– “Welcome, it is a pleasure to have you back” said the TV.

The Digital Transformation affecting the hospitality industry will play a key role on Marriott’s business and operating models, and their ability to deliver an exceptional and personalized customer experience.

Marriott International has reached a merger agreement with Starwood Hotels & Resorts worldwide, a deal worth $12.2 billion that will result in the world’s largest hotel company.  Going forward, the Digital Transformation affecting the hospitality industry will play a key role on Marriott’s business and operating models and their ability to deliver an exceptional and personalized customer experience.

Matthew Von Ertfelda, Marriott’s VP of Insight, Strategy & Innovation, describes a context where the rise of millennials and Gen Z travelers, the increasing competition for online booking platforms and the rise of Airbnb worldwide exert great pressure for digital innovation, a key area where Marriott is focusing to remain competitive in a new industry context.

5 Trends for the Internet of Things (IoT) in Hospitality

  • Natural Users interfaces: Technology has shaped the channels of interactions with guests, where websites and mobile apps are an important element of the omnichannel experience that users expect from resorts. Moreover, the user experience starts before the guest arrival to a hotel: it comprises from the search and booking till the sharing of his or her experience in social media after the checkout. Therefore, great interfaces to which the guests can connect with the hotel are crucial.
  • Mobile Engagement: Mobile devices contribute to decrease disruptions and enhance customer experience. Guests can check-in directly using smartphones through the hotel app, prior to arriving, avoiding wasting time at the reception counter, eliminating a user pain-point along the registering process. Also, hotels can automatically send electronic key cards using Bluetooth technology, providing room access directly through mobile devices.
  • Guestroom Automation: Smart connected rooms are an essential part of today hotels’ value proposition. Controlling the room lights, thermostat and curtains through a mobile device, a tablet or the TV is already a reality for high-end hotels. Still, this is just the tip of the iceberg of the endless potential of automation.
  • Hyper-personalization: Access to bulk data and guests’ preferences is enabling hotels to create a much better targeted approach and to deliver a highly personalized experience that make guests feel “special”. From targeted advertising campaigns that show information that is relevant to each guest, to “memorizing” comfort preferences – like room layouts, temperature and lightning preferences – allow to serve customers in an ultra-customized way.
  • Predictive Maintenance: the IoT use sensors that continuously report data on actual performance of devices, infrastructure and facilities. This allows maintenance or housekeeping to anticipate and investigate whether something is mal-functioning or might lead to a problem – sometimes even before it occurs. Mitigating the risks of failures or breakdowns can enhance the user experience during their stay.

Marriott’s/Starwood Digital Transformation Strategy: Innovations and Next Steps

Both Marriott and Starwood have advanced in many digital transformation initiatives to stay up-to-date with the IoT trends affecting the hospitality industry. Some examples include:

  • Facebook Dynamic-Ads: Content is being customized to deliver personalized content to travelers, related to what is relevant to customer’s needs in real-time, and tailoring calls-to-actions depending on those needs: whether this means signing-up as a member to the hotel’s rewards program, downloading the hotel app or booking a reservation.
  • Real time data tracking: All guest-hotel interactions are stored and monitored in a central command center. This allows to connect social media to guest data to identify opportunities to interact with clients and maximize engagement in every touchpoint. Furthermore, by saving guests’ preferences information hotels can match those preferences to their property features (i.e. preferences for high-floor, far from elevator, etc.)
  • Key-less technology: Registered members can get a “key” code in their mobile devices replacing the physical card-key, granting guests access not only to their room but also to common areas (i.e. Gym, pool, etc.).
  • “Daylight Harvesting”: Automation initiative that saves energy and increases indoor lightning consistency that adjust LED-lightning to the natural light detected in the room.

