Graham Perry, Managing Director Australasia, BWH Hotel Group
I thought it would be interesting to dust off the old crystal ball and look at the global hotel industry over the next 10 years.
As a child I recall a puzzle where you were asked to choose from 7 routes (cats) to reach a single destination (mouse) in the middle. Only one route was correct. So you had a one in seven chance of picking the right cat. The routes between the 7 cats and the mouse were all entangled so you couldn’t see which one was correct. I soon worked out that if you started from the mouse and worked backwards you always found the correct cat.
At the time I didn’t realize I’d spend my whole career Chasing the Mouse.
In the early 90’s I recall a meeting of the senior executive at Utell International (remember them). We had just spent 10 years leading and embracing change through technology. We had become the world’s largest hotel reservations and marketing company with 6,500 hotels worldwide and we were meeting to reimagine the next 10. Some of us including yours truly wanted to leap over the travel industry fence and take our brand direct to the consumer. Some of us even wanted to go beyond hotels. The naysayers won the day and the rest is history. It was a defining moment. They chose the wrong cat.
We all often get caught up in the frantic and quickening pace of life and business. At the heart of everything is technology which is employed everywhere and in everything we do. Disrupters watch us and our collective lives whilst identifying common themes, obstacles and solutions using technology as the change agent. Just think about Apple, Amazon, Uber, Facebook and Google. They simply looked at the key lifestyle challenges we all face, joined the dots, saw the opportunity, applied technology and presented solutions. They stood in the shoes of the mouse and worked backwards to find their cat.
In travel, technology is employed well by those who help travellers get from A (home) to B (the destination) as quickly and efficiently as possible, but not so well by those who reside at B (the destination). Those getting us from A to B such as the airlines embrace technology at every turn. Without technology we wouldn’t have planes, we couldn’t fly and we certainly couldn’t travel as far and as wide as we do. The travel disrupters observe this relentless A to B activity conjuring up technology innovation such as Airbnb and Booking.com.
But hotels are different. Their product is built on bricks and mortar not technology so it’s not surprising then that hotels are slower at technology uptake. However sooner rather than later disrupters are going to stand in the shoes of hoteliers at B (the destination) and when they do they’ll see new disruption opportunities.
The hotel sector will likely consolidate further and embrace technology like never before but if it does it will always need to keep outstanding customer service at its very core
Once there they’ll also turn their heads back up stream looking from B (the destination) to A (home) and will see a wealth of opportunity there too.
At B (the destination) hoteliers use good old fashion customer service to delight guests. Disrupters will see the value of linking this to technology (Mobile) to transform the guest experience and remember hotels already have hundreds of millions of loyal members to engage with. Technology already exists to allow guests to use their Mobile to check in at the hotel, open their bedroom door without a key, order breakfast, dinner and room service, connect to the TV to watch their favourite programs, make maintenance requests, leave reviews and check out.
Most hoteliers will think their job is done when this is all in place but disrupters will ask why we can’t let guests see everything that there is to see and do at the destination around the hotel – bars, restaurants, café’s, tours, retail, cinemas and theatres. Why can’t we let guests locate all this concierge information on their Mobile and why can’t they book and pay for it. In fact why does the guest have to wait until they arrive at the hotel to do this. Why can’t they do it at home. Why can’t they check in at the hotel from home and chose a room and why can’t we send them upgrade offers before they arrive?
Disrupters will then realise guests don’t chose a destination because they want to stay in a specific hotel. It is simply a preferred means to an end being where to stay at the destination they’ve already chosen. They will realise that most in the industry focus exclusively on the A (home) to B (the destination) and not on the B and for those that do it is often offered as part of their A to B strategy or is too fragmented for example National Tourist Boards with few if any allowing customers to book and transact (often restricted from doing so by the governments who fund them).
So why don’t we look at travel distribution differently and make it easy for destinations to find customers. Why don’t we use AI to aggregate all the destination information and let these loyal guests chose the destination before they organise and book travel and the hotel. Let them see what there is to do and experience at all destinations anywhere in the world. Present them with personalised itineraries based on what we know about them, where they’ve been and not been for both business and leisure, the hotels they prefer, (ours of course), the airlines and class (based on a knowledge of their frequent flier preferences), the tours and experiences they enjoy, the restaurants they like to eat at. Above all let’s allow them to book, pay and earn loyalty points throughout this whole process.
Disrupters will want to apply technology to unify everything that can and should be included in this “New Destination Approach” much of which is currently siloed across multiple industries namely air, travel, hotels, car, tourism, hospitality, entertainment, retail or perhaps even broader. Perhaps it should be literally each and every industry and business that has been impacted by the closure of international borders during the pandemic or by the restrictions to travel within a country. If you think about it that’s a huge industry and a huge disruption opportunity - and the intriguing thing is that technology already exists to pull this all together.
Just perhaps disrupters will act soon to grasp this enormous industry opportunity with a global destination play that combines technology including Mobile and Loyalty in a way never seen before – and if and when they do it will provide the opportunity for the hotel industry to differentiate and complement (not conflict) its offerings from those provided by others including the OTA’s and above all to turbo charge direct bookings.
This all works to show that to thrive the hotel sector will likely consolidate further and embrace technology like never before but if it does it will always need to keep outstanding customer service at its very core.
I have come to realize that the puzzle I discovered as a child has changed not one iota in all those years. It’s just that the name has changed … It’s now called Chasing the Mobile.