Transformative innovation in hospitality: Looking ahead to 2022

By Chris Hemmeter and Scott Barghaan

It’s axiomatic that the development of a personalized, seamless journey is critical to meeting the needs of the modern traveler and boosting profitability for hospitality companies. At the same time, the move in that direction has been dealt a blow by current realities: social fragmentation and political and economic volatility, the onset of COVID and increasing pressure on brands to deliver differentiated, quality experiences in a world where owners are still recovering and workers are difficult to satisfy, pose a daunting set of challenges for owners and operators.

Without minimizing the breadth of the challenge, we take the view that the glass is much closer to half full, thanks to a new disruptive tension, mixing with a renewed C-Suite commitment to increasing agility, flexibility and productivity.

Looking ahead to 2022, we believe the coming year is when innovation and personalization finally converge to deliver on the promise of technology for hospitality and all its stakeholders—guests, owners and associates alike.

An intrinsically “personal” enterprise
The hotel business relies on a uniquely high level of trust and sustained personal interaction among diverse groups of actors.

The ways in which a guest experiences a hotel stay, perceives value and builds or does not build loyalty is impacted directly by the actions of a property owner, brands, management companies, onsite staff and many other actors.

From booking through arrival, check-in through departure, the hotel guest immerses themselves in a hotel’s brand promise more intimately and continuously than any other consumer experience we can think of.

Unfortunately, the number of actors combined with a complex web of antiquated technology systems have traditionally made it difficult to deliver, accurately measure and fully monetize successful guest experiences, within a single hotel and across properties.

That is about to change.

Starting with data
The future of effective hotel operations and guest service that accurately measures the guest experience begins with data.

Consider the quantity of data that is generated in a simple one-night business or leisure journey.

It starts with booking a hotel stay online with a credit card. Flights are also booked. If the guest is planning to drive to the location, rental cars and parking are a serious consideration. If not, ridesharing or taxis are engaged, likely restaurant and entertainment reservations are made. On-premise meeting space might be reserved, an upgrade, an early arrival or a late check out requested. Reservations can be completed using a combination of dollars and/or rewards points—and additional loyalty currency is generated during the stay. The type of room booked, whether onsite or offsite parking is accessed, how a guest checks in and out for their stay, whether they request housekeeping, engage in booking recommended amenities while on property and possible onward bookings at the next destination can generate even more data.

In a word, the list is endless and the amount of transactional data generated is huge.

To date, accessing all the available data and compiling it into a complete, actionable guest profile has been out of reach as a result of the disparate systems, fragmented data and technology architecture that are required to run a property.

Now, though, it is made increasingly possible by the transition from an on-premise, data-siloed culture to an open-API environment.

A new and impactful set of disruptive start up companies have created automated SaaS solutions that marshal customer data effectively, translate it for effective sharing and manage it to produce better revenue management, more effective property operations and a more seamless guest experience. At Thayer Ventures and Salesforce, we are excited to invest in, and partner with many of them. An important byproduct is a new level of advanced analytics to help hoteliers fine tune service delivery, handle payments and ultimately, understand their guests better.

While guests receive more seamless service, hotel owners and operators benefit from increased efficiencies, cost savings and the ability to organize data to heighten guest engagement and ultimately, build loyalty.

The industry’s leading brands are starting to take notice as well. Just a few years ago, adoption of truly disruptive technology among the industry’s leading players was close to zero. Today, the most forward thinking among corporate managers are utilizing advanced solutions in areas such as Revenue Management, Property Management, payments and more.

The role of transformative innovation

The promise of a new kind of open platform is driven and maintained by an emerging class of “middleware” solutions. It puts managers in a better position to manage their businesses and eventually, overcome the “single-stack” thinking that inhibits a total view of the customer, revenue streams and the utilization of human resources on property.

We believe the rise of middleware solutions has just begun, and the clear benefits from its adoption by hotels will increase substantially.

With disruptive SaaS solutions as a centerpiece, new technologies are also transforming other parts of the hospitality business.

At the macro-level, some companies have leveraged innovative technologies to remake the entire operating model of the hospitality business, enabling owners to achieve cost savings, efficiencies and higher asset values, while providing exciting new options for guests.

Driving it all, we should not discount the impact that new kinds of creative thinking a “de-siloed” data environment can produce.

That kind of thinking is critical to the start-up enterprise and more important, to the ultimate transformative change that everyone now agrees is critical to push hospitality forward.

Why can’t a guest folio be requested and delivered when and how the customer requests it, in a form in which they want to see it—by chatbot, if necessary?

Why can’t we think about loyalty in new ways that cut across disparate elements of the guest stay—by building both guest experiences and increased profitability through a newly enhanced level of personalized relationship among all of the hotel’s stakeholders?

That’s the kind of thinking that drives our investments in the hospitality space, and will continue to do so in the years ahead.

Starting with comment cards decades ago—evolving through TripAdvisor and other review platforms—it’s clear that the power of guest preference in shaping experience and even hotel product, is only increasing.

A new level of data-driven personalization will allow us to merge the interests of guests, associates, owners and operators in ways we never before thought possible.

The year ahead
As we think about the challenges the hospitality industry has overcome in the past 24 months, we’re gratified that the level of innovation has not decreased, but in fact has accelerated.

The adoption of new technologies has mushroomed as a result of pandemic economics and the willingness of investors, brands and most importantly, creative founders to put capital to work—pushing the boundaries of innovation. We are confident that it will continue and in fact, accelerate even faster.

We wish our colleagues across the travel ecosystem a safe, healthy and super profitable 2022—a year in which innovation and personalization combine to bring guests and hotels closer than ever before.

Chris Hemmeter is managing director at Thayer Ventures. Scott Barghaan is VP AMER GM, travel, transportation and hospitality vertical at Salesforce.

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.