Mastering the digital revolution in the lodging industry

Mastering the Digital Revolution in the Lodging Industry


May 2013

As Accenture’s 2013 Technology Vision simply and powerfully argues: “Every business is now a digital business.” Information technology is far more than just a way to improve operations; it has become “the driving force for how we effectively grow our companies.”1 This profound shift from bricks and mortar to bits and bytes is especially applicable to the lodging industry. Although at the end of the day—literally—lodging is about a room and a bed, the industry is in fact permeated with technology. The digital era has transformed how consumers learn about a property and a brand, share information about it and book it. Technology helps define the experience that a guest has before, during and after a visit. Such IT capabilities are now simply the way business is done.

However, an Accenture report on the digital revolution and the lodging industry emphasizes that new technology strategies and initiatives are needed not only to keep pace in the digital world of the global lodging industry but also to create competitive differentiation and drive growth.2

Major technology developments, including cloud computing, mobility, social media and analytics, have immediate practical applications for the lodging industry, from back-office and enterprise systems to the application environment and front-office systems.

IT can especially improve the effectiveness of guest interactions. Technology innovation is the key to “getting personal” with customers, allowing companies to provide guests with a tailored and personalized experience. This innovation is also vital to managing guests’ experience at all stages of a visit, from planning a trip to checking in, to staying on the property to checking out—even after walking out the door. In addition, technology is crucial to managing operations more effectively, enhancing sales and marketing approaches, increasing efficiency and reducing costs.

Our research and experience underscore three IT-related action areas for hoteliers focused on analytics, mobility and the optimization of digital channels.

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1. Leveraging analytics to customize the guest experience
Over the past few years, hotel companies have been investing in reporting and business intelligence solutions to improve decision making. However, advanced hoteliers also need to:

  • examine the decision factors that attract a specific customer type to a property, which can help in developing more targeted offers;

  • leverage guests’ past purchasing behaviors and preferences to present appealing offers once guests are on property; and

  • capture and evaluate data about property operations to identify areas of improvement in both effectiveness and cost efficiency.

With analytics, hoteliers can use the data they capture to go beyond their traditional loyalty programs and deepen their knowledge of guests. They can develop a more granular understanding of the behaviors, needs and expectations within particular guest segments; identify the most profitable segments and their buying preferences; and identify opportunities to attract new guests.

Analytics can also be used to evaluate the benefits of social media and further leverage the all-important social channel. Lodging companies are beginning to monitor social media activity in real time to view how their hotels and brands are faring. Analytics will further allow hoteliers to link these types of media feeds with their own internal hotel and guest data for broader analysis.

2. Harnessing the power of mobility to engage the “now consumer”
Today’s hotel guests (and employees) are likely to be highly mobile and always connected—focused on what is going on and what they need . . . now. Customers expect to use mobile devices and applications to interact with products or services in new ways; employees look for mobile solutions to improve their productivity and ability to collaborate.

Lodging companies are already making inroads with incorporating mobility at varying points across the guest lifecycle. A lodging study conducted by Hotel Technology magazine cited that the majority of hoteliers surveyed currently provide, or have plans to provide, guest-facing mobile apps for check in, search, check out, and on-property experience management.3

One challenge is to improve the mobile experience—the interface and usability—to encourage acceptance and usage of mobile applications by consumers. A recent Expedia Media Solution/comScore study4 of the US travel industry found that although more than three-quarters of the country’s travelers had purchased travel using a PC in the past six months, only 34 percent had done so using a tablet—and just 28 percent had made a booking using a smartphone. Companies must work harder to establish consumer confidence in and satisfaction with mobile interactions.

The lodging industry has yet to fully leverage the full power of mobile capabilities in today’s marketplace. To maximize success, hoteliers should develop an overarching mobility strategy that takes an end-to-end view of the guest lifecycle, evaluating how mobile applications and experiences can serve as tools for the guest from booking to checkout. It’s also important to remember how mobile apps can enhance what takes place at the most critical point of the lifecycle: during the stay. What aspects of anytime/anywhere connectivity might provide distinctive value to guests while they are on the property?

IT architecture and governance issues must also be carefully considered. The architecture will need to serve both enterprise and consumer-based solutions, foster standardization of platforms and toolsets, encourage consistency and reuse of enterprise services, and provide assurances around security.

3. Orchestrating and optimizing all customer touchpoints
Market forces in the consumer space are driving new expectations from guests about how they want to interact with hoteliers through a seamless array of digital channels and personal interaction points. Hoteliers must tightly manage and integrate consumer experiences, consistently creating relevant experiences across all channels (digital, social, mobile, traditional and in-person) and geographies. They must also continuously monitor performance of those channels in real time and rapidly respond to new consumer insights.

Achieving relevance does not mean creating more campaigns or websites to appeal to each consumer segment. It means using the economy and flexibility of scale to make relevance both effective and affordable at every moment of truth, every time.

Building contextual understanding of target guests will entail leveraging internal and external data. At the heart of achieving relevance is having the ability to gather and act on target guest context and intent in precise and nuanced ways. Hoteliers should invest in knowing their audience through real-time segmentation models that consider how customer intent changes and what drives guests’ decision making at every step of the journey. This will require connecting fragmented data from independent functional siloes and multiple service providers—from media agencies to technology vendors.

The better an organization can become at data integration, the better positioned decision makers—from marketing and sales to the C-suite—will be to appropriately synthesize and act on all disparate data sources.

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The continuing wave of change in business and technology represents an opportunity for hoteliers to focus their strategic technology investments to extend the reach of their brand and deliver more personal and relevant experiences to guests. Technology will play a key role, whether that involves using analytics to know and satisfy guests’ expectations better than a competitor, pushing the possibilities of mobility or orchestrating all guest interaction channels to create more relevant experiences.

Targeting investments in digital capabilities with analytics, mobility and relevance in mind can help a lodging company prepare for an increasingly competitive and buyer-driven market.

 

Footnotes
1. “Accenture Technology Vision 2013: Every Business Is a Digital Business,” Accenture 2013 (Back to story.)

2. “Getting Personal with Digital: Mastering the Digital Revolution in the Lodging Industry,” Accenture 2012 (Back to story.)

3.Lodging Technology Study: Hotel Technology in 2012,” Supplement to Hospitality Technology magazine (Back to story.)

4."The Rise of Mobile: Adoption, Sentiment and Opportunity,” Expedia Media Solutions and comScore, 2012 (Back to story.)

 

About the authors
Paul Loftus leads the Accenture Travel industry group.

Mike Boushka leads the Accenture Travel industry group in North America.

Anne Pruvot leads the Accenture Travel industry group in Europe, the Middle East, Africa and South America.

 

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This Article is Tagged: Travel.
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Technology in Hotels: Building the Hotel of the Future – Executive Summary

New Technology for Hotels: Leveraging Mobility

Getting Personal: Mastering the Digital Revolution in the Lodging Industry [Interactive Infographic]

About the authors

Paul Loftus leads the Accenture Travel industry group.

Mike Boushka leads the Accenture Travel industry group in North America.

Anne Pruvot leads the Accenture Travel industry group in Europe, the Middle East, Africa and South America.


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Mastering the digital revolution in the lodging industry | Accenture Outlook 
An Accenture report on the digital revolution in the lodging industry emphasizes that new technology strategies and initiatives are needed to create competitive differentiation and drive growth.
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