As we witnessed different technologies, such as telephones, cameras, and GPSs, converge into one smart mobile device, what did this convergence bring to the hotel industry?

As we witnessed different technologies, such as telephones, cameras, and GPSs, converge into one smart mobile device, what did this convergence bring to the hotel industry? The speed of mobile technology penetration is fascinating, and provides important implications for the lodging industry and the society at large. According to the Pew Research Center, by the beginning of 2014 90% of American adults had a cell phone, and 58% of American adults had a smartphone. Moreover, 63% of adults use their mobile devices to go online, and for 34% of them mobile device is a primarily way of accessing the Internet. Cisco estimated that in 2013 mobile data traffic grew by about 80% over the 2012 mobile data usage, and 18 times exceeded the overall web traffic generated in 2000.

Such combination of mobility and the Internet access provided numerous opportunities for hotels to improve and advance their services, and required the industry to keep up with the constantly raising speed of mobile technology development. The growth, spread, and acceptance of mobile technologies have made a tremendous impact on the lodging industry affecting guest experiences before, during and after the hotel stay. Hotel companies have introduced mobile apps that would encompass the entire hotel guest cycle, starting from finding a hotel, making a reservation, checking in, using the app as a concierge for requesting different services, all the way to the departure from the hotel (See Figure 1).

Pre-Arrival

Information and communication technologies constantly change the way people think about travel. And selecting a hotel is not an exception. For example, HeBS Digital reported that in 2013 mobile access (smart phones and tables) have generated over 35% of web visitors and nearly 32% of page views for the hospitality industry. Mobile accessibility and having information available on travelers’ fingertips have made it possible for the future hotel guests to find different hotels at a particular destination of their interest, view the hotels’ services and amenities, and compare prices. The main goal of hotels at this stage is to increase the look-to-book ratio by increasing the visibility of their properties, and offering convenient ways of placing reservations, e.g., placing a phone call from the mobile app, or making an online reservation.

HeBS Digital reported that in 2013 about 12% of bookings, room-nights, and revenue was generated from mobile devices such as smart phones and tablets. Furthermore, PhoCusWrite forecasts that in 2015 27% of all travel reservations will come from mobile devices. Such dramatic growth of mobile reservations highlights the importance of providing reservation services to customers. Surprisingly, not all hotel mobile websites and mobile apps provide reservation capabilities.

According to the 2014 Customer Engagement Technology Study that appeared in the Hospitality Technology Magazine only 75% of hotel mobile websites include reservation option, and, even more surprisingly, only 46% of hotel mobile apps allow travelers to make a room reservation. Such statistics provided by different market research projects provide an interesting insight into the state of hotel mobile technology. First of all, it appears that hotels recognize an importance of mobile presence and make it a part of their strategy to develop visibility, accessibility, and awareness of the property. However, it also seems that some of the hotels do not fully realize potential benefits of using mobile technology, when not making room reservation available on their mobile website or a mobile app.

A strategy of having a mobile presence but not allowing mobile reservation may backfire and hurt hotels by pushing their customers to book via alternative distribution channels, such as online travel agencies. In a situation like this, a hotel still has a chance of bringing the customer to the property, but maybe not through the most desired channel. If a customer made a hotel selection via a hotel’s mobile app or a mobile-optimized website, and then could not place a reservation online, they may still book the same hotel on another website (e.g., online travel agency’s website), however, in this case a hotel would have to pay a commission to the travel agency, and, therefore, reduce the potential profit from a given customer.

In addition to higher distribution costs, sending a customer to book via other mobile websites may also be detrimental to the hotel’s loyalty. For example, customers who have to switch to other websites to make a booking, in the future may go directly to those websites instead of coming to the hotel directly. Such behavior may serve as predicament for exploring other brands and potentially switching behavior. Overall, given the forecasts of constantly increasing traveler bookings on mobile devices, hotels that implement mobile bookings on their mobile websites and apps may enjoy a higher guest count, higher revenues, and higher guest retention rates.

The next step in guest pre-arrival mobile experiences may be a mobile check-in. Recognizing the growing adoption and importance of mobile technologies hotels started offering mobile check-in capabilities to their customers. For example, Marriott hotel app reminds a guest when it is time to check in. The app will also request to indicate an approximate time when the guest is planning to arrive. The guests may complete check-in from them mobile devices when they are still on the way to the hotel, and later save time on the property. Upon arrival to the hotel guests would just need to go to a special mobile check-in desk and pick up their key. Mobile check-in feature may benefit the guests by saving time spent at the front desk, and making sure that the hotel has the room and the key available by the time of arrival. Also, knowing the guest’s arrival time may assist hotels with their inventory management, including housekeeping activities and late check-out requests.

