Autumn isn’t the only season that is taking shape right now — for hoteliers, budget planning season is fast approaching. Budget management is always top of mind for hoteliers, but no time more than now, as CFO’s and Controllers work to predict expenses and allocate spend for the upcoming year. The question on everyone’s mind becomes — where will 2019 investments go? Renovations? Technology? Staffing? Marketing? FF&E?
During the budgetary process, there are a number of variables to consider. Primarily, hoteliers tend to focus on guest-facing CAPEX initiatives in the form of property updates — think, new carpet in the lobby, fresh paint in the hallways, and anything that the guest can “see.” In a previous time when technology was simply running in the background, this made sense. Guests were mostly concerned with physical upgrades to ensure their stay was comfortable and up to aesthetic expectations. However, technology has long since given up its place in the backseat of hotel operations.
In today’s hospitality landscape, technology is a driving influence in a hotel’s appeal to guests, as they consciously seek out more tech-forward, mobile-centric and personalized travel experiences. Today, guests expect technology to be at their fingertips throughout every stay, aligning with their smart devices and enhancing their experience with your property in convenient and exciting ways. Not to mention, digital solutions are often the gateway to personalization and, according to recent studies, increasing personalization across channels can increase overall consumer spending by up to 500%. Further, 49% of guests say their hotel selection is influenced by high-tech features in the guest room and investing in technology reportedly increases in-room sales revenue by 20%
Cutting-edge technology can create huge benefits for businesses that are willing to be early adopters. With this in mind, it’s more important than ever for hoteliers to consider technology as a major budgetary item on their list.
Don’t Neglect New Tech
We all know that if you keep doing the same things you generally get the same results. The most important question to ask is: what will the adoption of specific technology add to your business? Most industries face constant challenges from procurement teams to deliver year-on-year cost savings and this can only be achieved by looking at new ways of doing things; technology can play a key role in delivering this.
In a study leading up to Q4 in 2017, 70% of hoteliers noted that they’d be spending less than $150,000 on technology upgrades. On the other end of the spectrum, a smaller percentage— 6% —said they’d be spending north of $750,000 on technology in 2017. This is especially concerning in the era of Airbnb, OTA booking continuously success and countless competitive disruptions and increasing consumer demands across industries. Connecting with guests and enhancing guest loyalty has never been more critical, so the question becomes — why aren’t hotels budgeting for much-needed technology updates?
While tech-based updates may not be immediately seen by guests and staff, that’s not to say they won’t be immediately appreciated. Investing in hotel technology allows hoteliers to run their business more efficiently, enhance staff productivity and genuinely create better guest experiences. A hotel’s operational model should be a well-oiled machined, and new technology is that much-needed oil change.
If It’s Not Mobile, It’s Not Guest-Friendly
Mobile isn’t an emerging trend — it’s long since invaded hospitality territory. With guests citing their smartphone as their single most indispensable item they carry with them when they travel (ahead of their toothbrush, deodorant, and driver’s license), the delivery of a mobile experience within hotels becomes paramount. From pre-arrival to post-stay, guests should have access to mobile notifications, check-in/out, self-service kiosks and even keyless entry to ensure a seamless, mobile-friendly stay. These updates can be offered through a hotel’s mobile website or a dedicated native app, as long as they are user-friendly and help to enhance the guest journey at every touchpoint through increased efficiency, convenience, and personalization.
Beyond personalization and convenience, mobile technology also helps to drive revenue, enhance engagement and inspire loyalty — making an indisputable case for hoteliers’ investment in mobile guest journey technology this year. With an increased connection to guests, and guests’ willingness to share information in exchange for personalized offers, mobile technology unlocks a more targeted marketing approach for all promotions, upgrades, and communications.
Paradoxically, new technologies can be both a major source of expenses for hoteliers, as well as a method of eradicating your biggest costs. Technology is, if anything, the investment that keeps on giving, and places hotels in a position to adapt and grow with evolving guest demands. It’s an established truism that the only constant is change. If you want your business to survive, you’re going to need to keep up with that change. Of course, hotels must never lose sight of their budget initiatives, but technology budgets that include innovative mobile-centric solutions should be looked at as a long-term, revenue generating investment. Offering a beautiful property is one thing, but a beautiful property that utilizes guest experience technology to drive profits, loyalty and operational benefits is in a league of its own.