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The tides are changing in the hotel landscape as operators face new competitive forces shaping the way business is conducted.

In recent years, consolidation has altered the playing field considerably, while social media continues to take marketing strategies to the next level. Consumer-focused web-based services, such as TripAdvisor and Airbnb, have also put hotel operators on high alert when it comes to managing guest satisfaction.

Cloud-based services and greening are now mainstays; and savings gained through the back-end efficiencies these initiatives have created are now being applied to the front-end in order to elevate the guest experience. As a result, there is a larger trend towards incorporating wireless and mobile services as part of the transforming guest experience.

GAME CHANGERS
For Warren Markwart, president of MK2 Hospitality Inc. in Toronto, the biggest disruptor in 2016 was Marriott’s purchase of Starwood. “This type of consolidation is unmatched in history. Marriott will be a juggernaut and tens of millions of people will be part of its rewards programs. This is putting a lock on smaller operators in some ways, but also providing them with competitive advantages.”

Another disruptive factor is the rise of Airbnb, which is indicative of the trend towards consumerization of services, says Kevin Craig, director of Enterprise Sales for Concur, a Toronto-based travel and expense-management provider. “Airbnb’s success has been created through [providing] a whole new set of inventory for travellers. What it brings to the table is an extra option in destination cities where travellers can experience communities and cultures.”

Craig says despite Airbnb’s phenomenal growth, hotels continue to offer a tremendous value proposition for travellers. “They know their customers and can negotiate [favorable] contracts with companies. Put that together with the effort hotels make in creating personalized and loyalty programs [and] I don’t see Airbnb as competitive — I see it as complementary. The one thing it could do is help push the hotel’s value proposition.” Players that don’t operate the same way hoteliers do are changing the game, confirms Didier Obeuf, vice-president, Operations for Groupe Germain Hotels in Montreal. “But they are here to stay and we have to accept that and make sure our own products and services are just as good, if not better. We shouldn’t be using Airbnb as a scapegoat. People will always go to hotels for the service, attention and loyalty. Innovations will come from the surprises you can add.”

TALK IS CHEAP, BUT PROFITABLE
Markwart is also seeing marketing transform as Twitter, email, Facebook and TripAdvisor dramatically affect customer actions and expectations, in addition to providing important channels of communication. “One challenge, however, is that a lot of times general managers understand [its importance] but don’t know how it works or how to implement it. Everybody is still trying to figure out Facebook and Instagram, but they have to in order to stay in the game.”

Of these channels, Markwart says TripAdvisor is the biggest disruptor, as it provides a platform for unfiltered opinions and comments from consumers. “It’s pure and unadulterated feedback by the people, for the people.”

The early advantage is with hoteliers who truly grasp these communication tools, he adds. “Millennials are the ones who will have the competitive advantage in the short term, but everyone will figure it out at some point.”

Theresa Ginter, general manager at Nita Lake Lodge in Whistler, B.C., says the resort has a distinct advantage on that front. “We have a pretty young management team, so we understand how people want to interact on a social-media platform. That’s a key advantage because we have lived with it and understand how that interaction should be.” She says the “small but very strong” marketing team is always interacting with guests. “Social media is never off. It’s there 24 hours a day, seven days a week, 365 days a year. We are always connected so we can keep the engagement up, which is quite important for a boutique hotel like ours.”

Ginter adds that Instagram, Twitter, Facebook and other platforms are an ideal way for guests to share their experiences with a broader audience. “Having them post stories for viewing gives others a sense of what this place truly is and provides a level of authenticity that other marketing approaches can’t. That is really key.”

Even the hotel’s visuals for its website are going high-tech with the addition of drone-video footage of the property over the changing seasons. “We want guests to see what it really looks like. Still images aren’t necessarily a true [representation].”

FACE FIRST
To counter outside competitive forces, there has been a major shift towards customer-facing innovations, says Gary Graham, manager, Program Operations at Ottawa-based Green Key Global. “The investment is now in visible things guests can see, from living walls and rooftop beekeeping to car-charging stations and vegetable gardens — all of which add to the overall experience. Those are things that guests can put on social media.” Graham sees a growing move towards digital replacements for almost all forward-facing facets: from check-in processes and door-lock systems to Netflix access over wireless and e-reading apps for newspapers. “Everyone is evolving this year. We are in an era of influx and everyone is adjusting to where the industry might be — or is — going.”

Brad Hutchings, partner, Tourism, Hospitality and Leisure, Canada for Deloitte in Toronto, agrees the key area of concentration is the nature of the customer experience being delivered. “What I see evolving is the theme of customization and the power of connections being enabled through technology, database information and integration of communications.” Hutchings also sees this integration extending into the guestroom experience. “There’s more attention being paid to innovation in room technology, leveraging mobile devices, seamless check-in and out and connecting back through social media. Hotel operators are able to communicate into the ecosystem as well, to [gather] customer intelligence to enable decisions, engage with customers and improve competitiveness.”

Marjolaine de Sa, senior director of Sales, Communications and Marketing for the newly opened Valcartier Hotel at Valcartier Vacation Village in Quebec, says the hotel is laying plans for creating a truly innovative customer experience at the 153-room property, starting with Quantum RFID (radio-frequency identification)-enabled electronic door locks that can be operated with a pre-programmed wristband. When completed, the project will include more than 300 networked door locks throughout the village.

“We also plan to interlink the wristbands with our restaurant, attractions, spa and shopping services,” she adds. “Not only can we monitor where guests have been and their preferences, it makes it easier for guests to enjoy the resort experience.” Valcartier plans to see the full integration completed by June 2018. “It’s quite a big project,” de Sa says. “Integration [at this level] can be a long learning curve because it is so specific.”

Trends in this realm are progressing rapidly following a period where operators were working on the underpinnings of service delivery through technology such as cloud-based services. “Now [that] they have dealt with their infrastructure to be more efficient and free up cash flow, that has freed up funds that can be [used] to apply technology assets to the customer experience,” explains Hutchings. “Ultimately, it’s the in-house experience that is critical for all,” he stresses. “But it’s an amazing and exciting time for the industry when you look at the overall ecosystem.”

Volume 29, Number 2
Written by Denise Deveau 

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