Ms. Fruend

Guest Service / Customer Experience Mgmt

Making the Most of Technology and Delivering Experiences

The Keys to Success for Tomorrow's Hoteliers

By Melissa Fruend, Partner, Global Solutions, LoyaltyOne

Technological innovation is transforming business and our lives. And the travel and hospitality industry is on the front lines, looking for ways to deliver meaningful experiences to guests even as their interactions with staff continue to diminish. The key to long-term success for hoteliers is personalization - understanding what make great customer experiences, while leveraging new technologies to adapt services and interactions to guests' changing needs and expectations.

More than half of Americans - 55% - took to the skies for business or leisure in the last two years, according to a recent COLLOQUY survey. Add to that already massive figure the millions more who ventured out by train and automobile and one thing is crystal clear: Americans love to travel (and they have no plans to stop - year-over-year travel rose 5.5% last year).

What's less clear, however, is who these tens of millions of travelers really are and what they want. They are all explorers in one way or other, to be sure, but the reality is they are individuals. These individuals comprise a wide range of ages, income levels, business and personal needs, and preferences.

So, how do travel industry leaders, and hospitality providers in particular, better understand the needs, preferences and rising expectations of all these travelers and guests and leverage that to create a better experience? This question is of even greater import particularly in a world where technology continues to chip away at the face-to-face relationships that were once so commonplace throughout the travel industry.

Technology's Pain and Promise

The good news is that, while some technologies like smartphones and mobile apps, as well as kiosks and robots, will inevitably continue to distance travel and hospitality providers from their guests, other innovations are creating enormous opportunities for the industry. Opportunities to help customers make decisions, meet unmet needs, and remove friction from the experience to build closer relationships, while driving additional revenue and engagement in the process.

The key to this wealth of opportunities lies in segmentation and personalization. It means understanding data, examining customer experiences and leveraging new technologies to adapt with flexibility to guests' unique and ever-changing needs and situations.

Personalization is particularly important in building stronger connections with business travelers. These are the road warriors who value a higher, more tailored, on-property and time-sensitive level of services than their leisure counterparts. In fact, 81% of business guests say service has an impact on how they evaluate a travel or hospitality loyalty program.

The quest for personalization also exposes preconceived notions that can impact how well experiences are delivered. Here is an example: Guests are often pigeonholed as either leisure or business travelers. But in reality, many are both. They earn loyalty program points as business travelers with one set of service expectations, and redeem points as leisure travelers with their families. This necessitates a completely different set of personalized services, amenities and expectations. For hospitality industry leaders, being able to adequately leverage technology to adapt to whether a guest is in business-mode or family-mode at any particular moment can make a big difference.

What is more, understanding a guest's changing needs and expectations is not ever simply a leisure-versus-business-traveler binary choice. Often, it is far more complex and situational. COLLOQUY's study found that a full 76% of business guests said they would extend their trips for a little leisure time if their hotels offered discounts for additional nights or the chance to have a friend or family member join them at a discounted rate.

At other times, personalization is akin to a game of three-dimensional chess. With the right data, hotels should be able to create more agile rewards and benefits programs that predict when business or leisure guests might be more inclined to book into a hotel network's budget, boutique, mid-range, luxury or resort and spa brands.

How far can personalization go? Ultimately, it is about leveraging technology to let guests customize as they see fit. Hilton Worldwide's Conrad Concierge program is a prime example. Launched in 2012, it was the first hospitality software application that enabled guests to customize their hotel experience through their tablets or smartphones - by selecting rooms from a digital floor plan, purchasing upgrades and requesting delivery of amenities to their rooms before their arrivals.

Hyatt introduced the "Hyatt Has It" program in 2013 after conducting an 18-month analysis of female travelers, including 40 facilitated group discussions around the world. The hotel chain declared that listening to guests and digging deeper into the mindset of the female traveler has led to more meaningful and illuminating findings, helping to truly understand the needs of female guests. With conveniences targeted at Business Women, offering essentials such as a phone charger, curling iron, steamer, yoga mat, makeup remover wipes, and razor to keep, borrow or buy, the purpose of this new initiative was to serve as an easy way to obtain items forgotten at home without breaking stride as well as to limit the need for over-packing.

