Guest Post: Reflecting on 2023 - A year to step back and consolidate

Hoteliers evolved their tech stack, but it’s a far cry from the tech industry’s expectations, says Ryan Haynes of Haynes MarComs and Travel Market Life podcast

Hasn’t this year felt somewhat ‘normal’? We’ve managed to sink into a position reminiscent of the period before the big C. The travel industry has thankfully returned to a level of normalcy, and according to Travolution sister publication The Caterer, hotel revenue is well up. Cities have reclaimed their tourist crowns, and coastal and rural destinations have contended with a decline in visitor numbers from the lockdown heydays.

Conversations around bookings and revenue have been mostly positive, but it’s the discussions around technology that have been the most thought provoking. Hoteliers have woken to the essential need to develop their tech stack, not only to compete and provide guest experiences but to alleviate huge staffing challenges.

Yet while the tech industry throws out more innovation, and talks up artificial intelligence, automation and machine learning, hotels are simply looking for tools that will help them do their jobs.

Technology needs focus

Hoteliers are frustrated. The plethora of systems in the market is bamboozling, with product comparisons that rarely add up, causing friction in the buying process and hesitancy in decision making. For buyers who jump straight in, the realities of the systems come all too late.

In conversation with Kurt Macher, general manager of Shangri-La The Shard, London and innovation and luxury customer experience lead - Middle East, Europe, India & Americas of Shangri-la Group, he explained his irritation around software that doesn’t connect to existing systems; the right interfaces are lacking in the industry, with seemingly no standardisation. As Zennio celebrated 180 PMS interface connections, it merely reinforced Macher’s point - and just scratched the surface of the hurdles technology companies need to overcome for their applications to work completely within hotel tech stacks.

The hotel sector is not alone in this challenge; it’s also apparent within the wider travel industry. The travel and hospitality sector as a whole needs to address legacy technology to   enable a more comprehensive connectivity between systems, in secure environments.

Hard-truth about adoption levels

The reality is only a handful of hoteliers are innovators and early adopters: the likes of Zetter Hotels, Motel One and Mollie’s are leading the way in implementing new technology. Fortunately for these brands, their leadership has the technology acumen to understand the opportunities and can piecemeal systems together. For some, such as Mollie’s, it can be easier to start fresh when you are launching a new brand and property.

On the other side, the 84%, made up of the majority and tech laggards - well, they’re looking at simpler tools which help with the here and now. It’s an area I take particular interest in, working closely with the industry and media to look at real-world deployment of technology that solves problems with demonstrable ROI.

In Hotelier’s Voice podcast series 3 - and the launch of our new series Hotel Partner - it is incredibly clear tech vendors are racing ahead and leaving hoteliers more puzzled than ever. As hoteliers look for intuitive solutions, they are also seeking applications that work with existing systems. I’ve gauged an increasing concern from hoteliers over the number of third party partners they are working with, and the challenge to not only manage a plethora of systems, but to ensure data is protected, and guest and staff information remains secure.

The reality of innovation on hotel teams

Though there are other realities. Building a data culture is no easy feat, despite over 70% claiming they have an integrated revenue strategy - from a survey between The Caterer and IDeaS RMS facilitated by Haynes MarComs. Chris Bowling, head of digital marketing and ecommerce of Best Western, James Wilson, director of business intelligence and analytics services of Outrigger and Christoph Peppers, director of ecommerce of H-Hotels.com, all expressed the importance of working with aspects of data, including training and developing the team to understand it and incrementally evolving how data is used.

This discussion spilled over when speaking with Michael McCarten, VP EMEA of IDeaS, alongside hoteliers Geza Bocsak, head of revenue management and sales of Harbour Hotels, Inna Nekrassova, head of revenue of The Lanesborough, Raimund Notz, director of hotel revenue optimisation - Central & Eastern Europe, Preferred Hotels and Dario Artiola, senior director revenue performance of Radisson Hotels Group. All wish to have a more integrated approach between sales, marketing and distribution, allowing the implementation of total revenue strategies.

The IDeaS/Caterer survey further revealed adoption levels of RMS showing a gulf in the use of technology to enable commercial success, with less than half (45.3%) of regional hotels using a revenue management system (RMS) compared to over three quarters (77.2%) of city hotels. Yet, properties using an RMS were reported to have a 14.15% ADR increase in 2022/23, compared to just an 11.69% ADR increase for those without. Training is a big issue, with many professionals having to self-study where official programmes and courses are not offered.

It’s a process of reinforcement, exploration and identifying the opportunities that the data offers - and each and every hotel business has different sets of data, as well as a variety of interfaces which consolidate the data. Emer Hallahan, group head of marketing and eCommerce of The iNUA Collection, explained the importance of data, and that using a guest data platform has enabled their marketing to be more targeted and personalised. However, to make these gains she’s had to constantly engage staff, highlighting the importance of capturing data.

The echo I heard throughout my conversations is the need for ongoing training and support of frontline staff by tech vendors and internal hotel leaders to help the end users understand the importance of initiatives such as data capture.

