Automation and The Hotel Guests Cycle: Panning and Booking

AUTOMATION AND THE HOTEL GUESTS CYCLE (1 of 6): PLANNING AND BOOKING

This article is an excerpt from the book "HOTEL 4.0 - Artificial intelligence, robotics, big data, virtual reality, 5G and automation technologies for a new generation of smarter hotels". Contents: Introduction; 0.0 Panning and Booking; 1.0 Activities in the planning and booking phase; 2.0 Technologies in the Planning and Reservation Phase; 2.1 Mobile technology; 2.2 Search engines; 2.3 Virtual reality; 2.4 Chatbots; 2.5 Revenue Management; 2.6 Internet Booking Engine.

Introduction

Everything starts with our guests; they are the hotels’?raison d'être?and the basis of our business. The use of technology has to be an instrument that we use to achieve our primary objective: create added value for our guests and improve their experience.

What do our customers think? Only 8% of respondents said they were delighted with the experience compared to 80% whose expectations exceeded the experience (Meyer & Schwager 2007).

The guest journey is a complex one. It is a cycle that starts off with an idea and a plan to travel. It continues with a thorough search involving activities, desired accommodation and so forth. Once, the hotel has been booked, the guests will experience their first interaction with the hotel from their moment of arrival,

During this process, the customer's feelings fluctuate widely between positivity and potential dissatisfaction. This is due to the inherent stress generated by arrival, check-in, and the comparison between expectations and actual experience, including check-out and departure.

Our mission is to anticipate guests' reactions and meet their expectations. To achieve this, we have to accurately identify their wishes and needs to always be one step ahead of events.

We can have the best?revenue management?strategy or the best?sentiment analysis?software and analyze the feelings of our customers. Still, it will be of no use if we fail during the moment of value creation.

It is important to note how a tactical use of technology during the customer cycle can improve the customer experience and directly increase sales at the same time as we contain costs and increase the efficiency in operations. According to MyStay, the average cost of reception work (check-in, documenting, data management, key handover, check-out) for each new guest is around 1.65 Euros. On the other hand, the turnover generated by reception staff does not exceed 0.6 Euros on average, partly because 80% of the workload is devoted to tasks other than sales and customer service, mainly bureaucratic tasks, which can be automated.

In the previous chapters, we have already looked at the main 4.0 resources, studied the human factor, and reviewed some of the megatrends which shape our society. Now we will look at the natural integration of different technologies in operations and their impact on the guest cycle.

Planning and Booking

The journey starts with the travel idea and its preparatory activities when the client compares all available options, prices, previous personal experiences and those of other travellers. In this first period of the guest cycle, our main objective is to convert a potential customer into an actual booking through proper segmentation and promotion, and providing a memorable booking experience.

How do our clients act? 83% of leisure travellers and 76% of business travellers plan their trips online (Skift Portrait of the Millennial Traveller 2016 - A Study in Contradictions). 96% of travellers start their travel planning using a search engine, and 47% do so from their mobile phone (Skift Portrait of the Millennial Traveller 2016 - A Study in Contradictions).

At this point, our potential client carries out two main activities: planning and booking. At the planning stage, the customer starts looking for inspiration and information. They research, collect data and compare accordingly to ensure that they not only get the best value of money, but the property also matches their needs. However, with the act of booking, the customer makes a decision and starts his or her guest experience.

During this step, technology is an ally in the service of correct data analysis for effective customer segmentation. It provides?h?telières?with a better understanding of market trends, effective promotion, and optimization of the digital experience during the search for information and the booking process.

1.0 Activities in the planning and booking phase

As mentioned earlier, the customer’s journey starts from the very moment they begin to look for inspiration while collecting and comparing the information.

How do our clients act? 83% of leisure travellers and 76% of business travellers plan their trips online (Skift Portrait of the Millennial Traveler 2016 - A Study in Contradictions). 30% of potential customers look for inspiration on social media, and 52% claim to have been inspired by photos posted by their contacts on social media (Martech). 49% of travelers compare prices on Expedia, Priceline, or Kayak as an essential part of the pre-booking research (PBT) process. 72% of potential customers will not make a booking until they have checked reviews written by other travelers (Condor Ferries Statistics).

The way we search for ideas and information about our travel and accommodation options have changed substantially, although the essence and feelings that fuel it remain the same. If we look back two decades, we can see how the information-seeking process has mutated. At the dawn of the Internet era, word of mouth, magazines and guidebooks were still, in many cases, our best sources of information. In those times we did not have social media and review platforms to refer to.

How do our clients act? According to the study?"Using eye-tracking to obtain a deeper understanding of what drives online hotel choice (2014)"?conducted by Cornell University, when a potential customer searches for hotels, they focus their attention in order of priority from highest to lowest on name, price, images, and ratings. But during the final deliberation phase, images are the main focus of attention, relegating price to third place behind the description.

