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  • 1. HOSPITALITY AND TOURISM MARKETING AND SALES Hotels Future with Technology Trends Assessment PENNY SWANSON AND KEVIN O’DONNELL 10/3/2012This paper talks about the future of hotels and technology from a manager’s point of view. Wheretechnology has been in the past year, examples of the influence of technology on the hospitality field,and where it will be in the future.
  • 2. Hospitality and Tourism Marketing and Sales 1 Hotels Future with TechnologyHotels Interactions with Technology Hotels have been using different techniques over the years to catch the eyes of theirconsumers. In the last year hotel managers have used technology to draw in customers andrevenue. A number of hotels have been renovating everything from room amenities such astelevisions, and beds to fitness centers and restaurants. Along with using technology torenovate, hotel managers have been using mobile applications to draw in customers of thegenerations X and Y. Hotels around the world have started using mobile applications to allowguest to book reservations for dinners or the spa. One hotel simply put the link to download theapplication in the signature of their email along with in a section of the newsletter and withinone month had over 400 downloads (ORourke, 2012). Consumers want to do what is easy andmost convenient so when offered the chance to make reservations on their mobile apps theyare going to be all for this because it is less time consuming and can be done on the go. ASmartphone application to book reservations was just the first step in technologyadvancements. One study from Seattle, Washington showed that hotels with mobile apps thatallow for customers to use their phones to order room service have seen an 18 percentincrease (ORourke, 2012). This allows both the guest and employee to skip the languagebarriers, bad connections, miscommunications and background noises that may be present.This idea takes a known form of communication and forms a new channel for the consumer touse. Smartphones and other mobile devices are not the only source that hotels are using. Afew different properties are now providing guest rooms with tablets to help enhance theirexperience with another form of technology. These tablets are allowing guest to change thechannel on the television along with regulate the temperature of their room (ORourke, 2012).By giving guest these amenities they are giving them an entirely new level of experience thathotels have to offer. The ever growing technology is allowing for hotel managers to go to a levelthat has never been reached before, provide guest with experiences that older generationsnever even imagined. Managers can take these applications and different technologies andchange them to meet the needs of different customers. Whether the managers aim the app atguest who are looking to book for a wedding and show them different features such as roomblock booking, and custom itineraries or to potential guest as a contest to show them theapplication is not only useful but fun as well, this technology can and is being used by the hotelsto reach a wide variety of markets. Hotels and other businesses in the hospitality field can usethis trend of technology to catch the eyes of the younger generations and draw them into theircompany. Hotel properties are seeing these technology advances as a massive revenuegenerator that is often overlooked (ORourke, 2012). Hotels are slowing picking up on howuseful and helpful technology can be to their business. It is an example of the trickle-downeffect, at first only the wealthy can afford it but over time it moves down the line until thegeneral can afford it as well.Hotel Advancements With new technology mobile bookings can be one of the largest opportunities forincreasing a company’s revenue. Just like many other stores rely on mobile bookings similar todinner reservations. It is fast simple and not time consuming, the key things everyone wants
  • 3. Hospitality and Tourism Marketing and Sales 2 Hotels Future with Technologywhen they are checking in to a hotel room. The basic way it works is guests who opt to try "fastcheck-in" will give the hotel their smartphone number and download the Open Waysapplication. Then, two or three days before their arrival, they will receive a text messagecontaining their room number and a unique and encrypted sound code that they will use tounlock their hotel room door. The code will work once and then reset itself. One of the waysthat Open Ways makes the system attractive to hotel owners is that they upgrade existing hoteldoor locks with an additional device that contains a microchip, instead of requiring the hotelowner to invest in a completely new locking mechanism. The microchip listens to the audiocode that comes from the smartphone and the chip validates the sound. This new technologyhas the potential to be the futures of all check-ins and hotel room keys (Haridasani, 2012). The main decision comes again from that cost benefit strategy before you can makemoney with your hotel mobile application you need to put it in your guests’ hands. The cost ofthese decisions is the first thing to think about. The cost is something that may not be foreveryone because it can become pricey. Hotels dont see much cost savings from the changesbut expect that the moves will help them stand out in customer service along with attract theyounger generations X and Y. There are many factors in deciding cost as well. For example theroom keys that were plastic and never completely