HITEC 2015: The Trends In Focus

HITEC 2015 – the premier North American hotel technology show – has come and gone. Much has already been said about the exhibitors and their products in the immediate aftermath of this June-set convention. But now that it’s September and the summer is in the rearview mirror, it’s time for a dutiful reminder of all of the ways in which the latest trends and innovations will continue to change how we help travelers and earn a buck in the process.

Exhibitors, attendees, media, small booths, large booths, two-story booths, tablet kiosks, LCD monitors, live demonstrations, handouts, swag bags and an endless flow of fresh coffee – all these and more coalescing to represent what the next five years will look like for our industry. Emerging onto the showroom floor as the opening bell rings, a vigorous positivity is immediately palpable. Every vendor is hungry for sales, funding, new product insights or business growth, but they bring with them the conviction that their wares will help hospitality operators succeed in our current, ever-disruptive market.

In short, the exhibitors at HITEC, no matter their chosen merchandise or service, traveled down to sweltering Austin, Texas to help hoteliers succeed in their business goals. Our industry has indeed recovered from the tumult of the 2008-2009 recession – and we have grown stronger and leaner because of it – but there are still many more game-changers on the horizon (or already in the station) threatening to plunge us back into the red. You’d be hard-pressed to find a dormant corner of the convention center where whispers of the sharing economy, the internet of things, free WiFi, Airbnb, frugal millennial purchasing habits or OTA dependency weren’t within earshot. While not every exhibitor’s solutions are compatible with every property’s specific needs, the undercurrent of the convention was one of humble confidence – together we can weather any storm thrown our way.

I am confident that just as technological innovation has caused many of the woes affecting our livelihoods of recent it will also be our saving grace. Let’s look at the big trends both present and upcoming as well as a handful of the more fascinating vendors to give you a better picture of how your hotel might benefit from what debuted at HITEC 2015.

Predictive Just-In-Time Marketing
The rise of Big Data has given birth to an endless stream of trillions of numbers ready for analysis. Data scientists, a relatively new job title geared expressly to this end, work to use past behavior to forecast how consumers will act in the future. By formulating how certain individuals will behave, it helps us personalize the sales process, whether that involves customized room packages, temporally shifting our marketing messages or knowing when a certain customer isn’t even worth your while.

This is what’s known as predictive marketing and the practice has existed since well before we all started throwing the term ‘Big Data’ around. However, it has only been a recent development whereby predictive analyses have merged with just-in-time capabilities in order to deliver personalized advertisements to consumers at the exact moment when they are most susceptible to absorb the message and predisposed to make a purchase.

I was enthralled by a presentation by Kaptivating, a company that wholly embodies the best of how this approach can help you increase revenues. Using proprietary algorithms that evaluate individuals based on their social media footprints, hoteliers can then send targeted promotions to prospective customers who have announced their plans to travel to a given region. A hotel can preselect offers’ parameters so that they can be automatically distributed at the most favorable time after a guest states his or her intentions, which is often within minutes of this declaration. Better still, because these promotions are exclusive to each person, they don’t have to conform to rate parity agreements with the OTAs.

Also big on the just-in-time marketing front is a little company you might have heard of called Oracle, still fresh off their MICROS acquisition last summer. According to a chief systems architect, the transition has been smooth throughout with a now wholly cloud-based PMS serving the corporation’s need to lead the industry and adapt to non-traditional competitors. With every hotelier looking to this juggernaut for guidance, members of the Oracle team are confident that they’ve yet to mine their most powerful consumer inferences from the throngs of Big Data. The possibilities are only starting to be unveiled, and software integrations have never been more crucial for finding guest engagement patterns to aid in the success of predictive just-in-time marketing tactics.

Holistic Revenue Management
First there was RevPAR, then came RevPOR and now we are moving towards RevPAG. While Revenue Per Available Room looks to give you a broad benchmark for determining a property’s gross potential, Revenue Per Occupied Room goes one step further and brings an estimation of percent habitation into the mix. Revenue Per Available Guest not only includes this occupancy figure but incorporates assessments of other ancillary income streams.

When revenue management first took root within the corporate structure, it looked to efficiently supervise the ever-diversifying channel mix and control average daily rates to maximize margins with the highest attainable occupancy numbers. Nowadays, however, senior executives have the tools necessary to answer far more complex questions about what channels are actually the most effective and which guest mix will yield the best gross revenue.

