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Industry Updates

Hotel Technology: What’s next?

What will hotel owners likely see in the next three to five years and how can we drive technology adoption in the hospitality industry?

The 2019 edition of the Arabian Hotel Investment Conference (AHIC) takes place from April 9 to 11 under the banner ‘Synchronised for Success’. Dedicated to the topical issue of Disruption, the first day will explore the various trends, challenges and developments impacting the hospitality industry, with technology inevitably a key focus.

AHIC founder Jonathan Worsley sat down with technology experts Ted Horner, owner of E Horner & Associates, and David Sjolander, chief operating officer, Hospitality Technology Next Generation (HTNG), ahead of their session at the event, and asked them for their thoughts on how disruptive technologies are redefining the hospitality landscape.

Jonathan Worsley: Technology and its potential to reshape the hospitality sector is high on the agenda at AHIC, so this year’s conference will feature our second annual ‘Day of Disruption’. We are bringing leading minds in the Internet of Things (IoT), Artificial Intelligence (AI), Robotics and Blockchain to share their insights on what these mean for hotels.

What do you see as the biggest technology trends in hospitality in the next three to five years?

Ted Horner: Having just visited a hotel in Seattle that has installed an Amazon Alexa device in every room, I believe voice assistants have the potential to redefine the guest experience in hotels. There are now close to 100 million of these devices in households in the US and this number is expected to grow dramatically, now that both Amazon and Google are actively marketing these products not just to consumers, but to the hospitality industry as well.

In addition, with the expectation that the number of installed IoT devices will exceed 31 billion by 2020, I believe that the Internet of Things (IoT) has the potential to automate and streamline processes in hotels. Marriott is already working with Samsung and Legrand to develop an IoT guest room lab, with the intention of personalizing the guest experience.

David Sjolander: IoT can increase efficiency, improve the guest experience and provide data for analytics and artificial intelligence (AI). It is complicated, and there are many security and privacy considerations, but there’s also great potential.

Worsley: What about disruptive technologies such as Airbnb and other social marketplaces? Are they likely to continue to disrupt the hospitality industry?

Sjolander: Technology is likely to enable disruptive business practices rather than be disruptive on its own. Technology did not disrupt the taxi industry, Uber did, with technology as a key enabler. Alternative lodging concepts and social marketplaces will steadily grow, continuing to blur the lines between hotels and residences.

Horner: Airbnb is constantly sited as a major disruptor for the traditional hotel marketplace and that’s why some of the largest hotel companies have purchased companies like Airbnb. Their technology, lower cost of distribution and local experiences for guests have seen them grow dramatically over the last few years. We in the hotel industry need to learn from them and try to use technology more effectively so we can compete with them on a more equal footing.

Worsley: How do you see AI impact the way we operate hotels?

Horner: AI is going to have a huge impact on our industry and the voice assistants I mentioned earlier already use AI extensively. AI-powered analytics technologies are going to allow hotel companies to analyze data and extract actionable information to make quick business decisions.

Worsley: What about Robotics?

Sjolander: Robotics will find a place, but our industry will be resistant to replacing people with machines due to the nature of hospitality. Guest-facing robots will be a novelty, but more robots will find a home in the back of the house.

Horner: Robotics have a huge future, in the first instance to automate dull and dirty tasks such as vacuum cleaning. There’s a company that has created Robotic cleaners that can take five minutes off the cleaning time of a room by a housemaid.

Worsley: With all these technologies likely to impact our industry significantly, what do you see as the biggest challenge in technology adoption?

Horner: The biggest challenge is that owners are not willing to invest in technology to the same degree as in other industries. Owners are willing to spend big on refurbishments, but not necessarily on technology, as they either do not understand the role technology plays or are not convinced of the return on investment (ROI). Decision-making is slow and many owners do not want to be early adopters.

Sjolander: The industry is fragmented; most hotels have an owner, a management company and a brand, and they’re usually multiple entities. By the time a new technology can be rolled out, it’s often outdated.

Horner: There are great examples of hotels that reap the benefits of being early adopters of technology though. Take Citizen M, for example; they rolled out some very cool technology from the get-go and quickly garnered positive reviews on TripAdvisor which led to increased interest, and over time, to higher room rates.

Sjolander: The ‘leading edge’ is often called the ‘bleeding edge’ for a reason though. If you want to be at the leading edge, you must be willing to accept failure. On the other hand, if you wait too long to adopt new technology that is demanded by your guests, you will fall behind with fickle and demanding consumers. As an owner, you must find the right balance that meets with your risk profile and is acceptable to brand partners.

Worlsey: What should owners and developers be aware of in terms of hospitality technology investment? And how can brands and owners work together to make sure technology is implemented to drive our industry forward?

Horner: Make sure that the investment is well thought out and adds value to the existing hotel technology stack. Investing in shiny new objects without this value proposition being fully researched can lead to failure. Owners need to at times challenge the brand standards by getting an independent opinion on these investments. It’s worth remembering that owners and developers fund this technology, not operators.

Sjolander: If possible, owners should employ a hospitality technology expert or consultant who can educate them and represent them at a brand level. The relationship between brands and owners is often adversarial because they have different fundamental objectives, but the differences can be mitigated by balancing technology expertise on both sides.

Horner: The use of third-party consultants to provide an independent perspective will help bridge the gap that sometimes exists between brands and owners. Once the decision is made to proceed, having a dedicated project manager to drive the project is paramount to success.

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