SA hotel industry must embrace technology to stay competitive

Gillian Saunders
Gillian Saunders

South African hotels, like their global peers, must expedite the adoption of technology to meet customer-led demand, according to a new report from Grant Thornton.

Internationally, the hotel industry has lagged behind other sectors in adopting technology and, as a result, hotels must now put mobile technology at the centre of their customer experience as they race to catch up and compete in the “sharing economy”, where services such as AirBnB are challenging the traditional business model. However, the report cautions against de-humanising the hotel experience, stressing that the most successful companies will be those that master the balance between using technology to respond to customer preferences and keeping the personal touch where human interaction is a value-add.

Hotels 2020: Welcoming Tomorrow’s Guests highlights the changing nature of hotels and their guests. This is in part due to the increasing spending power of millennials, digital natives looking for local, authentic experiences when travelling. This demographic group are set to outspend baby boomers in hotels by 2017 and expect increasingly tailored services, such as mobile room customisation and special in-app offers.  With the number of Chinese tourists alone expected to double to more than 200 million by 2020, rising numbers of travellers from emerging markets mean hotels need to change their services to cater for new needs and preferences.

Gillian Saunders, head of advisory services at Grant Thornton Johannesburg, and Global Leader for Hospitality and Tourism at Grant Thornton International said: “Hotels need to work to understand their guests’ requirements, making the most of big data to analyse and establish where personalisation through better use of mobile can really add value. “It’s all about striking the right balance between apps and technology, as well as human interaction, which is still hugely valued. Get it wrong and you risk alienating your customers. Get it right and you can reap the rewards.

“The battle for tech talent with other industries is fierce, and the sector will need to think creatively and work with external strategic partners to get it right. This could include technology providers, app developers and existing services such as Uber, as well as local hosts adopting the home-from-home aspect of the sharing economy. “With millennials and tourists from emerging economies set to dominate future reservations, tomorrow’s guests will expect tailored services that break down language and cultural barriers, while still offering an authentic, personal touch that gives travellers the unique experience they value.”

The report points out that the hotel industry has been lagging behind other industries when it comes to mobile personalisation; from retailers and personal finance providers to travel companies and restaurants, mobile technology – and especially apps – are being developed at a rate of knots to provide accessible, customised customer services. The report urges hotels to consider apps that personalise elements of the entire guest experience, going beyond the simple logistical processes of room booking and check-in to allowing guests to truly tailor their stay through their smartphone.

Ms Saunders said: “With the rise of digital enterprises like AirBnB, TaskRabbit and Lyft demonstrating the power of the sharing economy, it would be tempting for hotels to simply follow the ‘there’s an app for that’ mantra and just push out mobile technology that adds little value to the customer experience or subsumes it. Hotels must take their efforts further. “Developed carefully, with a real understanding of what the consumer wants, technology can go a long way to build unique customer experiences that meet today’s demands. From ensuring the minibar is stocked with a guest’s favourite drink to providing details of local restaurants via their smartphone, hotels must retain the personal touch that keeps consumers coming back.”

Some hotel chains are already using technology well to personalise the guest experience. For example, during the London 2012 Olympics, Holiday Inn partnered with Samsung to enable guests to control their rooms’ TV, air-conditioning and lighting with their smartphones. Hilton Worldwide are developing a mobile check-in and check-out service, and the Ritz-Carlton app, launched last year, provides concierge services including booking reservations, local city guides and special offers. A snap survey conducted by Grant Thornton South Africa has found that unlike the foreign hotel chains, South African hotel groups are not addressing the advances in mobile technology.

Martin Jansen van Vuuren, director and hotel consulting leader, Grant Thornton South Africa said: “Domestic hotel groups do not have the R&D muscle of the big international chains, but they certainly need to have a strategy in place if they want to continue to appeal to the markets of the future; international and domestic. “These markets are increasingly tech savvy and will have high expectations of personalised delivery. After all, they will be getting it elsewhere in the world and will expect nothing less locally.”

However, with recent privacy concerns around the amount of data shared through cloud platforms and mobile devices, the report warns that hotels must be mindful of how much data is likely to be shared by guests, and therefore work closely with consumers to ensure that personalisation is introduced at a level that is comfortable and achievable for both parties. “Hotels must act now to differentiate themselves. They must make a reality of mass personalisation – while keeping the human touch – to surprise and delight guests,” Ms Saunders concluded.