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September 2022, Virtual
September 29 2022, Virtual
BUSINESS TRAVELLERS PLANNING TO STAY this January at the Thistle hotel at London Euston are being offered the opportunity to embrace an innovative attempt to enhance their booking experience.
Thistle launched a pilot project late last year that gives guests access to images of the hotel’s 362 bedrooms – including a 360 degree ‘virtual’ tour. Once a booking has been made, an email with an online link to the hotel’s floor plan is sent to the guest who can then make a decision on which room location is desirable (such as close to or far away from the lifts) and see what individual rooms actually look like – including the view from the window.
Thistle’s chief operating officer, David Grosfils, believes empowering guests in this way will help reduce some of the uncertainty facing travellers over what their room will look like when they check in, backed by Thistle's research that suggests about half of guests do actually find this situation stressful.
Assuming all goes well with the Euston pilot, the chain – part of GLH Hotels – plans to roll out the scheme this year throughout its 31 UK hotels, including ten in London.
Although sending an email to set-up the ‘choose-your-room’ link may seem rather clunky technology, Thistle’s willingness to innovate in this area encapsulates just how hoteliers are fast-adapting to changing market conditions. Everything from micro-measures such as scrapping nightly room ‘turndowns’ to cut costs, to a macro-embrace of all things mobile – especially deploying smartphones to speed up check-in and room access – is now on the agenda.
For a hotel industry that traditionally has been slow to innovate, the pace of change promised for this year is transformational. A dazzling array of new ‘lifestyle’ brands are coming onstream: from the budget hi-tech Hub by Premier Inn – which opened its first Hub in London’s Covent Garden last month – to the upscale Venu planned by luxury-focused Jumeirah Hotels. Marriott’s ‘edgy’ Moxy chain will see five properties open this year in Germany and Norway, with the first London Moxy slated for 2016 on Heathrow’s Bath Road. Hilton is also hoping to open up to a dozen of its recently-announced Canopy lifestyle brand this year, possibly including London.
Driving this brand explosion is not just the increasing influence of Generation Y (aka Millennials) but the need for the global hotel chains to grow their revenues as they become primarily brand managers rather than hotel operators or owners. Segmenting the hospitality marketplace into ever-more specialist brands has become the new name of the game for the leading chains.
Latest figures from French hotel consultancy MKG Group, moreover, confirm that the top ten chains – led by UK-based Intercontinental Hotels Group (IHG), with Hilton and Marriott close behind – remain the main engine of growth for the global hotel industry as independent hotels are squeezed. The ten leading chains are now estimated to account for nearly 8 million hotel rooms worldwide, about 40 per cent of total global roomstock, with fastest growth rates in the Asia-Pacific region.
But the continued worldwide growth of the chains this year will not come without its problems. “The major hotel groups are in a race for growth to resist increasing pressure from the online tech and web giants, with respect to which they must reach a critical size,” says Georges Panayotis, MKG’s chief executive.
Hotel chains in recent years have had a love-hate relationship with online travel agencies (OTAs) such as Expedia and Booking.com: they embrace them when seeking to shift roomstock at the last minute, but baulk at the egregious level of commissions (25 per cent or so) and discounts they are forced to concede. Given that Booking.com, for example, has over 557,000 hotels on its system worldwide while IHG has just 4,760, it is clear that the OTAs currently have a strong hand in dealing with the hotel chains.
Yet hoteliers are not throwing in the towel. Instead, they are taking a leaf from the airlines’ successful playbook and increasingly seeking to drive room bookings directly through their own systems rather than relying on third parties. And they believe that the surge in mobile smartphone technology will give them the edge.
Surveys back this up, indicating that business travellers are becoming ever-more mobile-dependent. Expedia/Egencia’s latest Mobile Index, for example, reveals that almost eight out of ten global business travellers have used a smartphone in a travel planning capacity, with slightly fewer using a tablet device.
Not surprisingly, travel management companies are being forced to adapt: Carlson Wagonlit Travel (CWT), for example, is rolling out a hotel search and booking capability through its CWT to Go mobile app, which includes corporate policy-mandated preferred rates and properties.
So far, most of the leading chains are looking at introducing the technology to facilitate speedier check-in and check-out via smartphone apps, a move which not only enables travellers to avoid queues at the front desk by checking in remotely but also provides scope for hotels to trim costs.
