Disruptors in the hotel industry

Disruption is changing the face of a broad range of industries and it is happening at a staggering rate. Underpinning this is an intermeshing of technology development, shifts in demographics, and globalisation which has also brought about rapid urbanisation. This in turn has led to a change consumers’ expectations and needs. In the face of the disruptive market forces, companies need to be agile and able to evolve, innovate and/or reinvent to sustain or stay at the top of their industries.

The hotel industry is no exception and has not gone unscathed amidst waves of disruption. New technologies, online platforms and markets are seen manifesting in new initiatives of all sorts ranging from metasearch engines evolving into one‐stop reservation options, chatbots, and robots providing butler services to alternative accommodation options. 

The initiatives are sometimes driven internally by major players within the industry, while at other times by the changes made in response to disruptors playing in the accommodation space. Although disruptions are commonly perceived by incumbent players as threats to their businesses, disruptors could also be sources of significant opportunities for incumbent players to create newer and better services as well as experiences for their guests, hence entrenching themselves even more within the industry. 

In its latest Hotel Insights report, Colliers highlights some of the disruptors that are influencing the hotel industry and its views on these emerging trends.

Pop-up hotels

While pop‐up restaurants, pop‐up exhibitions and pop‐up shops are a common sight nowadays, pop‐up hotels have caught on as well. This is unsurprising given consumers’ increasing emphasis on immersive and authentic experiences when they travel, and pop‐up hotels have the agility of providing on‐demand accommodation in locations that traditional hotels could not and/or travelers would not necessarily have access or ease of access to alongside customisable accommodation settings, thereby delivering an entire bespoke guest experience.

In Asia, Singapore had its first shipping container hotel in operation in January 2020. Targeting millennials as its primary consumers who are more adventurous and looking for an experience, the shipping container hotel will shift to a different location every two to three years, allowing guests to explore various parts of Singapore. Each cabin features a 300 sq ft air‐conditioned room with two queen‐size beds, a study table, living and dining space, kitchen and bathroom. Similar to the traditional hotels, guests will have access to a 24‐hour customer service hotline and the rooms will also be cleaned after each stay.

Key players of the pop‐up space are predominantly boutique groups although major brands such as Marriot and Accor have started to experiment with pop‐ups. Indeed, this may well lead to other brands exploring the feasibility of pop‐up hotels, considering that consumers’ increasing desire for personalised experiences is expected to continue for years to come. However, the planning, resources and financial outlay required may put a dampener on the interest. Therefore, it remains to be seen if pop‐up hotels will go mainstream.

Facial recognition

For travelers, checking in to a hotel can be a laborious process involving hotel staff performing manual checks on travel documents, for example. In addressing this, other than mobile check‐in which is hardly a new concept, more hotels are seen taking it a step further with the use of biometric technology such as the facial recognition technology to speed up guests’ check‐in time and thereby improve the customer experience, make processes more efficient and enhance security.

In Singapore, the Singapore Tourism Board (STB) and the Singapore Hotel Association (SHA) have jointly launched a new initiative, the E‐Visitor Authentication System (EVA), in November 2019. Through the use of the EVA, participating hotels in the country can enable faster verification of guests’ stay validity and facilitate a seamless check‐in experience for guests. By eliminating the process of performing manual checks on travel documents, the amount of check‐in time is expected to be reduced by up to 70%.

In order for the facial‐recognition technology to go mainstream in the hotel industry, it is imperative that hotels recognise and make it a top priority to address these privacy concerns and adhere to the applicable regulations concurrent to ensuring the quality of the stored data and system. In addition, whilst this may well serve high volume and ‘business’ hotels, its use in luxury hotels, where the personal touch matters, may well have to be adapted to ensure it is seamless and less impersonal.

Voice assistants

Voice assistants ‐ such as Amazon Alexa, Siri and Google Assistant – are one of the fastest growing technological fields today, becoming commonplace as a feature of the internet of things. Therefore, it is only a matter of time before voice assistants become a standard feature in hotel rooms.

According to Hospitality Technology’s 2019 Lodging Technology Study, nearly eight in 10 respondents named voice‐enabled technology as the top choice when asked to identify technology that has the most potential in the near‐future, and 62% of the respondents listed voice technology as a transformative technology that makes an impact. Meanwhile, half of the data leaders said they will prioritise augmenting service with artificial intelligence and voice‐enabled devices.

In anticipation of the rising demand of guests for more personalised experience, hotels’ adoption of voice assistants in their properties has therefore been gaining traction. In addition, voice assistants could potentially be used by hotels to gather actionable insights and feedback as guests may be more encouraged to speak to the voice assistants and comment candidly sitting in their room and avoid the awkwardness of facing the front desk employee. In turn, the data gathered can be analysed and utilised to enhance the hotel offerings. Obviously, communicating how data is stored, shared and used will be paramount.

Separately, hotels could potentially streamline operations processes and thereby improve operational efficiency and achieve cost‐savings through automating some of the daily hotel operations via the voice assistant.

Robots 

The use of robots within the hotel industry is a form of automation that is becoming more prevalent as hotel chains and individual hotels have become increasingly cognizant that the concept of automation and self‐service is playing an increasingly vital role in the customer experience. Notwithstanding, at the same time, hoteliers are aware that the use of robots could also bring about efficiencies in operations and costs, and can be a boon in tight labour markets.

The use of robots in hotels is varied: Check‐in and check‐out services; provision of tourist information; butler service to deliver amenities such as towels; transport luggage; and meal deliveries.  

Clearly, the use of hotel robots may yield operational and cost efficiencies to hotels, it is however critical that a balanced approach is adopted by hoteliers to ensure that automation does not supplant quality service hence alienating hotel guests as a consequence.

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