The biggest threat facing the hospitality sector

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In today’s competitive consumer-facing landscape, customers now have more power and options than ever before – and this is levelling the playing field. For every clothing brand, there’s hundreds of other labels; for every hotel, there’s another twenty that guests can stay in. Now, hospitality brands – ranging from hotels to food and beverage establishments – are under huge pressure to keep innovating in order to remain relevant in today’s market.

Challenger brands that previously couldn’t compete on size are now focusing on customer-centric experiences as their business differentiator – which is helping these firms increase sales in a challenging market. In revolutionising customer service and improving the user experience, they are improving their chances of taking market share from older, legacy brands that haven’t yet embraced a fully digital and immersive business model. As the market toughens, these legacy brands will ultimately risk being left behind.

To avoid becoming a victim of today’s technologically advanced times, established brands must enhance the user experience by embracing digital transformation innovations such as Augmented Reality (AR) and Artificial Intelligence (AI) to improve their offering and increase profits and brand loyalty.

The customer experience is key

AR can deepen a customer’s experience, making it truly immersive. With AR, digital information is presented in forms within the environment. Rather than presenting an entirely new and often fictional context (as in VR), it enhances and deepens what the customer is already. An app allows a guest to view a hotel’s premises through a phone camera, and then overlay links and images to create an in-app tour of the area, keeping the customer informed of the facilities during every minute of their stay.  

This technology can also help retail brands transform a shopping experience and make it immersive for a customer. Using AR can enable clothing brands to project an outfit onto the image of a shopper standing in a shop, allowing them to visualise a potential purchase on the spot. It can also help shoppers preview products in context: a furniture buyer could see how a sofa would look in their living room.

AR is now making its presence in the restaurant trade known, with menus being brought to life. US fast food chain Bareburger is planning to replace all of its printed menus with 3D visualisations, so that a diner can get a true-to-life preview of their food before placing their order. It will not be too long before visitors are scrolling through holographic representations of the food on the menu in restaurants across the world.  

Sometimes, using tech that can enable a company to simply do the basics well can also help a business deliver on customer satisfaction. McDonald’s self-ordering kiosks help not only speed up queues at busy branches and enable at-table delivery, putting the customer at the heart of the dining experience, but diners can also customise their food options – which is especially crucial for those with dietary requirements or allergies. 

Technology is key to consumer happiness

AI is proving to be a game-changer in revolutionising the customer experience. One of its most effective uses is providing a true omni-channel service, especially within the lodging sector. An AI system learns how to interact with guests and visitors, and analyse their hotel stay behaviours and preferences. It can make recommendations or suggestions based on these insights, furthermore creating a unique experience for guests.  

Virtual receptionists installed in hotel reception areas, and interactive bot concierges, are just some examples of how AI is effectively being utilised by hotels. Virtual receptionists can greet customers who have booked their hotel stay through an online account, by name, and even suggest activities and trips to the guests based on their pre-chosen preferences. Bot concierges are increasingly being used too, as ‘chat-bots’, by large companies such as Marriott and Hilton. This enables them to liaise with customers, or potential customers, through automated messenger systems. Some brands are even utilising Facebook Messenger and WhatsApp, and having them manned by interactive bots, to enable ‘always-on’ customer service – the key to keeping customers happy around the clock.  

Implementing technology-powered measures empowers customers to make their own decisions, for when it comes to booking hotel rooms for example. These systems need to be operated via a mobile phone, and should be available at any time, at the will of the user – services that are automated and digital means there is no ‘closed period’ on their use. This is a route the hospitality sector must continue to develop.  

Booking.com, Opentable.co.uk, Groupon and other online booking services have become powerful because they offer choice, making the customer feel that they are finding bargains. Decisions can be made in an instant with the use of a mobile device – which is where hospitality brands must continue to place an emphasis on, as over one third of people now use a mobile device to book a hotel room

Retailers can also increase customer engagement and help boost sales – and shopper loyalty – by using artificial intelligence. This ranges from the simple – using data-driven insights to offer a better customer insight – to the extreme. One example is AI-powered robots, which can interact with customers, like SoftBank in Japan. In 2010, the firm invested in a humanoid robot that could interact with shoppers and perceive human emotions. It was then used by a US retailer – which experienced a 98 per cent increase in customer interactions, a 20 per cent increase in foot traffic and a 300 per cent revenue growth as a result.

On the other end of the spectrum, North Face adopted cognitive computing technology to help website visitors determine which clothing was best for them for a specific situation. The results were based on variables including location and time of year – hiking in Iceland in winter or travelling around Toronto in spring – and gender. Pilot results showed a 60 per cent click-through rate and 75 per cent total sales conversions.

Digital provides huge amounts of opportunities for businesses to flourish – and the hospitality sector must embrace these opportunities in order to survive and thrive. 

Roger Bannister, Business Development Director, Timico
Image source: Shutterstock/violetkaipa