The first of its kind, The Hospitality Show is a bold new event for the entire hospitality ecosystem with one shared goal: operating hotels efficiently and profitably. Brought to you by The American Hotel & Lodging Association and Hotel Management, the event will bring together top industry leaders, senior executives of hotel brands, owners, operators, management companies and procurement specialists—and their teams—to discover, network and drive profitability.
Business accelerates when the right people are in the room, and this new weekly series of advisory board interviews goes 1:1 with the industry’s best and brightest as they build the inaugural event to be held June 27-29, 2023 at The Venetian Resort Las Vegas.
In this installment, we catch up with Alex Alt, SVP and GM at Oracle Hospitality.
What issues are currently causing headaches for the industry?
Alt: The top three most common headaches we hear from our customers involve looking for ways to improve staff efficiency in a labor-constrained inflationary market, growing revenue in nontraditional ways and accelerating their digital transformation to meet evolving guest expectations.
An AHLA survey late last year noted that 87 percent of hotels are experiencing staffing shortages. Without a doubt this is one of the most prevalent frustrations in the industry currently, as brands must be creative in how they attract and retain qualified staff and maximize the efficiency of each person.
The key to this goes hand-in-hand with the accelerating digital transformation to meet evolving guest expectations. Largely out of safety concerns over the last few years, many hotels have introduced "touchless" features such as mobile check-in and -out as well as keyless room entry. Those changes were well received and now guests want more. In fact, our latest survey found 73 percent of travelers are more likely to stay at a hotel that offers self-service technology to minimize contact with the staff and other guests.
For hotels that have been able to deliver on these digital demands, this self-service model has had the extra benefit of alleviating the burden put on slimmer staffs while still providing great experiences. Think of the amount of time saved at the desk just by not issuing and reissuing door keys.
While travel is largely back to pre-pandemic levels, most hotels are still looking for new ways to fuel sustainable revenue growth and provide higher value customer interactions. More than 81 percent of hoteliers surveyed said they expect a big service model shift between now and 2025, while 49 percent said special amenities and upgrades are critical to their revenue strategy. Perhaps even more noteworthy: customers seem game for this a la carte pricing model. More than half of consumers, 54 percent, said they are willing to pay more to choose their view; 38 percent to choose their room; and 32 percent to choose their room floor. What this means is we’ll see more hotels take a page out of the airline playbook by enabling guests to customize their stays via upgrades to certain amenities, such as paying for early check-in, picking a specific room or reserving a pool cabana the night before a beautiful day.
Hotels will also use artificial intelligence to better understand a guest throughout their entire journey—from booking to checkout—and determine what attributes they value most, at what price and at which point in their journey they will be most likely to upgrade or request services so they can deliver personalized offers at just the right time to get customers to act.
What will it take for those issues to smooth out and when do you anticipate that will happen?
Alt: As noted above, some of these challenges are being addressed incrementally but there is still more to be done. Hotels need to embrace the fact that every customer touch point provides a new opportunity.
By using a unified technology hospitality platform, brands can analyze data from all of these touch points to better understand guest behavior, develop personalized interactions that win loyalty and create upsell opportunities to support revenue growth. Hoteliers can maintain data integrity and provide real-time access to data across all departments: operations, sales and marketing, distribution and financials, with a single view of the guest, enabling hoteliers to efficiently run their properties, maximizing their revenue and profits and delighting their guests by demonstrating consistency in executing with excellence.
In our latest survey, 58.3 percent of hospitality operators are already in the cloud, or are in the process of moving to the cloud, with 24.3 percent stating that migrating to the cloud is one of their highest priorities in the next three years. 96 percent of hoteliers said they are investing in contactless technology, with 62 percent noting “a fully contactless experience” is likely to be the most widely adopted tech in the industry in the next three years. Additionally, 65 percent of those surveyed said they are incorporating new technologies to weather the labor shortages and attract new talent.
With these new mobile-integrated solutions and automated processes, limited staff will be freed from mundane tasks at the front desk and can spend more time serving guests across the property. They also provide brands the agility to "plug-in" new customer and staff-oriented features from an ecosystem of pre-integrated technologies, enabling them to innovate quickly or fail fast so they can move on.
What new trends do you see affecting the hospitality industry the most in 2023?
Alt: In 2023, we will see the hospitality industry increase its use of automation, AI and machine learning. These capabilities were once considered a “nice to have” in the industry, but they have grown to be essential for hotels to effectively compete in the market. For example, more and more hotels are using automated AI tools such as chatbots to give guests a digital option for instant self-service on common requests, such as asking for more towels or answering simple questions such as when they can swim in the pool or order room service. With these tools, guests get fast, responsive service while employees gain back time they can instead invest in higher value guest interactions.
One of the greatest values of AI machine learning comes from the feedback loop; that is, while the guests get their needs more easily met, hotels gain data into guest preferences, learning from what guests accept—and just as importantly, what they reject—to make better, more personalized offers moving forward. The smarter the system gets, the more revenue a hotel can generate by offering products and services relevant to a specific guest’s stay.
What do you see as the biggest opportunities for the industry as we make our way through 2023?
Alt: In 2023, the industry will see a lot of opportunity to fully embrace the new operating models that emerged as a result of COVID-19. That means executing with less staff on property while still delivering a guest experience worthy of the price points being charged. CoStar shows that ADR rates have recovered from the depths of the pandemic and are continuing to rise at a quick pace. In fact, ADR rates are actually 15 percent higher than in 2015. This means hotels will be adapting to the different preferences guests now have for various levels of human interaction during their stays – with some guests looking to avoid such interactions altogether and others still desiring the traditional experience that is heavier on the human touch.
Across this continuum of guest expectations, technology will be the great enabler, with mobile/digital interactions replacing human interactions at one end of the spectrum and hotels using readily available data about guests and their preferences to provide a more personalized high-touch experience at the other end of the spectrum. Finally, as noted above, hoteliers will leverage AI and automation across the entire guest journey, using both guest-facing and associate-facing technology to normalize a new and more efficient operating model while simultaneously increasing revenue-generating touch points with guests both digitally and face-to-face.
What do you think the industry’s biggest win this year will be?
Alt: The big win for the industry this year will be outperforming most other global industries that are more adversely impacted by a slowing macroeconomy. As talk of a potential recession has stalled demand and prompted layoffs for many industries, the hospitality industry reported stellar CY ’22 results and has widely provided upbeat guidance for 2023. As an industry, we need to continue to see business transient travel recover as well. Industry strength will allow for continued investments in technology and innovation, which ultimately benefit everyone, from brands and owners to associates and guests.
What are you most looking forward to at The Hospitality Show?
Alt: As always, I’m most looking forward to spending time with customers, which in this case spans brands, management companies and owners. The way The Show unites this expanded constituent group in a one-of-a-kind forum is genuinely new and exciting. To be able to discuss industry trends and the impacts our products make on addressing, enabling, and empowering the industry to better serve associates and guests while also driving improved results for owners is a dream for any technology provider.