How Starwood Hotels Makes It Personal and Makes You Come Back For More
Innovation in technology is one of the key elements that enables both the business and operating model of Starwood Hotels & Resorts to remain competitive and relevant to its SPG loyalty members.
Why Hoteliers are Flocking to Technology?
Hoteliers can no longer woo their guests with the original hallmarks of a hotel: great service, a clean guestroom stocked with terry towels, large pillows, and room service, along with a full-service restaurant, pool, and fitness facility. Guests’ expectations are higher than ever as they have more control of their choices and seek hotels that go above and beyond the standard amenities and offerings. More and more hoteliers find themselves flocking to technology as their saving grace in delivering value to guests. To stay competitive, hoteliers are finding innovative ways to deliver high-touch and high-tech service. A reason for this shift into technology is largely in part due to the Millennials. This demographic is of interest to the industry for two reasons: first, 52% of Millennials rank “far above or above average” as early adopters of technology and second, Millennials are estimated to spend $4.1 trillion annually by 20201.
Starwood Hotels & Resorts – A Beacon of Hotel Technology
The Starwood Preferred Guest (SPG) loyalty reward program is the darling of the industry because of its success in creating a strong loyalty membership-base. Starwood Hotels and Resorts, which was recently acquired by Marriott International, owes much of the success of the SPG program to the company’s ability to be innovative with technology. Given Starwood will be folded into Marriott, it is still unknown what will happen to SPG; however, it is worth exploring how Starwood became the pioneer of the hotel technology2.
Starwood is hyper-focused in understanding their consumers’ needs, preferences, and pain-points. This focus is done in part to achieve a personalized guest experience that recognizes and rewards guests for their loyalty to the brand.
Considering Starwood’s business model, it aims to deliver a unique guest experience and engage their customers across several touchpoints: the guestroom, food & beverage, group events, and health & wellness. The business model is successful in part due to the adoption of technology, but also because of their operating model. Behind these different guest touchpoints involves a seamless operating model that leverages guest data to deliver the promise of a unique guest experience. With a portfolio of 1,200 properties that expand across 11 brands, Starwood’s operating is structured to deliver a consistent quality of service while also is adapting to the evolving needs of their guests.
Innovative Technologies Find Their Way into Hotels
Most of the adoption of technology has come from understanding different pain-points for the guest. For example, the check-in process is time consuming, inefficient, and redundant. To address this issue, Starwood leveraged the use of beacons, a special augmented reality that transmits data via Bluetooth, to enable keyless entry3. Launched in the Fall of 2014, Starwood has “opened its doors” to its SPG loyalty member guests with keyless entry4. One of the key advantages of this new technology is the omission of the front desk check-in process and self-directed guest experience.
The keyless entry lives within the Starwood mobile app along with many other guest features. This is a great example of how technology continues to evolve and build upon existing technologies, such as the mobile app. For example, the James Hotel added an e-concierge feature via their mobile app, which provides guests access to special offers, self-guided tours of the hotel art work, and local recommendations 5.
The Future of Technology in Hotels
The future success of Starwood will largely depend on its ability to adapt to evolving demands of the consumer and deliver a seamless personalized experience. The business model needs a top-down mandate that prioritizes ongoing implementation of tech infrastructure. The operating model needs to integrate and leverage these technologies to execute this seamless personalized experience, which is where Starwood needs to continue innovating.
Starwood should leverage the use of beacon technology to help recognize guests by their first name, let housekeeping know when guests are still in a room, and let the hotel staff know when guests are on the property. Often, a SPG member may be eating at a hotel restaurant but is not a registered guest staying at that hotel. Starwood should know when their members are on property to recognize them for their loyalty 6.
Part of the personalized experience involves a self-guided engagement. Guests want on-demand access to information. The next frontier is augmented reality. Printed materials, such as brochures and food menus could be further enhanced. A guest could point their mobile phone to visualize a pop-up hotel map, or a map of local points of interests or read reviews and recommendations from a restaurant menu. Possibilities are endless with the enhancement of technology. Gone are the days when you wait in line to order food, call up housekeeping to request towels, or are placed on hold to connect with the restaurant to make a reservation.
