In Newsletter #38: ALICE’s technology predictions for 2017.
2016 was a pretty good year for hospitality technology. Many early stage technologies made headlines and hotels continued their upwards trajectory in prioritizing (and thus investing) in tech. In a year that everyone got fed up with the word “millennials” (turns out that demographics are not as indicative of behavior as one would think), Marriott and Starwood merged, and Lifestyle became the new Boutique, hospitality technology growth continues to be the most exciting vertical in all of travel tech. But with so much hospitality technology in the news, it’s easy to lose sight of the forest for the trees. So, we’ve looked back ourselves over the 24 newsletters we published in 2016, and we asked our team and our hoteliers… What was truly important in 2016, and what will be even bigger this year? Which trends of the past year represent enduring change and improvement to hospitality, and which might be still a few years farther out?
Thank you all for your tremendous support in 2016. We ask you to continue to challenge and push us. To question and to experiment.
Hope you enjoy the infographic of our year,
– Alex Shashou
BIG IN 2016. BIGGER IN 2017 & BEYOND
- HOTEL STAFF TECHNOLOGY. Ops is the new black.
Happy staff = happy guests, and 2016 was the year where staff technology and back of house operations finally got the attention and validation it deserves. Until last year, most attention was on guest technology, particularly on guest apps and on guest-facing innovation, like keyless entry and in-room controls. Companies like Marriott and IHG poured millions into their mobile guest applications, while their staff were left to fumble with clunky, poorly designed systems. Staff are the heart of hospitality. Without them, hotels are just real estate.
This year, JW Marriott launched a beautiful campaign, all centered on taking their staff to the ballet. It’s an idea we feel strongly about — industry leaders like Danny Meyer and Richard Branson both espouse the view that prioritizing your staff is both good business and the right thing to do. We’re starting to see an exciting shift in thinking along these lines when it comes to technology in hotels. First empower your staff with the innovation – and then see the results in the guest experience.
- PLATFORM APPROACH. Hospitality’s new standard.
We issued our report on platforms in August, and since then we’ve definitely seen an uptick in reference towards platforms and the platform approach to hospitality.
For the hotel industry, the platform approach – the idea of unifying systems across departments and allowing for the integration of external tools, channels, and vendors – provides an opportunity to leverage technology holistically to bring every person and every department together. Running a hotel is tough enough without having to deal with closed technologies that don’t work together and don’t let you build on top of one another.
Indeed, simply adding direct-to-guest interaction through mobile, without rethinking how hotel operations works, fails to improve the guest experience. The value only comes in combining different systems together seamlessly, when your software allows you to add new features to it without having to kill all the progress you have already made.
2016 was the year we made platform synonymous with ALICE and with back of house operations. 2017 will be the year this idea goes mainstream.
The Platform Economy
- CHAT INTERFACES. Is messaging the future?
Messaging made headlines in hospitality in 2016, much like keyless technology did in 2015 and beacons did in 2014. Unlike keyless and beacons, however, messaging (or chat) is proving an enduring consumer trend — guests are already accustomed to messaging in their everyday lives, and it doesn’t require guests to download yet another app. Industry-wide adoption of messaging has been swift. From small boutiques to big brands to OTAs, messaging has become a successful engagement channel, bringing noticeable improvements to the guest experience. Whether its SMS, Facebook, WhatsApp, or a platform (see above) that lets you do all three, guests are into it and it is going to be a lot easier to reach them this year if you are too. Staff are also buying in and as we help our hotels transition from radios to smart devices, let’s not ignore the importance of staff-to-staff chat.
- OPEN TECH STACK. Open those APIs.
Facebook, Google, Four Square, Ebay, YouTube… all the big tech companies have done it and for good reason…The open API is integral. APIs, or Application Program Interfaces, are the backbone of any digital network of programs; connecting the software, applications and programs that power your hotel operations. Companies like Snapshot and ALICE have been preaching the power of APIs all year. Expect more of this in 2017.
As you hear nightmare stories of integrations taking 9 months, make a note of it, and ask your next software vendor how “open” they are before buying. The pace of technology and innovation is too fast for a 9 month decision. You wouldn’t give your housekeeper 9 months to get to great work.
- GUEST ENGAGEMENT APPS. Engaged!
Guest engagement was another buzzword in 2016. Study after study last year showed the positive correlation between engagement and better TripAdvisor reviews, more loyalty, and increased revenue. But there are no losers in this equation — only happier guests and more successful hotels. Between apps, chat, and one day, voice, there are an increasing number of channels to explore. Which channel makes more sense for your hotel might vary. 2015 was all about guest apps, but apps might only make sense for the biggest hotel chains and the most original boutique brands. Independent hotels and management companies, meanwhile, might find chat most cost effective. Hotels should continue to experiment with the best modes of guest in engagement in 2017, because this is a trend with legs.
- AIRBNB. A hotel company?
