Recent studies by both Sabre and Amadeus have underlined the necessity for hotels to rethink their strategic planning.
Both leading reservation systems presented their ideas at the ITB Travel Show in Berlin
Both corporations accept that flat growth can no longer be taken into consideration for future strategy-making – particularly in the travel booking business. Turbulence and constant changing consumer behaviour needs to be taken into account as never before.
“Today, many young people no longer use normal emailing applications. One estimate shows that the average high schoolers texts upwards of 3000 SMSs a month and that the rest of their communication is done on online social networks, such as Facebook”, Paolo Torchio, Vice President for eMarketing services at Sabre Hospitality Solutions told 4Hoteliers.com at the ITB Berlin 2011.
“Technology is changing and we need to accommodate this change. Now we know the kinds of devices that people are using and how they are using them. We know that we need to work much better with SMS texting, when communicating with clients and to make sure that web technology is device agnostic – meaning that apps open up only content which is really considered relevant according to the mobile device being used. In the great scheme, we simply need to provide end users and hotel clients with the right apps and the right upload capabilities such as download vs HTML 5,” Torchio continued.
Such new technologies no longer allow the travel industry to be able to segment their customers into easy to define categories. Customization has been a key word used at the ITB trade fair, when referring to the challenges laying ahead for hotels in their quest for securing market share.
Paolo Torchio emphasized that in order for hotels to properly customize their services, they would first need to know exact details about their customers and couple this with utter flexibility as well as intense knowledge about their own neighborhood – a necessity in offering value added services to their clients.
Allen Appleby, Director Product Marketing at Sabre added that “customization also means using custom made native applications which will need to replace most of the apps that are currently available to end users… Only tailor made apps will be able to accommodate individual client needs.”
Rohit Talwar, CEO of Fast Future Research, which conducted a study for Amadeus told 4Hoteliers.com that the need for more flexibility and customization has taken the industry by storm and that there is virtually no time to waste in implementing these process changes. He cited the turbulence in several tourist destinations as an indicator at the inflexibility of most hotel markets in dealing with change. “Call it spontaneous changes in a traveller’s plans or political crisis, hotels need to implement new measures in order to react to these changes,” Talwar said.
The hotel industry is being faced with the challenge to understand that individual travel plans and tastes have become so far varied and each taste has become particularly difficult to please. Smartphone use has been the primary source for the need of having more personalized travel planning.
The hotel industry, however, is also being confronted with that fact that guests from traditional source markets are earning less than in previous years and that the average vacation time has been reduced considerably. Simultaneously, however, expectations are increasing. Travellers basically want better value for money. “Money is too tight to tolerate deficits in service,” Talwar said.
Even wealthy travellers, trying to escape the rat race of their daily lives, are searching for a relaxing, no hassle experience. This group of traveller makes their choice based on word-of-mouth. However, they want to have even a better experience than what their millionaire friends will have had.
“All groups of travellers have an enhanced hotel experience,” Talwar told 4Hoteliers.com
He underlined that hotels are driven by ratings based on customer feedback and that it is no longer enough to simply have a pallet of amenities that are available to all. “Individualization and improved service are essential,” he said.
Jerome Destors Director Hotel IT Amadeus told 4Hoteliers.com that the the traveller no longer only wants to not only choose the seat he will be sitting on the plane. He also wants to be able to choose from a list of amenities that can be made available to him at his hotel. “Personalization is key and Smartphone technology, for example, has been the motor of this revolution,” he said.
“How many people use the TV in their room or the coffee maker? Hotels could ‘sell’ items which the customer wants rather than cluttering their hotel space with things they perhaps never use,” Talwar said. He told 4Hoteliers that today it is already possible for a hotel guest to choose what kind of motif he wants to hang on his hotel wall. It is already possible for a hotel not to have to invest in TVs for each room and that it is even possible for the hotels to go into partnership with technology providers, such as Samsung, to source 3D TVs, for example, when needed.
Because of the social media boom hotels have had to improve their understanding of the power of these media. The tourism industry has recognized that hotels today have to listen to what is being said to them by their customers. There is consensus on this by all industry leaders attending the ITB travel show. Stronger use of such technology must be used to catapult the industry towards improved service.
Hotel management must be trained to deal with this development. The hiring process has already begun to reflect this.
There has also been a development in the management concept which many hotels have pursued. Many property owners of the hotels are no longer eager to house established hotels within their properties. There has been an explosion of white label hotels – i.e. of property managers who have started up their own brands and marketing. The technological revolution has given such niche hotels a chance to proliferate themselves without the backing of international names.
The biggest change in the hotel industry today has been hotel’s participation in the revenue sharing of all processes of a traveller’s stay. It is no longer enough for a concierge to make his suggestions and call in reservations. Hotels need to participate in the booking process and earn commissions for each service their guest requires and inquires about through either their portals or at the concierge desk.
“Hoteliers need to continually develop deep insight into the profile of their customers. Technology is moving very fast and it has made personalized travel a thing of the present,” Jerome Destors told 4Hoteliers. He said that projected technologies are continually being installed into hotels and that such thing as interactive keys, which the hotel resident will carry with him, will allow the concierge or receptionist to automatically recognize the guest and his personal travel needs and history. This is all a part of service improvement which is a challenge facing hotels at the local level, Destors implied.
Finally, “hotels need to recognize that times can be completely turbulent. Management can no longer afford to be caught off guard. Plans a, b and c are imperative to have”, Rohit Talwar said. Success in responding quickly to any given situation will be essential for hotels to guarantee positive revenue trends. ”Amazingly people were surprised that the Middle East crisis had driven up oil prices,” Talwar said.
Hotels of future are an ongoing laboratory of these new trends. “Hotels know that their most important task will be to improve customer experience. Technology is the key source to this,” Rohit Talwar said. “Guest-centered marketing is of the essence. At Amadeus, we try to centralized the profile of the traveller and follow their habits – leading to more dynamic packaging of their experience,” Talwar continued.
Talwar underlined that flexibility is key. Although most travellers use portals such as TRIP ADVISOR to search for hot tips, hotels are nevertheless keenly aware that the ratings they receive from customer feedback encourages them to provide excellent service.
Research conducted by: Sabre and Amadeus