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To Win the Future, Avoid Innovation Mistakes from the Past

To Win the Future, Avoid Innovation Mistakes from the Past

It’s fun to think about the hotel of the future and what that next-generation guest experience could look like. But when hoteliers imagine transforming their properties with check-in kiosks, robot butlers, and rooms controlled via smartphone, they often overlook opportunities for improvement even before guests arrive on the property. Keeping up with front-of-the-house expectations means doing more than tinkering and, instead, transforming.

Hoteliers understand true hospitality better than anyone and how to take care of guests. Service remains a big advantage that hotels have over alternative accommodations. The booking experience, however, is still stuck in the past for a large swath of the industry, and hotels face an immediate threat from digital companies that have managed to improve consumers’ online booking path.

Lodging companies need to address this problem first and foremost. Conversion of website visits to secured bookings already languishes at rates that can be less than 1 percent for many hotels. When those hoteliers fall behind in basic e-commerce, that performance gets even worse. Fixing a lackluster online booking experience is a crucial early step in developing a revenue strategy that helps hotels drive greater profitability today, tomorrow, and the day after. Without that, hoteliers are losing bookings to intermediaries and what conversions they can secure on their direct channels may not necessarily be putting their data to its optimal use to make the most money.

Hotels have not always acted fast enough when they found themselves in a race to innovate. In 2002, when online travel agencies (OTAs) were just upstart marketing partners, few in the industry pictured OTAs growing as big and influential as they are today. Right now, these same competitors—not to mention Google and perhaps Amazon one day—are trying to develop new ways to capture the share of bookings that continues to migrate online.

Hoteliers can adopt new strategies around their booking and e-commerce experience to guard their market share and grow it. It’s not exactly low-hanging fruit, but it is a goal within reach. The broad consensus of what consumers expect from the travel industry is an online booking experience that is more seamless and more personalized, much closer to the modern e-commerce process they now get from the likes of Amazon or Netflix.

Hotels should focus on removing the friction from online bookings and reducing the amount of time and effort their potential guests must expend to find the right option. The fewer clicks it takes on a hotel’s direct channels to find the right room type at the right price for the dates a guest is seeking, the more likely she is to convert. Even better, once she begins her stay, a hotel’s staff can learn what she spends on the property and use that data to entice her back next time, with the room type, packages, and amenities that would appeal most to her.

Innovation around the guest experience is obviously important. But surface-level upgrades like check-in kiosks or keyless entry won’t completely transform a guests’ journey in booking, during their stay, and after. Keeping up with new amenities isn’t enough to prevent the OTAs, Google, or any other digital giant from innovating the booking experience and winning at a hotel’s expense.

Instead, think bigger and look deeper. Without replacing antiquated legacy systems to invest in a streamlined booking path, you’re building an empty “hotel of the future,” without enough guests for your robot maid to clean up after.

 

About the Author
Patrick Bosworth is CEO and a co-founder of Duetto, hospitality’s Revenue Strategy Platform, based in San Francisco.

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