For example, an interview with members of the Rainmaker team brought to light an interesting situation whereby free independent travelers would be favorable over groups during a consecutively peak travel period. Normally groups reign supreme as there are fewer management overheads and service requirements. But, in a few special cases, FITs’ command of higher ADRs and more onsite capture make dealing with, say, 30 separate check-ins favorable over one or two group arrivals.

In this sense, taking a holistic approach often entails tactics that are counterintuitive to the scope of any individual operation. The conservative viewpoint on total revenue management has typically been one of siloed optimization – that is, improving within a single department. Using demand forecasting, predictive modeling, pricing recommendations and social media aggregate integrations, the shift now is towards deftly balancing meetings and group ADRs with the potential for FITs, F&B, spa and other streams to outstrip established income expectations.

Another meeting with the people from Infor Hospitality elucidates the role that a contemporary PMS plays in this picture. To kick off the conversation, it was expressly stated that the foremost duty of a PMS is to integrate all revenue streams, not necessarily to manage them. That said, the latest advancements in this software niche aim to make the data gatherer trump a hotelier’s gut in all aspects. A modern PMS helps hotels automate complex data sources, forecast all revenue types by market segment and predict future ecosystem interactions so that executives can make the optimal decisions. This helps mitigate the emergent problem of too much Big Data whereby managers find themselves drowning in numerical minutia to the point where they miss the forest for the trees.

The Infor team backed this up by revealing how sophisticated data automation can now anticipate customers exploiting the cancel-rebook loophole in search of lower price tags. Additionally, the company showcased its dynamic payroll management feature which can highlight fruitful streams that are in fact underperforming when staff costs are deducted. While revenue management has already reached maturation, these new features are demonstrating that there’s still a bit of juice left to squeeze.

A Frictionless Environment
Another title of this section I was playing with was ‘Mobile Everything’ to give you a sense of where we’re headed. Mobile has already forever changed the ways consumers behave and interact with their environments, and this evolution will only continue in the near future as new applications are explored.

As any discussion of mobile goes, based on my own tour of duty through HITEC 2015, it’s readily apparent that no hotel should be without its own mobile app. That is the space where guests are increasingly looking for answers to their questions instead of approaching the concierge or calling down to the front desk. In other words, while even three years a vanity mobile app might have been perceived as a value-add for incoming guests, today such programs have crossed the threshold into expectation territory. Moreover, such apps are no longer dedicated onsite companions but are designed for travel research prior to arrival as well as for continuing the relationship long after departure.

Three prominent mobile app companies I interviewed while making the rounds included Monscierge, Alice and m-hospitality (although there are undoubtedly others). Monscierge is a clear frontrunner when it comes to highly integrated, information-first branded apps where the goal is to give guests all the pertinent details with the lowest number of buttons clicked. A simple, breezy design like theirs can work wonders for hotels that are part of a larger chain or those seeking straightforward, content-centric software builds. The latter two emphasize more of a graphical interface (downloaded in its entirety to the phone to reduce load times) with creative skins that are unique to each hotel and aim to bestow more emotion to the user experience.

A key question that all three are working hard to solve: what motivates guests to keep the app after their stay? With the power of Big Data and unremitting analyses of clicking behavior on a mobile device, these developers can pinpoint guests’ specific interests, and then periodically send personalized messages to keep the conversation going. Such identified preferences are also relayed to the hotel to assist their promotional efforts and for up-sales.

Mobile as we know it, though, is far more than just getting your own custom-skinned vanity app. That’s where the word ‘frictionless’ comes into play. While mobile apps serve guests’ desire for immediate answers to questions about the hotel or the region and for instantaneous service orders, this is but one facet towards creating a stress-free and problem-proof ecosystem for consumers. Aside from using technology to eliminate service errors, ‘frictionless’ also implies faster and anticipatory service delivery.

Several less conspicuous utilizations help illustrate this point.

Firstly, Ingenico, a POS manufacturer, unveiled its latest innovations to accommodate the growth of mobile wallets via intensive security features and PMS integration. Eventually, as trust of near field communication reaches a pervasive level of acceptance, the front desk itself will be subject to elimination – another point of friction in the guest-staff relationship. While we cannot outright excise the 3,000-year old system that is physical money, advanced mobile payment terminals reduce the need for a desktop computer, thereby ‘untethering’ a cashier or desk clerk to serve guests whereby they may be.

Other companies, such as LaunchKey, operate on the software side of this space. While I grilled them during an interview about the potential for Big Brother-type tracking and hacking of a mobile wallet or keycard, they presented a fairly airtight case by showing how integral authentication and verification codes stay within a person’s own device and are never transmitted through cyberspace. It was at that moment when I realized that this ‘mobile everything’ trend is a bona fide cash, credit and physical keycard usurper all at once.

