Balancing In Between a Rigid and Adaptive Hotel Business Model

The advent of new technologies has brought about a great deal of change for hospitality businesses. The trend has opened up amazing possibilities, while at the same time causing great apprehension. Regardless of this complex consumer revolution, the core business practices that have led to success in the past will remain unchanged. New tech, and other innovations will greatly improve every hotel’s efficiency, but the “old school” ways of business will be valid always. Striking the balance will soon differentiate winners from losers.

Editor’s note: This report first appeared exclusively at Hotel-Online.

We’ve been talking with key decision makers across the spectrum of hospitality business, to try and glean which components of operations will remain steadfast, and which new variables will improve service, efficiency and profit. Here’s some insight into the new world of steered experiences, finely tuned decision making, and disruptive market engagement. I think the reader will be surprised at just how unchanged business will be in the near future.

Conventional Wisdom Meets Tomorrow’s Guest

From sales and marketing to customer service, and leadership to the hospitality business culture, business executives today are experiencing a good deal of flux because of alleged disruption in the sector. You’ll notice I said “alleged”, because much of the innovation and change in our business is simply hype. Okay, hyperbole and sometimes enthusiasm, if I am completely fair. But most hoteliers already know this, or at least they sense that not much has really changed because of technology. The fact is, some of the tools have changed, and new channels of communication have opened, but a “guest” is still a guest, and service is our business. To better frame this reality, I contacted Tomasz Janczak, Director of E-Commerce & Distribution for Plateno Group for Europe, in order to discuss how hoteliers are adjusting. Janczak, who is the co-founder of the DotComHotels conferences, offered some solid insights into how “old school” hospitality integrates within a technology environment.

According to Janczak, the classic guest relations manager “give-and-take” approach still exists for upscale hotels. But he says that “more and more the travel experience happens within a virtual & technological environment.” And it is here that hoteliers jump into the “conversation”, and where they gain valuable data for decision making. It is in this new hotel ecosystem, where we are returning once again to another “old school” approach, “one where hoteliers need to switch between different systems and apps, etc.” Janczak’s experience tells us, that data like guest history, spending behavior, loyalty, social interaction, reputation, and so on have always been kept and studied. Only now the capability into a more sustainable business model is made simpler by technology. According to Janczak, and others I have talked to, what’s coming are singular platforms, where all guests‘information will be easily accessible, so that hoteliers will be allowed to re-focus on their guests‘experience, instead of getting lost in analysis.

In order to cement the true value of technology in place, I talked with Janel Clark (above), who is the Head of Consultancy & Education at SnapShot GmbH, which is the leading technology company focused on creating just such a platform as Tomasz Janczak described. Ms. Clark works with hospitality schools and other educational institutions, in order to help students and key executives alike, better integrate the latest tools. While many decision makers today are frustrated to simply understand “Big Data”, people like Janczak and Clark are busy informing. Here’s what Ms. Clark had to say about truly useful data and technology:

“Technology allows hoteliers to really know their business: it’s not about needing new or different data, it is about identifying the key information you need, in less time. Now hoteliers can immediately have easy access to data which would have taken hours to collate, allowing more time to analyze and make smarter decisions.”

Hotels: As Adaptive As Humans Can Be

Until the day human beings turn to taking virtual vacations instead of real-life ones, one on one interaction will remain what it is, the most vital value of hospitality. Some might argue how we all “know” one another over Facebook, Skype, or other social mechanisms, but total reliance on technology and tools cripples business. The give-and-take of personal interaction, the genuine reciprocity and communication that ensues is the hallmark of our business. While every hotelier reading this is already keenly aware, it helps to hear top leadership speak of influence, real networking, and the friendships which forge real loyalty. I called one of the hotel world’s very best, Tom Magnuson of Magnuson Hotels, to get his take on “in the flesh” versus digital prowess. The co-founder of the world’s largest independent hotel chain had this to add:

“To expand your network of influence globally, it’s critical to understand one of the most valuable things a CEO should know– how to work a room. And this capability begins and ends with the bond of friendship between people. Influence networking prowess are about detoxing yourself from reliance on email dialogue, and showing you care enough to make a trip to see colleagues, and partner, and friends.”

Magnuson, who’s built a small empire off the power of a sincere handshake, has hinted at one of the most critical lessons hotel businesses can learn. Hoteliers need to be able to take full advantage of technology and new disruptions, while “detoxifying” themselves and their operations from too broad a reliance thereon. It becomes all too easy to get distracted and wrapped up in integrating tech etc., and hoteliers are already stretched to the limit in the day-to-day. So the balance is the benchmark hotel executives are seeking. By highlighting Tom Magnuson’s “old school” approach to business, I am not by any means suggesting hotels cling to a “rigid business” model. I know Tom very well, and he would be the last person on Earth to marginalize the value of technology.

To drive home this, the most crucial point for hotel businesses, I reached out to Dr. Graham Miller, Professor of Sustainability in Business, and Surrey University’s Head of School of Hospitality and Tourism Management.  Dr. Miller talked about the false sense of security technology can give hoteliers, where truly understanding and engaging guests are concerned. He also added:

There is of course a kind of continuity to the service that hospitality provides, which usurps technology and any new innovations. This is that people want to have a memorable experience and be impressed with the way they are treated. Technology can certainly help to deliver this, but it should not replace, or distract us from our core goal. Back of house our key requirement is to understand our guest, our staff and our business.”

So, what Magnuson and selected others do practice, is a form of adaptive business where it is possible to work in typical “top down” executive fashion, while at the same time meeting the needs of a transformative consumer experience. Put plainly, hoteliers like Magnuson see new tools and channels for what they truly are – enablers only. While rigid hotel management will be able to squeeze out profitability for a while to come, the future of sustainable hotels demands an augmented strategy. The rising tide of consumer experience must be met by brands willing to listen and adapt, but to remain steadfast too. The human perspective is where this “balance” has to be struck, and new technologies only allow us to react faster and more efficiently.