Cust Engage

8/9/2019 Cust Engage

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A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O

FINDINGS ON HOW

YOUR COMPETIT ORS

ARE ENGAGING GUESTS

From mobile tools to social sites, hotel and restaurant execsreveal what is and isnt working


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WWW.HTMAGAZ INE.COM CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 HOSPITALITY TECHNOLOGY 3

Table of ContentsA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y

TECHNOLOGY GROUP

www.edgellcommunications.com

PUBLISHER

Lenore OMeara

[email protected]

EDITORIAL

EDITOR-IN-CHIEFAbigail A. Lorden

[email protected] EDITORDorothy Creamer

[email protected]

STUDY AUTHORS

Jungsun Kim, PH.D.

William F. Harrah College of

Hotel Administration, UNLV

Daniel J. Connolly, PH.D.

University of Denver

SALES

ACCOUNT EXECUTIVELeah Segarra

[email protected]

ACCOUNT EXECUTIVEHope Corcoran

[email protected]

ASSISTANT TO PUBLISHERJen Johnson

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ART/PRODUCTION

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ART DIRECTORKelly A. OLeary

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PRODUCTION MANAGERLynn S. Wilhelm

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VP, MEDIA INTEGRATIONRob Keenan

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& AUDIENCE DEVELOPMENTJason Ward

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ON-LINE EVENT PRODUCERKaren Carvelli

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MARKETING/EVENTS/CIRCULATION

DIRECTOR, EVENT PLANNINGPat Benkner

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CIRCULATION MANAGERJeffrey Zabe

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SUBCRIPTIONS978.671.0449REPRINTS: PARS Intl, 212.221.9595 x319

CORPORATE

CEO/CHAIRMAN Gabriele A. Edgell

[email protected]

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CORPORATE OFFICE

4 Middlebury Blvd. | Randolph NJ 07869

973.607.1300 FAX: 973.607.1395

FOUNDER DOUGLAS C. EDGELL 1951-1998

CONTENTS[INTRODUCTION]

4 | Customer Engagement Tech Goes MainstreamThe evolution of customer engagement technologies is leading to deeper and more meaningful

connections with guests, and hospitality operators are hoping -- ultimately to increased sales.

Last years rst ever Customer Engagement Technology Study, through a research partnership

with University of Nevada, Las Vegas and University of Denver, proved the importance of CETs

in the industry. This year, the study was repeated to learn how the segment has changed and

how CETs are contributing to guest loyalty, differentiation, competitive advantage and bottom

line. Insights were culled from execs who collectively oversee 81,748 restaurant units and

5,705 hotels worldwide across all market segments.

[HIGHLIGHTS]

6| Snapshot of Customer Engagement Tech in HospitalityThis infographic highlights several key ndings from the Customer Engagement Technology

Study. Insights range from what technologies rank highest in impacting business performance

and customer engagement to what percentage of restaurants and hotels will have mobile

websites by the year 2015.

[RESTAURANT REPORT]

8| Restaurants Sharpen Focus on CETs with ImpactFor hotels, mobile technology is dubbed the greatest priority among customer engagement tech-

nologies. Its the best suited technology to enhance customer engagement, and the most likely to

improve business performance. Opportunity hinges on creating integrated applications, custom -

ized incentives and rewards, and memorable experiences at every phase of the guest life cycle.

[LODGING REPORT]

16| Guest Devices are Re-Architecting the Hotel ExperienceAs todays hotel guests are more tethered to personal devices than ever, naturally, mobile tech -

nology is of top priority in the lodging industry. Not only is this impacting bandwidth needs, but

mobile technology is the highest ranking in terms of both customer engagement and improving

business performance. For the second year in a row, mobile technology was named the greatest

priority among customer engagement technologies. Its the best suited technology to enhance

customer engagement, and the most likely to improve business performance. Great opportunity

lies in mobile websites and mobile apps, however, the caveat is that hoteliers must ensure that

these technologies work well and perform the functions that guests want and expect.

Copyright 2013 Hospitality Technology. All rights reser ved. No part of this pub-

lication may be reproduced or transmitted in any form or by any means, elec-

tronic or mechanical, including photocopy, recording or information storage and

retrieval systems without permission in writing from the publishers. For article

reprints & e-prints, please contact PARS International at (212) 221-9595, Fax:

(212) 221-9195 or email: [email protected]. POSTMASTER: Please

send address changes to HOSPITALITY TECHNOLOGY, P.O. BOX 261, LOWELL, MA

01853. PRINTED IN THE U.S.A.


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4 HOSPITALIT Y TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGA ZINE.COM

IntroductionA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y

Hospitality is about creating unique, memorable experiences

that impress and delight guests. Information technology (IT) has

become an enabler in delivering guest service throughout every

phase of the guest life cycle and is quickly becoming a key de -

terminant of guest satisfaction. Consequently, a new category of

technology is emerging called customer engagement technologies

(CETs). CETs can be dened as technologies and/or applications

which are utilized to create deeper, more meaningful connections

between a company and its customers to enhance the overall

quality of their experiences, drive customer loyalty, and ultimately

lead to increased sales and protability. Last year, we launched

the industrys rst-ever study on the use of CETs in the hospitality

industry. Because interest was so great, we repeated the study

this year to learn how things are changing. Many CETs are now

becoming mainstream and consuming a signicant portion of IT

budgets. More importantly, they are contributing to differentia-

tion, guest loyalty, competitive advantage, and the bottom line.

