Tech trends in a mobile world

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.”

Hotel Management associate editor Andrew Sheivachman is Tweeting live from HITEC this week in Austin, Texas. Follow his Tweets at @HospitalityWN.

A Neilsen Co. report from March 2011 found that 33 percent of consumers planning to buy a smartphone in the next year will choose Google’s Android platform, compared to 30 percent for Apple’s iOS. A full 50 percent 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.”

Bandwidth Blues

Property bandwidth requirements are increasing in lockstep with the advances in cloud-based systems and mobile devices.

“Most bandwidth requirements are doubling every nine months according to studies, so hotels are going to have to find ways to increase bandwidth,” Rice said. “Some hotels believe it’s all going to go to mobile networks, but they’re running out of capacity too. Now mobile companies are figuring out how to get things off mobile and onto terrestrial networks.

“Most likely it will take more than six months and less than two years for this rapid convergence of mobile device traffic onto a single access point within a portion of the hotel that can handle both WiFi and licensed cellular spectrum.”

For Hilton Worldwide, a comprehensive approach to technology advances is prevailing over incremental property updates.

“Burstable, affordable bandwidth at a global level is an increasing demand, and we’ve taken a position that this is a service we’re going to unify on a global level through our partners,” said Mark Satterfield, VP of enterprise architecture and security for Hilton.

And as more systems move offsite, hoteliers are also forced to grapple with increased downtime as systems malfunction.

“You have to consider how many servers are being used, because servers are always down despite what IT people tell us,” Rusch said.

Social Media Landscape Adapting to New Needs

As consumers become more connected by technology, hoteliers have to develop new techniques and channels to engage potential customers.
“We have a position devoted to social media and Internet content; she lives on the Internet so we have a live presence,” said Ted Rusch, director of revenue management for The Roosevelt Hotel in New York. “The beauty is that you have a real live direct relationship with customers that can be viewed by thousands of people. We can respond directly and other people see it, so they see customer service in action at The Roosevelt Hotel.”

Adapting to social media today doesn’t mean your team will be in touch with consumers in the future.

“If you look at Facebook five years ago, people were simply contacting each other,” Rusch said. “Now it’s more of a marketing tool. The nature of the medium is changing and giving hotels opportunities to show customers what kind of service they’re going to see before they walk into your hotel.”

For many, social media is a chance to communicate with consumers on a more direct basis and encourage a lasting dialogue that leads to bookings.

“When you’re global and dealing with 90-plus countries, sending a little email isn’t as simple as we think anymore,” said Mark Satterfield, VP of enterprise architecture and security for Hilton Worldwide. “Consumers are going to force the industry to integrate its programs and be more travel-like.”

Hotel Management associate editor Andrew Sheivachman is Tweeting live from HITEC this week in Austin, Texas. Follow his Tweets at @HospitalityWN.