Technology and Hospitality: Airbnb and the Changing Guest
In the last few years, the peer-to-peer technology, Airbnb, has dismantled the traditional hospitality model and given rise to a new type of hotel consumer. By allowing anyone with a spare room to function as a hotelier and to connect instantaneously with potential guests, Airbnb offers the consumer an authentically local experience and significantly expands not only the volume but also the type of supply in the market. With this increased menu, a guest is offered a myriad of choices within a given geography and is able to find a residence which resonates on a financial, personal, and emotional level. Because the Airbnb user is not transacting with a professional proprietor, she must rely on unfiltered reviews and images in order to establish a sense of trust with the seller.
What emerges from this model is a traveler who expects more than the luxury, consistency and reliability offered by the traditional hotel. This new consumer-type is large and growing, spending nearly $2.4 billion on Airbnbs in 2015. [i] [ii] In order to remain competitive and relevant, traditional hotels will have to find a way to transition from an outmoded value proposition to one that includes or improves upon the choice, cost-effectiveness, convenience, authenticity, personalization, transparency, and emotional connection offered by Airbnb. [iii]
How Starwood is Using Technology to Remain Competitive
Through its merger with Marriot, Starwood is hoping to cut costs and achieve a wider array of options for its guests and compete with the cost-effectiveness and breadth of Airbnb.[iv] Independently, however, Starwood has been “leading the hospitality industry in technical innovation” in order to adapt to the needs of the evolving consumer. [v] Starwood has prioritized technology that:
- Enhances transparency and information availability
- The rise of social media and Airbnb together have ushered in an age in which the consumer expects a wealth of unbiased information and evaluation, tilting the balance of power in the guests’ favor. [vi] Starwood was the first major brand to include unedited ratings and reviews on its websites and to crowdsource user-generated comments and photos from social media channels. [vii]
- Improves convenience
- Starwood has invested in an array of digital services that attempt to rival the ease of access and convenience of residential living offered by Airbnb. A mobile app allows guests to bypass check-in and use their phone for keyless entry.[viii] The app also includes a new messaging feature permitting any guest need to be serviced immediately at any hour of the day—an offering supported by the upcoming implementation of “robot butlers” and digitized room-service carts. [ix]
- Increases opportunities for guest personalization
- While Airbnb tackles customizability through the array of lodging options available on its website, Starwood personalizes the guest experience upon arrival through the use of interactive technology (see table below). Through these tools, Starwood has reimagined its guests as “co-creators” of their unique hotel experience.[x]
- Evokes emotional connections
- Through its app-based loyalty program and app-embedded social media, Starwood gains insights and data (e.g. birthdays, anniversaries) which it uses to shape a persona-based guest experience. Starwood also utilizes the app to track and maintain guest preferences regarding diet and room climate in order to anticipate their needs prior to arrival.
What else should Starwood be doing (or not doing)?
While Starwood has successfully leveraged technology to deliver upon some of the new areas of demand popularized by Airbnb, its eager embrace of the technological revolution may also, paradoxically, hinder the hotel’s efforts to compete with Airbnb’s most alluring value proposition: the ability to “live like a local.” While technology allows Starwood to compete on matters of transparency, customizability, convenience, and even emotional connectivity, technology, by its very nature, is a force of standardization that ensures that processes and procedures function identically across hotels and geographies; a guest staying at a W Hotel in Los Angeles will be able to check-in in much the same fashion as a guest in the Maldives. What’s more, much of the way in which a hotel delivers an authentic and unique experience is through interaction between guests and staff- whether through an initial welcome offered in a local dialect or a concierge’s vivid description of his nearby upbringing.[xi] As robots and apps displace employees, these opportunities for crafting unique experiences become increasingly limited.
As it implements these technologies across its brands and regions as well as Marriot’s, Starwood should take care to contextualize (or eliminate) each technological initiative as appropriate. For example, Starwood currently has its mobile check-in operating at various spa hotels in exotic regions where a personal greeting with a local beverage could prove emotionally significant. As Starwood scales its digital innovations, it should ensure that its guests feel at home but not too at home.
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[i] CBRE, “THE SHARING ECONOMY CHECKS IN: AN ANALYSIS OF AIRBNB IN THE UNITED STATES”, http://www.cbrehotels.com/EN/Research/Pages/An-Analysis-of-Airbnb-in-the-United-States.aspx, accessed November 2016.
[ii]John Devine, “Is Airbnb a Threat to the Hotel Industry?”, U.S. News, November 2, 2016, http://money.usnews.com/investing/articles/2016-11-02/is-airbnb-a-threat-to-the-hotel-industry, accessed November 2016.
[iii] Suzanne Bearne, “How technology has transformed the travel industry,” The Guardian, February 29, 2016 https://www.theguardian.com/media-network/2016/feb/29/technology-internet-transformed-travel-industry-airbnb, accessed November 2016.
[iv] BI Intelligence, “Marriott-Starwood merger sets stage for intense competition with Airbnb,” Business Insider, September 26, 2016, http://www.businessinsider.com/marriott-starwood-merger-sets-stage-for-intense-competition-with-airbnb-2016-9, accessed November 2016.
[v] Samantha Shankman, “Interview: Starwood CEO on Using Technology to Improve the Guest Experience”, October 22, 2014, https://skift.com/2014/10/22/interview-starwood-ceo-on-using-technology-to-improve-the-guest-experience/, accessed November 2016.
[vi] The International School of Hospitality, “How Technology is Changing the Hospitality Industry,” http://tisoh.edu/how-technology-is-changing-the-hospitality-industry/, accessed November 2016.
[vii] Note: While other properties have made use of Instagram images — or Instagram-inspired images — in their advertising, Starwood is the first to add them to its properties’ websites Source: Jason Clampet, “ Starwood Hotels Adds Guests’ Instagram Photos to Its Hotel Websites,” Skift, December 11, 2014, https://skift.com/2013/12/11/starwood-hotels-adds-guests-instagram-photos-to-its-hotel-websites/#1, accessed November 2014.
[viii] Caroline Baldwin, “How Starwood Hotels is using technology to innovate hospitality,” Essential REetail, April 14, 2016, http://www.essentialretail.com/ecommerce/article/570e6f41e959f-how-starwood-hotels-is-using-technology-to-innovate-hospitality, accessed November 2016.
[ix] Suzanne Bearne, “How technology has transformed the travel industry,” The Guardian, February 29, 2016 https://www.theguardian.com/media-network/2016/feb/29/technology-internet-transformed-travel-industry-airbnb, accessed November 2016.
[x] Jay Kandampully, Anil Bilgihan, and Tingting Zhang, “Developing a people-technology hybrids model to unleash innovation and creativity: The new hospitality frontier,” Journal of Hospitality and Tourism Management, (December 2015).
[xi] Jeff Higley, “Hoteliers Embrace the Age of Authenticity,” Hotel News Now, August 21, 2015, http://www.hotelnewsnow.com/Articles/27502/Hoteliers-embrace-the-Age-of-Authenticity, accessed November 2016.
Images sourced from: http://www.businessinsider.com/marriott-and-starwood-merger-complete-but-airbnb-still-competition-2016-3 and http://www.travelandleisure.com/slideshows/hotel-technology-starwood
Table is self-constructed.