How can hotels adapt their offerings to take account of the huge changes arising from digital technology? The exponential rise of Virtual Reality, Artificial Intelligence and connected objects is opening up new fields of opportunity for the hotels of the future.
With the increasing deployment of smart city technology, hotels are also taking on digital features and becoming hybrid creatures…for better or for worse, as the hotel industry was among the first sectors to be impacted by the Uberisation of the economy. The chief ‘culprit’ here is Airbnb, the undisputed leader in the home rental market, with 2,000,000 short-term lodging options on offer in 34,000 towns and cities. These new phenomena are disrupting the hotel sector and hotels are now having to re-think their business models. According to research company STR, the U.S hotel industry is expected to continue its performance growth through 2017. It appears to be a good time to think about the hotel of the future, with some new business models, new types of customers, new segments and new ways of using hotel space.
Optimising hotel occupancy rates
Thinking about the hotel of the future basically comes down to identifying the problems affecting the sector and identifying technology solutions that can help solve them. Faced with ‘uberisation’, hotel managers are having to step up their efforts and use their imagination to adapt their offerings to the market and to the aspirations of society at large. The major hotel chains have been the first to implement strategic changes in order to optimise their occupancy rates.
The Accor Hotels Group has for instance launched a project entitled ‘Nest’, which is designed to transform hotels into real communities – with the thinly disguised aim of competing with Airbnb at a more sophisticated level. The idea is to offer new practical services to people living in the vicinity of Accor hotels. This represents a new way of getting closer to their neighbourhoods and creating new social links.
The hotel chain is also looking to attract a younger clientele, between 18 and 35, by for example offering event-type services. Addressing this new target audience, which craves sensation, and is more ‘connected’ and volatile, might be a way to fill a hotel flexibly and fast, outside the peak periods that are preferred by more mature and better-off hotel guests. Launched during the Hub Forum 2016 event held in Paris last October, but still at the ‘work-in-progress’ stage, ‘Nest’ is one of the flagship initiatives of the Accor Group’s digital transition, which is projected to cost €225 million over four years.
Many other hotels are also adapting their offering to these new demands. The As You Stay app enables you to book a room by the hour rather than the night and to pay ‘as you go’. You no longer have to plan far in advance when you will arrive to take your room, as no reservations can be made more than 23 hours before arrival time. So hotels that are able to take on board the new needs of their customers will gain in flexibility. Booking by the hour means that a hotel can be filled over time by offering new ways of filling the available spaces. The formula works just as well for a small guest house as a Hilton hotel and can appeal equally to a businessman, a tourist or a large family. Here we have a resolutely modern way of doing things, which opens up new opportunities as regards hotel services.
The hotel of the future: a sensory experience
In order to implement these changes and appeal to the Millennial generation, the hotel of the future will have to offer sensory (even sensual) and fun experiences.
British futurologist Ian Pearson predicts that by 2030 hotels will be a subtle blend of science fiction, relaxation and eroticism, based on virtual reality(VR) and augmented reality(AR) technologies. Hotels will therefore need to invest massively in new technology equipment, especially for entertainment. In tomorrow’s hotels, the bedroom will no longer necessarily be the basis of the business – a change which is already underway. At the forefront will be a range of services and things to do. Halfway between a theme park, a well-being salon and a pleasure garden, the hotel of the future will aim to have something for everyone.
In the near future, reckons Pearson, the hotel experience will be based on connected interactive bedrooms. Traditionally a hotel bedroom is an intimate, almost secret place: a sort of hideaway from the rest of the world, a refuge from the bustling public domain. With the changes brought about by digital technology, the hotel bedroom may well become a sort of window on the world, offering new forms of social interaction based on VR and AR. In addition, there will be new games, entertainment and also sexual activities to satisfy all customers’ desires, predicts the British futurologist.
In addition to updating hotel entertainment areas, the new technologies will also be embedded in hotel bedrooms, helping to improve guests’ sleep patterns and well-being. Ian Pearson foresees that the hotel experience might be projected into your dreams so as to improve your sleep. Already today, as L’Atelier reported in an earlier article, numerous connected objects and VR and AR apps are being invented to revolutionise sleep. All in all, the hotel of the future is likely to be multidimensional, interactive and customisable, providing well-being, entertainment and gaming opportunities, says Pearson.
Future sleep via Travelodge
An ‘à la carte’, ultra-customisable hotel experience?
However, the real innovation is likely to be the ultra-customisation on offer at hotels. The ‘smart hotel’ will be capable of understanding and predicting the needs and desires of the guests, able to adapt perfectly to their moods, tastes and habits. Based on experience, the hotel will create ‘à la carte’ bedrooms providing personalised services, ranging from connected sexual objects to interactive siestas. Hotels 2020 – Responding to Tomorrow’s Customer and the Evolution of Technology – a study authored by global travel industry futurist Rohit Talwar, who is the CEO of research and consulting company Fast Future Research – polled customers from a large number of hotels worldwide as to their vision of what hotels will look like in 2020. Some 86% of those surveyed agreed that personalisation would be an important element and that customers would be able to choose the size of their room, the type of bed, the audio equipment they want and would decide whether to book a room at a particular hotel on that basis. So we can probably expect to see hotels driven more directly by their customers. But how can the hotel sector business model be adapted to fit these new needs and expectations?
An à la carte hotel means of course highly personalised services. Every guest will be offered a range of services suited to his/her wishes. To do this, the connected hotel will use data drawn directly from online resources, social networks and other input. This will mean that a bedroom can be easily adapted to suit the individual customers, downloading playlists of their favourite musicians, creating a particular ambiance or injecting specific scents that they are especially fond of, according to information available on the social networks. This trend to hyper-personalisation will also see hotel firms competing with other once again, with each one striving to develop its own branded universe. Brand publicity and the profiling of hotel brand names on the social networks are likely to prove decisive for success as hotels strive to meet the expectations of their future customers in an optimal manner.
The Hotels 2020 study reveals that the desire for hyper-personalised services is shared by both the providers and their potential customers. Some 96% of customers polled agree that “hotels will need to develop strong social media ‘listening skills’ to understand how customer needs and perceptions of brands and service quality are truly evolving and to develop service propositions, marketing messages, and pricing solutions that reflect the needs of an increasingly diverse customer base”. One consequence of these changes is that hotels will need to train their staff in new forms of communication and the use of the relevant state-of-the-art technologies.