FOUR TRENDS FUEL THE GROWTH OF CETS:

1) CONSUMER TECHNOLOGIES The consumerization of IT contrib-

utes not only to guest expectations but also to the types of tech-

nology and content guests carry with them and use during their

experiences. The rise in BYOD (bring your own device) and BYOC

(bring your own content) creates challenges in offering sufcient

Internet bandwidth and power outlets to support the sophisticated

needs of todays and tomorrows guests.

2) SOCIAL Social media connects travelers throughout every

aspect of the guest life cycle, creating greater transparency and

more informed consumers having greater expectations.

3) MOBILE The ubiquitous nature of mobile technologies enables

travelers to be always connected to the Internet anywhere and ev-

erywhere. Seldom is a mobile device out of arms reach.

4) CONVERGENCE The convergence of consumer technologies,

social media, and mobility create new expectations and opportu -

nities to deliver guest services and to enhance guest experiences.

With social media apps integrated into every new mobile device,

most social media usage and Internet activity now occurs through

mobile devices. Travelers are at the epicenter of this convergence

trend; it epitomizes their lifestyles.

To assess the state of CETs, we surveyed a diverse mix of hotel and

restaurant executives (owners, managers, sales and marketing pro-

fessionals, and technology professionals from corporate, franchised,

professionally managed, and independent hotels and restaurants

across all restaurant and lodging industry segments) in April 2013 on

a broad range of CETs and then delved deeper to explore specic mo -

bile applications, social media networks, and interactive marketing

technologies. We inquired about current (2013) and planned (2015)

implementation rates, and compared them to 2012 use rates. Each

CETs effectiveness at enhancing customer engagement and busi-

ness performance was determined by asking respondents to express

their opinions using a ve-point Likert scale (from 1=strongly dis-

agree to 5=strongly agree). In total, we heard from 269 indus-

try executives who collectively oversee 81,748 restaurant units and

5,705 lodging properties (an estimated 1.5 million rooms) worldwide.

The results of our 2013 study follow; in all there are 143 nd -

ings, analyzed for practical signicance. We explored CETs im-

pact on both business performance and customer engagement.

By juxtaposing these, we were able to create directional compass-

es, which should serve as useful tools in setting future priorities

and developing IT budgets.

JUNGSUN (SUNNY) KIM, PH.D.

Assistant Professor,

William F. Harrah College

of Hotel Administration

University of Nevada, Las Vegas

DANIEL J. CONNOLLY, PH.D.

Associate Professor

Fritz Knoebel School

of Hospitality Management

University of Denver

ABIGAIL A. LORDEN

Editor-in-Chief

Hospitality Technology

CUSTOMER ENGAGEMENT TECH GOES MAINSTREAM

Annual research measures impact of social, mobile and more on hospitality


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of restaurantscurrently accept

MOBILE PAYMENT

Plan to by 2015.


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8 HOSPITALI TY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGAZ INE.COM

Restaurant ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y

RESTAURANTS SHARPEN FOCUS ON CETSWITH IMPACTMobile websites & apps proving to be a smart investment

Technology is profoundly impacting the restaurant industry, caus-

ing disruptive innovation in nearly every facet of the business. Cus-

tomers routinely consult social media and consumer reviews prior

to selecting dining venues. They perform a number of activities

online, ranging from nding restaurants and making reservations, to

ordering food and buying merchandise, to searching for coupons and

checking in on social media sites to share their whereabouts with

friends. They then post their experiences, good and bad, to share

with the world. While dining, customers expect to connect their mo-

bile devices to free wireless Internet services (WiFi). Consequently,

restaurants must modify how they deliver service and how they meet

ever-growing customer expectations. These adaptions require in-

creased investment in technology and infrastructure, especially In-

ternet bandwidth. Like hotels, restaurants are quickly learning that

they can never have enough bandwidth. Technology advances also

require changes in operating procedures, restaurant design, and how

service delivery processes are architected.

MOBILE AND DIGITAL DEVICES

Restaurateurs are looking to prot from technology-savvy customers.

Our study revealed upticks in adoption for all CET categories in 2013

and continued growth based upon expressed priorities and IT invest-

ment plans (see Figure 1). Mobile websites, mobile apps, and digital

signage top the list of CET usage in the restaurant industry. Interest-

ingly, our 2012 study predicted a decline in kiosk usage due to the rise

of other technologies, namely tablets and smartphones, but instead

kiosk adoption jumped by nearly 10% and is expected to more than

double by 2015. Most of this growth is in the quick-service sector,

where the technology is contributing to increased average checks and

higher customer volumes.