Some of the hotels take their mobile check-in to the next level and offer specific room selections. In July 2014 Hilton Worldwide announced that their guests will be able to select the exact room location from digital floor plans when checking-in on the mobile device (See Figure 2). Such a step provides an advanced control to the guests over their hotel experience. Prior to introduction of this feature hotel guests were not able to see the available hotel inventory and request a specific room. Such idea came to the hotel industry from the airline and cruise line industries, where passengers have been enjoying the opportunity of selecting an exact seat on the aircraft, or an exact cabin on the cruise ship for many years. Why not do it in hotels? Now, when it has arrived, selecting a hotel room at the mobile check-in may enhance guest stay at the property by contributing to a unique and highly customized experience at the hotel.

Figure2

At the Hotel

Mobile technologies may greatly contribute to the guests’ in-house experience by placing numerous hotel services just one click away from the guests. Mobile concierge function aims to make it easy and convenient for guests to choose and order different services during the hotel stay. For example, Hilton hotels provide Concierge app services, and position the app as “Personal luxury at your fingertips”. Indeed, mobile concierge services may help hotel guests to further personalize their stay, and request all desired amenities, services, or entertainment directly from their mobile devices. Marriott hotels have created “incubator” hotels where they test advanced mobile technologies before making them available at all Marriott properties. The results of testing revealed that requests for extra towels, housekeeping, and wake-up calls were among the top frequently placed requests on mobile devices. Another feature that hotel may enable via mobile devices is the distribution of hotel room keys. Recently, Starwood Aloft Hotels have introduced a Smart check-in process that allows guests not only to check-in on their mobile devices, but also to use their Starwood Preferred Guest (SPG) card as their hotel room key. In such case, the necessity of stopping by the front desk is completely eliminated. Guests now may enjoy the luxury of walking into the hotel and going directly to their rooms, saving the time needed for front desk check-in and skipping the lines.

Besides activating a loyalty card and converting it into a hotel room key, hotels may also rely on near field communication (NFC) capabilities of mobile devices to utilize them as hotel room keys. In 2014 Hilton Worldwide announced their efforts of equipping their hotel rooms with innovative technology that would allow guests to unlock the doors with their smartphones. The company’s plan is to introduce such technology in all US hotels by the end of 2015, and in all international locations by the end of 2016.

Some hotel mobile apps may also be linked to external websites, such as social media websites to encourage guest interaction and feedback. Hotels may make their Facebook, Twitter or Instagram accounts available through their mobile app to make these channels easily available to customers, and encourage them to post their content and provide feedback. Gusts active engagement with the hotel’s social media channel may assist hotels in building their brand awareness, as the content posted on social networks will be seen by the entire network of the customer who stayed at a hotel. Also, it will help to keep the social media channels active, and to keep the conversation flowing.

In order to enrich customer hotel stay, some properties have provided information about local dining, shopping, and transportation via their mobile apps. Eventhough perceived as beneficial by some hotel managers, these features have raised some debates in the lodging industry. The major concern about including local-area services on the hotel mobile apps is sending customers down the street to patronize off-property restaurants, gift shops, beauty salons, and other available services. However, on the other hand, many managers consider availability of local-area services via the hotel’s mobile app as a nice touch, effort in providing a holistic and memorable experience to the guests, and an expression of true hospitality. Finally, a hotel stay may be concluded with a nice and simple mobile check-out process. Similarly to the mobile check-in, check-out features are added to hotel mobile apps for the purposes of convenience, saving time and hassle at the front desk. Different hotel brands, for example, Marriott and Hilton, enable mobile check-out for their guests. This mobile app capability not only allows guests to leave the hotel without stopping by the front desk, but also enables them to receive their folio charges via email.

Post-Departure

After the guest checks-out from the hotel, their relationships with the hotel brand do not stop, and, mobile app is a great way to keep this relationship current. First of all, hotels may enable mobile feedback option, and encourage their guests to complete a survey about their experiences or post a TripAdvisor review while the memories are still fresh. Customer feedback is extremely important and beneficial for hotels from two perspectives.

First, everybody likes to hear that they are doing great. Positive comments would be a great asset to showcase to prospective customers to win their business. Second, negative comments may also be used to a great advantage when handled properly. Receiving a negative comment from a customer presents a unique opportunity for service recovery. Making a substantial effort to correct the service failure may help a hotel to bring an unsatisfied customer back. Moreover, a hotel’s response to negative reviews may also show potential guests that a hotel truly cares about their customers, has their best interest at heart, and makes every effort to make a customer happy.

In summary, mobile applications may streamline the entire hotel guest experience. When designed strategically and effectively, a mobile app may serve as a central piece to plan, organize, and customize the entire hotel stay. Given the variety of different options and services that may be included on the hotel’s app, it also become important to build in an analytics module to see how guests interact with the app. Such module may help hotel managers to understand what mobile app features are more demanded, used more frequently, and, therefore, require more attention. Understanding guest needs and behavioral patterns is needed for development and implementation of a successful mobile strategy.