The Middle East has become the primary destination for obtainable luxury when it comes to the hotel sector globally. The continuous development of hotels continues to drive the bar higher in terms of facilities, amenities, and technology. However, with the pandemic hitting, the expected impact on top-line spending isn’t necessarily keeping pace.
When we look at the demographic and segment changes in hotel occupants over the last two years, have the hotel operators hit the mark when it comes to savvy technology investment to drive revenue? For the 12 months prior to Covid, hoteliers had a sharp focus on key technology areas such as revenue management, and with Expo 2020 it made sense. How can you optimise your inventory for the period of the event? Room nights, meetings, and events were the core revenue generators.
The guest drivers changed overnight and people wanted home comforts. In-room TV streaming, room service ordering online, electronic keys, and contactless check-in and out. And if they couldn’t get it from the property they would do one of two things:
- Stay elsewhere
- Use third parties to facilitate their needs
The first option became a clear opportunity as rates plummeted and with them access to properties with little demand and low occupancy. The second option is a more complicated issue best explained by a recent real-life stay.
How hotels are failing to use technology
I arrived in typically efficient Middle Eastern style through the airport to a five-star business hotel with 800 rooms split between residences and hotel rooms. I approached the front desk where service was diligent and warm as they checked me in and cut two keys. Upon arriving at my room I noted that it had been cleaned to the brand new Covid cleaning standards, but there was no mention at the front desk of the mobile key that could have enabled me to ditch the plastic cards. Having worked closely with this hotel, I am aware that the owner has invested significantly in mobile key technology (circa US$1m+) but there was no communication before my stay alerting me of the ability to utilise this innovation. Nor was it mentioned on arrival. The experience wasn’t bad, it just missed the chance to be something better.
As I am now stuck in my room for 24 hours while I await my PCR test result, I am further disappointed by the fact that whilst there is a QR code to get to room service it is just a menu which means I have to pick up the telephone to place an order and hope that I can accurately convey what I require. Alternatively, I could just follow what everyone else seems to be doing and order from Talabat or Deliveroo and do it all on my device.
Food ordered, work completed for the day, time to catch up on another box set on Netflix… Or not as I cannot stream a thing so it looks like I’m going to have to concentrate on that five-inch screen a little longer.
Technology is here to stay
Putting this all in perspective, Covid has probably simplified the guest journey. However, it has now enabled a significant revenue opportunity in ancillary spend which many are missing out on due to technology adoption.
In my opinion, the operators have focussed on the whizzbang of technology rather than focus on the business case. Meanwhile, the Talabat and Deliveroo drivers mount up in the hotel reception giving the hotel guests more triggers to order from them.
Kevin Edwards joined Alliants from PnK People where he served as managing director. Prior to PnK, Kevin founded the hospitality consulting firm, Avenue9 where he worked across many of the leading hospitality brands. Edwards exited the business after a successful sale to JLL, the fortune 500 real estate firm. He has led the technical disciplines for a multitude of large-scale private equity-backed hotel portfolio transactions.