Recognizing that mobile users will soon dominate the Web, res-

taurateurs are investing appreciably in mobile websites and mo-

bile apps in anticipation that prots and customer loyalty will fol -

low. As was the case last year, mobile websites continue to show

stronger penetration than mobile apps (53% versus 29%) and, as

seen in Figure 5, higher scores for contributions to both businessperformance (3.56 versus 3.4) and customer engagement (4.16

versus 4.01). Mobile websites likely outpace mobile apps due to

lower development and support costs, portability across different

platforms, synergies with existing websites, and challenges in mo-

tivating customers to download their apps.

While more respondents this year reported having implemented a

mobile solution, the numbers increased only slightly due to tight bud-

gets, but this will change. By 2015, 85% of all restaurants expect

to have a mobile web presence, and 70% plan to have a dedicated

mobile app; many will have both. That leaves 15% of the industry on

the sidelines, waiting to see how mobile will unfold. The time is now

to get engaged and build mobile competencies. Mobile is quickly be-

coming a competitive necessity; restaurants lacking mobile solutions

will be disadvantaged.

The most common functionality included in restaurant mobile apps

is depicted in Figure 2. The top ve functions are (1) access to menus,

(2) restaurant search with location-based/GPS integration, (3) access

to nutritional information (4) integration with customers social mediaaccounts, and (5) the ability to place food orders. Last year, the ability

to download coupons and access time-sensitive deals were among the

top ve functional features, but not so this yearperhaps because an

improved economy reduces the need for discounting and undocument-

ed correlations between discounting and customer loyalty.

Having mobile solutions, though, is not enough. Operators need

to ensure their mobile implementations truly add user value and

convenience (with minimal data entry and functionality optimized

to work on a variety of mobile devices having different capabilities

and varying screen sizes).

Digital signage implementations are also on the rise. We used cross-

Mobile

Website

Mobile App

Static Digital Signage

Mobile Payment

Nutritional Info on Digital Signage

Kiosks

Interactive Digital Signage

Tablets for Digital Menus

Tablets for Tableside Order ing

Tablets for Tableside Payment

Tableside Ordering, non Tablet

Tableside Payment, non Tablet

70%29%27%

56%29%26%

53%8%

36%8%4%

36%15%5%

35%10 %9%

25%5%1%

24%10 %1%

23%6%3%

19%8%4%

18%6%3%

2012 INSTALL BASE

0 25 50 75 100

53%46% 85%

2013 INSTALL BASE 2015 PROJECTED

Figure 1 Use Tracker: Customer Engagement Technologies


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WWW.HTMAGAZ INE.COM CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 HOSPITALI TY TECHNOLOGY 9

tab analysis to identify the major users. Currently, quick-service restau-

rants account for the preponderance of all restaurant digital signage;

full-service family/casual restaurants follow at a distant second. Digital

signage can be an effective vehicle to display and promote menu items

through suggestive selling and item pairings, particularly in quick-ser-

vice environments, and offer an efcient, cost-effective way to update

menus and pricing across multiple units. Digital signage implementa-

tions are coming in two forms: the static variety (often used to display

menu information), and the interactive variety, which incorporates dy-

namic content such as touch screens. In 2012, 26% of our respon-

dents reported the use of static digital signage versus 9% who reported

usage of interactive digital signage (Figure 1). In 2013, these gures

increased slightly to 29% and 10% respectively. Over the next two

years, digital signage adoption should increase signicantly as technol-

ogy costs decline and as competitors continue to embrace this technol-

ogy. By 2015, 56% expect to adopt static digital signage, whereas 35%

will select interactive digital signage. Because more states require

restaurants to report nutritional information, many restaurants (36%

by 2015) are planning to use digital signage as a vehicle to report this

information in addition to reporting it on their websites.

Mobile payments have been slow to catch on but are expected to

increase dramatically in the years to come, given strong growth projec-

tions in general. Forrester predicts that the mobile payments market

will reach $90 billion in the United States alone by 2017, but implemen-

tation of a payment solution has yet to hit main stream. A mere 8% of

restaurants in our 2013 study have implemented a mobile payment

solution. Real growth is expected to occur by 2015, with an adoption

rate of nearly 53%an almost seven-fold increase.

Tableside ordering and payments via tablets or other technology

devices have experienced limited adoption. Interestingly and in an in-

dustry beset with security breaches, more than half of all restaurants

are passing over these technologies, especially given 1) the need to

improve credit card security to meet Payment Card Industry Data Se-

curity Standards (PCI DSS) compliance and 2) the widespread adop-

tion of tableside credit card authorization and payment technologies in

Canada and Europe. The use of tablets for digital menus and merchan-

dising also shows signs of slow adoption. While tablets are emerging in

some high-end restaurants and bars, particularly where there are large

menus and/or wine lists, only 5% of our respondents currently offer the

technology. Some traction is expected to occur two years out, with 25%planning to use tablets for their menus and wine lists by 2015. Con-

cerns over cost, theft, breakage, issues associated with point-of-sale

integration and/or other operational issues may be impeding adoption

of these CETs, along with a general resistance to change.

