Consumers rekindled their passion for travel over the summer for several reasons: The pandemic caused them to rethink their priorities and though travel used to be on their bucket list, now it’s on their do-now lists; generational shift in consumers preferences and experiences over goods; with housing prices remaining prohibitive, consumers are turning to travel as a source of joy in the moment.
In response to this reboot, I’m seeing some exciting changes across the hospitality industry. Leading brands finding new ways to deepen ties with existing customers—as well as to win over new ones. To do so, they are using inventive and increasingly personalized offers.
Success has often meant leveraging an advanced set of technologies to solve some of the most critical business challenges hotels face today. These challenges range from staffing shortages and increased operating costs to dwindling customer loyalty and complex climate disclosure requirements, which take on added urgency in the wake of extreme weather events.
In my conversations across the industry, I see brands and owners beginning to update decades-old legacy systems. This is an exciting development for the future of the industry, especially as companies begin to see results from the improved experience they’re providing guests and employees.
However, I’m not yet ready to declare mission accomplished. The complex and competitive hotel ecosystem continues to present challenges. What we do have is a blueprint to consider for success in delighting customers. Here are three important elements of that blueprint:
1. Step up your loyalty offerings
PwC’s 2022 Customer Loyalty Survey shows that hotel guests are far more likely than consumers overall (46% versus 37%) to give up on a brand or company after a single bad experience. It’s clear that hotels need to nurture loyalty from every angle of the guest experience. Start with the booking process and move through the guest’s entire stay from check-in to check-out.
That’s why I’m encouraged to see leading brands stepping up their loyalty offerings. More than 75% of hospitality executives told PwC that personalizing the customer experience to boost loyalty is a high priority, versus 61% across all industries. Today, successful hospitality brands connect with loyalty members via notifications outlining customized, discounted options based on their preferences.
The benefits are tangible: After a tech upgrade to its loyalty program, a major hotel brand recorded 50% fewer missed or adjusted guest stays within loyalty-member billing, compared to the same period the previous year.
2. Build out your tech ecosystem
Delivering highly personalized offers to guests requires a foundational tech ecosystem. Start by migrating legacy software systems to a cloud-based platform. Companies leveraging cloud technology can automate a range of workflows to drive efficiency and reduce routine data collection and entry.
In turn, workers can focus on providing improved customer service based on real-time data analysis and insights generation. Tech transformation can do even more by helping to streamline the hiring process, controlling costs and managing margin.
PwC’s 2023 Cloud Business Survey illustrates that cloud-powered businesses across industries can expect continued revenue growth of 15% in the current business environment. Not only do respondents report fewer obstacles to realizing value from their investment, but they are also doing so at approximately double the rate of their non-cloud-powered peers.
Meanwhile, as generative AI democratizes revenue management across all segments of hotels, technology vendors are diversifying generative AI-enabled pricing tools beyond hotel rooms. For instance, one hotel brand we spoke with is investing in tools to make decisions on hotel room allocation, conference rooms and restaurant pricing. In fact, leaders at consumer-facing companies tell PwC their highest strategic priority over the next three to five years is embedding AI and generative AI, responsibly, into their business models.
3. Underscore a shared future for tech investment
Looking out across the industry, I see a nuanced landscape with brands, owners and operators advancing at various speeds and through different stages of the technology journey. Migrating from legacy systems is rarely simple, compounded by stakeholders with varying needs:
- Brands tend to prioritize upgrades that drive customer loyalty. For example, they can use the rich trove of consumer data from branded apps to help cement brand loyalty as the route to top-line growth. They also want scalable solutions to onboard employees, improve operational efficiency and reduce turnover.
- Owners and operators, meanwhile, typically focus on investments that boost revenue. They are interested in systems that provide an aggregated view of data to illustrate enterprise-wide performance in real-time.
Many agree that nurturing guest loyalty is essential to growth. But how do we get there? Essentially, by delivering inventory at the right price and at the right time. Without a robust tech ecosystem, that is close to impossible. What does success look like? A collaborative approach demonstrating long-term value for stakeholders, as well as governance standards for integration.
Make thoughtful choices
So where do we stand today? While tech can be an enabler, hospitality will always require a human touch. As you embark on tech transformation, you should make a range of thoughtful choices about integrating your technology into your overall vision. Ultimately, those choices will keep your guests coming back for the human-powered, tech-enabled guest experience they crave.
Jeanelle Johnson is a principal at PwC. She is also a member of HOTELS Magazine’s editorial advisory board.