Hospitality Trends in 2017
November 3, 2016Asking what the next big thing in hospitality automation will be is always something of a trick question. Industry watchers generally follow product announcements with a wait-and-see demeanor; contrary to conventional wisdom, the appearance of a better mousetrap does not guarantee a well-beaten path to the door. Industry consultants, on the other hand, tend to stay knee-deep in the needs and aspirations associated with current clients' current projects. Taken as a whole, it means that there is generally a substantial gap between innovation and adoption.
We sometimes forget that we are afloat in an ocean of technology, and that change arrives in an unending series of waves. We are all perennially at different points in the constant shift in the depth beneath us. It can take a long time - years, perhaps - for the rising tide to lift all boats; one technologist's new trend is another's been-there-done-that adventure story. The most important factor in technology adoption is not what is suddenly available, but what is next on the list of established priorities. The competition for investment funds is keen, the projects endless, and the operational ability to assimilate change finite; the pace of change is not the pace of innovation but the but ability to fund and deploy something new in environments struggling to keep up.
Nonetheless, there are definite trends afoot, and they do bear some consideration by those making system and transition decisions in the coming year. First, let's consider some of the must-haves: the technology demands that require immediate responses, typically owing to regulatory, security or ownership imperatives. These are the high priority changes that typically combine massive effort with minimal gratification or interest. One of the changes-du-jour that has falls squarely into that category is EMV compliance. This was supposed to be on last year's list, but we're still sorting though a lot of the details on a processor-by-processor basis.
As you will note from not only your hotel experiences, but also from your trips to - oh, any business that accepts card payments - that the conversion to chip-card technology has been highly disorganized. The card approval process used to be predictable enough that the general public could participate without appearing completely buffoonish. Now, it's a jigsaw puzzle of hit-and-miss implementations; regardless of whether we slip, slide, swipe, tap or slap, the hokey-pokey steps can differ at each location. Perhaps it's worth mentioning in passing that the rush to do something, despite the lack of industry, card-processor and hardware readiness, was because issuing banks are staunchly committed to shifting the liability for card fraud down to the merchants (you, at work), who, in turn, are committed to the price increases that shift that burden down to the consumers (you, at home). Our life / learning lesson here: technology changes can be swiftly implemented, provided there are no other options available and you don't care how the project turns out.
Another infrastructure issue still looms large as one of 2017's trends - an orderly transition to the cloud. This might feel like yet another trend from a previous year but for many hotels it is still very much in transition, still a part of that shifting ocean beneath us.
Why has the pace of adoption been so slow in the hospitality industry? Cloud apps - true cloud applications - are specifically designed to function in, and make the most effective use of, distributed networks where business logic, application data, on-line redundancy and the users themselves can span multiple data centers in multiple time zones. Lifting a traditional legacy application into a remote data center is not cloud computing - it's hosting.
Many outstanding cloud apps have made their way to the market - that's the good news. However, today's hotel sites are largely powered by one of a trove of extremely complex legacy applications that are piled high with sub-systems and specialized functions, layered deep with options, parameters and variations that span international jurisdictions, federal, state and local taxing authorities, independent security auditors and hundreds of accounting and service interfaces. Although cloud environments have been readily available for years now, the super tankers and the complex entities couldn't move before appropriate applications where there to meet them. Reengineering features that have evolved over hundreds of programmer-years into brand new hospitality applications is a task that only needed time and investment - but significant quantities of both.
While those properties that were placed on hold awaiting more usable applications, operational requirements continued unabated. Hospitality software manufacturers with limited R&D budgets poured their resources into enhancing their cloud offering; the offset to the cloud investment was that many legacy applications went quiet, losing their forward momentum. Meanwhile, interfaced systems and other allied business products of interest to the industry put their efforts into cloud and cloud-compatible products. The net effect of the catch-up hiatus for the more complicated operations was that waiting to move ahead was putting them geometrically further behind.
And let's not forget another severe impact on properties waiting to catch up: the cost of transition. Replacing a heavy-lift application like a property management system is no small matter - the entire staff must be retrained and many operational workflows are based on PMS procedures and outputs. Management can lose its enthusiasm for modernization when days or weeks of business interruption and transition smoothing means that you can return to checking guests in and out without trauma and drama.
Thankfully, more robust versions of the industry's workhorses are finding their way to market, satisfying some of the market's pent-up demand. Cloud transitions continue to reach deeper and deeper into the base of legacy-installed hotels. As the barrier of missing cloud-based complexity falls away, those locations that have been unable to make substantive forward progress are back in the market; the tide is finally beginning to lift these boats. 2017 promises to be a year of dynamic growth in cloud migration.
Beyond the must-haves, there is considerable movement in the non-core apps - the "nice to haves." These are the items that may capture the imagination of your marketing specialists, your technicians and your customers but they can end up being answers to questions no one has asked yet, especially when trying to capture the mood of a fickle buying public.
Much that is being done with the intention of enhancing the guest experience. Attracting new guests, improving their stay experiences through advances in communication and service, and therefore building the kind of personal relationship with the consumer that results in repeated loyalty coupled with personal and professional referrals that increase the guest's monetary value to the hotel. Yes, money matters.
The millennials are highly sought as the most promising market to court for two reasons: (1) they're plentiful, and growing in number and purchase potential and (2) they are technology savvy, often preferring online and self-service contacts over face-to-face or voice contacts. What better way to marry willing, competent participants with handsome financial returns?
A very strong trend over the past several years has been the downloadable loyalty applications, but travelers who patronize multiple chains and brands found themselves having to install an app for each. Although the idea was that the application would lead to recognition, rewards, and enhanced experiences, they seem to be waning in popularity. The newer trend is toward smartphone texting. The good news: its uses guest-chosen, guest-toted technology - no user training and support required. The cautionary note: it can be more challenging that you anticipate at the onset, particularly with international guests on unexpected chat platforms in unanticipated languages. What could become the bad news: service providers with direct access to guests need to be at hand to assist, not host a chat room. Keep the contact short, relevant, and - other than in emergencies - inbound from the guest. Follow the incredibly good advice given to you by your grandmother: don't speak until spoken to. The habit of dispatching cloying communication is the bane of modern civilization. Vendors with access to email addresses must believe they are writing to shut-ins who are eagerly awaiting the next message. Remember your marketing maxims: personalized, targeted, timely, and relevant. You didn't get access to your audience because they all needed a friend… they were only looking for recognition, accommodation and a discount.
2017 promises to be a builder's year, leading with implementation, following with refinement. Technology well trained, well installed and well employed - on behalf of both owners and guests - might be the leading innovation of the year.
Michael Schubach, CHTP, CHAE, has more than thirty years of Hospitality industry experience and is currently the Strategic Deployments and Program Management Director at Infor.
As published in Hotel Business Review.
- North America