Everyone knows online services are an increasingly important consideration for businesses and customers – even in primarily bricks-and-mortar-based sectors like hospitality. We can see the growing importance of the online channel in all manners of research findings, from Phocuswire’s revelation that travel brands are now spending 61% of their marketing budgets on online channels, to JiWire’s finding that most people were booking their hotels via mobile as early as 2013. Your customer-facing staff will see it every time a guest raises an eyebrow when they can’t make a CNP payment. And most importantly, customers see it, with over half of consumers in the UK, for example, saying they like online payments best. Despite these compelling signs, many hotels still haven’t met the demand for online and mobile services. In this article, we’ll consider why parts of the hotel industry have been so slow to digitally transform, and how hotels can give travellers what they want through digital transformation, without risking their current success.
What’s holding hotels back?
Last year, ICAR proposed four key factors hotels need to respond to if they are to keep up with digital transformation:
- Regulation – compliance with ever-evolving payment regulations is a must. The biggest news of recent years from a regulatory perspective has been the GDPR, which threatens very significant huge fines for businesses hotel companies that don’t look after customer data properly.
- Technology – technological advancement is no longer an operational factor; it’s a central concern for any business taking consumer payments. How should hotels with traditional strategies and skills to match go about implementing a tech-centric strategy, without jeopardising their existing success?
- The economy – the technological advancements of rival hotels is driving increased price-consciousness in customers and a more urgent need for hotels to implement solutions that lower the costs of acquisition and operations.
- The digital society – rather than simply adapting traditional methods of doing things, hotels must create fresh strategies based on a new social paradigm, where a growing proportion of guests have lived in a digital world since childhood.
In light of such a wide range of concerns, it’s a small wonder some hotels have yet to complete their transformation.
Why we recommend an iterative approach to digital transformation
We believe digital transformation should be a matter of steps, not leaps. Hotels should seek to implement new digital services one at a time, with help from a technology provider or team member specialising in that service. Let’s take payment acceptance that interacts with guests’ connected devices for example, since that’s Prommt’s area of expertise. It’s easy to see how implementing digital payment technologies could be especially daunting for hotels in 2019, given the combination of tight data regulations and high cybercrime threat currently affecting the industry. Our solution is to take airtight online payment technology with proven success in the field, and give hotels access to that tech in a way that doesn’t interfere with their existing payment setup. With Prommt, hotels can accept payments via SMS or email; customer data is protected using proven technologies including 3D Secure and card tokenisation; hotels can use our API to connect Prommt seamlessly to their booking and property management software. When first implementing a digital service, a hotel’s objective should be to bring digital options into play without compromising existing ways and methods. Then, as more customers adopt digital payments, hotels should explore the finer options available through their Prommt dashboard, with a view to placing digital at the heart of their payment strategy. That’s our model for digitally transforming a key moment in the hotel-guest relationship – and the same theory can be applied to other hotel operations. From booking to check-in, it always pays to:
- Engage the specialist provider or team member required to lead on the new service implementation;
- Implement the new service alongside existing options;
- Master the new service and move it towards the centre of your strategy.
By the time you’ve worked through these three steps, your digitally transformed service will have become the new normal for many of your guests. At that stage you’ll have the tools to join the 47% of travel companies now using real-time digital service data to provide automated personalisation for guests – which is the tipping point at which digital competitiveness can become competitive advantage.