This also rings true for Sustainability. Angeliki Kania, senior sustainability manager of Lamington Group, explained why it is so important to have regular catch up and training programmes to ensure that sustainability is embedded as a core action in the business - particularly as it still takes a lot of learning to get it right. And while there are criteria for enforcing a sustainable supply chain, many local suppliers are yet to have the means to meet this fully, with larger enterprises still in the process of fulfilling all requirements.

Doubling down on existing investment

Particularly poignant is the need to double down on existing investment and make incremental gains from already-installed systems. While infrastructure development allows hoteliers to respond to digitalisation, existing tech can provide many more additional benefits than it is.

Andreas Stockli, general manager of Hotel Schweizerhof, has been introducing new technologies from smart TV systems to staff management applications over the past couple of years - and they are now spending the time to expand their use of these technologies.

Tej Walia, managing director of The Foxhills Collection, explained how it’s difficult to be near the cutting edge of technology and innovation, but as a hotel providing service to guests, it's essential to define the immediate needs and plan longer term strategies through senior management across the business, having to carefully balance investment in new amenities and upgrading existing facilities alongside introducing new technologies.

Distinct differences in approach

In conversation with Veryan Palmer, director of Headland Hotel at the Independent Hotel Show London, we discussed the deployment of artificial intelligence at the family-owned independent hotel. The implementation of a chatbot was less a need of innovation and much more determined by the need to reduce pressure on staff. Although they are aware of automated technologies, new tech is assessed on the added value it brings to operations and administration without distracting from service.

Monica Coppetta, general manager of Columbia Beach Resort, hailed the benefits of room monitoring systems to reduce pressure on staff while amplifying the property’s luxury offering. For Coppetta, it’s essential to monitor new tech on the market to ensure that, digitally, the brand can continually augment the luxury experience. Data is used to provide guest insights so staff can personalise the guest experience, while also providing a more flexible service through the use of tablets across the property.

Quite clearly two distinct approaches to technology - but both reducing pressure on staff and increasing service provision - and the industry must embrace and cater for both.

Challenges are also seen within large global brands. Accor explained at IHTF 2023 that only 5% of properties worldwide had digital room keys - and this is 20 years after the technology was launched. This is the same global brand who, in 2022, announced its PMS strategy to bring a more simple and aligned technology infrastructure to the portfolio. Seeming as hotels don’t change their PMS frequently, it will be some time before all properties are on board.

In another blow to innovation is the level of Cloud adoption - one global brand set 2027 as their goal to migrate all hotels to the Cloud - another technology that has been in the market for over 20 years. And while Cloud has been drummed into us over the last few years,  businesses are still weighing up the pros and cons of onsite hosted versus Cloud-based systems.

The challenge many hotels have in adopting these technologies is not only having the right level of expertise and skill level internally to support the change, but having the L&D and training programmes to ensure the change is realised and becomes part of the DNA of the hotel.

Evolution of independent hotels to challenge the market status quo

Gone are the days of needing IT developers and coders onsite - or even having to have a full scale IT team. Tech has (thankfully!) evolved with the cloudscape offering on-hand experts to provide account management, support, and security monitoring. Investing in regionalised, human customer support is a hallmark of the stand-out new technology companies.

As tech becomes affordable and more easily customised, independent properties and hotel groups are able to compete on a more level playing field. In fact, the range of products is so vast for hotels that businesses are capable of having more control over their revenue and distribution and therefore become more agile in the market.

Journey Hospitality has grown 65% this year as its single shopping cart booking system enabled hotels to surface more products in the reservation process, and guests to better personalise their stays. Their onejourney retail booking platform has been so successful that Journey won a number of innovation awards this year.  

It’s not the only company to see success: HotelREZ has seen significant growth of its portfolio as hotels look to reduce the cost of sale and improve market visibility by diversifying channel distribution with the GDS and improving direct booking experiences.

Where the listener lies

The Travel Market Life podcast is in its fourth year, and 2023 has indicated the topics that are really challenging the industry. The top 5 most listened episodes were:

1. Where security lies embedded in the guest journey
2. How Louvre uses Robotic Process Automation
3. AI and Ethics
4. How independent regional hotels can be revenue smart
5. = Why hotel analytics is becoming crucial

= How to incorporate wellness and spa assets into hotel

A personal favourite conversation was speaking to Jason Doebrich, VP IT at Virgin Hotels, about how Virgin is making thousands in additional revenue each month through smart TVs.

What I particularly enjoy about technology is the ability to augment the guest experience through upgrading existing systems, whether it’s new software or a retrofit, without having to replace it. Not only does this enable businesses to save money, but it improves sustainability credentials by giving existing hardware a longer shelf life. On the other hand, the developments for improving operations and hotel management are yet to be fully realised, and one I’m looking forward to in 2024.

Change is coming

The peculiar thing about life (oh and of course business) is it goes in circles. Where we had a growth in innovation, new products, during the 2010s, this decade will see consolidation of the market. Companies have been on an acquisition blitz: the likes of Cendyn, Lighthouse (formerly OTA Insights), Journey, Oracle, Shiji and SIHOT show that more is to come. For hoteliers, this means more rounded, fully integrated products that will even further simplify their tech stack.