How the IoT Will Shape the Hospitality Industry

By Andy Ellicott Chief Product & Marketing Officer, | January 21, 2018

Every company is becoming a technology company, and players in hospitality industry are no exception. While friendly service, quiet living quarters and a comfortable bed will always be the cornerstone of the hotel industry, technology already permeates a hotel guest's experience. From the keycards guests use to enter their rooms to the WiFi they purchase during their stay, spending the night at a hotel has become a digital experience - and will only become more so.

The transformation has been happening for quite some time, and bookings were the first area of the hospitality industry to be impacted. By letting guests check for room availability on their own, hotels reduced staffing expenses. By pairing that experience with algorithms, hotels began to automatically optimize pricing depending on availability, helping them sell more rooms at maximum profit. And it wasn't just the large hotel chains - by listing with an online travel agency (OTA) like Kayak or Travelocity, smaller hotels reached a larger audience. And now, thanks to newcomers like Airbnb, even amateur hotel hosts are able to put skin in the game.

Technology led to more choice, a quicker and easier experience for the consumer, and a thriving industry. Annual online-travel spending grew 55 percent between 2012 and 2016, spurring competition between hotels and OTA's - the latter which accounted for two thirds of online spending in the U.S. in 2015.

More recently, mobile devices have begun to disrupt the way consumers book hotels. Consumers use mobile devices about as much as their laptops (46 percent vs 48 percent), which has impacted the way they browse for and book hotels. Dimension Date reports that most hotels and restaurants have adopted mobile-first strategies and increasingly deploy mobile apps, with new mobile offerings like iPhone apps up 61 percent year over year. Marriott alone booked over $1 Billion in revenue through their mobile app in 2015.

But technology can to go much further and deeper in improving a guest's experience than a mere bookings website, or a shift from desktop to mobile. One of the biggest ways the guest experience in hotels will change will be through technologies associated with the Internet of Things (IoT).

IoT is rapidly becoming a trillion dollar market. People already leverage IoT through devices like smart watches (FitBit, Apple Watch), smart home devices (Nest, Canary, Alexa), and connected cars (OnStar, Tesla). By connecting these devices centrally, people can control the temperature of their homes, order a refill of washing detergent using just their voices, or unlock their cars from hundreds of miles away.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.