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Strategically Positioning Hotels for ‘Techspitality’

Strategically Positioning Hotels for ‘Techspitality’

Consumers are definitely changing their behaviors. Recent reports have shown that both millennials and, more surprisingly, Boomers want more technology in hotels. Guests across the board want an efficient check-in experience and easy access to their room, and most aren’t willing to wait in lines to obtain these service. These shifts in consumer preferences, in part, drives adoption of technologies such as check-in kiosks (for example, at Yotel New York), robots at the front desk (like those at Henn-na Hotel, Japan), robotic baggage storage, robotic concierges (such as at Hilton, McLean, Va.), and Artificial Intelligence-supported chatbots. All this raises the question—is human interaction still an important and indispensable part of hospitality?

This transformation where hotels are using more and more technology in operations, including customer-facing areas, is termed techspitality. Even though a large and increasing proportion of consumers are ready to embrace these technology solutions, the industry is lagging to adopt technology, perhaps due to the implicit hospitality philosophy.

Demographic trends and the rapidly increasing sophistication of technology provides alternatives to human-delivered services, suggesting that hoteliers will need to anticipate a very different competitive landscape in the next decade, if not sooner. In addition to individuals’ attitudes to technology, economic factors also play a role. Customers will prefer a faster, quicker, and less expensive service, even if highly reliant on technology. Just look at the evolution of airline product/pricing models. Passenger check-in processes, including baggage, are increasingly automated and the number of airline staff engaged in this activity has greatly reduced. Jet Blue and Delta are piloting biometrics-based self-boarding processes. Consumers appear to readily accept technology solutions when it eases their service experience.

These trends indicate two broad future directions. One end of the continuum will be anchored by a high tech/low touch service product, and the other end by a high touch/invisible tech service product. The term ‘invisible tech’ describes back-office operations or guest support that facilitated by technology but largely not visible to the consumer. The matrix below shows the strategic positions that are possible in this situation. The vertical axis describes the level of human interaction in the consumer experience while the horizontal axis describes the visibility of the service technology to the consumer.

Techspitality matrix

Augmented luxury is a luxury service product in which the customer interface is augmented by technology both visible and invisible. Even luxury offerings cannot escape the economic advantages derived from deploying invisible technology nor the increasing need to deliver a unique guest experience. Consider, for example, Ian Schrager’s latest concept, Public. Incorporating technology and outsourcing housekeeping and telephone operations has reduced the number of Public employees at the 370-room New York hotel to 50. However, aesthetics, product design, and redesigned customer-facing job descriptions create a sense of luxury for these products.

Traditional luxury describes a product that depends, to a great extent, on current conceptions of luxury service with high room-to-employee ratios (for example, Four Seasons). While front-end technology may be deployed with caution, these traditional luxury companies will take advantage of the increasingly sophisticated back-office technologies such as artificial intelligence, the Internet of Things, and sensor technologies to manage the delivery of services. The use of technology will help achieve greater efficiencies in the back office, freeing resources that can then be applied to expensive, high-touch service.

Tech describes a lodging product that incorporates the greatest level of technology both in customer-facing and in back-office operations. The Henn-na hotel in Chiba, Japan, “employs” 140 robots and seven humans to manage a 100-room hotel—a room-to-human employee ratio of 0.07.

Finally, Economy represents hotels that have a low to medium level of human interfaces with almost no visible technology in the customer interface. However, these products are likely to employ technology to support and enhance back-of-the-house operations.

As hoteliers and guests alike develop a greater understanding and acceptance of technology, the likely differentiating factors among hotels will be the level of technology in the interface and product design. It is entirely feasible to imagine some customers who will willingly pay premiums to enjoy a “high-touch” service product in a world that is more and more technology oriented. What is clear, though, is that evolving technology preferences among various demographic groups and advances in technology are creating imperatives for reimagining the lodging product of the future.

 

 

About the Author
Karthik Namasivayam, Ph.D., is a professor and chair of the Department of Hospitality and Tourism Management at Rochester Institute of Technology. He has more than 30 years of diverse hospitality industry experience on three continents. He is currently interested in technology and its applications in the hospitality industry and can be contacted at kxnism@rit.edu.

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