By Alex Shashou
From Amazon in retail, to Uber in transportation and Airbnb in hospitality, a variety of businesses across multiple industries are embracing platform technology strategies.
For the hotel industry, the platform model (one that leverages technology to unify end-to-end operations) enables the receiving, dispatching, monitoring and analyzing of service requests with exceptional precision, allowing hotels to optimize their operations while engaging directly with and owning their guests.
However, as many hotel owners will admit, embracing this new platform model is not as simple as flipping on a light switch. What are the areas where hotels have the biggest opportunity to evolve their service model toward the platform approach? And what are the biggest obstacles that prevent them from doing so?
What Is Required for Hotels to Harness the Power of a Platform?
Embracing the platform strategy requires hotels to think about their operations more holistically.
The platform model, as applied to hotels, is one that is:
1. Unified: guests and staff can interact in real-time across any device
2. Open: other channels and vendors can plug into the platform easily
3. Sticky: the platform creates value, attracts guests, and makes things personalized
Creating a system that is unified, open and sticky can unlock the platform living within a hotel, creating significant cost savings, improved efficiency and increased revenue opportunities in the process. In order to apply these principles, we need to understand what stands in hotels’ way. Below are three challenges to operating as a platform, including unifying guest engagement, limiting analog communication, and simplifying back-end systems.
Unifying Guest Engagement
One of the biggest challenges facing hotel operations is there are too many ways a guest can interact digitally with a hotel: via web, SMS, email, social media or apps. These channels are often not well-integrated and it can make monitoring and responding to the right channel at the right time tricky.
This is a problem of stickiness. Guests see their hotel as a single unit. They expect to be able to request services from any department through their channel of choice, and for those requests to be shared across the property, which is not currently the case in most hotels. From this perspective, the issue of stickiness is actually caused by the lack of a unified system.
Guests will choose to engage differently based on their needs and stage of their stay. Each engagement point provides an opportunity to gain or lose stickiness. “Hotels see ROI from delivering authentic experiences,” explains Prakash Shukla, ex-CIO of Taj Hotels. “Experience and authenticity comes from a consistent end-to-end service. If I have a good check-in process and room service messes up, that is no good, and I will write about the bad experience that I had. If I have a hotel with a great ambiance, but they screw up on my airport pickup, I am going to write about it. It comes down to the weakest link phenomenon.”
Limiting Analog Communication
Another barrier to building a hotel-specific platform is that analog communication is still very prevalent. Many hotel employees rely on radios, pagers and even pen and paper as the norm for internal communications. According to a 2015 survey from Software Advice, 25% of U.S. hoteliers still use pen and paper to manage their entire properties, and another 16% of respondents said they had no system at all (aka 100% analog).
Analog communication prevents a hotel from achieving a unified operation since it is disconnected from software solutions. Interactions have no traceability, and provide no audit trail. Guest requests are not captured in a searchable place, meaning the hotel can’t learn about guest habits over time, even though the staff is fulfilling them. Steven Goldman, EVP at the Amsterdam Hospitality Group, says there’s an opportunity cost to running a hotel with analog tools: “If you’re not tracking, you have no idea what your issues are and then you can’t fix them.”
With heightened expectations of personalization, accessibility and transparency, radios are insufficient tools. In some contexts it is critical to know the VIP status of a guest, or their history of previous requests. Radio communications have no context and limit the quality and breadth of the interaction. Radios are also strictly staff to staff, and serve as a “closed circuit, [meaning] while they talk internally they don't talk to anyone else. The internet talks to everybody,” said Shukla.
Simplifying Hotels’ Back End Systems
Many hotels operate using a disconnected range of systems across their various departments. Since integrating these systems is costly, many exist as standalone solutions. This creates a lot of redundancy as staff navigate between various “islands” of information that collectively make up the guest journey.
Having staff on different systems also presents a problem of standardizing operations. It becomes virtually impossible to provide a consistent experience across every department, let alone every hotel in a group. As requests get fulfilled by the relevant staff members, there is no central place to track progress. A hotel is required to staff central dispatchers to guarantee that a guest request will be responded to within a certain window across departments.
The property management system (PMS) is the one common system that integrates with many service systems, but it is not built for unifying operational requests. For this reason, department specific systems must be connected directly to one when sharing is important to operations. However there is no central clearinghouse for all hotel requests, hence management is limited in its ability to view, analyze and improve the operation as a whole.
This is a barrier to ensuring that brands can deliver on their brand promise, which includes certain service quality expectations. According to Deloitte, executing on the brand promise requires the hotel to measure and monitor execution. Without a central place to capture the requests handled by hotel staff, management is unable measure and monitor execution. This prevents brands from accessing the health of their brand promise at any individual property. With these limitations, it is impossible for a hotel to effectively foster the exchange and co-creation of value by staff to guests, which is critical for a unified platform. Look for a future post, in which we will outline the 3 ways hotels can overcome each of these obstacles to operate as a platform.
