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COVID-19 impact: Intelligent technology spend

Saturday, August 8, 2020, 10:55 Hrs  [IST]
Asmita Mukherjee | Hyderabad

The pandemic has deeply affected all sectors, especially the hospitality industry as there is a huge decline in hotel bookings, drop in international tourist arrivals with airlines being suspended along with lots of other critical impacts. The state is quite worrisome for businesses operating in this sector. 

But on the bright side, the current economic pause gives hospitality brands an opportunity to change their business game leveraging technology. Technology can be efficiently explored by the hospitality industry in the new normal, as an enabler to protect margins, as well as, guests and staff from the deadly virus.

Many hospitality brands are the torchbearers of this transformation, in spite of deductions in revenue, over the next few quarters. According to Anil Kaul, CEO & Co-founder, Absolutdata, “The ‘new normal’ has made the sector realise that investment in technology can impact ROI which can be gauged through RevPar and TrevPar. Revenues at the recovery curve may not come out extensively during this period but will show its true potential once the economy revives. As far as customers are concerned, they won't compromise on health over money.”
Varun Balwani, Director of Sales and Channels India, FCS, mentioned that before investing in any new technology, one has to understand a few essentials to get the best out of it. “There are few essentials to understand before investing in a new technology such as the 360-degree loop, GDPR, ease of maintenance. I think hotels in India will now seek efficiency from employees. It is no longer a time to keep more staff because they are more affordable, but it is about keeping the right set of numbers to ensure social assurance to guests,” he added.

Given that any kind of COVID vaccine is several months away, travellers are being very cautious and refrain from staying at hotels. But the hospitality industry needs to survive and thrive in this new normal. “This means that the hospitality industry needs to implement several health safety measures in order to restore confidence amongst guests that it is safe for them to return. On the other hand, the guests need to ensure that they themselves are taking precautions and following the health safety measures implemented by the hospitality industry. The challenge that I foresee will be in ensuring compliance with these measures, given that these measures need to be adopted for a long duration of time. Technology has a big role to play in order to ensure such compliance. The government or independent bodies have issued guidelines and are asking for compliance, and audit logs indicating such compliance. Unless the hospitality industry adopts technology, the manual effort to ensure compliance will be extremely tedious and still will not be full-proof,” reiterated Rahul Bhalla, Co-founder and CEO, Zenatix A Hero. 

As per industry experts, cleanliness and hygiene will be major selling points for hotels in the new normal. While guests have always trusted that hotels will be clean, now they want proof. For example, they want to know whether a hotel is meeting new safety protocols set in place by government or industry bodies. For instance, Singapore has launched the ‘SG Clean’ stamp and big-name hotels, such as Accor, have publicly launched ramped up cleaning protocols across their properties.

Speaking about the rising hygiene and safety concerns among guests, Frank Trampert, Managing Director & Chief Commercial Officer, EMEA & APAC, Sabre Hospitality Solutions, mentioned that combining trust and innovation will be key to recovery and future growth in the ‘new normal’. Trampert said, “Travellers are turning to domestic, or regional travel, either because they have no choice as a result of border closures or because they feel more comfortable staying closer to home right now. If hotels can put the trust back into travel, increased number of people will feel more comfortable about travelling.

However, it’s not enough to simply have health and safety measures in place. Hotels need to make sure their potential guests know about them and should make health and safety measures part of their marketing messaging. If guests feel confident about these cleanliness measures, then it will drive loyalty to the brand.”

According to Subhabrata Roy, General Manager, DoubleTree Suites by Hilton Bangalore, the outbreak of COVID19 has forced everyone to transform their way of working and adapt to the new age of operations. “Hotel staff is working collaboratively, as well as, responding promptly to the new emerging trends and the behavioural change of guests. We have taken steps firstly to appraise and acclimatise our team members of the changes in the stay experience of our guests - right from when they leave their home to taking up an upcoming journey. It is amazing how this pandemic has brought the entire industry together from ground transport providers, airports, airlines, and hotels to make travel safe again. At this time, every guest who is eager to get back to travel expects technology integration,” he said.

Roy stressed on the various facets of technology spending by saying, “We should continue to invest in technology in a way that increases operational efficiency, saves cost in the long-run and generates additional revenue for the hotel. As technology empowers guests with several options and enhances their stay experience by giving them the assurance of safety, hygiene and well-being, the cost variance will have a direct impact on our financial results which will be passed on to the guests proportionately”.

Hoteliers agree that although they do not know how the road to recovery will look like, but they do know for sure that technology adoption is already seeing a spike in the post-COVID-19 era. While the consumption of technologies for boosting guest experience will be costly, it is necessary to identify ‘must-have’ versus ‘good to have’. Thus, hoteliers should plan to invest for the future in such a way that there is no sudden rush to implement new solutions, but at the same time be able to deliver long-term results.

In the current environment, hotels and chains are adopting new technological solutions to realise revenue, augment supply chains, and fuel geographic growth ambitions. The hospitality industry needs the right technology partners and solutions to ensure that it has a robust, intuitive and flexible distribution strategy in place, which can be fine-tuned in changing circumstances to make near, middle and long-term strategic plans and decisions. Many hotels are also looking at changing or expanding their geographic markets as a result of Covid-19, and this requires a distribution strategy which can be targeted at travellers in markets which are open for travel now, and those which will be open for travelling in the near future.

Trampert shared his insights on personalisation in the current landscape, by saying, “There is also an increased focus on technology to facilitate personalisation. While personalisation has rightly been a buzzword for many years, it is increasingly important as a result of the Covid-19 pandemic. As far as travellers are concerned, they are unlikely to ever take travel for granted again and, when they do travel, they will not want to waste a moment doing anything that doesn’t suit them. They will also want to make the most of their next trip, and hotels have the opportunity to use personalisation to increase RevPar in every room by creating personalised offers and upselling ancillaries.”
According to Kaul, it is crucial for the hospitality industry to personalise experiences, as post-pandemic guests will prefer contact-less services, which can only be implemented through technology, “We already acknowledge that a further robust digital transformation of the industry is crucial to provide guests with personalised experiences. AI-based tools may lead to a surge in direct booking and reduce dependencies on OTAs. Hotels should invest significantly in technology to boost customer retention, loyalty, and acquisition while improving guests’ stay. But, that may not render immediate results in the wake of the current economic downturn. Yet, such investments will prove beneficial in the longer run.” 

Cost has always played a major factor for hoteliers while innovating, and it has obviously become much more important in the current environment. Some innovative technologies might demand large up-front investments in hardware or integration costs, but currently, technology has become a key enabler in the hospitality industry’s efforts to bring back guests. Hoteliers have to spend wisely on technology keeping long term goals in mind and make the best use of the current situation to evolve in the new normal.

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