June 14th, 2017
While the winds of change will usher in the predictable and unpredictable in 2017, RAR Hospitality founder/CEO Robert Rauch (pictured below with his wife, Linda, and daughters Melissa and Meredith) shared 10 key hospitality trends he anticipates will take hold this year.
Text and Chat – Use of texting to respond to guest needs and safety and security issues that require immediate attention; provide subtle communication; or eliminate language barriers will be technologically feasible and available in many hotels. This is among tech trends hotels will employ to attract Millennials, the fastest-growing consumer group that will eventually dominate due to its size. “If we want to attract Millennials, we have to be willing to speak their language,” Rauch said. He said most of his employees are Millennials.
His hotels are employing Zingle Inbox, a web-based text and messaging software. Guests download the app, which functions as a combined concierge and guest services communications channel, he said. The system provides a dashboard that allows employees to manage multiple conversations, see on-demand analytics, scale communication and create automations from any device.
Mobile Check-in – Another Millennial-pleaser, mobile check-in will allow guests to control their hotel visits by picking their rooms directly from their phones and bypass the lobby check-in desk. For security reasons, the door lock is enabled with radio frequency identification technology, which is programmed with a code when the guest makes the reservation and room selection. Once the RFID code is set, the door only opens when that guest’s mobile device is nearby. Rauch said rather than a keycard, guests hold their phone near the door lock.
Relay Robot will assist guests at RAR Hospitality’s Fairfield Inn in San Marcos
Guest Services Robots – Hotels will use robots to deliver immediate customer service, resulting in improved service and savings on labor costs. Rauch plans to use Relay Robot (above), a product of artificial intelligence developer Savioke, to provide guest services at his company’s new Fairfield Inn and Suites by Marriott in San Marcos (below), opened June 8, 2017.
He said Relay is programmed to interface with the elevator operating system, allowing it to deliver towels, other linens and food from the pantry to any guest room 24 hours per day, thus improving service at limited-service hotels, where only one staff member may be available at night. The robot has a digital screen for communicating with guests. Rauch also said that with minimum wage rising, hoteliers may use robots to perform a houseman’s job, which involves routine tasks like bringing housekeeping staff clean linens.
Sharing Economy – While Airbnb steals some market share from hotels, Rauch said the firm’s likely future is as an online travel agency of sorts. Airbnb’s low commission structure would provide more upside as a unique distribution channel that benefits hosts and hotels, rather than a traditional competitor to hotels, he suggested. He said Airbnb charges just 3% for bookings and could compete directly with online travel agencies like Expedia and Priceline, which own the majority of online booking services, and charge hotel operators 13% to 25%, particularly if it expands into other tourist areas like rental cars and airline bookings.
Loyalty Pricing – With online travel agencies like Expedia charging high commissions, it is imperative for hotels to manage the cost of acquisition of each customer and find ways to educate them to book directly with the hotel. Rauch told Bisnow operators will focus on growing their loyalty programs by using their email database of all former guests to market directly to consumers.
In-room Technology – Today’s guests expect the in-room entertainment experience to be better than or at least as good as they have at home, and they want it on demand. “Millennials want content from everywhere, so to the extent that rooms are large enough, guests can expect to see 40-inch TVs with 500 channels and equipped with similar technology they have at home, like Netflix and Slingbox,” Rauch said. He said this is an advantage that Airbnb now has over hotels, as host homes generally offer more viewing options than hotels.
Marketing and Social Media 2.0 – “Data and analytics must be mined to measure successes and look for new ways to improve our guest experience or market toward a specific demographic,” Rauch said. Hoteliers will gather this information from travel-oriented sites, like TripAdvisor and other social media outlets people use to get travel information or share their travel adventures with friends and family, he said.
He said hotels will employ people with marketing research expertise to visit social media sites to try to find out where people are planning to visit, Rauch said, since some people map their planned trips online to share with friends. To capture this business, hotels will have to optimize their websites with Google AdWords and provide information optimized for smartphones, he said.
Culinary Options – Guests expect an experience at every level when visiting a hotel, so food and beverage should not be an afterthought — even if it is just a grab-and-go option. Rauch said his Fairfield Inn and Suites in San Marcos will serve guests a complimentary breakfast to compete with the Hampton Inn across the street.
Company Culture – With minimum wage increasing throughout the country and a workforce that’s more health conscious, this trend of defining a positive company culture is apparent everywhere. “We operate under the philosophy that if we treat our employees well, they will treat our guests well and our guests will come back,” Rauch said. “We pay competitive wages — above minimum wage — and provide healthcare benefits and programs that honor our employees for their hard work and loyalty.
Design, Brands and New Markets – Millennials favor hotels with large, open lobbies for connecting with others and WiFi throughout a site for using their multiple electronic devices. They also prefer boutique-style hotels, particularly ones with authenticity like RAR Hospitality’s historic Keating Hotel in San Diego’s Gaslamp Quarter (above).
To capture Millennial guests, major hotel operators continue to develop new boutique brands to compete with independents for their business. Rauch said Hilton has announced three boutique brands, TRU, Canopy and Curio, and Marriott has launched two, Autograph and Edition. While these “soft brands” have the look and feel of independent boutique hotels, their reservation systems are tied into the parent company’s system.
Additionally, the Chinese outbound travel market is No. 1 in the world and will likely hit 200 million visitors by 2020. As a result, Rauch expects to see more Chinese capital going into US hotels, especially those combined with condominiums, like The Wanda Group’s $1.3B One Beverly Hills Hotel & Residences project on the former Robinson-May store site at 9900 Wilshire Blvd. He said this combination is popular because developers can pre-sell the condos to build the hotel.