worked would be replaced by the customer’sphone costing the hotel less for room keys. Another cost saver is the time spent having stafffrom your hotel checking people in. Money upfront to give that freedom and accessibility hasthe potential to reward you in the long run. Ease and accessibility are things customers look forwhen checking in and staying at a hotel. Fast easy and convenient is the new trend for the world. Most people today have asmartphone capable to use this technology. Even guest who do not have smartphones have thechance to use this new technology by receiving a text message and calling the number they areable to access the key feature(Haridasani, 2012). This is a benefit to hotels allowing them tomarket a larger group. This doesn’t mean in any way that this will be the only way to check in itjust is time for a change. This idea is very similar to the grocery store checkouts that now havethe self-checkout lines. New technology has allowed us to do automatic check out taking outthe checkout line and person to person engagement. The new systems cut down on one of thebig annoyances that customers have with typical key cards that use magnetic strips: the cardssometimes demagnetize and stops working. Carrying your key next to your cellphone is often allit takes to make one of these keys to stop working. Although the potential for success is there with these new plans there is a side ofcomplications. Many believe that there are some service flaws and potential risks when using aphone for all of this. First off if your phone is lost or stolen you cannot just go to the front deskand ask for a new phone. Hotels generally send travelers their room number via text messageor email, a potential concern if someone else gets access to your phone could mean risk to all ofthe hotel guests. M it can risk safety and personal information two very important items. Thereis also the old fashioned group out there that believes that talking to someone when you checkin and anytime you have a question is part of the experience. So when targeting both older andyounger generations hotels just need to remember to change their marketing pitch to grab theattention of the intended market at the time.
  • 4. Hospitality and Tourism Marketing and Sales 3 Hotels Future with TechnologyRiding the iPhone Until now, the only way to ride the rails was with a paper ticket that you had to hand tothe conductor. Though you could look up schedules and make reservations online that oftenmeant wasting precious moments standing in line at a ticket window. Not great for your bloodpressure if you’re minutes away from missing your train making and making you late for yourdestination. You can book and pay for your e-ticket online, on a mobile device, or by using thenew Amtrak iPhone app. Once purchased, you’ll get an email with the ticket attached as a PDF.Smartphone users can simply show that e-ticket to the conductor, who can then scanit (ORourke, 2012). The iPhone-based system will allow Amtrak customers to print tickets or access a specialbar code that conductors will be able to scan. On the back end, conductors will be able to keeptrack of the passengers on board much easier than with the hole-punch system. By checking inpassengers electronically, conductors will be more efficient and cut down on mistakes thatwere possible with the old, ticket-punching method. The iPhones used by Amtrak conductorswill have specially designed scanners attached and will include a company application thatkeeps track of passengers, sends alerts to the engineers if disabled-person assistance isnecessary, and sends reports of maintenance needs to mechanics. With the new ticketingsystem being electronic, customers also benefit. Currently if a change in reservations needs tobe made at the last minute, the customer would have to get a refund issued at a ticketingwindow, and then get a new ticket issued. With the Amtrak iPhone app, however, customerscan make adjustments on the go, without having to worry about ticketing lines (Ogg, 2012). This system set up with Amtrak customers is a great way to create smoother travellingfor people all over the world. Not only does it make it a smoother running system but it isentirely full of informational updates on delays on high traffic volumes and arrival / departuretimes. The iPhone system cost Amtrak $7.5 million — $5.5 million for the softwaredevelopment and $2 million for the hardware, the company said (Ogg, 2012). Amtrak’ssmartphone app for passengers is currently available only for iPhones, but the corporation saidit was working on a version for Android devices, due for release by early fall. Users of othertypes of smartphones can still load their tickets through Amtrak’s mobile Web site with theability to adjust their trip. This is an example of how mobile devices are playing a large role withimprovements in all areas of the hospitality and tourism field. Hotels are not the only ones whoare benefiting from the evolution of smartphone applications.A Professional’s View For the interview we interviewed Randy Christensen the General Manager of the CountryInn and Suites in Little Chute Wisconsin. Randy has also been the Sales Director for HowardJohnson Hotel and Country Inn and Suites before becoming the General Manager. We askedRandy a number of questions asking his professional view on the role that technology plays inthe hotel business. Randy felt that it was important for hotels to keep up with technologybecause people are making reservations and checking for hotels on the go from airports, etc.
