Reviving the Spirit of Innovation in the Hospitality Industry
July 12, 2018 1:38pm
By Olivier Harnisch
The hospitality sector is one of the world’s most dynamic industries. Yet over the past decades it has lost much of its innovative edge, given the advances in technology that are fast-transforming the way we live and work. There are new models in the business, no doubt, but in pure-play hospitality, there is a definite need to look at how technology can be better and more effectively integrated.
In the 1950s and 1960s, hotels stood out for the ‘modern’ conveniences they offered – from design to technology incorporation, hotel rooms had an advantage over private homes with the provision of amenities such as colour television with remote control, direct line telephones and ergonomic furniture. Hotel rooms were modern ‘getaways’ – places to unwind and to explore a new lifestyle that was not possible in most homes.
Today, by and large, this is no longer the case. While the needs and wants of travellers are shifting, evolving and transforming at a dramatic pace, the hospitality industry now appears to be a bystander – either resorting to technology as an afterthought or just providing the essentials, such as WiFi.
Observing how the hospitality industry has responded to fundamental change such as online distribution and the sharing economy, one can recognise four distinct stages. They can be labelled as ignore, rationalise, resist, and embrace. In the first stage, we simply do not recognise the changing realities and focus on our comfortable way of doing business. In stage two, we acknowledge a change in market dynamics and consumer behaviours but convince ourselves that they are a passing fad, which will not affect our industry in the long-run.
In stage three, we finally realise that the change is meaningful but attempt to impede it, often by lobbying the regulatory system and seeking the help of authorities to regain the competitive advantage, which more proactive disruptors have gained in the meantime. It is only in the fourth stage that the industry rises to the challenge, embraces the change and seeks solutions which help address the evolving needs. Years are lost between the first and fourth stages, resulting in disruptive players taking on market share and eating into the value chain.
Today, we simply cannot afford this complacency. It is important that we do not waste our energy on the first three stages – and be continuously future- and change-ready. The key factor in this transition is that technology deployment and change management must place guest service as the primary consideration and end-goal.
It is by serving guests in the best manner possible, building their loyalty and creating exceptional experiences that we, as an industry, can forge ahead and stay competitive. This will put us up-to-speed with the needs and aspirations of our guests – not in a reactive manner – but proactively. The focus of the hospitality industry must be on creating demand through our innovative offering. In today’s tech-driven era, we have that opportunity to redefine the guest journey.
Technology is a great enabler and has the power to fundamentally change the nature of guest experiences by removing friction points that are inherent in the guest journey. Friction points are touchpoints which frustrate guests as they imply repetitive activities which need to be completed time and again, stay after stay (such as setting up the room entertainment system or the gym equipment), waiting times (such as for a restaurant bill or queuing at the front desk), having to go somewhere to fulfill a transaction (such as checking out at reception instead of being able to check out anywhere in the hotel) or confusion (for example not understanding the workings of the light system in the room).
While advances in technology help remove such friction points, it is also important to ensure that the transition leads to positive emotional links with the guests. This is more so because the ‘wow effect’ of any new technology is short lived – guests become accustomed to it very quickly. The real difference is made by the people, who have the ability to ‘wow’ guests time and time again – with their warm, attentive, personalised, solution-oriented approach. Technology can never replace humans in this context.
So, the challenge before us – as an industry – is in identifying how we can excel in both areas simultaneously; in short, ensuring that we draw on the capabilities of technology whilst keeping the warm personalised touch of human service.
In doing this, it is useful to differentiate between transactions (fulfilled by technology) and services (provided by humans). Transactions are touchpoints in the guest journey which need to be completed as efficiently and seamlessly as possible. This removes dissatisfaction but does not generate guest delight. Excelling at services creates that. Services enrich the guest journey, provide memorable moments and connect us to the guests emotionally. The tricky part is that the differentiation between the two is not always clear cut. It can vary by demographics and by travel purpose.
The same activity can be a transaction or a service for the same guest, depending on the reason of their travel. For example, checking in is likely to be a transaction for a business traveller arriving late on a weekday night. In this scenario, speed and efficiency are essential. The same traveller arriving for a week-end with their family will have different expectations. Checking in then becomes a service and an integral part of the travel experience. Hence it is critical to fully understand the guest journey across all its touchpoints
The implications for our industry are massive as they influence how we design and build hotels – such as designing much more convivial lobbies centered on human interactions without the need for receptions and concierge desks. They will also impact how we recruit and train associates. Roles in hotels will become increasingly less specialised. Associates equipped with a mobile device that allow them to access information about guests and deliver any kind of required services, become guest ambassadors rather than specialised waiters, receptionists or concierges.
This is the time for us to fully leverage tech-advances such as the internet of things, near field communication, cloud-based CRM technology, and others, so that we bring back the allure of hotels as providers of innovative and exceptional amenities and service standards.
Collectively, we have a great opportunity to be a forceful, innovative industry. Let’s take on the task.
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An international hospitality management leader with over 30 years of experience, Olivier Harnisch is the Chief Executive Officer of Emaar Hospitality Group. He is mandated with driving the overall operations of the organisation with a focus on setting new benchmarks for Emaar Hospitality Group in Dubai and other international markets.
With the goal of national and international expansion as well as enhancing productivity and profitability, Olivier leads the company in unlocking the potential of its three hotel brands – the premium luxury brand Address Hotels + Resorts, the upscale lifestyle brand Vida Hotels and Resorts, and the contemporary midscale brand Rove Hotels.
He is also responsible for the leisure clubs and restaurant assets under Emaar Hospitality Group. In addition, he will focus on further enhancing guest experiences and implementing new strategies that create long-term value for all stakeholders.
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