Technology is transforming every aspect of the hospitality sector, innovating operational efficiencies, optimising and creating new revenue streams, improving guest experience, and even differentiating portfolios as hotel markets evolve.
“Technology is a means to an end,” said Roman Pedan, founder/CEO of Kasa Living, a tech-enabled hospitality company that offers hotels with both apartments and rooms.
Pedan has a technology background and his company built its own property management systems to deliver better guest experiences, lower the cost structure for owners, and operate more efficiently.
1. Improved margins
“Today, I’m probably more excited than ever because the opportunities for artificial intelligence to unlock a level of improvement to the guest experience and efficiencies are what we only could have imagined previously,” he added.
Hotel owners and operators should consider the margin of improvement gained before investing in any technology. However Pedan said that by automating and centralising systems to limit staffing requirements, his company now averages 60 per cent gross operating profit (GOP) margins across its portfolio. “We think AI can add 400 to 500 basis points to that high.” That's 20 per cent on the asset value, so for a $200,000-per-key asset with the average GOP margin that equates to a 50 per cent increase in equity value.
Implementing technology to automate customer service and personalise guest experience can improve pricing and marketing. The biggest tech opportunities for Kasa Living are in revenue management, finance automation and guest experience.
2. Better guest engagement
There also is technology for guest engagement.
“Guests are there for the experience during the stay, and this [the LasoExperience app] personalises content that's offered to their liking,” said Milos Zikic, co-founder/CEO of LasoExperience, a guest relations app that adapts content to each guest’s preferences, optimising hotel services and enhancing guest satisfaction and revenue growth.
The app engages from the first day of a guest’s stay and follows their activities throughout. Data collected can be pulled up later to further personalise if they return.
LasoExperience has a back-office operation that sees the list of a hotel’s booked guests, along with any of their preferences and activities from previous stays. This information also offers good conversation starters for staff when greeting guests and the human touch that is so very important in the hotel industry.
3. Hyper personalisation
Deniz Dorbek Kocak, founder/CEO of hotel operator The Bright Group is focused on developing and implementing innovative technology solutions to improve operational efficiencies, drive revenue and improve guest experience. The company is currently focused on creating lifestyle/tech-centred products and is building holistic technology platforms for its hotels.
“Quite recently, we opened our second Vitality Hotel in Dayton, where we are really focused on hyper-personalisation,” Dorbek Kocak said. “We have a kiosk system and self-check-in system, but we also have lobby ambassadors to build meaningful communication with guests. All the technologies we implemented so far are piloting in our new lifestyle hotels and are focused on improving the margin, she said. “We’ve had amazing results.
“But more importantly, we’re creating this intuitive and meaningful guest journey,” Dorbek Kocak added, noting the many amazing technology tools are now available to help with labor management and streamline processes. “We are trying to make it (tech) as invisible as possible and keep it really human, but paradoxically, we still have very intense tech activation across our brands.”
4. Problem solving
Kasa Living has developed its own AI platform, which takes data from every source to identify the root of a problem and categorises the percentage of issues caused by that root, “Then we systematically go after the issues that were causing the greatest percentage of problems and solve them,” Pedan said. “Maybe it's not an obvious way of using AI, but it's using all the data at our disposal to systematically up-level the guest experience.”
LasoExperience, which deploys AI across the platform, addresses similar challenges. It also can be used by marketing teams to create campaigns and more engaging content.
“It’s fairly good at answering guest questions,” Zikic said, “and recommends content based on the guest’s profile, resulting in a very high engagement rate, with 55 per cent click-through rate.”
For bookings and other things shared with the guests, he explained that the app uses a short-message format, starting with a SMS notification and then an email. “So it’s at the right time, just when they need it, and that really at the end, pays off.”
While hotel operators want to embrace new technology like AI, especially for personalisation, there is some wariness about taking automation too far, particularly in Europe.
“There is a fine line from a consumer point of view; they do not want to be pressed too much into one particular direction,” said Margitte Verkruijsse-Reiner, VP enterprise at Mews.
The brands are embracing technology on the hotel level, but on operational level, there are concerns about how guests will react to it.
5. A low-cost helper
Using AI for guest communications costs a lot less than using existing staff but there is a balance to be struck. Pedan said workers identify categories of messages that AI is able to handle with data already in the system, like a late checkout request. But when it involves a complex question, a human answers.
With AI handling the majority of guest questions, his staff can focus on creating experiences that guest through personalisation, he continued, noting that appreciation for something that makes guests feel special depends on the amount of effort that goes into it.
Verkruijsse-Reiner also noted that loyalty is another area where AI comes into play by providing space management to generate revenue from ancillary services, like bike rentals, food service, and parking, whether the user stays at the property or not. “We are trying to find ways to think beyond the typical accommodation experience, widening the loyalty component and guest experience to guests not staying overnight.