BERLIN—The hotel industry has historically been a slow adapter to new technology and not particularly known for being at the vanguard of innovation. In order to remain relevant and ahead of the curve, hoteliers need to be more cognizant of what tomorrow will bring.
The important conversation around innovation in the hospitality space was held during IHIF 2022 at a panel session titled: "Can the Hospitality Industry Drive Innovation?" The debate consisted of two schools of thought: 1) Do we really need to innovate because... 2) We can adopt the best-in-class innovations from other industries.
It's an age-old debate: pioneer or co-opt?
"There is almost a fixation to use only products that are fit for hospitality; whereas, in fact, most of the use cases we have are common across multiple sectors," said Kevin Edwards, SVP of commercial, Alliants, a guest experience technology platform.
Alliants provides a customer messaging platform used by hotel groups, but also other businesses, such as DHL UK’s express courier operation which handles one million messages a day, a volume bigger than all of Alliants’ hotel clients put together.
Some operators are not fans of technology specifically designed for hotels. “Hospitality can certainly be an enabler of innovation but the best innovation comes [from] outside the industry, whether that’s software for HR, finance or CRM," said Rami Zeidan, founder and CEO of Life House. “One-hundred percent of our tech stack is non-industry tech. We’ve built nine proprietary products and where we are making bets on integrations, it’s been with industry-agnostic products."
The New Labour
Tackling the recruitment and retention challenge requires new ideas. Giving employees a stake in the business is the way forward. Jeff Coe, founder of Limestone Capital, said: “Our biggest challenge over the last 20 years has been staff and people and management. We are now doing share option deals on each hotel so everyone who works there has vested shares.”
The speakers noted that innovation and new implementations must always have measurable goals that point towards profitability.
Consider a 17,000-room U.S. hotel group, which, as Edwards pointed out, was considering introducing mobile keys, but did not have any data to indicate the ROI on it. "Just to keep pace with the competition is not a good-enough reason when you are going out to try and persuade ownership groups," he said. "We advised them not to go ahead because, when there is no measurable outcome of success, those are the projects that tend to backfire.”
In the end, it is people who have to implement change, said Norbert Speth, VP of strategy and openings, Deutsche Hospitality. He noted that resistance can be strong.
Zeidan at Life House highlighted an industry report that showed that revenue management systems with an auto-pilot function have less than 10-percent take-up because staff do not trust the AI pricing."It’s pretty shocking and manifests the resistance to change in the industry," he said.
Added Edwards: “The biggest objection to why someone should change their property management system is that the staff are familiar with the Opera system. It’s a farce. We need to simplify these systems for them. ”
Zeidan said Life House has solved the labour turnover problem by building software that is so simple to use that he can literally “pull someone off the street and teach them in a few hours.”