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1 Experian, “The 2013 Digital Marketer Report” (PDF file), downloaded from Experian website, http://www.experian.com/assets/marketing-services/reports/2013-digital-marketer-download.pdf?SP_MID=768&SP_RID=4037003k, accessed on November 16, 2016
2 “Marriott-Starwood deal will raise the bar for hotel technology across the industry”, December 3, 2015, StaynTouch Blog, http://connect.stayntouch.com/blog/marriott-starwood-merger-impacts-hotel-technology/, accessed on November 16, 2016
3 “How Hotels Are Using Beacons and Augmented Reality”, Hospitality Technology, December 14, 2015, http://hospitalitytechnology.edgl.com/news/How-Hotels-Are-Using-Beacons-and-Augmented-Reality103717, accessed of November 16, 2016
4 Deanna Ting, “The Current State of Keyless Entry at Big Hotel Brands”, Skift, June 29, 2016, https://skift.com/2016/06/29/the-current-state-of-keyless-entry-at-big-hotel-brands/, accessed on November 16, 2016
5 “How Hotels Are Using Beacons and Augmented Reality”, December 14, 2015, Hospitality Technology, http://hospitalitytechnology.edgl.com/news/How-Hotels-Are-Using-Beacons-and-Augmented-Reality103717, accessed of November 16, 2016
6 Abigail A. Lorden & Dorothy Creamer, “Starwood Opens the Door to Next Gen-Engagement”, September 18, 2015, Hospitality Technology, http://hospitalitytechnology.edgl.com/news/Starwood-Opens-the-Door-to-Next-Gen-Engagement102246, accessed on November 16, 2016
Thanks for the post! I’m sure it’s very interesting for all the consultants we have that have spent the last few years in and out of hotel rooms! I do agree that success will depend on a chain’s ability to adapt to customer demands and changing technology. I also wonder what this will mean for these chains in terms of training employees. Will they also need to invest heavily in people to ensure seamless integration of technology into their service offering?
Very interesting post! I totally agree it is a great program in theory, but unfortunately it doesn’t work well. I have slept 170 nights in SP&G hotels last year (#consultant) and it has never worked. Sometimes it worked the first night, but then it didn’t work the second night, so you had to go all the way to the reception, show them your passport and ask for a room key. In the end it takes a lot longer than checking in the old school way. Some hotels (e.g. Conrad) have mobile check-in where you can choose your room location from a map, so you can choose how close you want to be to the elevator, what floor, city view etc., which is handy. In general, I think there is still a lot of improvement potential, but it’s a step in the right direction
Great post! I agree that Starwood does a great job providing excellent customer experiences in their hotels. It will be interesting to see how Marriott leverages the technological advantages that Starwood has as the two companies begin to integrate. One thought I had while reading this post was whether/how Airbnb could leverage similar technologies as Starwood to make the check-in/check-out process more seamless for guests staying in Airbnb accommodations. As Airbnb continues to increase its number of bookings, the company’s decisions around the adoption of technology will have large implications for its customers (http://qz.com/329735/airbnb-will-soon-be-booking-more-rooms-than-the-worlds-largest-hotel-chains/).
As a frequent traveler, this article was super interesting. I know Marriott has started utilizing mobile check-in, but they still require visiting the front desk to obtain a key. I wonder if Marriott will be able to roll out the SPG mobile check-in technology to their entire book of hotels soon given the acquisition. Your article also made me wonder if there are privacy concerns to worry about. I can picture someone losing their phone and then having to worry about someone having their room number and access to their hotel room. Are there ways SPG can improve security by validating a user is supposed to have access to the room — maybe via fingerprint technology?
Always really interested to hear what else hotels are doing to better customer service. I have always wondered though, is there truly a replacement for humans in that industry? Customer service tends to be a huge differentiating factor and in my view, a key competitive advantage of luxury hotels. It would be easy for a lower end chain to replicate some of Starwood’s innovations (if they felt like it was even worth the investment) but providing a luxurious experience through personnel I think is a lot harder (and arguably more expensive given you have to hire more people). So while an app could ensure that room service is properly delivered to your room, a person still has to do this and is a key factor in making it a successful delivery. Curious to hear what you think about that tension and whether an app can really make or break your stay.
Thanks so much for this post! I found your suggestions of ways to further bring digital innovation to the hotel industry really fascinating. For the higher end hotels, I’m also wondering to what extent new technology could be integrated to improve the more traditional concierge services? Perhaps the app could allow you to pull up on your phone personalized suggestions for dining or activities from the concierge based on previous restaurant choices you have checked into, or from aggregated data on past “favorite” experiences.