Blog: Lack of Visibility on Hotel Operations
Competition Drives Innovation
A competitive environment calls for innovation. And it’s in this competitive environment that many hotels have, to coin an old British phrase, ‘upped their game’. According to this report from James Chappell at Horwath HTL, the last 25 years have brought us “… the inexorable growth and expansion of branded hotels”. This has coincided with a trend for an asset-light model for both owning and operating hotels. This model is based on management and franchise contracts, rather than direct ownership. The result being reduced capital investment, leading to a reduced exposure to risk. A model that can promote growth, even in the most turbulent of times.
Although brands have led the way, both in the number of hotels, the operating model and the guest offering, independents have also benefited from this upward curve. Independent hotels also need to innovate; in fact I would argue that they need to innovate more to survive & thrive in the face of branded expansion, albeit with more limited resources.
However, as shown on the graph above, even though the growth continues, the rate of revenue growth is in fact slowing down. Source: Statista
Keeping Up with The Jones’s
It has long been a necessary part of innovation to keep up with the Jones’s (Another traditional British phrase). For those unaware, keeping up with the Jones’s refers to the idea that you will benchmark yourself against your neighbors, or those around you. You can achieve this by comparing material wealth or possessions. This is then used as validation that you belong to the same, or a higher social class than those who surround you.
Of course, in the Hospitality Industry our Hotels may not compare themselves directly with their physical neighbours. No, the neighbours they seek to compare themselves with are those with which they compete for customers. In the industry, this is known as the Competitive Set or ”CompSet” for short.
The challenge here is that the traditional ways of differentiating between hotels are vastly reduced. Common differentiators once obvious to guests are removed. The lines are blurred. Every hotel offers the same, well-styled website, comfortable beds are everywhere, from the simplest, limited-service establishment, to high-end properties with 4 figure room rates. Even recently, I sat enjoying a beautiful mango green tea in what was officially a 2-star establishment.
So, Why Is This a Problem?
In simple terms, today’s guests are fickle. When it comes to chain hotels, the average guest is very likely to have memberships to multiple loyalty schemes, just like I do. So regardless of which chain I spend my money with, the experience can be like-for-like. In 2020, that just doesn’t cut it. A repetitive, cookie-cutter experience, isn’t something that necessarily draws me back.
Segueing back to our title, why does a hotel need visibility of its day to day operations? What is the impact of a lack of visibility?
Well, as I said at the beginning these are competitive times and having visibility of your operations helps any hotel to remain one step ahead of the competition. You see, even if guests, just like me can be fickle at times, we can still be impressed. And it’s the little things that can truly make a difference. Perhaps it’s how quickly the towels are replaced after the minor flood in my bathroom. It could be the ability to access fast, secure internet with simplicity. It could even be a tailored experience when I step into the room, with the TV menu in my native language and my channels and other content preferences prioritised. All of this adds to the feeling of being at home.
This begins with not only understanding your guest, but also taking time to understand how he or she interacts with the hotel. Taking time to be aware of their service record, any complaints they may have raised, how long it took for issues to be resolved, all starts to help you build up a picture of the guest’s persona. Combine this with understanding what they like to eat and drink, and it allows the hotel team to be able to make the little differences that matter, and truly differentiate.
Can You Tell Me When the Towels I requested Will Arrive?
Let’s take the example of the additional towels, required after a bathroom mishap. If, following the initial request, Housekeeping is slow, it is sure to leave a nasty taste in the mouth. I know I’ve expressed frustration when not being able to leave a hotel room for an undetermined amount of time, following a request to the front desk.
However, if hotel staff track when the request was first presented, and also when the delivery of the towels was completed, then they are able to judge their responsiveness. This tracking can lead to the observation of patterns. Patterns that can help the hotel team to understand the average levels of demand. Suddenly, the required staffing levels are clear to optimize guest responsiveness and the schedule begins to write itself!
Our second example of WiFi is similar. Enabling hotel staff to see that a Switch or an Access Points is down allows them to build up a picture of which rooms will not have adequate service. They can take action such as removing the affected rooms from service (temporarily) while a fix is sought. If this isn’t possible, they can proactively prepare the guest, perhaps explain there is an issue with the WiFi in their room, offering a solution such as lounge access, or a complimentary drink in the bar where the WiFi is working. This can go a long way to a guest who has just stepped off a plane, and desperately wants to Skype their kids before they go to bed.
Moving to our third example, does an Italian guest really want to scroll through dozens of channels before they finally find Rai Uno? My intuition says not. The more likely result is actually they will give up and just go online for their content, frustrated at the TV experience. And this is extra-disappointing if the TV system is something the hotel has invested heavily in.
Building an Understanding of Hotel Operations
To understand what is happening requires the hotel team to have access to the relevant hotel operations data. Ideally, it should be presented in an intuitive, graphical format through a Dashboard that shows the large number of parameters available in a way that simple & quick to grasp. In a busy hotel environment this will help the team running the hotel take timely, informed business decisions, thus improving the guest journey and fostering increased loyalty.
Of course, there is another, excellent added value to this clear picture of hotel operations. It drives the sustainability effort. Understanding what is required where & when, and more importantly what is not required, is key in any hotel’s drive to be greener. Having this clear picture helps the entire team, regardless of department, understand the measures they can take to reduce the hotels environmental impact. For further inspiration on the move toward sustainable hotels,take a read of this Article on HospitalityNet.
If you found this piece inspiring, I encourage you to check out the following articles, from HospitalityNet and Todays Hotelier, which are along a similar theme:
Simon I’Anson is Chief Strategy Officer with Hoist Group, whose main focus is finding Hoist Group’s myriad of advanced technology solutions their rightful home in some of the world’s greatest hotels. With over 15 years of experience in the hospitality technology space, he is sharing his valuable insights through these posts. Outside of work he is a big fan of many sports, including Rugby and Tennis, enjoys spending time with his family, and likes the type of music that should be turned up to ‘11’. You can find more about him here – LinkedIn