Guest Experience Will Be Key: Loyalty Doesn’t Mean Loyal Anymore

For years, hoteliers have been innovating to meet changing guest wants and needs.

NB: This is an article from Cloudbeds, one of our Expert Partners

But COVID-19 upended all of it. As McKinsey & Company puts it, the crisis has transformed business forever. Digital transformation efforts, for one, accelerated years ahead in just a few short months. Technology has been a critical player in accelerated innovation in the hospitality industry. But the industry is known for lagging behind others in tech.

One of the main reasons for the slow adoption of digital tools is a highly fragmented lodging industry, meaning many discussions, approvals, and integrations. However, to compete today, hoteliers must rely on connected tech as guest expectations rise and evolve faster than they ever have before.

In this article, we’ll discuss why an omnichannel guest experience needs to be at the core of hoteliers’ strategy – and how tech can help hoteliers innovate and automate as they continue to face the Great Resignation, one of the most significant labor shortages many have seen to date.

Loyalty Doesn’t Mean Loyal Anymore

Loyalty doesn’t mean what it used to. Over 75 percent of consumers have changed their buying habits in the past 18 months, and research shows that they are increasingly willing to change brands. However, about two-thirds of traditional loyalty programs fail to deliver value, according to McKinsey, and many erode value. It’s safe to say that the COVID-19 pandemic changed consumers’ relationship with points. As the lodging industry has had to adapt many facets of business, the way we look at loyalty also needs evolution.

Simply put, points-based loyalty programs will not have the same allure they once did. Instead, hoteliers need to think outside the box and find ways to provide more instant gratification, whether that’s through personalized offers, upgrades, amenities, etc. Increasingly, lodging providers ask: What will be my property’s main differentiator from the competition?

The Guest Experience will be a Differentiator

The lodging industry has always kept a pulse on the guest experience. After all, the guest experience is at the core of hospitality. However, guest expectations continue to evolve. Consumers now more than ever are demanding more from brands. That means hoteliers need to focus on the guest experience at every stage of the guest journey. It goes beyond just the experience on property. Guests’ first impression of a hotel is formed far before they step foot through the front door.

And the data doesn’t lie: Customer experience continues to be king. A recent survey found companies that made substantial investments in their customer experience over the past year are 10 times more resilient and three times more likely than their counterparts to have grown their customer base in the last six months.

How do you keep a pulse on the guest experience at every touchpoint? One answer is technology. Tech is the driving force to meet and exceed rising guest expectations. Hoteliers would do well by implementing a guest experience management program. Data gathered in such a program can give hoteliers the insight needed to make business decisions to move a business or brand forward. Hoteliers need to know what guests want before they even have an opportunity to pose the question. Technology can help with that.

For example, hoteliers have data on what consumers will do at different points in their journey, and the data shows what they will typically request. A guest experience management program can help hoteliers understand the trends, and then they can use those insights to bolster the guest experience at the right touchpoints. At the end of the day, decisions backed by data are the best ones hoteliers can make for their businesses.

To make the quickest, most thoughtful decisions, hoteliers need to ensure their data across systems is centralized to be accessed from one location. This makes it possible to quickly share insights with the teams that need it when they need it. Without an integrated platform, hoteliers can’t have an end-to-end view of the guest experience. They need to know where the friction lies in the guest journey so they can fix what’s broken. Hoteliers also need to know where the opportunities are for adding value to touchpoints along the customer journey. Again, it’s important to remember that the guest journey doesn’t start when guests walk through the hotel’s doors. It starts at the very first touchpoint, often in the digital journey. Hence, hoteliers need to ensure they’re providing an authentic omnichannel guest experience, from digital channels like the website and email marketing through the on-property experiences and beyond.

For example, recent research from Zendesk shows that 65 percent of customers want to buy from companies that offer quick and easy online transactions. But hoteliers need to go deeper than providing a great experience on just one channel. The guest experience needs to be good – and consistent – across all channels, from the website to the app, moving to the booking experience, the on-property experience, and everything before, in between, and after.

That means, just as hoteliers offer a quick and easy online experience, the on-property experience needs to measure up. For instance, guests can’t stand in line at the front desk to check in for 20 minutes. Likewise, they can’t wait hours for towels to be delivered to their room. Hoteliers can be as transparent as possible if their property is working with a short staff. Still, at the end of the day, minimum guest expectations must be delivered – especially if the industry, as a whole, avoids discounting rates. Hoteliers who focus on building a foundation for improved guest experiences will be best poised to succeed throughout the rest of the pandemic and then post-COVID.

Automation Plays a Huge Role

However, the elephant in the room can’t be ignored. Hotels are also tasked with doing more with fewer resources as the Great Resignation continues to tear through the industry. A record number of restaurant and hotel workers are quitting the industry, according to the Bureau of Labor Statistics, and that doesn’t appear to be slowing down anytime soon. Compounding the issue, today’s workers are demanding higher wages. A recent study by Boston Consulting Group found 7 to 10 percent wage growth can lead to a 70 to 300 basis-point direct impact on a company’s earnings.

That means tech that allows hoteliers to automate what used to be manual processes will be essential for success moving forward – for both cost and labor savings. Research shows that more and more companies are looking for automation. A global survey from McKinsey & Company of 800 senior executives shows that two-thirds are stepping up investment in automation and AI either somewhat or significantly.

So, what can realistically be automated? Back-of-house functions like manual data entry, collecting and reporting data, to guest-facing jobs such as checking in guests, sending marketing communications, and responding to sales RFPs are all on the list. Today, many hotel operating processes can be handled by machine-learning automation. In turn, teams can be freed up to multi-task and focus on providing a great guest experience – which we know will be a differentiating factor for success as the lodging industry continues to navigate the pandemic.

Hoteliers can’t – and really, they shouldn’t – try to take the human aspect out of hospitality. But they also can’t compete if automation isn’t part of the strategy. Using a fully integrated technology solution can help save hours of work per week. Hoteliers should look for solutions that drive revenue and increase guest satisfaction while at the same time streamlining operations by automating mundane tasks that were previously handled manually by staff. In the past, hoteliers and hosts had to work with many different tools and vendors to achieve these goals. But more and more properties today are choosing a platform approach, partnering with a single technology provider that seamlessly integrates all the tools they need for reservations, distribution, payments, revenue management, marketing, and guest experience into one single platform that has one login and is always in sync.

Innovation is Critical for Success

If the pandemic taught the lodging industry anything, it’s that change can happen overnight. As more is learned about new and emerging COVID variants, hoteliers must remain vigilant and agile, ready to adapt in a fast-paced world.

Technology will play a key role in how quickly hoteliers can adapt. It’s important to seek out partners who never stop innovating. Remember that just like the industry, hotel tech should not be static. The lodging industry is going through more changes than ever before, so tech needs to follow suit. It needs to anticipate what’s next, not simply react to what’s happening now.

It’s also important to note that the problems the lodging industry is experiencing today, such as the labor shortage and unpredictable demand, are going to continue as the pandemic forges on and travel recovery starts. The technologies hoteliers invest in need to make their jobs easier, first and foremost.

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NB: This article was reprinted with permission from www.hotelexecutive.com