Technology :: The Future of Hotels: How technology can move us forward

Amadeus interviewed Anton Hell about how technology can help hotels drive their business objectives better. Hospitality technology expert Anton Hell has a thorough understanding of the hospitality industry having spent more than 20 years of his career in the hospitality and travel sector. Born and raised in Austria, he has lived and travelled extensively in Europe, America and Asia and held executive positions with major international hotel companies and cruise operators such as Marriott, Penta and Cunard Line.

Given his extensive background in the industry, he carries within him a passion to develop new business solutions that result in more efficient and cost-contained hotel operations. For him, technology exists to serve a greater purpose in fulfilling business objectives. Currently, he is the Managing Director of Berlin-based hit-CONSULT GmbH. The company aims to help its clients to strengthen their competitive edge in the industry by optimising processes in the areas of operations, controlling as well as marketing and distribution.

What are the key drivers that make hotel companies consider adopting new technologies?

The first key driver is reducing complexity within our technology. A full service hotel operation has easily three or four operational systems for specific functions, i.e. Property Management System (PMS), Sales and Marketing, Catering, Point of Sale (POS), with mostly proprietary interface technologies connecting them. Since these on-property systems generate both vital business intelligence data as well as customer relationship relevant information, they in turn are connected to above-property systems (Customer Relationship Management (CRM) solutions, Business intelligence tools, finance, etc.). 

The questions that hotel companies need to answer are: how can we reduce complexity, how can we increase system availability and how do we obtain business relevant data to market and run our hotels effectively? The concepts of cloud computing is a great way of putting critical systems “above property”, hence eliminating proprietary interfaces and increasing data security. Another important initiative that is developed by European Hotel Technology Next Generation (HTNG) - an organisation aiming at standardising interface specifications and thus simplifying system to system integration.

Another key driver is the rapid evolution and change of the distribution landscape. Can our existing technology infrastructure and operational processes easily adapt to both emerging distribution channel and/or changed customer shopping behaviors? Among other things, the market penetration of internet-enabled mobile devices will have a huge impact on how we distribute, how we engage with our guest and how we enhance guest service.

Last but not the least, product differentiation. I believe that a well-defined and understood target customer group(s) (who are our guests), a product definition serving key needs of the target group (what is important to our guests) along with a defined business strategy and objectives (how are we going to deliver it and measure our success) are key to success. We see this happening as more and more hotel companies create sub brands to that effect. In that respect, CRM will continue to play an important role to help hoteliers better understand their customer needs and to effectively engage with their customers in pre-stay, during their stay and post-stay.

Since changing technology is also a means to achieve strategic business objectives, how should hotel companies get prepared for that?

Systems and technology alone do not solve issues, they provide a framework to support vital business processes. Thus technology needs to be adapted to your business needs and not vice versa.

I believe that first of all companies should clearly define their business objectives with regards to new technology or change of systems. Based on our experience, implementing a new technology usually affects various departments, if not the entire company. We very often see that individual key players within the organisation have different understanding/opinion of what exactly the objectives are and what these new technologies should enable.

Secondly, make sure all key players support the agreed objectives and understand their individual responsibilities.

Thirdly, establish and agree on a realistic cost/benefit and return-on-investment (ROI) calculations. Going through the process ensures that the new technology and its functionality are tailored around your business needs, that systems are not under- or over-engineered, and that technology positively contributes to your business success.

Finally, measure and monitor your success. Based on the business objectives and the ROI, derive appropriate key performance indicators (KPI’s), and monitor them regularly. This allows hoteliers to adjust implementation strategies if the KPI’s show underperformance and/or to determine early in the process when to abandon the project.

How can hotel companies bridge the gap between technology, operations and controlling?

When we help customer, we always first go back to the fundamental questions: Who is the customer, what are his needs, and why is he buying my product/service? Once these questions are answered, operational requirements are clear, as well as what kind of technology is required to best support the operation, and what financial and operational controls must be implemented.

Focusing on the customer greatly benefits the company in making sure that they do not over-engineer certain processes and that the key processes that are important to the customer are optimally supported by technology.

How can hotel companies define new business and IT processes, and align them with their organisation’s overall business goals?

Again, I believe customer focus is crucial when answering most of these questions. How does my customer buy the product? How does he experience it? How do I make him return? These questions should be at the center of every technology re-engineering process or any IT project to stay focused on the real value of what any new technology should deliver.

What key industry trends will be the most impactful for the next 3 years?

The whole mobile computing trend will continue to have a major impact on distribution channels, more precisely on how customers shop and buy travel products, and will consequently change customer booking behavior. Most of our customers see 80%+ of all bookings made from a mobile device being made on the day of arrival. Time window of booking will shorten. For example, there will be instances when larger companies will abandon global contracting and will give more freedom of booking back to individual travelers as long as they stay in a certain price range. This is a key change of how the industry will distribute and this will impact technology greatly in terms of how product information and prices are presented.

Providing solid and good internet connectivity in every property will be a MUST. The role of in-room entertainment will diminish and may even go away eventually since people will bring in their own entertainment with them.

The whole energy theme will become an issue in itself too. Energy and energy saving technology will come increasingly into play. Within the next three years, management companies will start adding energy saving-related requirements into their management contracts because of operational cost concerns. Before, it was not as an issue but now it will be.

CRM is going to be more and more prominent especially for products that do not necessarily compete over price like niche products. More and more hotels will refocus their distribution strategies, defining better their customer segmentation and how to take care of them, for example by setting up smart loyalty strategies. Adoption of CRM systems is still in its infancy in the hotel industry simply because of system complexity. It will require superior guest recognition improvements to meet the needs of hoteliers in their guest strategies.

Pressure to consolidate will increase. Focusing on brand and brand value will also be a major trend.