April 9, 2019
Today, “every business is a tech business” and in every industry consumers’ digital customer service expectations are growing. A decade after the U.S. travel and hospitality industry emerged from the 2008 recession; industry players, including airlines, airports, cruises, hotels, and other travel brands, are feeling the heat to compete and earn the loyalty of a new customer base via emerging technologies.
Trends and Pain Points in Travel and Hospitality
Shift in Target Demographics
Though Gen Y overtook Baby Boomers as America’s largest living generation in 2016, the demographic with the most purchasing power around the world today is millennials, and they don’t vacation like their parents. Travel brands need to both court and cater to millennials, who prefer to spend their money on experiences (like immersing themselves in another culture) over material objects and are more spontaneous and comfortable with tech than previous generations.
Competition
First it was online travel agents like Expedia and Priceline; then came Airbnb and VRBO—OTAs and the sharing economy have rocked the travel industry, altering distribution channels, taking business away from traditional industry players, and forcing airlines and hoteliers to compete online to win back customers. According to ADI, approximately 60% of all travel reservations are now made online despite Loyalty Rewards Programs for travelers who book directly through the airline or hotel. Another consequence of OTAs and millennials’ spontaneity is that the window between booking a ticket and boarding a flight is getting smaller, putting strain on travel and hospitality operations.
Heightened Consumer Expectations
We live in an experience economy, where it’s becoming critical for businesses to have customized offerings and personalized services. Millennials want to do something new and memorable on each trip but they also want personalized experiences and don’t mind sharing their data to receive customized travel recommendations. In a time when a single data breach can destroy a brand, travel companies must walk a fine line between capturing enough data to personalize services and respecting guests’ privacy and security. In addition to personalization, today’s consumers consider sustainability and wellness in their travel choices, expecting hotels to “go green” and have state-of-the-art fitness centers, healthy food and beverage options, even yoga classes.
Labor Gap
Within the leisure and hospitality sector, there are an estimated one million job openings in the U.S. alone. As companies struggle to attract and retain the right talent to fill the experience void, reduced immigration is impacting the supply of transient and hourly workers that have come to make up a large portion of the hospitality workforce. Moreover, recruitment for new job roles needed to incorporate the latest tech into the travel experience is proving difficult and high turnover is discouraging investment in skills development for new and existing employees.
A Testing Ground for New Tech
Historically, the travel industry has been quick to adopt new tech: In the late 1940s, before most consumers had a television set at home, hotels began to install TVs in the guest rooms. Travel companies were also among the first to leverage the World Wide Web to increase sales, with the first hotel websites launching in 1994; and one of the very first use cases for Google Glass came from Virgin Airlines in 2014. But the challenges above call for real implementations and dramatic digital transformation.
Applications for Immersive and Wearable Tech in Hospitality
Virtual booking
“Try-before-you-buy” shopping apps have become an early hit for augmented and virtual reality, especially for big-ticket items like furniture and real estate. Travel, too, is expensive and consumers need a lot of information before deciding to book. Virtual reality presents the ideal medium for selling an experience, giving travelers insight that no amount of text on a website or any number of customer reviews can match by allowing them to essentially preview their trip – from their seat on the plane to the view from their hotel and local attractions – before committing.
In 2017, Amadeus unveiled the first VR booking experience in which users shop for travel in a virtual world. Users can search for flights, review cabins, compare hotel prices, and book rooms all through a VR headset. And while you might think that as VR gets more and more immersive it will replace travel altogether, current research has found that visiting a destination in VR actually makes one more inclined to visit the real place. If VR hits critical mass at $199 per headset over the next few years, VR travel planning and booking may very well be one of the killer apps for the technology.
Marketing
Hospitality brands spend a lot on marketing. AR/VR is becoming a major differentiator in this area, as hotels themselves adopt the technology as a selling tool. Hundreds of hotels now offer virtual tours. For instance, Atlantis Dubai offers a virtual tour on its website so guests can explore the hotel’s luxury rooms and on-site experiences like swimming with dolphins from the comfort of home. Once on the website, consumers are more likely to book directly through the hotel, as well. In 2017, Marriot launched a VR tour of its meeting rooms, allowing corporate clients and event planners to virtually walk through its function areas from anywhere. During an on-site tour, one might even digitally augment the space to get a more realistic feel for a venue’s suitability. Palladium also uses VR, not to inform prospective guests but instead to educate travel agents about its properties. Palladium salespeople go around giving agents VR headset-enabled virtual tours so they can better sell the chain’s hotels to customers. Some hotels even offer on-site AR/VR experiences, usually smartphone-enabled, that both entertain guests and enlist them in the brand’s marketing efforts via social media sharing.
Operations
There are a lot of moving parts in the travel and hospitality industry, requiring staff to be in constant communication in order to provide seamless customer service around the clock. Management and staff have traditionally kept in contact via two-way radios, a method prone to lost connections and poor audio quality. Looking for a better way to communicate, Viceroy Hotels turned to wearables: At the Viceroy L’Ermitage in Beverly Hills, hotel staff piloted Samsung Gear S3 smartwatches to manage guest requests and resolve incidents more efficiently than they could with a walkie-talkie or phone. The pilot showed response times going down from 3-4 minutes to just 60 seconds; the solution was also less intrusive, sending silent vibration alerts to the staff members best placed to serve a guest’s need. Houston’s Hotel Alessandra also uses Samsung smartwatches for fast and discrete communication among employees, improving the experience for both guests and staff.
