Are your hotel anxious and feeling a little paralyzed about all the talk about digital disruptions?
Does it all sound like a big hype that you believe will not impact your hotel at all?
I will help your hotel demystify digital disruption, and at the same time help you get a better understanding of why it is so important now.
What is digital disruption?
Digital disruptions or disruptive innovations have often in the past been used in overly hyped-up scenarios. And it has been more a buzzword than something that added value for the hotel industry.
A disruption by itself is a process where a smaller company is successfully challenging existing business models in any given industry.
The hotel industry has experienced disruptions through various stages.
When we look at the introduction of the internet it opened the gateway for new brands that were enabled to tap into new uncontested markets with the help of new technology.
Online travel agencies
Online travel agencies were introduced as a marketplace that allowed consumers to research and book travel products and services, including hotels, flights, cars, tours, cruises, activities, and more, directly with travel suppliers.
Hotels were slow to adapt to new technologies and primarily offered one-dimensional experiences, while online travel agencies provided multi-dimensional bundled experiences.
Airbed & Breakfast was officially launched in March 2008 during the South by Southwest (SXSW) Conference and Festival in Austin, Texas.
Originally it was not seen as a treat to the hotel industry as the industry considered Airbed & Breakfast to serve a different market.
In March 2009 Airbed & Breakfast transformed into Airbnb to expand their offers beyond rooms to offer apartments, whole homes, and vacation rentals.
Airbnb understood the value of consumers and their communities. In 2016 they became the official alternative accommodation provider for the 2016 Rio de Janeiro Olympic Games.
In February 2018 boutique hotels were welcomed to use Airbnb as a new distribution channel. And in 2019 Airbnb acquires HotelTonight.
Airbnb’s goal was to become a more comprehensive marketplace serving every guest either the plan a trip a year ahead, or a day in advance.
Start discovering why your hotel needs to take digital disruptions seriously!
1. Growing Digital communities
Both Online Travel Agencies and Airbnb understood the value and importance of digital communities.
They both understood early on the importance of cognitive perceptions in context with digital communities.
80% of human information is captured through the eyes. Our visual perceptions are impacted by optical impulses.
Online Travel Agencies created unique bundling experience offers that created a perception that the hotel price was more cost-effective than if they made a direct booking on the hotel’s website.
As a result, online travel agencies were able to tap into uncontested market segments that allowed them to dominate the digital market.
A community of hosts
Airbnb for sure also had its share of hiccups and mishaps. But this did not stop them, they learned and developed a service that would support their vibrant community.
They created a unique community where for where hosts could share knowledge, get inspired, and meet other hosts who are creating a world where anyone can belong.
Tip: The first rule of digital disruptions is to build relationships, and make friends first!
2. Customers want digital transparency
What hotels need to understand is what online travel agencies and Airbnb did is something available for any brand.
It all started with creating a business principle around the business to everyone (B2E). And from there focus on value innovation that builds on differentiation and cost-efficiency.
These are principles that focus on creating new frontiers of opportunity, growth, and jobs.
In the past customers have for the most part accepted that hotel brands worked for them to provide legendary experiences. Today customer expects hotels to work with them to provide legendary experiences.
We already mention that differentiation is one key for value innovation.
Creating a culture of trust and honesty and empowering employees to share their opinions and ideas open for valuable communication.
Invest in cost-effective digital tools that empower your hotel employees to communicate both internally and externally. Effective digital communications are what opens the door to being transparent today.
Tip: The second step of digital transparency is to work with your digital community, and let them be in charge of what you can do for them. Communication is all about providing relevant valuable alternatives. Don’t forget you are working with the customer now.
3. Digital disruptions creates new legendary service alternatives
With the dramatic change in innovative digital alternatives consumers now are more informed than they have ever been. And if they don’t have the relevant information about your hotel they easily can find it in a matter of seconds.
One of the side effects of this trend is that traditional customer loyalty has dramatically transformed.
I will not say brand loyalty is dead because consumers are still seeking some form of belonging.
Some interesting factors that impact this transformation are ‘personal’ recommendation and the ability to provide a real-time wow factor.