Hilton, however, has edged ahead of the pack – and rather overshadowed Thistle’s offer to ‘book the view along with the room’ pilot at its London Euston hotel – by becoming the first major chain now offering guests the ability to choose the room they want at most of its worldwide properties.
From early morning the day before arrival, travellers with bookings can access a digital floor plan of available rooms (updated in real-time) and see pictures of each room, reserving it if they want. Since the scheme was first introduced last summer, about a third of guests have pre-selected their room.
The key drawback at present, however, is that room keys still need to be picked up before rooms can be accessed. But starting this spring, at four of Hilton’s brands in the US, guests will be able to use their smartphone to actually enter their rooms, with full implementation worldwide during 2016. Of the other leading chains, only Starwood has so far announced plans to utilise smartphones as room keys.
But there is a significant caveat. Only those guests who are members of the Hilton HHonors loyalty scheme can utilise this innovative technology. This is a deliberate ploy by Hilton to put some ‘clear water’ between it and the online ticket agencies by offering its most ‘loyal’ guests – there are some 38 million HHonors members – a perceived valuable benefit. The hope is that they will book Hilton brands rather than use OTAs to find cheaper deals elsewhere.
Hilton is not alone in seeking to use its loyalty scheme members to help regain some power from the booking agencies. From mid-January Marriott International is offering members of its Rewards loyalty scheme free in-room wifi (see feature, p82) – one of the perks surveys show is most sought-after by business travellers – at all its hotels worldwide. At present this is only offered to Elite members of its loyalty scheme.
But this perk will only be given if the room booking is made directly though a Marriott channel and not with a third-party, typically an OTA or even traditional agent. Even the Thistle scheme for letting guests choose their own room applies only to direct bookings made on its website, Thistle.com. Such moves emulate airlines’ efforts to shift bookings from agencies directly to the carrier because they are more profitable.
Marriott has denied it is trying to freeze out agents, but the move has already created controversy. “If major hotel chains seek to drive bookings direct via loyalty schemes this will have a significant impact on corporate travellers and buyers,” says Mary O’Melia, head of corporate product at FCM Travel Solutions. “It is particularly concerning that Marriott is providing free wifi to Rewards members who book direct as this excludes bookings made via the GDSs [global distribution systems]. For the travel buyer this just makes the process of buying travel more complex.”
Marriott and Hilton, moreover, appear to be applying further pressure. From the start of January both chains are due to tighten the rules on last-minute cancellations which traditionally have allowed business customers with flexible schedules to cancel without penalty even on the day of scheduled arrival. Now, if rooms are not cancelled the day before arrival, a penalty will be charged of one night’s room rate.
This move partly reflects the current strong demand for hotel rooms in most business markets worldwide. But some industry observers believe it is also an attempt to stop frugal business travellers from booking a guaranteed room with a big chain and then searching online for a cheaper last-minute rate elsewhere.
Whatever the reason, not all hoteliers are following suit. The first of Sir Richard Branson’s new luxury Virgin Hotels chain, which opens in Chicago in mid-January with 250 rooms and suites, says guests will still be able to cancel their room without penalty even as late as midnight on the day of scheduled arrival. Its stylish website sets the tone with a promise: ‘No nickel & diming – or surprise fees’.
Check out what’s checking in
WHILE SMARTPHONE TECHNOLOGY MAY BE THE KEY – in more ways than one – to the way many business travellers check-in to their hotel over the next year or so, the way they want to use hotels is also changing.
According to research from hotel reservation agency HRS, road warriors are seeking more flexibility over the time they check-in or checkout: the standard 3pm check-in and noon check-out no longer works, suggests HRS’s UK managing director Jon West.
Six out of every ten of 650 international business travellers, quizzed for HRS, said they would prefer the opportunity to adjust check-out times by three hours and book rooms according to need, perhaps in time blocks of 1-8 hours.
Some chains are already responding to this trend: Westin and Novotel hotels, for example, now offer complimentary late check-outs on a Sunday, typically the day of the week with less pressure on room turnaround times because of lower occupancies that night.
But all areas of traditional hospitality are now open to review, as the chains seek to meet changing guest demands and trim costs. Already room-service is being replaced in some chains, including Hilton, with more ‘grab-and-go’ food outlets within the hotel, especially for breakfast.
Hilton CEO Chris Nassetta has also queried whether guests really want the availability of bathrobes, slippers or a nightly turndown service – especially as this comes at the price of higher room rates.