While the list is non-exhaustive, there are a few insights that we can examine:

First, the Internet of Things will be a distinctive tool to help hotels improve their customer experience. The potential of digitization is huge, meaning that Hotels will need to continue developing capabilities to assess new customer needs and prioritize innovation initiatives. Also, ability to rapidly adapt and implement change will become a key competitive advantage. Thus, hotels might face the need to partner with third parties to develop their online systems that will increasingly require software (API interfaces) integrations. However, digital transformation in hospitality will have an impact beyond customer satisfaction. In particular, there is great opportunity to use IoT to improve hotels’ environmental practices: It will be very interesting to see how digitization will shape a more sustainable hospitality business.

(772 words)

Sources:

  • http://www.hotel-online.com/press_releases/release/7-trends-for-the-internet-of-things-in-hospitality#When:14:05:27Z
  • http://hospitalitytechnology.edgl.com/news/Starwood-Opens-the-Door-to-Next-Gen-Engagement102246
  • http://hotelexecutive.com/business_review/4299/how-26-billion-internet-of-things-devices-will-impact-the-hotel-industry
  • http://www.puzzlepartner.co/the-internet-of-things-the-impact-on-the-travel-and-hotel-industry/
  • http://www.chiefmarketer.com/marriott-vp-digital-marketing-on-digital-apps-and-guests/
  • http://www.nytimes.com/2016/08/16/business/airbnb-for-business-travelers-more-wi-fi-fewer-hosts-in-towels.html?_r=1
  • https://openforum.hbs.org/challenge/understand-digital-transformation-of-business/why-digital/starwood-hotels-a-digital-winner-in-the-hospitality-industry
  • https://skift.com/2016/02/03/marriott-executives-explain-the-brands-internal-strategy-shift-at-mit/
  • http://www.emarketer.com/corporate/clients/marriott.aspx
  • https://skift.com/2016/01/12/understanding-marriotts-vision-of-the-future-of-meetings-in-2016/
  • http://www.mckinsey.com/business-functions/operations/our-insights/redefining-service-innovation-at-starwood
  • http://hospitalitytechnology.edgl.com/news/Starwood-Opens-the-Door-to-Next-Gen-Engagement102246

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3 thoughts on “– “Welcome, it is a pleasure to have you back” said the TV.

  1. Jean Grey – Thanks for highlighting the Marriott-Starwood merger! When the deal was announced, I had wondered if gaining access to the data in Starwood’s SPG loyalty program was one of the driving factors behind the acquisition. I think this may be a case where the intangible data was just as (if not more) important as the physical hotels. Marriott has already rolled out a large campaign to get customers to link their Marriott and Starwood accounts [1]. What role do you see these points programs playing in the hospitality industry going forward?

    [1] Marriott International, “Marriott International Completes Acquisition of Starwood Hotels & Resorts Worldwide,” http://news.marriott.com/2016/09/marriotts-acquisition-of-starwood-complete/, accessed November 20, 2016.

  2. I thought it was interesting that you brought up the point around room automation and then environmental practices as an area for continuing improvement. To me, the rise of the “smart room” could be a great way for hotels to leverage digital technology to better manage their environmental footprint. E.g., if a guest has raised the temperature of a room really high overnight and is leaving the room for a few hours, the smart sensors can realize this and normalize temperatures.

    Another example of where digital technology can be useful for environmental purposes is in how some hotels will try to minimize water usage by incentivizing guests with SPG points to re-use towels. Currently from what I’ve seen, a guest has to remember to put a notification around the door, and often forgets. I can imagine a future where a guest will get a notification on their phone from the hotel app telling to do the same thing, which I imagine will be more effective than a door hanger.

  3. Thanks for posting. Like most people, I would rather sleep in my own bed, but I appreciate when I am staying at a hotel that is using technology to improve my stay. When I stay at a hotel I typically leave all the lights and the TV on even when I leave the room. However, if hotels made it simple and convenient to turn off all the electronics in the room through either a button near the door or an app they would be able to reduce their energy expenditures. I saw in an article that in 2016 only 20% of Hotels reported having plans to utilize IT to help with energy management. As this is one of Hotels largest costs, it seems like it should be a priority focus area. http://hospitalitytechnology.edgl.com/news/6-Mega-Trends-in-Hotel-Technology105033

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