Competition within the Australian hotel industry is fierce, with a new report by Deloitte revealing that more than 7,100 new Australian hotel rooms were added in 2018.
It noted supply has now exceeded growth in demand for the first time in a number of years, resulting in lower occupancy rates year-on-year.
In a flooded market, many hotels still compete through heavy discounting, which has led to a climate of decreasing brand loyalty and increasing price sensitivity amongst consumers, as they become cognisant of the opportunities to save money at every turn.
So, how do hotels entice consumers in the face of rising customer disloyalty? Hoteliers need to look beyond price and differentiate themselves through continuous engagement and personalised experiences.
Making personalisation a priority
For decades, the hotel experience has been highly transactional, starting from the online or over-the-phone booking, followed by a physical check-in and check-out, and finished with a follow-up email or online survey.
But understanding a customer’s individual needs can no longer begin at check-in. Consumers now expect personalisation from the moment they are searching a hotel’s website, and it needs to continue all the way through to the next time they visit again. Leading hotels in the US are leveraging customer data to adapt room settings such as temperature, lighting and entertainment based on their guests’ preferences before they even walk through the hotel doors.
A Millennial concept, but a modern-day reality
Pre-selected entertainment or temperature controls may seem a little futuristic to some, but in reality, bespoke and experiential touches such as these are becoming more of an expectation than a luxury not just to Millennials, but also to those who have known the hotel industry historically including Generation X and Baby Boomers – particularly those who travel for business.
With the bar at an all-time high, hoteliers are beginning to see that the key to success in a crowded market is customisation regardless of the demographic. This means truly understanding your audience and knowing that though a high-tech entertainment system might strike a chord with millennials, hoteliers should ensure they always provide an alternative to suit guests who may not be as tech-savvy.
Learning from the frontrunners
The retail industry has long been ahead of the curve when it comes to offering a unique and bespoke service. For retailers, success lies in making life as easy and as relevant for the customer as possible. If we take a step back and look at what techniques have catapulted retailers large and small into the limelight, it is a combination of convenience and personalisation. The hotel industry would do well to take notes from its retail counterparts.
Some e-commerce retailers are now using a model that takes the customer’s personal preferences into consideration in advance of the product being delivered, or even being suggested, to the customer. Subscription boxes are a prime example of this. Whether it’s a weekly food delivery box or a monthly wardrobe bundle, companies are learning that they need to know their customer even better than their customer knows themselves, and accurately adapt to their tastes and needs in order to remain competitive. When the element of choice is eliminated, these vendors must consider the use of AI and social media to inform the choice of product distributed to the customer on that particular cycle and deliver all of this as quickly and as seamlessly as possible.
So, how can we learn from the experts, and mirror these techniques in the hospitality industry?
Hoteliers would do well to ditch the paper processes and invest in back-end systems that allow hotel staff to pre-empt the guests’ movements and requests. For example, allowing online check-in, which has been available at airports for many years, and permitting guests to go straight to their rooms after a long flight rather than having to wait in a queue at the front desk for a number of minutes.
With the correct customer data on file before they have even set foot in the hotel, the front desk can foresee certain services that may make for a more comfortable stay. For example, if the customer is leaving the hotel at 7am for an early flight, perhaps they would like breakfast delivered via room service at 6am to make their check-out process as comfortable as can be?
Not only will leveraging customer data result in a smoother and more seamless experience for the guest, but it will also mean the hotelier is spending less time on their computer completing lengthy and mundane tasks such as the transference of data from paper to spreadsheet. Because of this, hotel management can spend more face time with the guest and concentrate on making their experience as inviting and personalised as it can be.
Peter Buttigieg is the founder and managing director of RMS Cloud.