Cloud computing. Mobile apps. Networked energy-management systems. New technology allows brands and hoteliers opportunities to lower costs and increase bookings, at a time when global economic volatility is challenging the industry’s core growth assumptions. Industry leaders discussed the increasing importance of modern technology to guests and revenue generation.
As mobile phones and tablet computers become ubiquitous, the basic nature of a hotel’s guest experience and service has been challenged.
“Mobility is such a big, important area of change right now and it comes in several flavors,” said Doug Rice, EVP and CEO of Hotel Technology Next Generation. “One side relates to distribution, selling hotels through mobile. This is almost getting old. Another side has to do with guests bringing their mobile devices into hotels with the entertainment content they want and interacting with everything in life.”
Rice, however, said he believes the industry-leading iPhone will not shake out to be the dominant platform for hoteliers.
“I really cringed when I watched these hotels make iPhone and iPad apps, because by the time they started developing them it was obvious iOS isn’t going to be the dominant long-term platform,” he said. “Android is becoming more important and overtaking Apple now. The app is an important way things will be delivered, but the only way hotels are ever going to keep up and recoup investment is on a platform that operates across multiple types of devices, making HTML5 the primary choice for hoteliers.”
A Neilsen Co. report from March 2011 found that 33 % of consumers planning to buy a smartphone in the next year will choose Google’s Android platform, compared to 30 % for Apple’s iOS. A full 50 % of recent smartphone buyers chose Android.
“The most valuable technology is going to do less things better,” said Tom Magnuson, CEO of Magnuson Hotels. Magnuson is preparing to launch 2,000 new hotel websites hosted on Google to capitalize on the opportunity for increased direct bookings. “We’re all really networked organizations now, so it is more important than ever to move fast and have really good partners.”
Today’s uncertain economic climate means hoteliers are best off thinking of new mobile sites and applications as new methods of direct distribution.
“Five years ago, who would have ever thought to use the word ‘app’?” said Ted Rusch, director of revenue management for The Roosevelt Hotel in New York City, which is managed by Interstate Hotels & Resorts. “If we don’t change, we’re going to get run over by the future. If I can book a hotel room on my iPhone in three minutes, why would I ever call a hotel or brand?”
Rusch said he thinks the biggest technology change the hotel industry will endure in the coming years will have to do with the demise of traditional DOS-based global distribution systems.
“Eventually the GDS will fade into the sunset, yet we still have to use it and manage it,” he said. “We have to plan that it’s going away because it is so much easier to book elsewhere. Right now mobile booking apps are in their infancy. I don’t think we’ve begun to touch on what they can truly do.”
Magnuson agreed with the focus on cutting out unnecessary middlemen and increasing revenue for owners in the process. “What keeps us working night and day to get this technology hooked up is finding ways that we can go direct and eradicate the costs hotel owners must bear,” he said. “We all operate according to the laws of supply and demand, so it helps to make hotels more profitable by increasing distribution and finding direct ways to do it.”