Talkin' 'Bout My Generation

One of todays most talked about customer segment differentiators is generational. This is a facet of personalization that dovetails nicely, of course, into travel and hospitality. Born in the last two decades of the 20th century, America's 75 million Millennials are adults now - they are tech-savvy, incredibly well connected via social media and have broad spending power. In fact, the United Nations estimates that Millennial travelers generate more than $180 billion in annual tourism revenue, a jump of 30% over the last decade. And research suggests Millennials are leading the charge in the pursuit of meaningful experiences over "things". This is something disruptors like Airbnb are paying a lot of attention to, as evidenced by the homestay network's new local experiences offerings.

COLLOQUY research reveals that experience-valuing Millennials are more likely to pay more for luxury car rentals, special dining and events, presenting creative hospitality leaders with some interesting coalition opportunities to explore.

For their part, other hotel industry groundbreakers, like the Global Hotel Alliance for instance, are making their mark by recognizing the unique needs and expectations of their various customers segments and providing them with their own authentic and unusual local experiences. Global Hotel Alliance's Discovery program, promotes its experiences to members through frequent, targeted email communications that offer hyper-local rewards - like a day with a fisherman off the coast of Portugal and later eating the day's catch, or enjoying a personalized meal at a luxury hotel with a menu selected by the chef from local ingredients.

Chicago's boutique Acme Hotel is a great example of gearing services to the needs and wants of Millennials. Acme focuses on trendy art, high tech services, hip crafted cocktails in the hotel bar and in house bakery with drip coffee and fresh pasties all day long. All day room delivery is also available and all of this is provided with a low impact on the wallet. The services that take into account the peaked interest of the Millennial cohort include morning coffee delivery, "knock and drop" room service which allows guest to lounge in their robes and not worry about interacting directly with room service hosts, hangover cure packages available at front desk and free Fit Bit rentals to track guest activity.

And while Millennials get a lot of attention, no one should forget that 75 million Baby Boomers and 66 million Generation Xers remain major players in travel and hospitality. There is of course the Gen Zers who should not be discounted as they get older and come to market with a new set of expectations for experience and shifted interests and behaviors.

Whether it is newer sharing-economy companies or longstanding hotel chains, hospitality leaders must continue building relationships, creating loyalty and meeting the unique needs and preferences of each generational cohort.

The Future, as in the Past is Still About Relationships

With technology being intelligently exploited to create an omnipresent and fluid travel experience for travelers, successful hotels of the future will need to find smarter and more effective ways to interact with guests. They will need to build personal rapport and emotional connections, and respond quickly when technology begins to commoditize or circumvent these relationship-building efforts.

The key to keeping relationships and bottom lines healthy, as Warby Parker Co-CEO Neil Blumenthal said recently, is to "eliminate low-value interactions and amplify high-value interactions." Fortunately, technology is already helping leaders in hospitality do exactly that. Technology is efficiently dealing with low-value interactions, like check-ins and check-outs, for instance, while devoting more time to high-value human interactions such as custom room accessories or specialized maid service. This will become more vital than ever as hotels' look to strengthen their brands and build lasting relationships.

The great news moving forward is that, even with the accelerated pace of technological change and rising traveler expectations, hoteliers and other leaders in the travel industry that invest in personalized rewards programs, thoughtful and next-level mobile technology and unique customer experiences will be well-positioned to drive long-term loyalty and profitability.

Melissa Fruend has over 20 years of expertise in leading the development of consumer loyalty and CRM strategy solutions with specific emphasis on the research and strategies for Millennials. As a Partner at Global Solutions, she is responsible for the Loyalty and CRM Strategic Consulting focus in our practice. She manages a team of consultants and business analysts who offer innovative loyalty strategies to improve customer engagement through increased customer identification that impacts revenues for brands. Industry expertise includes High Frequency Retail, Specialty Retail, Quick Service Restaurant, Grocery, Travel and Hospitality, Entertainment and Financial Services. Recent client relationships include Domino’s Pizza, Abercrombie & Fitch, Caribou Coffee, Darden Giant Eagle, E-Bay, PetSmart, Alaska Airlines, Four Seasons Hotels and Resorts, Tim Horton’s, and Darden Restaurants. Ms. Fruend can be contacted at 416-552-4513 or mfruend@loyalty.com Please visit http://www.loyalty.com for more information. Extended Bio...

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