Next, Evolve Controls demonstrated that thermostats can be much more than just a temperature gauge. In fact, they can do wonders to boost guest satisfaction scores via predictive fault detection systems so that maintenance issues never occur while a guest is around. Furthermore, enhancing actionable data and the guest’s degree of climate control both mean smarter responses to micro-specific changes like east versus west-facing rooms or whether a guest is sleeping and doesn’t want the HVAC unit to churn on in the middle of the night.

Lastly, Savioke is a builder of room service robots that are capable of independently navigating a property’s halls to transport requested items directly to the guestroom. Frictionless in this case means pandering to the modern consumer’s inclination for digital-centric anonymity alongside consistently flawless service quality. True, these robots are still in the novelty phase, but by bolstering speed of service through guests’ smartphone apps and eliminating other human variables like tipping, miscommunication or the potential for guest harassment, such futuristic installations will soon reach mainstream appeal.

Spotlight Canada
As is usual for HITEC, the Canadians made a splash and were more than able to hold court with the big boys from the United States and overseas. It’s always great to see familiar faces from the likes of (in no particular order) Mitel, Guest-Tek Interactive Entertainment, Vecima Systems, Intello Technologies, Squirrel Systems, ResortSuite, Celayix Software and OpsMatrix and quite a few others – all with new products to show off and a polite, jovial sensibility that can only come from the Great White North.

Just because they’re regulars doesn’t mean they fail to impress. Axxess Industries debuted its latest version of an electronic do-not-disturb sign and custom room display system that’s so sleek and practical you’ll be scratching your head over why you don’t already have them for your own property. In addition to this, they offer seamless mini-bar detection and room service tray tracking sensors to improve automation in these highly specialized aspects of hotel operations.

More on the hardware front, Elfiq Networks brought its most current lineup of bandwidth and internet connectivity products to the show, offering hotels the best in speed and reliability so that issues like free WiFi for guests are no longer an omnipresent concern. While it may seem to be a mute point to be still drum on about the imperative for good connectivity, lest you forget that just as broadband and wireless upgrades catch up to present expectations, guest behavior will change yet again with ever-higher demands for video streaming, cloud-based services and so on. It’s a nonstop game of cat and mouse, and as such this is one area you can never neglect.

Far from being outshone by larger US rivals, Maestro by Northwind introduced a bunch of new mobile solutions to complement its PMS meal ticket, including curbside check-in, housekeeping automation and tablet signature capture, all features that are urgently in demand for independent properties to keep pace with the big chains. As well, the company proudly flaunted its Guest Expectation Measurement tool which addresses the need for precise quantification of the consumer experience so that the proper onsite improvements can be executed for a sustainable competitive advantage.

One relatively new entrant was My Digital Office – a Toronto startup with its roots in Kingston – with a remarkable way to automate accounting systems and generate electronic reports to eliminate paper and manual processing from the workplace. With a highly adaptable, cloud-based interface, the company’s platform helps build connective tissue amongst disparate software modules already in use, helping to optimize workflow and reduce labor costs.

It’s always reassuring to know that we Canucks are consummate innovators and our wares are just as good, if not better, than those made around the globe. So, be a patriot and call upon your fellow Canadian vendors to see how they can facilitate your business’s growth.

It’s no longer about products; it’s about solutions. That’s the mantra to remember as we move forward into a brave new, tech-filled world.

We’ve reached a point of technological maturation whereby various electronic devices and software suites are all capable of completing many different (and often overlapping) tasks, so much so that you’ll seldom see a ‘dedicated’ product anymore. Instead, everything is ‘robust’, offering hoteliers and their customers multifaceted programs that meet a variety of needs. Hence, it’s now a matter of selecting a certain product, and then deciding what features within that package to use in order to solve specific business goals. Not every hotelier has the time to maximize a piece of software’s potential, though, so it becomes a matter of working with vendors and asking them “What more can you do for me?”

The world these days can be a scary place for a hotel that both scorns tech-born threats and fails to embrace what innovative suppliers can do to guide you through these turbulent economic waters. As seen from the keen group of exhibitors at HITEC, most every hospitality vendor is indeed here to help. For them, it’s not a matter of simply selling to you for their own gain. They are deeply invested in your success, even though they aren’t taking a cut of the profits. That’s the spirit of the tradeshow and all the more reason for you to attend next year in New Orleans.

(Article by Larry Mogelonsky, published in the September 2015 issue of Canadian Lodging News.)