SOCIAL MEDIA AND INTERACTIVE MARKETING

One of the greatest shifts within the restaurant industry is the empha-

sis being placed on both digital and social marketing versus traditional

marketing methods. In fact, these are the next big competitive battle-

grounds. Almost daily, a restaurant company captures headlines for a

new initiative involving social media or interactive technologies in hopes

of capturing additional market share, driving revenues, and/or engen-

dering customer loyalty. The trend is currently lead by games and con-

tests in which customers are encouraged to participate in photo, video,

and blogging activities to compete for various prizes. Points are often

awarded for posts, and drinks, appetizers, and discounts are used to

reward customers for checking in via social media sites. Scavenger

hunts, daily deals, and special promotions provide additional examples

of how to engage customers, build followings, and drive business.

Between 2012 and 2013, use of interactive marketing tools slipped

in almost all categories of our study (see Figure 3) except for social

media, traditional loyalty programs, and quick response (QR) codes.

New investments are planned in all areas over the next two years. We

attribute the temporary declines to experimentation, time needed to

assess the results of various pilot tests, and shifting resources across

categories to test different tools. The industry is still learning aboutthese tools and how best to use them to generate business value.

By 2015, nearly all restaurants are expected to embrace social me-

dia: 89% currently engage with consumers via social networks and by

2015 well hit near full-market penetration at 97%. What will trail is

restaurants ability to integrate their social media initiatives with their

loyalty programs (currently at 7%, and projected to be 52% by 2015).

This is due to the costs involved, the technological complexity needed

to achieve integration, and the need to take incremental steps. Not

surprisingly, Facebook and Twitter are the social media sites of choice

because they are the most popular (1.11 billion Facebook users, 5.5

million Twitter users). As shown in Figure 4, most restaurants use Face-

Menus

Restaurant search w/location-based (GPS)

Nutritional information

Integration to customers social media accounts

Ordering food

Coupons

Restaurant search, non-GPS

Payment

Gift certificates/gift cards sales

Area information

Consumer reviews

Loyalty program access & signup

Games

Real-time feedback via customer survey

96

%

65%

52%

48%

43%

35%

30%

26%

26%

22%

35%

35%

22%

22%

Figure 2 Use Tracker: Restaurant Mobile App Features


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10 HOSPITALIT Y TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGA ZINE.COM


book (94%), and over three-quarters (77%) use Twitter. Yelp, YouTube,

and Foursquare round out the top ve social media sites used. While

LinkedIn is somewhat popular with a 37% response rate, we suspect

this service is used more to recruit new employees and connect with

suppliers than to generate new customers. Pinterest, while relatively

new, is growing rapidly among restaurateurs; usage increased to 28%

in 2013, up 11 percentage points from 2012. Because of the rate

of subscriber growth, many believe Pinterest shows great promise. A

number of early-adopter restaurateurs are positioning themselves to

cash in when Pinterests time comes.

Consumer review sites are also gaining in popularity and inuence.

Respondents reported signicant increases in actively using Yelp (up

10 percentage points), Urban Spoon (up 8 percentage points), and Tri-

pAdvisor (up 17 percentage points). Moreover, these services can be

goldmines for those who mine the data to gain important customer

feedback and insights and incorporate these into their continuous im-

provement process.

Location-based services such as Around Me and Poynt barely regis-

ter, with 3% and 2% of restaurants participating in these sites, respec -

tively. With an 12 percentage-point drop in location-based marketing

since last year, restaurants must determine how to turn this into an

effective tool, especially given consumer reliance on global position-

ing technology and maps when traveling. Daily deal sites like Groupon

and LivingSocial continue to make moderate gains despite frustrations

regarding the costs of these services, mixed results in their ability to

build customer loyalty for restaurants, and shifts away from discount-

ing; their popularity seems to be waning.

While we see growing interest in marketing through social media

and numerous innovations surfacing, it is premature to dene a clear

set of best practices as empirical results are not widely known at this

time. The jury is still out. Where there seems to be promise are appli-

cations that 1) are novel yet consistent with brand values, 2) attract a

critical mass of users, 3) engage users in multiple ways over long peri-

ods of time, 4) provide notable customer value, and 5) drive customer

visitation and purchase behavior. Our general advice is that restaura-

teurs should experiment with various social media tools based upon

how well their subscriber bases match targeted audiences and then

monitor their ability to produce results that justify the time and re -

sources invested.

GOING FOR VALUE

When it comes to IT usage in the restaurant industry, weve witnessed

slow adoption rates based upon a followership mentality, but just be -

cause a restaurant is using a particular CET doesnt necessarily meanthe strategy is adding value or worthy of copying. Therefore, we asked

respondents to rate their agreement, using a 5-point Likert scale, with

the following statements: this technology is effective at deepening

customer engagement, and this technology helps enhance restau-

rant performance (whereby 1=strongly disagree and 5=strongly

agree). We calculated the averages recorded for both engagement

and performance and placed them as intersecting midpoints to cre-

ate a four-quadrant Impact Compass. We then plotted each technol-

ogys value for performance and engagement as a single point on the

compass. (Figure 5 shows the impact of CETs and Figure 6 shows the

impact of Interactive Marketing Tools).

