What does the era of personalisation mean for boutique hospitality?

Joe Youssef By Joe Youssef
Uploaded 03 May 2019

Joe Youssef of Amadeus looks at how technology is driving the evolution of the relationship between hotels and their guests.

The world's very best boutique hotels really know what it takes to create deep and lasting emotional connections with their guests. They understand that crafting a unique experience ensures customers check out satisfied every time.

A new report, The Drivers of Change in Hospitality, by Foresight Factory and Cornell's Center for Hospitality Research, commissioned by Amadeus and IHG, argues that technology is set to transform hospitality, affording customers greater ease, increasing value, and driving personalisation. This applies to brands across the sector, from the boutique to the big chain.

The changing hospitality industry

Since 1970, the number of yearly international travellers has increased exponentially, from 310 million to four billion. By 2036, this number is expected to double, placing additional demands on the hospitality industry. The next five years alone will see a significant period of growth, with revenues from accommodation services predicted to rise from $5.6 trillion to $7 trillion by 2025.

At the same time, technology continues to transform expectations, creating new opportunities and challenges. We are entering a period of unprecedented change. Advances in cloud and data analytics technologies are equipping hoteliers with powerful new tools. Customers are creating and sharing more data than ever before and expecting a more efficient service. Today's traveller is likely to be better-informed, better-educated and well-travelled.

In producing the report, the authors surveyed over 7,500 consumers across 12 international markets. They identified three key trends transforming the industry.

1. The rise of tech-augmented hospitality
Around the world, automated solutions are becoming increasingly common. Whether we're getting onto public transport, or buying our groceries, automation has rapidly become a part of our daily lives.

The travel industry is no exception. From biometric technology being widely-used at boarding gates, to self-service bag drop, the industry has been a pioneer in adopting automated solutions to meet the challenge of rising demand.

For the hospitality industry however, the technologies underpinning automation won't replace human interaction, but rather augment it to add greater value. 67 per cent of hotel guests surveyed in the report said they valued interactions with hotel staff. As ever in hospitality, it's the personal touch that really counts.

Some of the most innovative boutique hotels are already employing cutting-edge technology to achieve this. From automated check-in, to drone delivery services, many boutique hotels are already well-practised in these areas.

However, technology will allow hotels to deepen interactions with guests and create more personalized connections at scale. AI algorithms, which can analyse complex data sets, will improve interactions with customers by providing staff with suggestions of what to offer guests in real-time. Whether that's allocating the right room or providing auto-translation of conversations, AI will help hotels to anticipate and adapt to guests' needs.

2. Achieving 'cult status' at scale
The most successful hotels are the ones that can create deep and lasting emotional connection with their guests, forging a kind of 'cult status' as a result. Indeed, 73 per cent hotel guests surveyed in the report said that finding a unique experience is a key objective when it comes to booking time away.

However, the report predicts that technology will allow bigger hotel brands to achieve a relationship with guests once reserved for boutique hotels alone. Driven by greater data-sharing and improved analytic technology, cultivating a loyal fanbase will be achievable, as the report suggests, at scale.

It's not just the bigger hotel brands that stand to benefit from this change. As hotels open up their APIs and, with the consent of guests, data is shared across the industry, hotels will have access to more information sources than ever before. This will allow them to better understand potential customers and further personalise services.

Additionally, smaller hotels will find it much easier to adapt to new technologies, their comparative size allowing them to be more agile when it comes to adoption.

3. The beginning of the end for room types
Boutique hotels are able to build customer loyalty because they are successful in providing their guests with the services they actually want. A one-size-fits-all approach is never part of the offering.

At most hotels, guests at the booking stage are confronted with a very familiar set of options. Namely, what kind of room do they want? A double, a single. How many nights do they wish to stay? At most hotels, our options don't extend much further than this.

This traditional formula however, is soon likely to be a thing of the past, with the rise of what the report describes as "attribute-based booking". No longer will guests simply book an identikit room with a flat price, but also decide on the amenities with which they wish to fill it.

This presents an enormous opportunity for boutique hotels. Analytics technology will allow them to better optimize the turnover of rooms. This might allow guests to book from 9am to 9pm rather than the reverse - perfect for long-distance travellers catching up on lost sleep. It could even allow guests to make decisions on the finer points of their room. Would they prefer gym equipment, or a yoga mat? What kind of mattress or pillows do they prefer?

There is of course a risk that guests will be confronted by a disorienting array of options. That's why it's important that hotels, through data analytics and more refined personalisation, provide guests with a list of amenities they truly value.

A new chapter for hotels

The hotels sector is entering a new era. Global traveller numbers are increasing year on year, while at the same time technology is transforming the industry, providing a foundation for the industry to meet new challenges.

The era of personalisation will help hotels continue to build on what they've achieved already, when it comes to creating deep and lasting connections with their customers.

Technologies such as AI will allow staff to focus on building deeper relationships with customers. At the same time, cloud and data analytics technologies will allow boutique hotels to better optimise their services and continue to improve the experience of guests.

By better understanding their guests, boutique hotels can continue to rise to meet the needs of their customers, while providing the highest quality of service the industry has to offer.

Joe Youssef is EVP corporate development and marketing at Amadeus Hospitality

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