Virtual Hospitality: Is VR Here to Stay or the Latest Fad?

Virtual reality is about to return in a big way. Once considered a high-tech oddity best left to video games and flight simulators, the practical potential of VR is getting noticed by professionals across the board, from engineers and doctors to marketing managers and hoteliers.

More and more, hotel owners are beginning to realize what a powerful marketing tool virtual reality could be for the travel industry. Giving a potential guest the ability to walk into their lobby without leaving their desk could change the way advertising is done.

Or it could just be a fad.

Will the technology be a game changer, like the smartphones in our pockets, or will it be just another Google Glass—exciting in concept but unable to catch on with consumers?


The First Time Around
In the ’80s and ’90s, virtual reality seemed poised to be the Next Big Thing—video game makers like Nintendo and Sony were hitting the market with the Power Glove and Sega VR, respectively, new hardware that promised the first truly immersive virtual reality experience.

Companies like VPL Research and W Industries were also driving innovation with new VR hardware and software, and publications like CyberEdge were forming to cover the growing industry.

But the eyes of the industry ultimately proved bigger than their stomachs—developers had trouble getting their products to a price point accessible to a mass market, and while technology was advancing with lightning speed, it still wasn’t quite ready to deliver the truly immersive virtual experience designers envisioned.

The final (if temporary) nail in the coffin was pounded in by another emerging technology—suddenly the Internet was everywhere, and consumers had a shiny new toy to demand their attention.

“(The Internet) became the new breakthrough technology that was going to amaze everybody,” Ben Delaney, the editor of CyberEdge Journal, tells The Verge. “The mainstream press found other, more exciting things to talk about; especially toward the end of the ’90s when very few of the wild promises had been fulfilled. People just walked away from it.”

Don’t Call it a Comeback
Flash forward to 2012, when the words ‘Oculus Rift’ started to take on meaning. Consumers had had time to process the Internet into a background hum permeating their lives, technology had caught up to vision—and developer Palmer Luckey was able to crowdfund $2.5 million for his VR prototype.

Facebook took notice, and purchased Luckey’s company in 2014 for $2 billion. Other corporations took the hint and scrambled to catch up—now headsets from Sony, HTC, Samsung, Microsoft, and others are scheduled to hit the market in 2016 or sooner.

Same Old Song and Dance?
So is virtual reality here to stay? Industry insiders think so.

“This is not a fad,” We Are Social Singapore managing director Don Anderson tells Campaign US. “While there are plenty of detractors out there, any noise they are hoping to create is being drowned out by the commitment currently exhibited by the world’s largest tech firms. VR is something none of us will be able to ignore.”

Business Insider forecasts that VR shipments will create a $2.8 billion market by 2020 (compared to $37 million in 2015), and that headset demand will grow at a 99 percent compound annual growth rate between those years.

While reaching a wide audience is still a concern, price points seem to be more attainable:

• Oculus Rift: Officially $350 (rumored at around $200)
• Samsung Gear VR: $199
• Fove VR: $349
• Zeiss VR One: $120
• Avegant Glyph: $499
• Razer OSVR: $199

And for those desiring an even lower price (say, under 10 bucks), enter Google Cardboard and the like—inexpensive, cardboard frames built to hold a smartphone.

Uses for the Hospitality Industry
Travel industry marketers have already begun to capitalize on virtual reality, and a new industry is emerging to meet the demand—companies like YouVisit are carving out a niche producing virtual tours of hotels, college campuses, and other destination points. Radisson reports that hotels with a virtual tour are seeing 135 percent online revenue increases over hotels without one.

Last summer, Marriott gave VR a go with its “Travel Brilliantly” campaign. The company created large phone booth-like stations, called “transporters,” that allowed guests to virtually explore a Hawaiian beach or climb London’s Tower 42.
More recently, Marriott placed VR headsets in two of its locations (New York Marriott Marquis and the London Marriot Park Lane) as part of an ongoing test. The program, called “VRoom Service,” allows guests to order a VR headset to their rooms for 24 hours. The device comes loaded with three pieces on content, including a woman visiting Chile, a woman exploring Rwanda, and a man traveling Beijing.

Marriott isn’t alone. Last year, Destination British Columbia unveiled “The Wild Within VR Experience,” which gives potential travelers a 360-degree tour of the entire region.

“We see virtual reality as an innovation that will change the travel business,” Marco Ryan, chief digital officer for Thomas Cook Group, tells Bloomberg Business. “The closer you get to the destination, the more excited you are to have that experience.”

Going Forward
One still can’t say definitively that virtual reality will become a mainstay in the travel industry, or beyond—a lot rides on products that haven’t arrived yet, and for some, the technology might actually make them sick.

But if consumers embrace the technology, giving guests a virtual view of what they have to offer will be a powerful marketing tool for hoteliers. And if VR becomes as popular as they say, that might be what it takes to pull those guests away from their screens and book a real room.

About the Author
Abi Mandelbaum is co-founder and CEO of YouVisit, a fully integrated platform for creating, distributing, and monetizing virtual reality and other immersive experiences across all devices, including headsets, mobile, and desktop. YouVisit has worked with thousands of businesses and institutions such as Hewlett Packard, Microsoft, Carnival, Yale, Zumba, and New York’s Central Park.

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