2012 INSTALL BASE 2013 INSTALL BASE 2015 PROJECTED

0 25 50 75 100

Location-based Marketing

27%16% 59%

QR Codes

33% 34% 55%

Rich Media on brand.com

37%35% 52%

Social Media & Loyalty Integration

11%7% 52%

Traditional

Loyalty Program

42% 47% 80%

Social

Media

77% 89% 97%

Daily Deals

29%27% 49%

Poynt

Around me

Tumblr

Flickr

LivingSocial

Groupon

Google Plus

Pinterest

TripAdvisor

Blogs

LinkedIn

Google Places

Urban Spoon

Foursquare

YouTube

Yelp

Twitter

Facebook78%

94%

65%

77%

43%

53%

42%

49%

36%

42%

31%

39%

27%

39%

30%

37%

32%

35%

16%

33%

17%

28%

14%

26%

14%

20%

11%

19%

12%

17%

5%

3%

1%

2%

9%

2012 USE RATES 2013 USE RATES

Figure 3 Use Tracker: Interactive Marketing Tools

Figure 4 Use Tracker: Social Media


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12 HOSPITALITY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGAZ INE.COM


Given limited budgets and resources, these Impact Compass-

es can provide guidance on how and where to invest in order to

achieve optimal engagement and performance results. While it

is ideal to strive to maximize each scale so as to attain Top Per-

former status, it is important to recognize that 1) it can take time

to achieve this status; 2) it is wise to employ a portfolio strategy;

and 3) placement of a given CET on the chart can vary with time

due to the dynamic nature of business, technology, and consumer

trends. Value can be context- and mission-specic, and some

CETS might be needed simply to maintain competitive parity.

Our study revealed that mobile websites and mobile apps lead

the way when it comes to CET adoption. According to Figure 5,

these technologies are top performers in terms of engaging cus-

tomers (4.16 and 4.01 respectively) and contributing to the bottom

line (3.56 and 3.4 respectively). These are closely followed by dig-

ital signage, both static (performance=3.41, engagement=3.53)

and interactive (performance=3.49, engagement=3.64). Accord-

ingly, these are areas in which to invest and innovate; they offer

the greatest all-around potential.

Tableside payment technologies and tableside ordering via

tablets contribute positively to performance. They are good for

business, but fail to fully engage customers in meaningful ways

perhaps because servers rather than guests use these devices.

Because they contribute to the bottom line, they should not be

scrapped, but a key question to explore is if they can be deployed

differently to create better, more engaging customer experiences.

Conversely, nutritional information presented on digital signage is

rated high when it comes to customer engagement (3.63) but low

when it comes to impact on business performance (3.12). Be-

cause reporting nutritional information is a legal requirement in

LOW CUSTOMER ENGAGEMENT HIGH CUSTOMER ENGAGEMENT

LOW

BUSINESSIMPACT

HIGH

BUSINESSIMPACT


LOW

BUSINESSIMPACT

HIGH

BUSINESSIMPACT

2.8

2.8

MID POINT 3.42

MID

POINT

3.36

4

3.8

3.6

3.4

3.2

3.0

2.8

3.0 3.2 3.4 3.6 3.8 4.02.8

Kiosks

Nutritional info ondigital signage


Static Digital SignageTableside payment,

not tablet

Tableside ordering,not tablet

Tablets as menus

Tablets for

tableside payment

Tablets fortableside ordering

Mobile payment

Mobile app

Mobile Website

TOP

PERFORMERS

LOW

PERFORMERS

GOOD

FOR

ENGA

GEMENT

GOOD

FOR

BUSINE

SS

Figure 5 Impact Compass: Customer Engagement Technologies

The Impact Compass (Figures 5 and 6) measures technology performance, on a 1-5 scale, in two categories: customer engagement (the horizontal axis) and busi-

ness performance (the vertical axis). Technologies that scored high in business performance but low in customer engagement are Good for Business (top left);

technologies with both high business performance and high customer engagement scores are the Top Performers (top right); technologies with high customer

engagement scores but low business performance scores are Good for Engagement (bottom right); and technologies that scored low in both engagement and

business performance are Low Performers.


