Last week the OTA Insight team attended HITEC, in Minneapolis, United States. The four-day event is the world’s largest hospitality technology show and brought together enquiring minds within the sector keen to check out the latest innovations the industry has to offer.
In addition to hosting stands for vendors, the conference also saw startup companies face off in the Entrepreneur 20X Competition, with the Judge’s Choice Award being given to TraknProtect, a provider of real-time location technology. Personalisation, artificial intelligence and their relation to the evolving distribution landscape formed some of the most prominent themes across the range of sessions held at HITEC.
Here are some key topics that emerged from the event this year:
The dynamics of market share between hotels and OTAs have shifted in recent years, with OTAs seemingly dominant. This was addressed in a session, “The Next Big Travel Industry Threat”. The discussion reflected on the hotel industry giving away large segments of its customers to online travel agencies like Booking.com, Expedia and Airbnb.
A greater concern now is the potential risk of losing even more market share to technology giants with massive budgets and a deep understanding of e-commerce strategies such as Amazon and Alibaba.
Presenters, including Nick Price, CEO of NetSys Technology, asserted that in order to prevent further market takeover, the hotel industry needs to adopt a retailing mindset with technology to complement that approach, rather than looking to outdated property management systems.
Detailing how the hotel industry doubted the ability of OTAs to successfully sell rooms in the face of their loyalty programmes and long-established brands, Price explained that “by 2010 industry executives were welcoming the opportunity to partner with OTAs, but instead, companies such as Expedia and Booking.com did a better job than hotels at using technology to meet the needs of travellers, resulting in these and other OTAs now controlling a substantial percentage of sales for some brands and independent properties.”
“How many industries can say we’ve essentially given our product away for somebody else to sell over the course of 20 years? That’s a pretty embarrassing thing to say,” Price added.
Path to redemption
Presenters expressed that to start to correct previous oversights of not recognising the skilled retailer traits of OTAs, hotels need to use technology to package their products and create an online shopping experience that meets the needs of digitally-experienced customers.
But, Price says, hotels continue to rely on their PMS, even though those systems lack the modern capabilities that consumers have come to expect from companies like Amazon, such as the ability to purchase multiple products in a single shopping cart with a one-click payment method at checkout.
A retail-style system would also enable hotels to create meaningful packages for guests, as a way to engage loyalty programme members and to offer consumers something they can’t get through other distribution channels.
Price also says by eliminating reliance on the PMS, the industry can move beyond the antiquated notion of a “room night”. The solution, he says, lies in a system that uses a set of APIs to manage the many products a hotel can sell combined with a unified booking and payment system.
While a PMS and other tools remain valuable resources for any revenue manager, hotels are indeed starting to explore other avenues, including Marriott who have begun an “experiences marketplace” in the style of the experiences commonly found on the platforms of Booking.com and Airbnb.
Nalin Viji, Head of Travel, Transportation and Hospitality at Mindtree, stated: “today’s connected travellers demand high-quality digital and mobile experiences, competitive pricing across the value chain and to be recognised and responded to in real time, according to their preferences or behaviours.”
He continued, “however, in the always-on, always-connected world, there is a growing gap between traveller expectations and the ultimate experiences provided by travel brands.”
The solution to bridging this gap could be found in advanced technology like artificial intelligence, machine learning, natural language processing, analytics, blockchain, the Internet of Things and computer vision.
The first session, “4 Real Business Use Cases of AI in Hospitality”, was led by Adnan Saulat, Head of Consulting for Travel. This explored four key areas where AI can strongly impact the hospitality industry to provide better assistance and elevate customer experience:
The second session, “Expectations vs. Reality: How to Better Serve the Connected Traveller”, was presented by Karan Rao, Principal Consultant on Travel. Rao referred to a “personalisation gap”, describing hospitality companies’ journey to refining a true, single view of customers, currently resulting in fragmented, partial efforts towards personalisation.
Debate also revolved around the significant revenue opportunities missed by hotels offering a disjointed travel experience to the connected traveller. Rao implored hospitality brands to re-examine their customer experience, loyalty programmes, and service delivery in order to keep up with the evolving technology landscape.
Hotel booking engine provider, Avvio ran a workshop, ‘Engaging AI’, which covered a range of topics, including the importance of involving metric-based engagement marketing, and creating a fully engaging user experience coupled with personalised and AI-driven digital marketing and technologies.
Presenter, Rich Tuckwell-Skuda, President of Avvio North America, described how personalisation “has become an overused expression when it comes to customer experience”, and detailed how AI can facilitate online uniqueness, enabling hotels to collect and analyse large amounts of guest data.
Looking outside the industry
Tuckwell-Skuda spoke about how AI can develop targeted, relevant sales and marketing material aimed at specific individuals or groups to create booking journeys that are individually tailored to the needs or preferences of each user.
Retail was identified as a key sector to learn from, with Amazon and Netflix’s deep understanding of their customers given as examples. This level of understanding is used to make recommendations that are a direct reflection of customers’ shopping and media consumption habits, and is what hotels need to aspire to.
Picking up on the direct booking special offers that hotels are using to drive loyalty, Tuckwell-Skuda stressed the importance of personalisation being applied throughout the sales and marketing journey.
“Hoteliers need to ask guests questions from the outset and collect as much relevant information as possible. This does not need to be an onerous task, and a well-designed website should be able to collect this information quickly and seamlessly. The more we personalise emails and other marketing output, the more effective it will be. Good hoteliers know that what makes guests feel really special is a truly personal service and this now applies just as much to a guest’s digital interactions with a hotel as it does to their face-to-face interactions with hotel staff.”
As well as taking in these exciting developments, we attended HSMAI ROC, with key themes including alternative accommodation. The OTA Insight team, including CEO, Sean Fitzpatrick, and Global Commercial Manager for Parity Insight, Clive Wood, were on hand to unveil our new End-to-End Parity Solution. Our Parity reveal was also featured in this HITEC summary from Hotel Tech Report, which spoke of our “...turnkey solution to detect, action and resolve parity issues in real-time.”
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