Where have all the innovations of the hotel sector gone? Item
Hotels were once synonymous with innovation. Elevators, steam power and air conditioning found their way to the UK via Savoy. And who as a kid wasn’t fascinated by the seemingly limitless ice maker? Hotels were the first in the area to offer color television, followed by cable television and in-room coffeemakers to stay competitive.
Innovation has now left the industry in favor of maintaining the status quo. Wifi is better at home. TV is better at home. In-room entertainment is much better at home, but it’s not just about the room.
The experience throughout the customer journey is better everywhere, but in the hands of the hotel. OTAs have mastered transactions with minimal clicks and are now trading on cancellations. Customers turn to Uber Eats rather than having another lukewarm Club Sandwich from room service. That in-room entertainment now comes from guest iPads.
How did we get here? The industry has never been so professional. The profile of those who invest in the industry shows pension funds, sovereign wealth funds, investors with serious responsibilities who are happy to trust the market, to bring it into the general public.
The key to the lack of innovation, however, lies with these investors. The large global operators now have several payers: shareholders, hoteliers and, finally, customers. The first part – the part that the company’s dividends go to – don’t respond well to scary things like change. He would like things to continue as before, thank you very much. With an instant growing side of the pipeline.
Maybe innovation in technology or services is not necessary for profits when the global tourism industry grew 5% per year before Covid, which is double the GDP growth rate of 2, 5% in 2019.
Does this explain the craze of events in the hotel sector around the world for data showing that the return to 2019 is shaping up to be very good? “When are things going to get back to normal?” Is the most asked question. The deals made since the start of the pandemic show that everyone is keen to ignore 2020 and act like it never happened. If only they could make it go away.
We believe in realism, but realism with optimism. For the sector to advance, it must innovate, as all other asset classes have been forced to do. Its response to OTAs was to turn to direct bookings, a move that added another layer of cost to franchisees. The response to Airbnb – which now has a higher market cap than any other accommodation company – was to say it didn’t affect the hotel industry, the hotel industry only cared about business travel. Now, business travel is harder to come by and Hilton’s response is to look to dog owners as a possible customer segment and source of chain-wide revenue. $ 50 per stay.
The truth of the hotel industry is that, even before Airbnb, hotel guests had options other than hotel rooms. For many people, especially those who don’t have large expense accounts – and even those who do – when traveling to a new destination, friends and family are sought after first. It is not imperative to stay in a hotel.
In order for the hospitality industry to become a leader again, it can no longer wish that the change would disappear. If we can work as hard for our customers and employees as we do for our owners and ultimately our shareholders, then we can drive revenue forward. Our industry must welcome the customer throughout the journey, making it easy and frictionless with technology and service that responsibly supports the well-being of the customer. We want hotels to surprise and surprise again, to create those experiences that bring people back to the hotel, not because they have to stay, but because they want to.
A new world of innovation for the hospitality industry can make it a leader. Because if he stands still, he will be left out by the next idea of targeting this $ 4.7 billion sector *.
* WTTC, 2020.