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16 HOSPITALITY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGAZ INE.COM

Lodging ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y

GUEST DEVICES ARE RE-ARCHITECTING THE HOTEL EXPERIENCEMobile web is major player in driving business and customer wins

IT is signicantly altering the competitive nature of the lodging

industry, including what customers expect when they travel, how

guest services are delivered, and how hotels interact with their

guests. IT impacts every facet of the guest life cycle. Perhaps the

most sweeping changes and greatest area of focus is on guest-

room technologies to enhance the quality of ones stay. The con-

sumerization of IT represents opportunity for differentiation yet

and can also be a major threat. Recognizing that hotel rooms

must be equipped with the technologies to which guests have

grown accustomed in their homes and places of work, hoteliers

struggle to keep pace with the ever-changing needs and expecta-

tions of their guests and the technologies they bring. This puts

increased pressure on hotel budgets, technology infrastructure

(most notably, Internet bandwidth), and employee training to as-

sist guests with connecting and using their devices during their

stays. To succeed, hoteliers must empower guests through tech-

nology while ensuring that the technology adds to the experience

rather than detracts from it. While seemingly obvious, technol-

ogy is often reported to be one of the greatest contributors to

guest dissatisfaction.

CUSTOMER ENGAGEMENT TECHNOLOGIES

We surveyed a group of hoteliers regarding their current and

planned use of various CETs. The results are reported in Figure 7.

The mobile movement is driving CET application deployment and

utilization across all segments of the hotel industry, particularly

as hotels look to attract younger generations of travelers. Hotel

respondents reported a sizeable increase in mobile website adop-

tion but a slight decrease in mobile app usage. In 2013, 76% of

hoteliers reported having a mobile website versus 60% in 2012;

by comparison, mobile apps dropped slightly during this same pe -

riod from 43% in 2012 to 40% in 2013. Clearly, mobile websites

are the preferred mobile solution due to portability and ease of

implementation. That said, respondents indicated that they will

continue to invest in both mobile websites and mobile apps. By

2013, 91% of all hotels are expected to have a mobile website,and three-quarters are expected to have mobile apps. Mobile is

quickly becoming a necessary competency for all hotels; yet nearly

10% of all hotels are seemingly missing the boat.

In terms of mobile apps, the most common functionality is de-

picted in Figure 8. The ability to make room reservations leads

the way with a 72% response rate, indicating a strong empha-

sis on driving commerce and creating revenue. Property search

without GPS (50%), collecting real-time guest feedback (44%),

and local information or concierge-type functionality (41%) round

out the top app features. Just over one third of apps offer GPS-

based property search and loyalty account access (both at 38%),

and the ability to book restaurant and spa reservations (34%).

Integration with social media trailed at 25%, and surprisingly,

mobile check-in and check-out fell to near the bottom of the

functional priorities, coming in at 9%. We expect this to change

given the popularity of mobile check-in in the airline industry and

recent announcements by some large chains regarding new ini-

tiatives in these areas. In fact, more than half of all respondents

indicated plans to offer mobile check-in abilities by 2015 viasmartphones and/or tablets (Figure 7).

Mobile is denitely the wave of the future. To be successful,

hotels must re-architect and streamline their service delivery

processes. They must also master how to provide personalized

and customized service on small screens and across devices

(i.e., laptops, tablets, and smartphones) in a consistent, conve-

nient, and user-friendly manner. Unfortunately, many of todays

solutions are cumbersome, slow, and require too much data en-

try for travelers on the go.

Digital signage ranked third in terms of CET usage (behind mo -

bile websites and mobile apps). Static digital signage implemen-

MobileWebsite

Mobile App

Static Digital Signage

Check-in on Guests Mobile Phone


Tablet/iPad at Concierge

Tablet/iPad for Check-in

Mobile Payment

Room Control Devices

Smartphones as room keys

Kiosks

Tablet/iPad In-Room Amenity

60% 76% 91%

43%40% 75%

48% 53% 66%

11% 58%6%

28% 29% 56%

20% 53%

50%9%6%

39%4%

17%16% 38%

38%8%

24%23% 33%

6% 8% 28%

20%

0 25 50 75 100


Figure 7 Use Tracker: Customer Engagement Technologies


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WWW.HTMAGAZ INE.COM CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 HOSPITALITY TECHNOLOGY 17

tations increased ve percentage points to 53% while interactive

digital signage remained relatively at at 29%. By 2015, digital

signage adoption rates are expected to grow considerably to 66%

for static digital signage and 56% for interactive digital signage.

Common features include event listings, weather and news feeds,

and maps. Interactive devices also include concierge-type func-

tionality and way-nding.

In our 2012 study, we predicted that kiosk usage would decline

and be replaced with other technologies, namely smartphones

and tablets, that guests would carry. In 2013, we report a very

slight decline but are projecting a modest increase by 2015. Ap-

parently, many hoteliers still see value in these devices for check-

in, check-out, and local information, but tablet technology is ex -

pected to grow at a much faster rate for these same services.

Tablets as an in-room amenity grew marginally to 8% in 2013,

up from 6% in 2012. By 2014, usage is expected to grow nearly

fourfold to 28% of all hotels. Luxury and boutique hotels lead the

way in providing in-room tablets, but because of the personalized

nature of these devices and the content loaded on them (i.e.,

reading materials, video, music, and games) and so long as trav-

elers expect to use these devices throughout all aspects of their

journeys (for example, in ight), we expect consumers will prefer

to bring their own devices rather than rely on hotels to provide

the technology for them. That said, consumers will expect to be

able to connect their devices wirelessly to a hotels television and

Internet services as well as to use the devices to control various

in-room features and to arrange for various in-stay services.

