirely awe-striking. But eventually, just as all technology, it becomes normal. It’s no longer a motivation factor, if you will, but remains a hygiene factor. Is that technology still defining the guest experience, or is it now a fundamental expectation? Indeed, front-of-house technology in all its finery will always provide convenience, but will it remain the central element of competitive advantage and guest experience in the hospitality industry? Not necessarily. However, the data that the usage of these various guest-room technologies will generate is the real value. That data and the way it’s processed and analyzed will revolutionize the way hotels can deliver guest experiences. Employees must be trained on how to use this data to improve the level of service. At the same time, hoteliers should think about investing in back-of-house technologies that can generate insights from data collected, to inform employee training and such.

The Blockchain is a great example. While very much in its infancy, its current possibilities see it as a back-of-house technology. A Blockchain is protected by various levels of security and could help the hospitality industry revitalize its data security. By being a decentralized ledger protected by cryptography (and a hoard of other measures), the Blockchain allows information to be recorded, stored, and exchanged securely. In an industry where sensitive information is passed through several travel intermediaries, the secure handling of that information is of utmost importance. Being decentralized means that the data is not stored in one place, making it a relatively less attractive target to cyber-attacks. While this is not something a guest will directly interact with during their stay, the added security provides guests with greater assurance regarding the privacy of their information. Today, and more so in the future, a company’s ability to protect their customer information is key to survival in an increasingly data-driven world. 

Hospitality, at its core, is a people business. While research suggests the need for experience enhancing tech, it also indicates that 72% of U.S. hotel guests place the utmost importance in the level of guest service. There is a need to invest in training technology that empowers employees with heightened skills, to enable them to deliver a better guest experience. Using technology to do so is in line with new-age learning philosophies; using gamification and interactive digital systems allow for independent and personalized learning at scale. It’s imperative to invest in new ways to train and to equip your team with the training they need to create unique, inimitable experiences. 

After all, it’s all about the experience. 

 

2. A date with data 

Another year passed, another year of data collected. The argument is simple; the more varied data hotels can collect on their guests, the better the experience they can deliver. It’s no secret that 2018 has seen a lot of questions targeted at companies heavily involved in capturing consumer data. The hospitality industry has also come under the spotlight this year with three sizable data breaches taking place. 

First things first; GDPR. The General Data Protection Regulation went live as of 25thof May 2018 and brought with it a hoard of challenges for businesses marketing to EU residents. Essentially, hotels now require explicit consent from any EU resident for any online marketing activity, even if you were previously engaged with them. GDPR came about as a modern-day upgrade to Europe’s 1995 Data Protection Directive and aims at giving EU residents greater control over the data they share online. GDPR puts hotels in a tight spot; today’s traveler is one that wants a unique and personalized experience. At the same time, they’re conscious and aware about protecting their data online, and now they’re backed with GDPR. If we think back to the nature of the Gen Z traveler, this phenomenon becomes more prevalent. 

That’s not the only threat to hotels though. Cybersecurity in hotels has seen much more awareness in 2018 with three major data breaches taking the industry by storm. It’s only logical to assume, that as data protection regulations get stronger, its value increases in the eyes of those with malicious intent. According to an annual data breach report, hospitality industry breaches have increased by 74% from 2017, with 63% of those being confirmed data disclosures. Not only are data breaches increasing, but their success rate is on the rise too, indicating that a hotel’s growing need for data makes them more lucrative targets. 

Going forward, data is only going to become more central to any guest experience, and it brings with it greater responsibility for hotels to protect this information. Hiring a dedicated data protection officer is an effective way to ensure compliance with regulations. Still, it’s important to go over and above to ensure the security of your guests' data. Working with professional security firms will allow you to identify faults in your system by way of carrying out system-wide audits. Instilling the importance of cybersecurity into your employees is crucial. The smallest things such as generic passwords, or opening malicious emails, or using a personal computer at work, could have detrimental effects. It’s important for training to include these aspects. 

2018 has been a strong year for the hospitality industry, the outlook for years to come remains positive with increased forecasts for international tourism. 2019 will presumably see hotel technology make a greater shift toward the cloud and the introduction of more guest-facing technology. Don’t forget about back-of-house tech though. The rate of technological obsolescence, propagated by a shrinking human attention span, brings up the need to consistently invest in newer technologies, which will at some point have a neutral effect on the guest experience. The people-centric nature of the industry, however, is something that will not change. It indicates a need to invest in technology that empowers employees to deliver higher levels of service consistently. Data will become more of a tool that employees can use to improve the guest experience. With this comes an even greater responsibility to protect guest data. Speaking of data-privacy, as Gen Z grows older, their influence grows, and they will out-populate previous generations in the coming year. They’re sustainable digital natives, who want personalized and unique experiences, but at the same time aren’t happy about sharing their data. To put it simply, they want services that require a lot of data analytics but aren't going to give it away easily. Regardless, hoteliers need to strike a balance between these dynamics to appeal to the newer generations and the changing consumer behavior they bring. 

 

2018 has been quite the year, but exciting times lay ahead. Onwards and upwards! 

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