The hotel industry is at the center of an incredibly diverse hospitality sector, which comprises 10% of global GDP and includes not only hotels, but also music venues, sporting arenas, convention centers, resorts, entertainment and more. Today, mobile commerce is crucial to any industry, but none more than hospitality where consumers are driven by experiences and connections, and are dreaming up their next trip or activity on their mobile devices.
Although revenue growth has slowed down, the hotel business has been generally positive in recent years. According to CBRE Hotels’ Americas Research, the US hotel industry will mark its 9th consecutive year of increases in occupancy, revenue per available room (RevPAR) and total operating revenue. With macroeconomic conditions in their favor, many hotels have had an opportunity to focus on moving the industry forward with technology investments for today’s mobile-first and mobile-only travelers.
A Mobile-First Hotel Industry
What does a mobile-first hotel industry look like? At the very least, adequate mobile capabilities include a true mobile booking engine built for the mobile environment (rather than an Internet booking engine adapted for mobile), streamlined check-in processes that can be managed on mobile devices, loyalty program integration with hotel mobile apps, and effective use of mobile channels (apps, email, social media) to up-sell and cross-sell guests throughout their journeys.
Last year, for example, Marriott rolled out mobile check-in across 300 hotels in Asia-Pacific, including Hong Kong. The feature is available for members of Starwood Hotels and Resorts’ loyalty program, Starwood Preferred Guest (SPG). This represents the standard of connected travel that mobile consumers increasingly expect – a seamless, frictionless experience from search and booking to payment, check-in and everything in between.
Digital Innovation and the Hotel Industry
One of the driving forces for the hotel industry to innovate and grow has been the emergence of digital innovators such as Airbnb, Uber and online travel agencies. With Airbnb, anyone can market their private residence as hotel inventory, which increases competition for hotels and can negatively affect local room rates. Services such as UberEATS can threaten to cut into business from hotel restaurants and concierge services. And the online travel agency Hotels.com has its own concierge mobile app, giving travelers a one-stop-shop for all their local travel needs. The opportunity in the hotel industry has never been greater, but the competition has also risen.
Hotels are realizing the urgency of investing in mobile capabilities that will give them more control of bookings, revenue and customer relationships. Mobile apps expand what a hotel can be: not just a place to sleep but a hub for all travel transactions and interactions. Starting with booking, hotels are using direct channel booking engines to drive ancillary revenue through travel packages that include air, car rentals, local activities and more. With so much global inventory, the market for hotel rooms has been significantly commoditized, but that has made loyalty programs even more central to hotel revenue strategy, as it allows hotels offer special rates to program members (online travel agencies are also investing in their own programs). Beyond booking, hotels with advanced mobile capabilities can better compete with new competitors for ancillary revenue (such as Uber). Ancillary selling can extend not just to guests but also to locals and business travelers looking for restaurants, events, luxury services and more.
Online travel agencies continue to dominate the travel market, accounting for about 2 out of every 3 online hotel bookings in the US. While hotels may not be able to bridge that gap, mobile innovation is nevertheless crucial for hotels to strengthen their online presence and market themselves direct to consumers through mobile devices. In fact, mobile accounted for 40% of all digital travel sales in the US last year. Without effective mobile solutions build specifically for a mobile-first environment, hotels will be unable to drive new and higher revenue or build loyal relationships with mobile-first travelers. Loyalty programs are an effective strategy for hotels to differentiate themselves from online travel agencies, but consumers expect loyalty programs to be integrated into a mobile user experience, along with the rest of their travel experiences.
Mobile Solutions for Hotels
In 2018, hotels will continue to invest in mobile solutions and implement mobile strategies to increase bookings, streamline hotel operations and processes, integrate more ancillary selling opportunities at every touchpoint in the customer journey, and send more targeted and personalized sales and marketing communications. Hilton plans to use its Hilton Honors app to create “smart” hotel rooms this year, allowing guests to manage everything – from check-in to check-out, room keys, lights and more – directly from the convenience of their mobile devices. This is a standard which all hotels will be striving for in the coming years, but it will take smart investments in the right mobile solutions to achieve a mobile-first hotel industry.
CellPoint Mobile’s portfolio of sell and pay side solutions can provide the end-to-end experience that hotel guests are demanding, helping them move through booking, payment and travel management with as little time and effort as possible – so they can enjoy their room, concert, restaurant, sporting event or conference, and spend more with your hotel brand. CellPoint Mobile helps hospitality providers across the globe make travel easier for their customers while increasing revenues. Are you ready to get started?