There is some evidence of mobile payment adoption, but this

still seems to be in the experimental stages and led by early adopt-

ers. The real growth will come in the next two years, as 39% of all

hotels seek to implement mobile payment solutions. We see a

similar trend with the use of smartphones as room keys. In 2012,

none of our respondents reported the usage of smartphones as

room keys. This year, 8% reported adoption, and by 2015, that g-

ure is expected to grow to 34% as more hoteliers seek to replace

and upgrade their current guestroom door locks.

SOCIAL MEDIA AND INTERACTIVE MARKETING

The hotel industry has been quick to embrace social media and

interactive marketing tools to attract the younger generation oftravelers, who are considered to be the primary growth vehicle for

increased market share. In fact, hotel social media and interac-

tive marketing adoption rates far outpace what we observed in the

restaurant industry.

Hotel marketing budgets are being redeployed to focus on new

media rather than traditional marketing channels. By far, social

media is the driving force. In 2012, 73% of hoteliers indicated

using social media as a marketing tool. Today, that gure is at

91% (Figure 9), outranking every other interactive marketing tool

we measured, including traditional loyalty programs. Hotels use

social media to create games and contests, to promote consumer-

to-consumer marketing, and to engage customers in on-going con-

versations. Many use social media to promote special benets

and promotional offers, and the more advanced companies (13%

of our respondents) integrate their social media and loyalty pro-

grams. Some companies have even gone so far as to incorporate

their booking engines into Facebook. Not surprisingly, Facebook

(98%) and TripAdvisor (95%) dominate hoteliers social media at-

tention (Figure 10). Twitter (81%) and LinkedIn (73%) follow at a

distant third and fourth respectively. Moving from only 17% ho-

tel adoption rates in 2012 to 44% in 2013, Pinterest showed the

biggest gain. Interestingly, Groupon showed a noticeable declinewhile LivingSocial experienced a modest increase.

Traditional loyalty programs continue in their popularity. In

2012, 70% of all respondents indicated having a guest loyalty pro-

gram (Figure 9). This gure grew to 78% in 2013 and is expected

to exceed 88% by 2015. Rich media on a brand.com website also

ranks high, particularly given the role brand.com websites play

in hotel bookings. Guests want to preview options and property

surroundings prior to making purchasing decisions. Hotels also

report greater interest than restaurants in the use of daily deals

and QR codes. Today, 36% of hoteliers reported using daily deals/

ash sales and 43% noted the use QR codes. Respondents sug-

Room reservations

Property search, non GPS

Real-time feedback via guest survey

Area information

Property search using GPS

Loyalty account access

Restaurant & spa reservations

Property maps

Integration to guests social media

Daily deals

Interactive way finding

Coupons

Mobile check-in & out

Schedule wake-up calls

Bill retrieval

Gift certificate/gift card purchase/ and reload

Specific room selection

72%

50%

44%

41%

38%

38%

34%

28%

25%

16%

13%

9%

9%

9%

6%

6%

6%

Figure 8 UseTracker: Hotel Mobile App Features


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18 HOSPITALI TY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGA ZINE.COM


gested these numbers will grow to 57% and 64% respectively by

2015. Again, this is a very different picture than what restaurant

operators reported. Perhaps the cost of the purchase, the extent

of guest planning, and the length of time guests engage in the

purchase decision and in the actual experience itself contribute to

explaining the difference in patterns of adoption.

GOING FOR VALUE

As with the restaurant portion of this study, we asked hoteliers

to rate various technologies based upon two key categories:

their ability to engage customers and their impact on hotel per-

formance. Using a 5-point Likert scale, hoteliers were asked to

provide agreement levels with the following statements: this

technology is effective at deepening customer engagement,

and this technology helps enhance hotel performance (where

1=strongly disagree and 5=strongly agree). The midpoints

(average of responses given) were calculated for both catego-

ries, and are represented by two intersecting lines (customer en-

gagement, horizontal axis; and business performance, vertical

axis). Results for each technology were then plotted on the four-

quadrant Impact Compass (see Figures 11 and 12).

The resulting Impact Compasses provide directional tools and

guidance for how and where to invest in CETs and interactive

marketing tools, especially given constrained resources and the

need to capture the most overall value for the dollars and re-

sources expended.

