Last month, I had the good fortune of attending what at the time I believed to be an assemblage of well-heeled venture capitalists searching for nothing more than the next fledgling business to invest in and make millions. Certainly, the audience members at Thayer Ventures’ annual meeting in San Francisco were that, but influenced solely by the dollar they were not, as I soon learned.
What I do know is this: Ten years from now, the hospitality industry—strike that, the world—is going to look a whole lot different than it does today. At least that’s what I gathered from my day spent at the conclave, which included talks from the likes of Google, Uber and Microsoft—three companies that are shaping the future as we will soon know it, in travel, in everywhere.
One of the more compelling talks of the day came from Alex Dichter, director and global head of travel for consultancy behemoth McKinsey. Dichter’s discussion was a refreshing rebuttal to what many today accept as axioms. He presented, then disputed, six travel myths, of which I highlight two: millennials are today’s big battleground and search is about breadth. Of the former, while I love millennials—my dear cousin is one—can we all ease up? As Dichter pointed out, “They aren’t as interesting a demographic as we think they are,” and that 51 percent of consumption is now driven by those over the age of 60. So, to all you brands out there, designing hotels and catering to a specific subset is not only myopic, it’s a revenue misfire.
His point about search was this: When you search on Expedia for hotels in New York, 941 choices appear. Imagine a restaurant menu with 940 entrée choices. How could you ever decide? Meanwhile, smaller curated sites tend to pull up a smaller cohort of hotels—Dichter cited Mr and Mrs Smith, a boutique travel site, which pulls up 32 hotels on a New York City search. The point is that customers want help choosing—and giving them too many options, while generous, is actually detrimental. This holds true for distribution as much as anything else: Choice is better when it's moderated.
This all brings me to my final point: Forward momentum is hard to stop. Companies like Google, like Microsoft, like Uber are all heavily invested in the future of tomorrow—a future that is unavoidable by you, me and everybody else on this planet. As hoteliers, it’s better to be prepared than to be passed by. So when I hear Google wax poetic on the coolness of virtual reality and augmented reality, Microsoft nerd out on the implications of machine learning and artificial intelligence and Uber freak everyone out with driverless cars—my first instinct is to hop in a time machine and dial it back to 1985, before quickly realizing that there is no escape. Be ready or be passed.
Hotels have the advantage of hosting people, many people. And because of DNA, all people are not created the same. Your customers are going to tell you what they want, not vice versa, so be ready to accommodate. As Stuart Greif, senior executive of travel and hospitality for Microsoft, said, “By 2018, half of all consumers will interact with cognitive computing on a regular basis.” That’s one year away. Ask how that will impact your property and what steps you need to take to allow for it. Soon, technology like AR and VR will let consumers choose their hotel experience like never before. That experience will then be intensified once they are on property.
Imagine, also, how new technology will impact the way hotels are built, bought and sold. In the not-too-distant future, you won't have to visit a site or property that is hundreds of miles away; you’ll be able to see every nook and cranny through a VR headset. And while there is never any replacement for the real thing, there is a companion.
The biggest takeaway I had from my day with Thayer Ventures is that evolution is happening at whiplash pace. There are people and companies out there that are literally reshaping the way we live, the way we will move and the way we will transact business. And they aren’t just doing it to make a buck, but to elevate and leave an imprint on society.
I’m, with slight unease, buying in—are you?