4. The findings
4.1. Before consumption
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4. The findings
The digital transformation is the perfect opportunity for hospitality groups to have their customer relationship evolve all along the customer journey, also called the guest cycle experience, and to create value and differentiate in order to retain customers and to attract new ones.
The customer journey is composed with 6 steps: Inspiration and information, planning and evaluation of options, purchase, preparation for the trip, stay and engagement.
The customers go through these six stages before they arrive in the hotel, while they stay in the hotel and after they leave. They are made of the interactions between customers and hospitality groups whether they are physical or digital.
4.1. Before consumption
Before the guest arrives in the hotel, he goes through 4 stages:
-Inspiration and information: When the guest focuses on a special need (location, price, ease of access…) and explore which hotel may be the best choice. The guest can contact the hotel through telephone, email but most of the time he will use the Internet and its website.
-Planning and evaluation of options: After selecting a list of hotels, the guest compares them using hotels platform with guest reviews, forums…
-Purchase the hotel: the customer books the room.
-Preparation for the trip: it starts when the customer receives the confirmation email, texts or a welcome note.
These stages are the most crucial for hospitality groups as they have to attract customers facing a fierce competition, and to engage them to have them book into their properties.
The ease of access to information, in high quantity and from any device and from everywhere, is the most important challenge brought by the digitalization in the hospitality industry that has clearly affected the inspiration and information, planning and evaluation of options stages.
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Hospitality groups have to focus on their online social reputation and to control it to affirm and reinforce their added value, set themselves as the best option for the researched service or product.
They clearly need to at least avoid bad comments and feedbacks that would definitely prevent customers from booking their service.
Starwood Hotels & Resorts Worldwide – E-reputation management
Starwood Hotels & Resorts Worldwide has clearly taken a step into controlling its online reputation and has selected the company Revinate (https://www.revinate.com/, a hotel operations, marketing and revenue software company) as Online Reputation Management Software provider in 2015.
Revinate aims to provide hoteliers with data about the guest experience, insights from the competition and road maps to improve and engage the guests.
Accessing relevant data about the online activity and the performance of other actors on the market, gives a global outlook of online reputation and enables the company to control user generated content by interacting with customers, to better understand customers by reviewing comments and to engage customers.
The added-value of this service is the possibility given to hospitality groups to shape their offer and value proposition to their clients in order to improve guest satisfaction and loyalty and as a consequence to increase revenue. On an internal point of view, such tools measure the Return On Investment (R.O.I.) for marketing teams and general managers that is important to evaluate the marketing efforts and to correct them.
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Figure 7: Revenue Insights – Performance Overview Dashboard Source: Revinate website (https://www.revinate.com/)
Digitalization has increased the need in mobility and comfort all along the customer journey, but especially into the selecting phases. If hospitality groups fail in offering a mobile experience, the customer would just not consider the offer as it would represent too much effort.
Hospitality groups have to offer websites that are responsive and easy to navigate from any device and to give an easy access to key information that customers are looking for.
Mobile experiences represent an opportunity for hospitality groups to catch the customer at the mobile-moment, that is according to Hotelogix (a PMS software provider company) “when people reflexively turn to a device, often to a smartphone - to learn or do something”. Mobile surfing is the favorite option out of business hours so this is a very important channel to consider as 70% of leisure
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travelers book trips and hotel rooms during their free time, for example while commuting or waiting for something.
By analyzing the traffic through mobile surfing, hospitality groups can choose the right time to push marketing promotions that could engage the customer. These new data about consumer habits can be used to boost the marketing R.O.I. by targeting the customer with the right message, at the right moment and on the right place.
AccorHotels – User-friendly website
In 2013, AccorHotels understood the crucial stake of delivering a user-friendly website accessible from any device by upgrading AccorHotels booking website. The new version is accessible in more than 90 countries and enables customers to book directly in more than 3,500 hotels.
It offers a friendly design, advanced search functions, pictures and video of hotels and a secured payment gateway, which is very important to offer the possibility to customer to directly make a reservation and to access easily and transparently all the information they need to prepare their travel.
The website has been optimized in order to facilitate booking and to make the reservation more spontaneous by reducing the sales process steps and as a consequence to increase the sales.
Customers who need to book a room quickly and effectively can use geo-location function for last minute bookings. They just need to activate the geo-location service on their device and will be offered several choices next to them that match their previous expectations. They can be reached as well by spontaneous promotions around them.
The use of data to target and personalize communication towards potential customers is a big opportunity for hospitality groups to drive bookings and hotels start to consider it.
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Figure 8: Accorhotels.com website on iOS Source: Screenshots from Hélène Delay
Once the customer has gathered all the information he needs and has chosen the hotel that matches the best his decisive criteria he proceeds to the purchase of the hotel room.
Despite a wide adoption of the internet, Phocuswright states in his report “independent hotels:
marketing, distribution and technology for non-branded properties” in 2015 that online travel channels still represent only 45% of all travel booking in 2015, which is surprisingly lower than expected. We should nuance our statements then, as there is still an important role to play for travel agencies, phoning and human contact… On the other hand, 52% of online bookings stem from OTA worldwide (62% in Europe!) and not from the brand’s channel.