In Figure 11, we charted the impact of various CETs on hotel

performance and customer engagement. Interestingly, all of the

CETS we measured fell squarely into our Top Performers or Low

Performers categories, but nothing in between. As we observed

in the restaurant portion of this study, mobile clearly ranked as

the top performer. Mobile websites scored 4.26 in customer en-

gagement and 4.27 in business performance, whereas mobile

apps scored 3.81 and 3.86 respectively. Also, interactive digital

signage scored high on both dimensions, but static digital sig-

nage scored lower on both. Although adoption rates for mobile

check-in were reported to be low (at 11%, as shown in Figure 7),

the impact of this capability on customer engagement and busi-

ness performance both ranked high. This observation reveals an

untapped opportunity, one that hoteliers plan to embrace based

upon what they reported in terms of their future plans and pri-

orities. Use of tablets for service delivery at the front desk and

concierge also show promise in delivering strong results and

customer engagement.Integrated room control devices also landed in the Top Perform-

ers category, but this technology is close to the midpoint line for

both engagement and business performance. Customers seem

to like the technology, but current implementation rates hover

around 16%. As more hotels implement energy management sys-

tems and automate the guestroom, well likely see an increase in

use rates (projected to be 38% by 2015), and increasingly higher

scores in terms of performance.

A number of CETs appeared in the low performer cell, including

kiosks, mobile payments, use of mobile devices as room keys, and

providing tablets as an in-room amenity. Interestingly, our respon-

Social Media

TraditionalLoyalty Program

Location-based Marketing

QR Codes

Rich Media

on brand.com

Social Media & Loyalty Integration

Daily Deals

73% 91% 94%

70% 78% 88%

44% 55% 79%

24% 43% 64%

34% 36% 57%

15% 19% 55%

10% 13% 43%


0 25 50 75 100

82%

98%

78%

95%

66%

81%

62%

73%

54%

64%

43%

68%

26%

38%

17%

44%

39%

43%

37%

43%

34%

48%

17%

23%

14%

25%

15%

21%

7%

2%

10%

20%

12%

2%

Facebook

TripAdvisor

Twitter

LinkedIn

YouTube

Yelp

Google Plus

Pinterest

Blogs

Foursquare

Google Places

Flickr

Urban Spoon

LivingSocial

Tumblr

Groupon

Around me

Poynt

2012 USE RATES 2013 USE RATES

Figure 10 Use Tracker: Social Media

Figure 9 Use Tracker: Interactive Marketing Tools


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20 HOSPITALITY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGAZINE.COM


dents indicated increased investment and long-term adoption in

each of these four technologies. Hoteliers may want to investigate

further and re-evaluate their implementation plans to see if they

can generate more productive results and to see if it makes sense

to continue investing in one or more of these areas. Of course,

implementation and results may vary by industry segment, type,

and location of hotel. Given that most guests own and carry one

or more mobile devices, it may not make sense for most hotels to

also provide in-room tablets, and it is probably more prudent to

look for ways to move kiosk functionality to guests own devices

to negate the need for future kiosk implementations. Regarding

mobile payments and the use of mobile devices as room keys, we

suspect that these scored low on both accounts because of their

relative infancy, but anticipate reporting noticeable improvements

in future studies. Certainly, these will be technologies to watch

carefully in the coming years.

Figure 12 maps engagement and performance for interactive

marketing tools. Once again, we see divergent results in two cat-

egories: top performers and low performers. Scoring highest are

traditional loyalty programs (4.42 for engagement, 4.26 for per -

formance). This is no surprise, given the competitive advantage

these programs provide and their longevity. It is widely known that

frequent traveler points drive customer behavior and loyalty. So-

cial media scored a strong second with an engagement score of

4.33 and a performance score of 4.19. Again, this is consistent

with our restaurant industry ndings and no surprise, given how


LOW

BUSINESSIMPACT

H

IGH

BUSINESSIMPACT

2.8

2.8

MID POINT 3.68

MID

POINT

3.62

4

2.8

2.8

4.2

4.0

3.8

3.6

3.4

3.2

3

3 3.2 3.4 3.6 3.8 4.0 4.2

Mobile website

Mobile Payment

Mobile App

Check-in onguests mobile device

Guests mobile phonesas room keys

Tablets as anin-room amenity

Tablets for check-in

Tablets at concierge

Static digital signage

Interactive digital signage

Integrated roomcontrol devices

Kiosks

TOP

PERFORMERS

LOW

PERFORMERS

GOOD

FOR

BUSINE

SS

GOOD

FOR

ENGA

GEMENT

The Impact Compass (Figures 11 and 12) measures technology performance, on a 1-5 scale, in two categories: customer engagement (the horizontal axis) and

business performance (the vertical axis). Technologies that scored high business performance but low in customer engagement are Good for Business (top left);

technologies with both high business performance and high customer engagement scores are the Top Performers (top right); technologies with high customer

engagement scores but low business performance scores are Good for Engagement (bottom right); and technologies that scored low in both engagement and

business performance are Low Performers.

Figure 11 Impact Compass: Customer Engagement Technologies


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15/15

HOSPITALITY TECHNOLOGY THANKS THE STUDY SPONSORS AND ACADEMIC PARTNERS

OF THE SECOND ANNUAL CUSTOMER ENGAGEMENT TECHNOLOGY STUDY. THEIR SUPPORT

HELPS TO MAKE THIS LANDMARK RESEARCH POSSIBLE.

STUDY SPONSORS

ACADEMIC PARTNERS

A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y

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