Nowadays, the search for inspiration is mainly done through social networks and is strongly influenced by the content published by our contacts, with a marked prominence of multimedia content such as photographs and videos.

Booking is the natural step as a purchase action once the customer has gathered all the necessary information, chosen their destination, and selected the dates and type of accommodation.

How do our customers book? In 2018 82% of travel bookings were made online or via a mobile app with no interactions with human operators (Condor Ferries statistics). By 2023, 700 million potential customers are expected to make their hotel bookings online (Condor Ferries statistics). The?average conversion rate?for hotels is 2.2% (Condor Ferries Statistics). Exposure of the potential customer to?User Generated Content?increases the conversion rate by 17.8% (Smart Insights).

At this?point,?the planning phase can be completed, and the customer will start their guest experience, giving us the first opportunity to generate memorable experiences. OTAs have understood this importance and made use of technology to improve the user experience and engage customers on their websites. The use of Artificial Intelligence and technologies such as virtual reality now opens up a new scenario.

2.0 Technologies in the Planning and Reservation Phase

Technology is rapidly changing consumer habits and falling behind implies too high a risk; OTAs have proven to be able to adapt to changes due to digitalization, but the use of Artificial Intelligence will prove to be a whole new battlefield.

A study conducted by Booking.com in 2017 indicated that approximately 30% of travellers would not mind having their bookings automatically made on a computer based on their preferences and previous booking history. This shows how precarious the future could be where hotels have not adapted to new scenarios and customer booking habits.

Technologies such as those described below can be an instrument for gaining market share and generating direct bookings if adequately harnessed and implemented:

2.1 Mobile technology

Mobile technologies are transforming the way we communicate, shop and travel. Mobile apps have undeniable advantages for guests who want immediate access to all hotel services and information from their personal devices.

Smartphones have increasingly been the protagonists of the information search and booking process. Still, mobile applications have undoubtedly increased with the arrival of COVID-19, conquering new segments of the population. These applications make it possible to partially eliminate processes such as check-in and check-out at reception and represent a new channel of communication and sales with the end customer.

2.2 Search engines

Good visibility on search engines such as Google is only the first step in attracting customer attention to your property. In the case of Google, Artificial Intelligence is actively used in projects such as Google Flights and Google Hotels. This promises to disrupt the sector and could very well represent a major competitor of the OTAs, which also presents a new playing field with different rules.

2.3 Virtual reality

This technology can be instrumental in the planning phase, bringing the customer as close as possible to the real hotel experience, including the rooms and facilities. It does this by avoiding the Photoshop effect where reality does not correspond to expectations. According to the study?"Using Eye Tracking to Obtain a Deeper Understanding of What Drives Online Hotel Choice"?carried out by Cornell University, during the customer's decision-making phase, images of the property are the element that attracts the most attention from the potential customer. Once again demonstrating the importance of the visual component in the decision-making process.

2.4 Chatbots

Artificial Intelligence-powered virtual assistants and chatbots are becoming an essential channel promoting a higher level of customer experience and improved customer service. During the information search and booking phase, they can provide advice 24/7 in place of a human member of staff. According to the website chatbotslife.com, chatbots can increase conversion rates by up to 80%.

This technology has already yielded positive results, with significant ROI returns in the first 18 months of implementation together with substantial net increases in customer satisfaction where It has been implemented. In addition to reducing staff turnover costs, the quality of work has improved, due to the improvement introduced in customer service departments with the implementation of these solutions, which can absorb a large part of the workflow. This technology leaves only the most relevant and complex issues for human operators.

Additionally, with more sophisticated applications, tracking customer activity allow us to maintain the context and thread of conversations across different channels. This allows the first interaction to be contextualized through a chatbot, thereby personalizing the welcome message upon arrival at the hotel.

2.5 Revenue Management

As we have seen in the second chapter, there are already commercial revenue management solutions based on Artificial Intelligence, which collect, monitor and analyze data in real-time, solutions that are able to fully or partially automate inventory, pricing and promotion activities through the different digital channels with immediate results.

2.6 Internet Booking Engine

This is a key element for generating direct bookings and a positive impact on the customer's booking experience. Companies such as AVVIO, with its product "Allora," have started to introduce Artificial Intelligence in booking engines, obtaining notably positive results in the increase of direct bookings.

Also, AI implementation enables higher levels of personalization, where the guest can potentially choose the room to sleep in and even partially customize the room layout.

*** This article is an extract from the book "HOTEL 4.0?- Artificial intelligence, robotics, big data, virtual reality, 5G and automation technologies for a new generation of smarter hotels". You can consult the book or contact me personally for more information on the subject or the sources I have used.