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Figure 9: Online bookings figures in 2015 Source: Phocuswright.com
If a customer is already loyal or has a positive attitude towards a hospitality group, he is then more likely to have the app on his phone/tablet and then to spend those last three stages (Inspiration and information, Planning and evaluation of options, Purchase the hotel) directly on the hotel provider app. While using the app, the customer is totally locked into the brand channel and has lower chance to compare and get alternatives from competitors. This is as well the right opportunity to attract and help the customer in his decision-making process through incentives and loyalty programs.
The experience the customer enjoys while going through the app is crucial because it gives a pre-taste of the on-site experience. It must be fast, well-designed, beautiful and efficient. To highlight the paramount role given to apps in the hospitality industry, Marriott’s CIO, Bruce Hoffmeister, has even called this rise of mobile apps as “one of the biggest shifts of the past decade”.
Starwood Hotels & Resorts Worldwide – Mobile App : Starwood Preferred Guest (SPG) Starwood launched the Starwood Preferred Guest (SPG) app available on iOS and Android in 2011 and has upgraded it in 2016. The app is now more personalized than ever.
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It gathers every single information potentially useful to customers in order to make the reservation as easy as possible, with especially a lot of pictures of properties so that the client can easily imagine it.
There are clear information about transportation and other convenient aspects available and about culture and events as well. Everything is at the fingertips of the customer for more comfort and easiness, the customer does not have to search for the information by himself, have less time to doubt and will not be tempted to visit competitors’ websites to find those information.
Starwood has added a social dimension, customers can share their travels or likes on Facebook and other social media… The company relies on its customers to benefit from viral marketing.
The app has reached a higher level of personalization, which makes it unique and makes it an added value of Starwood’s services and an axis for differentiation.
The guest has booked his room and now starts preparing his trip. This is the perfect opportunity for hospitality groups to create a strong relationship and interact with the customers!
The most common practice is to send a confirmation email to customers and some reminder afterwards, offering special services before they arrive (ex: airport pick-up) or other useful information about the hotel, available services, location… The goal is to make the customer feel valued by taking care of him through these interactions and as a consequence strengthen the customer relationship all along the life cycle and to give him the opportunity to buy new services.
For example, Hilton offers the possibility to its guests to choose the room they want and the view they prefer thanks to Google Maps. This is the only hospitality group offering this chance to customers, and the customer may feel valued as he now has the choice to choose the room he prefers.
Hilton use this opportunity to encourage upgrading by showing beautiful pictures of luxurious rooms.
Starwood Hotels & Resorts Worldwide: Automation of services & Interaction
The interaction with customers is easier today as the relationship is 24/7, from any device through automatic messaging or chatbots.
Starwood has launched “Let’s chat”, this is a new service available in 150+ select Starwood’s hotels
& resorts in the world, that enables guests to communicate via WhatsApp or iPhone messaging with the front desk, before or during their stay. With this service, customers can make a reservation for
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dinner, ask for assistance during their stay (ex: set an alarm, assistance in the room…). This has personalized the experience of customers, by understanding their real needs and to adapt.
This service is the opportunity to create loyalty and to differentiate. The preferences are kept and related to future potential reservations to directly offer the customers the services he prefers.
Figure 10: Customer feedback about Let’s Chat Source: Starwoodpromos.com
In order to avoid the loss of revenue induced by intermediaries through commissions, hospitality groups have to find ways to re-attract customers on their own channel.
AccorHotels – Marketplace
AccorHotels has launched its own market place in 2015
(http://www.accorhotels.com/fr/brands/marketplace/join-us.shtml) to counter Booking.com that does not only offer Accorhotels properties but independent hotels as well. This market place is not intended to offer an infinite choice of hotels, like Booking.com does for example, but rather a selection of 10 000 hotels by 2018. These hotels are assessed thanks to their grade on TripAdvisor, their location in key destinations and by a visit from a dedicated staff.
The lodging offer is widely dominated by independent hotels, 73% of rooms in EMEA, that do not have the means to ensure enough weight online and need the services from OTA, and especially Booking.com, which has divided the rentability of these independents by 2 in 10 years.
This market place is thus a new distributive way for independent hotels requiring lower commissions, and a wider choice for customers who can still compare those hotels online.
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The strategy for AccorHotels is to re-attract the customer on its own platform by providing him with a wider choice and the ability to compare prices and quality of services. As a result, AccorHotels intends to double the audience on its own portal, which already reaches 170 million unique visitors per month in the world.
AccorHotels does not stop there and wants as well to compete with the new actors of the sharing economy. It has acquired Onefinestay (https://www.onefinestay.com) in April 2016 for 148 million euros. Onefinestay is the upscale version of Airbnb and focuses on the rent of luxury properties coupled with services. AccorHotels will invest 65 million euros to foster an ambitious worldwide development, which will enable it to multiply its revenues by 10.
This strategy enables AccorHotels to compete on each segment of hospitality: traditional hotels from low cost to luxury offers, online travel agencies with its platform and the sharing economy.