Airbnb hit some regulatory hurdles in 2016, but it also evolved in ways that put it more firmly in the crosshairs of industry incumbents. Last year we all called it the “alternative accommodation” sector. As Rafat Ali, founder of Skift points out, however, there’s nothing alternative about it. Airbnb is mainstream and is trying to improve its hospitality offering. Hotels still have a leg up when it comes to what they can offer guests when it comes to lodging specifically, but Airbnb’s openness to customer feedback and the company’s constant innovation means it’s catching up quickly.
- GOOGLE. A travel giant.
Google entered travel in a big way in 2016, but for the most part kept their efforts pretty quiet. Thing is though, their effect on travel is pervasive – we use Google all the time, mostly without even realizing. Google’s advantage is data and the ubiquity of their platform in all areas of our lives. This makes the company uniquely suited to help us out in travel too. We expect a lot more from Google in 2017 and beyond.
- LEGACY THINKING. In the past.
Like it or not, hotels are tech companies too. Every company is. Yet for too long, the industry has been too conservative to embrace technology. As Jules Sieburgh says in this Cornell roundtable, “not legacy systems, but legacy thinking is what is holding us behind [in implementing technology] in the hospitality industry.” Too right. Without legacy thinking there wouldn’t be legacy systems, as hotels would push forward faster in implementing new and beneficial tech. As Ian Shrager said on stage at BLLA this year, “It’s like we wished technology did not exist.” Well, it does, and so does a whole new generation of brilliant tech-forward hospitality leaders pushing us forward in 2017. HFTP even announced their first ever technology-born President this year (instead of financial).
- DESIGN THINKING. Use it or lose it.
Speaking of the HFTP President, Lyle Worthington wrote a great piece on “user experience” this year. Researching the topic, we found a great book on how software underutilization was costing the United States $60bn a year. What is the number one contributor to software being used less than intended? Poor design. Too many hotel softwares and legacy systems have lived on despite looking like they were built 20 years ago. That is changing fast, because it doesn’t matter how many features you have if the users don’t want to use it. With iPhones and beautiful consumer software today, expectations are set too high for technologies that ignore this.
AND FURTHER OUT…
- SELF-SERVICE TECHNOLOGY. Too early to check-in.
In theory, there’s a lot of appeal in managing your own stay – from self-service check-in to check-out, but the reality is a little more complicated. When it comes to hardware it always is. Keyless entry has been just on the cusp of making it big, several years running, but keeps hitting speed bumps. Same too for mobile check-in, with its similar reliance on downloading an app. This one might cause some controversy as the word “mobile check-in” is heard often, and many hotels today, especially the chains, do offer it… in some format. However, until you can select your corner room and give your credit card and passport over the phone without having to stop by a person or kiosk at most hotels you visit, then we think it’s fair to say that this technology is inevitable, but still a few years out. 2018 perhaps.
- VOICE TECHNOLOGY. The next app.
Although Apple’s Siri debuted five years ago, it wasn’t really until Amazon launched their Echo device (aka Alexa) that voice technology became viable for hotels looking to adopt the latest and greatest. Previously seen as just a smart home device, the Amazon Echo started turning up at hotels in the summer of last year, in a pilot with Aloft Hotels. Then, in December, the Wynn Las Vegas equipped every room on property with its own device. Expedia Chairman and media guru Barry Diller said at the company’s Partner Conference last month that voice will be “as big as the iPhone” in its impact on consumer habits. He also cautioned that companies will be in trouble if they don’t integrate voice into their products within five years. And if they haven’t in ten years, he said, they’ll be obsolete.
Technology to process voice has been here a long time, but we’re finally seeing the data revolution and machine learning make natural language processing a reality. Once it gets good, it will change everything, because it’s just a more natural, and therefore better, way to interact with devices. Why type to ask for more towels, when you could just ask out loud, just as you would ask another human being?
Right now, however, we’re still in the early innings of the voice interface and it’s still a little too unreliable and little too inconsistent. So too, voice technology implementation at hotels will only work if robust staff tech infrastructure is in place that can receive, understand, and dispatch requests. Good thing trend #1 is here to stay. 2019 perhaps.
- LOCATION-BASED SERVICES. Ping me later.
According to Skift, nearly three-quarters of all hotels and resorts said in a recent survey they plan to implement location-based technologies in 2017, but big questions remain regarding relevancy and privacy. As do questions on adoption and use cases. Ideas abound of course, but we’re not convinced that the everyday traveler will feel the impact of this technology fully this year until its more practical for hotels to implement and users to adopt. The groundwork is still being set. 2018 perhaps.
- ROBOTS. We wish!
Hotel robots grabbed a lot of headlines in 2016, particularly those in guest-facing roles. If this trend has any legs at all though, in the near term, it will be back of house, where predictable, rote tasks lend themselves to automation, freeing up time for your staff to spend with your guests. We love robots more than anyone (we are techies after all) and commend the rapid work being done here, but can’t see them replacing the staff we love so much. 2020 perhaps.
Have you seen our ALICE in 2016 infographic?