The hotel industry has for many years talked about the importance of personalization. But the mistake that has been done is that it has been a concept where hotels focused on what they can do for the consumers.
Digital disruptions have put the consumers in charge of their options and have already indicated they want brands to work with them. Brand loyalty is impacted by the in-the-moment personal recommendations and wow factors.
This just builds upon the important impact of a digital community that understands and supports your hotel.
Differentiation or providing customers with new unique alternative solutions seems to scare many hotels.
For the majority of hotels, this is for the most part about introducing self-service digital solutions and channels that offers customer convenience.
citizenM is a hotel chain that has always been a frontrunner when it comes to differentiation and cost-efficiency. Like many brands during the pandemic, it pushed citizenM took to take a deeper look at innovation to attract new uncontested markets.
And through their mobile app, they were able to offer a one hundred percent contactless hotel stay. The guests can manage their entire stay from pre-arrival to check-out.
Mobile applications and digital payments are already available. Customers can already be identified as they enter and leave any hotel opening the prospect of unique personalized loyalty offers, automated registration of bookings, and digital payments without the need to check out at a physical front desk.
Tip: New legendary service alternatives are all about delivering frictionless digital experiences. Invest in a mobile application that lets the guests open doors, order room service, schedule housekeeping, and control room ambiance.
4. Digital service chunking
A new dimension to flexibility and alternatives is digital service chunking.
As a result of the pandemic, many hotels have experienced consumers has been seeking more flexible alternatives that they could not in current experience offers.
One example was that some brands required an alternative co-working space for their employees outside their office that provided the necessary flexibility without having to physically be at their workstation.
In some cases, brands did not require the room for more than a certain amount of hours.
This provides a new unique opportunity for hotels to help with their challenges while they help other brands in the local community.
We have also seen hotels that used digital tools and created a unique workcation to attract new uncontested markets. This provided travelers with some very important flexibility. They were provided with access to a room with almost a business center setup. In addition the hotel with assists with setting up tutoring and babysitting. And they were also guaranteed early check-in and check-out.
Tip: Be creative! Digital service chunking is a uniquely flexible solution that works great both to attract employees and new uncontested markets. There is a reason behind building relationships and making friends first.
5. Digital transformation is the new normal
A digital transformation represents a dramatic change in conditions and character.
We are in a situation today where we no longer can wait until quarterly prognoses and reports before actions are taken. By that time it is too late.
As a result of the pandemic, consumers are now more accustomed to using digital tools in everyday situations.
We have now moved with warp speed into big data which represents extremely large sets of data coming into businesses on a day-to-day basis.
The hotel industry has to find new ways to use this data that supports more effective real time decisions and actions.
To do this hotels need the right processes and technology in place to reach a new uncontested market that lays within the digital-first consumers.
Hotels need to focus on technology that supports differentiation and cost-efficiency.
A digital transformation process today represents a cultural change.
Today hotels need to adapt to a new reality that is better prepared for new unknown challenges and that builds around a positive and high-value employee experience.
This will support a process that will help hotels identify new talent, create new training programs, and a new team culture that truly supports digital-first consumers.
Tip: Effective digital transformation starts with collaboration. Working with a digital transformation coach will give your hotel a digital head start!
Over to you
The hotel industry is always changing, especially during a time of crisis. Make sure to future-proof your business and continue attracting new guests by investing in these solutions.
Ready to take your hotels digital transformation to a new level?
Hire a digital transformation coach for a new and bright future!
Related article: Digital Transformation Playbook for Hotels
We are in this together!
I need to let you all know that we are in on this together. If you need to vent, talk, cry, or just have some to talk with, I am here listening. Since I am working part-time at the local Kroger, I will best work it out around my schedule to the best of my ability.
Where to reach me
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We will get through this unprecedented event together! #hotelstrong #hospitalitystrong
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About Are Morch
Hi, I am Are Morch. Your Digital Transformation Coach that helps hotels create unique and unexpected experiences by freeing up resources to focus on new ideas through value innovation and a growth mindset.