AWS for Industries
Embracing Technology: How the hotel industry adapts to change
“When the world changes around you and when it changes against you – what used to be a tail wind is now a head wind – you have to lean into that and figure out what to do because complaining isn’t a strategy.” – Jeff Bezos
As someone who was fortunate enough to spend the majority of my career in the hotel industry, one thing I know for sure is that the industry is resilient. Tough as nails actually. It is a strength that comes not only from its people, but also from being on the front lines at inflection points that directly impacted the way that hoteliers operate. From changing consumer preferences, to unexpected and sometimes heart-breaking world events, there have always been disruptions that have the power to either stop the industry in its tracks, or propel it forward.
If you look back at the last 25 years, the pace and scope of change in the hotel industry is staggering. It wasn’t that long ago that guests were carrying printed hotel directories and calling hotels directly to make a reservation, armed only with the knowledge of whether it offered HBO or was AAA rated. Then, technology came to the rescue to provide much more information, much more easily.
During the mid-1990s, the hotel industry began its technology evolution in earnest. Central reservation centers were launched and the first ‘online hotel directory’ went live. This was followed closely by companies like Choice Hotels offering guests real-time access to central reservations, and the ability to book online. As hoteliers evolved from offering standard “rates and dates” booking functionality to satisfying the desire for more information and an improved shopping experience, business travelers also began to demand that they be able to work as efficiently on the road as they did at work. Even purpose-built brands with guest rooms, services, and amenities that catered to business travelers had to go farther. The guest room needed to become a virtual office and the hotel to evolve into a resource that enabled productivity beyond offering an on-time wake-up call and a fax machine (yes, fax machine) or print center. And, as the industry powered into the 21st century, the business traveler’s desire to stay connected was about to accelerate.
In the early 2000s, as the industry was recovering from the devastating impact of 9/11, business travelers and meeting attendees alike were checking-in with their bulky laptops in tow, with the expectation that they could connect from their guest room and work the way they wanted to work. Hotels that didn’t offer Wi-Fi and give their guests the ability to stay connected were seen as dinosaurs. The industry was pushing hard to keep up with consumer demand and meet guest expectations. Loyalty programs were no longer just about earning ‘points and miles’, but served as a way to acknowledge guest preferences, to surprise and delight and to differentiate brands from their competitors. The industry moved to targeted marketing and emails were king. Meetings and events now proudly included technology packages as a standard option. However, once again, the end of the decade saw the industry responding to two new major disruptions.
The release of the first iPhone in 2007 was an inflection point that put smart technology into guests’ hands, propelling the industry to start its mobile journey, a trip that continues more than a decade later. Words like ‘apps’ and ‘mobile-sites’ became part of our vernacular. Hotel companies began to untangle the complexity of legacy backend systems trying to interact with the new consumer-controlled capabilities. This technology disruption was followed closely by a recession that left a badly bruised hotel industry in its wake. Recovery plans were developed and guest satisfaction became paramount as demand began to return. Innovations like mobile booking, personalized offers, and elevated guest experiences were seen as ways to connect with the guest, differentiate brands and earn loyalty.
Consumers responded positively to these innovations, but their ever-evolving preferences weren’t just focused on recognition and the stay experience. Knowing what a company stood for and how its business practices impacted everything from the environment to its local community became hallmarks of the 2010s. Responding to this mindset shift meant pivoting to introduce environmentally friendly basics like in-room recycling bins and LED lighting, to more sophisticated predictive energy management solutions that reduce consumption, while still meeting guest expectations for comfort. New connected systems that help prevent food waste and predict water usage create efficiencies that can be monitored and measured and reduce the industry’s environmental impact.
So what does all of this mean for the challenges that we face today? We know hotel industry disruption will continue. Historically, as an industry, when we were challenged by disruptions that forced us to pivot, our ability to embrace or drive change was often limited by the reality of our business. Real-time data and consumer insights weren’t available. Speed to market was hampered by legacy systems that were disconnected. Deploying new experiences on property was a manual effort. Even in times of growth, the cost of maintaining and changing legacy systems to support business plans was staggering. Agility, flexibility, and innovation were often aspirational words on a white-board plan, labeled “future state.”
Now, fast forward to today. As the hotel industry leans into the current headwind, its leaders don’t have to face this current disruption alone. In my short time at AWS, it has been incredible to understand the power that the lodging and accommodation industry can harness to drive recovery and support innovation. Companies like Hyatt are creating connected and personalized guest experiences with one personalization project alone driving nearly $40 million in incremental revenue in the first six months. Melia Hotels saved 40% on their IT costs through optimization and AWS’ pay-for-what-you-use model. Choice Hotels, one of the pioneers in use of technology, is reinventing itself on AWS to provide even greater satisfaction to its guests and small business owners.
Industry-leading technology services are critical for success, but ultimately, the right collaboration is required to achieve a company’s business priorities and vision. Customers can leverage AWS services to create operational efficiencies, improve the guest experience, and position the industry for growth for the long term. For a deeper dive, I invite you to check out our new ebook: Building Resilience for the Long Run which is filled with tips and AWS services that can be leveraged to navigate through business disruption. The hotel industry has a resilient spirit and will confidently harness the power of technology to emerge stronger in the face of this, and future, industry disruption.