Who Is The Elon Musk Of The Hotel Industry?
Hoteliers Need To Rethink Traditional Strategies And Offerings In New Post-COVID Era
Per the title of this article, who would it be? Coming out of the pandemic, the hotel industry is facing challenges on all fronts, and we need bold, new, disruptive innovations to lead us into the decade ahead. That’s why we should consider a character such as Elon Musk who continues to expand Tesla from a mere electric vehicle company into a battery, solar panel, rocket ship, satellite Internet, robotics and neuro-computation company. When you think about such bravado, how can you as an owner or operator truly shake things up?
We’re both big fans of Elon Musk’s business acumen. He is a man of galactic vision and the dogged gumption to make those ideas into reality despite any criticism. Moreover, he understands marketing and brand extension. But while it’s easy to associate such a larger-than-life personality with an intrepid technology company, hotel brands tend to be far more conservative in their approach and evolution.
Maybe it’s that as part of hotel management school, we don’t really learn about the history of hotels so that we have a good frame of reference. Who was the last true revolutionary actor in our industry?
Hotel Industry Innovators
Looking further back just over a century, it was Ellsworth M. Statler who introduced the original concept of the modern hotel, including individual guestroom baths, lights in closets and daily housekeeping. Fast forward to more contemporary times and could this mantle belong to Ian Schrager with his creation of the boutique luxury hotel some 20 years ago? Perhaps one of our industry’s finest minds, Schrager created an entire class of products, which have now been imitated by all of the top chains.
Plagiarism is the best form of flattery, after all. Before him, perhaps the next big industry icon was Isadore Sharp of Four Seasons fame who redefined the luxury property for the modern era. Or maybe the next true hotel leader is—gasp—Brian Chesky of Airbnb. Plagiarism and flattery being what they are, every hotel chain loathes this tech-born home sharing juggernaut, and yet every company is slowly dipping their toes in the home sharing market with short-term rental products.
What a history of hospitality should stress is the need for constant innovation, and indeed no event in the past century may have precipitated that more than the recent pandemic. As COVID-19 seemingly draws to a close, now is the time for sweeping changes to how we operate. Now is the time for hospitality’s version of Elon Musk to rise to the occasion and show us how to untangle this giant mess.
An Innovator’s Mindset
This starts by shifting how we think. Hoteliers all know that technology is vital, yet we aren’t curious enough as to how it can transform rather than simply enhance existing practices. It’s thus a matter of asking the right questions and keeping a curious, observant mindset.
As a straight-forward example, instead of asking from your tech vendors how technology can make your front office operations contactless, you might instead ask how software and digital kiosks can wholly replace the front desk. Lots of evidence is pointing to this operation as being unwanted by the average guest for any hotel outside of luxury resorts. What would the lobby look like and feel like if the front desk space was reoriented to be something else? What value-adds could you put in the front desk’s place to get guests excited about your brand?
These are the broad matters you should consider, and now is the perfect time to do so. What if the only contact guests want with staff is via their mobile devices or when a specific onsite service is requested? How do you engineer the entire on-property journey to be facilitated from a customer’s phone? What cutting-edge programs, like sleep-enhancement programs or DNA-based medical tourism, can your hotel engage with to generate unique awareness and a whole new set of customers?
This requires a profound rethink to housekeeping, front office, F&B, reservations, accounting and practically every other department where technology may impact SOPs and labor. The entire daisy chain of enterprise software can and should be further automated to increase productivity per employee so that your property can achieve better margins off of a leaner team.
Next, the entire concept of the hotel has to be redefined. Fundamentals of our business model need to be questioned: Why is standard check-out at 11 a.m. and check-in at 4 p.m.? Yes, this is based on well-established housekeeping shiftwork, but now we have advanced scheduling software to better accommodate guests arriving at all hours of the day and night. This may require you to think about how to turn a room quicker or reconfigure furniture that is difficult to clean or superfluous to the guest journey, like the alarm clock.
Then consider dynamic pricing models and compression events. We yield room rates, so why not yield F&B, spa, golf, poolside chairs and fitness times? A dinner reservation at 8 p.m. is technically more valuable than at 6 p.m., so shouldn’t customers pay a small surcharge for those timeslots that are in higher demand? Dynamic pricing can and should apply for all demand curve utilization. For older properties that are desperately in need of renovation, you might even consider conversions to extended stay, college dorms, elder care or rehabilitation facilities.
To this end, a mantra we often repeat to our owner and developer clients is, “The hotel market isn’t overbuilt; it’s under-demolished.”
The bottom line is that despite all the recent upgrades we’ve made in light of the Coronavirus and the fear of a deadly new disease in our midst, we are all still reacting to present conditions rather than boldly going in a new direction. There are still so many systemic challenges ahead for the hotel industry that we cannot simply assume that customers will eventually come back as if it’s 2019 again. Corporate and groups are all but forever changed, even in 2022 as confidence is restored. Maybe the pandemic can still be the wakeup call we need, but who will be our Elon Musk to show us the way?