Entertainment & Tour Guide
VR headsets are popping up in airport lounges, on flights, and in hotel rooms alongside other amenities. Qantas, for one, has experimented with providing virtual experiences and games on high-quality VR headsets to first-class passengers; and in 2015, Marriott launched its “VRoom Service,” whereby guests can order a Samsung Gear VR headset delivered to their room—a step up from streaming services and on-demand movies. The headsets come preloaded with “virtual postcards” that not only entertain but also sell users on new destinations (where they can stay in a Marriott hotel, of course).
Others are using mobile AR apps and VR headsets for guest engagement. For example, Holiday Inn created an AR app allowing guests to view virtual celebrities in the hotel through their smartphones; while at London hotel One Aldwych, a whiskey cocktail called The Origin comes with a VR headset showing how and where the whiskey was made—a truly unique cultural experience made possible by VR. Hotels and travel brands are also developing custom AR tour guide apps, like a mobile concierge that provides real-time, heads-up navigation and personalized recommendations for loyalty program members, and enhances sightseeing with digital information overlaid on the landmark itself. The Hub Hotel from Premier Inn in the UK does this with special maps on the walls of every room, which, when viewed through a smartphone, display information about local places of interest—an unexpected, value-added feature for the hotels’ guests.
Airlines and hotels can also adopt augmented reality smart glasses to enable flight attendants and hotel staff to personalize customer service, using facial recognition to greet guests by name and tapping into a customer resource management system, social media and other data sources to bring up information relevant to individual passengers.
Convenience
AR certainly provides convenience by supporting guests and passengers in their native language, showing them directions, etc. Below the neck, IoT (Internet of Things) wearables provide convenience, as well. Case in point: Disney’s MagicBand, one of the earliest and most successful (bespoke) wearable devices in the travel sector, widely used today in Disney theme parks as an all-purpose means of payment, admission and keyless entry for resort guests. In 2017, Carnival announced its Ocean Medallion, a small, waterproof device that can be worn or carried, enabling cruisegoers to embark the ship, enter their staterooms, shop, and make reservations. The Medallion works with Carnival’s Ocean Compass app, which displays personalized recommendations for every passenger with the help of 7,000 sensors installed throughout the ship. Likewise, Meliá Hotels has begun offering waterproof, Bluetooth-enabled smart wristbands by Oracle, which, in addition to serving as a payment method on the Spanish resort of Megaluf, also work at nearby participating merchants like Starbucks.
Training
Compared to traditional teaching methods, immersive simulations have proven more effective for quick learning and retention of knowledge, which is why major corporations around the world are using AR/VR to train new employees and retrain core staff for new roles. In travel and hospitality, immersive tech can help prepare employees for exceptional scenarios that are hard (or undesirable) to train for in real life like diffusing an angry guest. Need to walk a team through new green housekeeping measures or alterations to the menu? Use VR.
In 2016, Best Western partnered with Mursion to develop a series of VR simulations for front-desk staff to practice interpersonal skills. According to the hotelier, the 60-minute virtual guest interaction training sessions contributed to a noticeable boost in guest satisfaction. Recently, luxury cruise line Seabourn worked with Pixvana to create a VR training solution to help wait staff quickly memorize the dining room’s 105 tables and 12 serving stations. Hilton has used VR with its corporate staff to build appreciation and empathy for the chain’s employees, having higher-ups virtually take part in routine operational tasks like cleaning a guest room and arranging a room service tray.
Conclusion
The convenience of wearables is appealing not just to millennials but to most modern consumers, as are enhanced experiences of physical spaces enabled by augmented and virtual reality. VR will surely become a popular way of shopping for hotels and AR a natural addition to sightseeing and other aspects of the travel experience (on-demand, in-context information). Early adopters in the travel industry are poised to define the competition, providing experiences to guests they cannot get at home, attracting new workers with brand new tech for training and carrying out daily tasks, empowering staff to provide superior, personalized customer service, and easily preparing employees for the roll out of new sustainability and wellness features.
*Learn more about emerging tech in the Travel & Hospitality industry at EWTS 2019: Hear from Blaire Bhojwani of Hilton Hotels, Andy Kozak of JetBlue, Jayson Maxwell of Six Flags, and more.
The Enterprise Wearable Technology Summit (EWTS) is an annual conference dedicated to the use of wearable technology for business and industrial applications. As the leading event for enterprise wearables, EWTS is where enterprises go to innovate with the latest in wearable tech, including heads-up displays, AR/VR/MR, body- and wrist-worn devices, and even exoskeletons. The 6th annual EWTS will be held September 17-19, 2019 in Dallas, TX. More details, including agenda and confirmed speakers, available on the conference website.
