Wednesday, May 23, 2012

Hotels: Time to get some Facelift

Lodging industry as part of Tourism Industry is one of the top 10 industry in US, with about $127B annual sales revenue and $18B pretax profit from Hotels rooms sales alone.

Consider the below figures to understand the dynamics of hotels Industry:
Over 70% rooms has an average rate of $60 or more and over 42% has average rate of $85 or more, the highest room reporting category. Looking at the guests profile, about 40% of guests travel for business reasons with 54% of of them managerial or professional position with an average yearly household income of $116,578.
A typical leisure traveler spends about $105 /night and travel with his/her spouse or family.
Based upon these its safe to assume that a professional business traveler or a leisure family are the two most frequent and most spending guests in upper category hotels.

Yet,  these types of hotels are not keeping up with tremendous technical adaptation going around elsewhere. Not sure if they  are just too complacent in Laissez-faire or the entire management are vacationing at their timeshares at Tahiti but they seems to have missed an entire decade of  technological changes going around everywhere.

If I have to compare my hotels stay from 10 years ago to now, I  will be hard pressed to list even a couple of major significant changes.

Below are some facelifts that the hotels can do at a very low cost to make the stay more  attractive to the new iPad-Facebook generation:

1. Start with Guest Web Page

A good number of guests do create a user's account on hotels site to take advantages of the points system and save their favorite settings like types of rooms, choice of floors, airlines miles etc. These are good settings but it badly needs expansions.

2. Check In Experience

Imagine checking into your hotels, choosing your room and then getting the electronic key on your iPhone while you print your flight boarding card ? How cool is that ?! Not to mention the ease of mind that you will get a room of your choice where you can connect to the internet freely and wouldn't' have to stand up in queue while checking in.

The current check-in system should be revamped to allow a guest to check-in electronically, choose their own room on whatever floor and whatever view or side they prefer in agreement with their purchases. Airlines are doing it since years, no reason hotels couldn't' do it. The hotels can additionally add things like 3D-views, internet and cellphone signals strength etc.  from different floors and alleys  to make the selection more meaningful.

And like an electronic boarding pass, an electronic room key could be sent over to guests smart phone. Some Hilton hotels have an RFID door locks already in place, it just needs to be upgraded to work with iphone key.

And please don't' still add the additional requirement to stop by the lobby. Much more complicated and costly financial transactions happens with faceless electronic verification than a simple hotel check-in Not to mention that the most of the hotels are already equipped surveillance system to cover the additional financial or security risk.

3. Personalize the stay, all the way

The only thing resembling 'personalization'  you can find in hotel stay these days is your choice of pillow, high or low floors or choice between queen or king size beds. These are goods but a lot more can be done to expand the personalization. Few additional areas of personalization are:

TV & Video

Aren't you fed up with turning on the hotel TV, watching the same old access menu which never gives you anything useful to watch. Add to that the excessive costs of movies-on-demand based upon some 20 years old pricing study and the navigational pain with the old IPTV remotes with lacks the basics like programming guides, inline info etc. ?

Things have changed upside down with the advent of iPhone, iPad, the app store and the content delivery network. Its about time the hotel management realizes that and can prioritize these upgrades accordingly. 

By adding a tiny little device like apple TV, or Google TV & integrating its interface with the guest home page, the whole TV and internet world can be personalized, starting from my favorite channels, my favorite apps, last scenes that I watched before I left home, my emails, my Facebook pages, my news sites, my games scores  etc. And as soon as the guest checks out, the customization will revert to default settings waiting for new guests to check in.

For five star and up hotels, adding a Vanity Mirror TV in bathroom, again customized with the above programming and control options will be a nice upgrade. Research shows that the bathrooms are getting more and more used like any other regular room in the house and at least 45% of adult male carry & use smartphone in the bathroom.

 

Internet

Some Chains are already on top of this one. The Data is a premier commodity these days and it costs money. So providing a better speed (or higher data limit) internet and then asking for a surcharge wont' be foreign to the dynamic pricing on internet  going on these days. But please, do provide a higher bandwidth internet with guaranteed speed of 2 mbps or more. Customers wouldn't mind paying for it as they will see the values with other integrated services as suggested here.

Phone

And while at it, integrate the phone system as well. The PBX system can be modified very easily to integrate with the Google or Facebook contacts either directly or using some third party tool. Do folks really still use that $1/min rate to call anyone using the hotel current phone system? Why to have this with no revenue stream but tons of negative appeal.

4. The mini bar and mini freeze

OK, this one is not technical but the recommendations are inspired by tech giants success stories. While Apple and Google have made billions with their 99 cents app store &  highly complex services offering for free, the hotel industry is still trying to nickel and dime customers by selling bags of chips or water bottle or laundry service at 10-20 times their street price. What about treating this line of businesses as complimentary customer service and making it profit neutral ? Believe me, with a happy customer they can make more money than selling a few overpriced bags of chips or bottle of wine.


Bottom line

The bottom line is that the  hotel's bottom line isn't going to get hurt by these seemingly free or at-cost options rather its going to grow. It will save time, add satisfaction and minimize stress to a business traveler and will make a vacationing family's stay smoother whose little ones are getting more & more tech savvier.  





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