The hotel industry's next round of disruptors is here

In some respects, Holiday Inn is the hospitality industry’s first big disruptor, having created a bridge between motels and hotels in the 1950s.

Sometimes it’s a good idea to stir the pot. Throughout most of history the hospitality industry was separated into two segments: hotels and motels. But one day in 1952, Kemmons Wilson opened the first Holiday Inn, creating the first midpriced hotel concept available to travelers and, possibly, the industry’s first true disruptor. Like all good disruptors, Holiday Inn was embraced by consumers and criticized by competitors, but the industry wasn’t felled by this new segment. Instead, hospitality evolved around Holiday Inn, opening it up to more concepts than ever before.

Bjorn Hanson, clinical professor at the New York University Preston Robert Tisch Center for Hospitality, said that during his tenure in the industry he has seen a number of disruptors arise, from limited-service and extended-stay hotels to Airbnb and home sharing. Despite these expansions in the hospitality space, Hanson said boutique hotels are the most disruptive force in hospitality today, even more than home sharing, because boutiques have had the most influence over guest expectations at mainstream hotels.

“Because Airbnb grew so quickly, it was misunderstood by traditional lodging executives, who believed it wasn’t relative to them or their business,” Hanson said. “Now the company is getting a disproportionate amount of attention as a disruptor.”

To Hanson, a disruptor is not simply an alternative to an existing product but something that causes consumers to think differently about a product they will continue to use. Most often this results in raising expectations in ways that previously weren’t being considered. Online travel agencies, for example, changed the rules of distribution at a time when hotels were concerned about amenities. While hotels were trying to figure out a way to attract guests without OTAs, boutique and lifestyle hotels gained traction with travelers looking to experience something new.

“A new disruptor for hotels is shared accommodation, similar to what a hostel is,” Hanson said. “This is popular in urban markets due to the nature of tourism there, where [developers] can fit four beds or bunk beds into a room. It’s a new price model for a new generation of travelers that are now college age. They are looking for a different adventure at a higher price point, and it’s not a hostel but there are no other terms for it right now.”

Personal Shakeup

These are large-scale disruptors changing the rules for what a hotel is or what hospitality can mean, but disruption is also taking place throughout the industry on a smaller scale. The most obvious example would be the guestroom TV’s changing purpose as guests bring personal media with them on the road. Another example, guestroom phones, used to be a profit center for hotels, Hanson said. Now they are required for zoning and safety purposes, but some companies are stepping up to provide alternatives as guests scale back their use.

The Society Hotel in Portland, Ore., is a property that combines traditional hotel accommodations with shared living spaces similar to a hostel.

One such company is Volara, which provides voice-engagement software on in-room hardware, such as an Amazon Echo or similar products. Volara allows voice-recognition technology to listen for verbal cues and respond with custom recorded messages unique to each hotel, or connect guests with the front desk in a manner similar to guestroom phones, but on guests’ terms.

“Most people you can only ask for something and get recommendations, but there is a lot of room for creativity here,” said Dave Berger, CEO of Volara. “We launched a sleep solution and we have a book component, so it can read you a bedtime story or play music, so we’re only limited by creativity.”

Replacement Race

Berger said hotels often approach Volara with questions about what existing technologies the company can replace with voice. Today, Volara is running on mirrors, lamps, clock radios and even art. SoundWall, a company formed to provide high-quality art integrated with voice-enabled technology and a speaker system, is just one of those companies. However, this kind of product is replacing more than just art and sound systems.

“SoundWall has a motion sensor and can perform trilateration through [Bluetooth Low Energy],” said Adam Goodman, president of SoundWall. This means the fixture would also potentially be able to serve as an interactive thermostat, and would be positioned in such a way to view the guestroom from a beneficial vantage point compared to where many guestroom thermostats are positioned.

As technology continues to evolve in this manner, a consolidation of products used throughout the industry is inevitable. Hanson said this could be uncomfortable initially, but previous innovations have resulted in net benefits for hotels across the industry. One example he gave is the shrinking hotel guestroom, which seems to grow smaller and smaller in average size each year. What can be thanked for this? Flat-screen TVs.

“Hotel companies across the industry are pushing for smaller rooms since there are no longer credenzas holding up TVs,” Hanson said. “Rooms just look larger without them, and all travelers are spending less time in their rooms, anyway. The majority of travelers are ambivalent toward this since their relationship with the guestroom is growing more casual.”