  • 5. Hospitality and Tourism Marketing and Sales 4 Hotels Future with Technologyand with that type of market you need to take full advantage and be assessable. Randybelieves that it is important to keep up with technology and review your position withcomparison to your competitors on a yearly basis. Along with that he stated that typicallydecisions based on technology updates are based on the brand standards. When asked if hethought that smart phones played a part in what hotels do and how they operate, he said yes itallows him to stay connected from anywhere. Wherever he is he has the ability to check rates,availability, answer guest concerns and respond as needed instantly. Looking at the technologytrend of smartphones with hotels in the eye of a manager it shows what a huge rolesmartphones play. They allow managers to be accessible when needed and for them to accessthe information they need in a few clicks. When talking about his view on customers using theirphones to check into their rooms and as a key to the room he had an interesting view on thisconcept. Randy believed that this special feature should be accessible only to elite or preferredstatus members and not for the general hotel guest. His reasoning was that it takes away fromthe customer service aspect of our industry and that face to face interaction with our guest isextremely important. With that being said check in is their number one opportunity for thatface to face interaction and if they were to give it away to the mobile phone they would losethat factor. Randy believes that technology is important however that it is not the main focus ofour industry, and that the industry will always be driven by customer service and you only haveone chance to impress people. Along with that Randy said that hotels should provide theamenities that guest are used to and the best way to gain advantage over competitors is to bevisible in the community, and have a strong focus on customer service and resolving guestissues quickly. After researching this topic we believe that the trend of the evolving technology in thehotel industry is impacting the industry and will continue to over time. As of now there a fewselect hotels that are using mobile phones as room keys but over time we will start to see moreand more hotels using this feature as part of the trickle-down effect. It will create a smootherexperience for guest and employees. Over time the technology is going to evolve allowing formore services to become available at the touch of a finger. Technology will not only be movingforward with phones but other products as well. Hotels use technology to reach out to thedifferent generations and fit travels to their needs and over time they will continue to getbetter at this. It is believed that in the near future hotels will have a total service model(Talwar, 2012). Guest will be expecting their stay to be personalized and hotels will be makingsure that their every need is met by having the correct bedroom, customized pictures withdigital picture frames, the correct temperature settings, and more. With this being said we alsoagree with Randy and that as big of a role technology does play, customer service fromemployees plays a larger role. 93% agreed that ‘Highly trained staff backed up by technologywill be the key to delivering personalized service and experiences’ (Talwar, 2012). If hotels traintheir employees to high standards of service and intertwine the new technologies that arecontinuing to grow they will have an advantage over other competitors. Being successful isabout knowing what information from the past or present to look at taking that and pairing itup with new ideas.
  • 6. Hospitality and Tourism Marketing and Sales 5 Hotels Future with Technology ReferencesChristensen, R. (2012, September 30). Technology in Hotels. (P. Swanson, & K. ODonnell, Interviewers)Haridasani, A. (2012, April 25). Mobile phone room key technology heads for Asia. Retrieved October 1, 2012, from Business Traveller: http://www.businesstravellerme.com/asia-pacific/news/mobile- phone-room-key-technology-heading-for-asiaKazmi, S. (2012, October 1). Unique Ways Hotel Business Centers Keep Tech-Savvy Guests Plugged In. Retrieved October 2, 2012, from Hotel Business Review: http://hotelexecutive.com/business_review/3159/unique-ways-hotel-business-centers-keep- tech-savvy-guests-plugged-inOgg, E. (2012, May 7). Finally: Amtrak to use iPhones for ticket scanning. Retrieved October 1, 2012, from GIGaom: http://gigaom.com/apple/finally-amtrak-to-use-iphones-for-ticket-scanning/ORourke, T. (2012, October 1). Driving Revenue Through Your Mobile App. Retrieved October 2, 2012, from Hotel Business Review: http://hotelexecutive.com/business_review/3158/driving- revenue-through-your-mobile-appTalwar, R. (2012). Hotels 202: Responding to Tomorrows Customer and the Evolution of Technology. Retrieved October 2, 2012, from Hotel Business Review: http://hotelexecutive.com/business_review/2699/hotels-2020-responding-to-tomorrows- customer-and-the-evolution-of-technology