Is hospitality an analogue industry in a digital age?
The annual Hostech Conference to be held on January 16th is a dedicated platform for members of the hospitality sector to address the impact, issues and innovations of technology in their industry. Traditionally, the perception has been that as a sector, hospitality has been reactionary as opposed to progressive in its willingness to incorporate technological developments. But with the advent of digitalised customer experiences such as Mobile POS, online booking systems and complete self-service automation has the sector changed its attitude? Or are a small number of businesses embracing the digital age screening the rest of the industry? The landscape of the hospitality sector is far too complex to be understood as a simple binary of progressive or reactionary; but with customer engagement and satisfaction driving the market so directly now, it is vital for businesses to understand what they are, aren’t and should be doing with regards to technology.
In 2016, the National Restaurant Association (NRA) in the US found that 32% of restaurant operators consider their operations to be lagging when it comes to technological use. If we consider the traditional restaurant or pub experience, automation and digitalisation would appear somewhat unnatural and an encumbrance to the sociability of the industry. The divided opinion on Wetherspoon’s Order & Pay app is testament to how the hospitality sector remains committed to trying to offer the optimal customer service. Several publicans regard this innovation as the beginning of the end of the business, as people make pubs and the human contact is an integral part of the practice. However, Wetherspoons successfully trialled their app in selected sites and were convinced to take it nationwide, describing it as a big hit with their customers. The app currently holds a 4.5 star rating on the Apple store. Whilst not eliminating the human contact, the process is streamlined and reduces it significantly.
Several bloggers and writers have argued that the hospitality sector continues to overvalue property and brand loyalty in an environment where customer retention is becoming more challenging with price comparison platforms and review sites such as TripAdvisor enabling greater customer choice and control. Lowry argued that ‘a lack of understanding, a regressive view of technology, an occasional arrogance and a traditional point of view is why hospitality is often lagging behind’. Digital marketing metrics on customer satisfaction continue to propagate quantifiable data to demonstrate success but with hospitality being by its very nature an individual, subjective experience is such information reflective?
If we return to the NRA’s 2016 study, they found that 53% of restaurant operators would implement a predictive ordering service for their site if the technology was available. This headline statistic demonstrates a willingness by the hospitality industry to incorporate digitalisation into their operations. The issue therefore appears not to be a sectoral cultural reluctance to embrace technology, but rather the technology not being either available, user-friendly or cost effective enough to be utilised by the industry productively. The answer, undoubtedly, lies somewhere in the middle with each hotel, restaurant or pub representing an individual case with a specific clientele whose disposition towards a more digitalised experience will vary.
As a sector wide phenomena, technological innovations and digital developments are increasing rapidly. This is evident not just through the apps, e-tables or predictive ordering in individual or franchised restaurants, hotels and bars. The percolation of technology across the hospitality industry cannot be overstated. From laundry services to targeted programmatic advertising to uniform supply every aspect of the sector is being revolutionised. Take our own Tibard Cloud Stores. In order to streamline the uniform management service we developed an industry leading solution to maximise efficiency and simplify the entire process meaning all your uniform needs are simply a few clicks away. The benefits this has had on our customer service is immeasurable. To have your logo automated to any clothing item you order ensures brand continuity and allowing all your clothing supply with pre-arranged pricing to be on one interface saves hours of time for busy staff. The fact that more and more of our customers want their own Cloud Stores setting up and new customers are enquiring about the process once again illustrates how the hospitality industry is willing to incorporate the digital age into its day to day operations.
New companies are setting up to provide the sector: information, products and software to facilitate this switch from analogue to digital. It can be stated with some degree of confidence that the digitalisation of the hospitality industry is occurring and we are currently at a relatively early stage. From just 5% of restaurants in Ireland in 2014 using any form of mobile technology to 34% of bookings made in 2015 in the UK being made on smart phones the landscape is changing rapidly and irreversibly. It is not just the use of mobile technology which illustrates the growing digitalisation of the hospitality industry, the rising availability of online bookings also shows how traditional aspects of the sector are changing. The long standing ‘phone and book’ is being supplanted by various apps or websites which enable instant, 24 hour a day restaurant or hotel reservations. The beneficial impacts of this innovation are mutual. The customer has a more streamlined experience which enables them to communicate with sites at any time, whilst the restaurant or hotel in question receives more available staff as they are no longer tied to a phone, an increase in revenue, instant quantifiable feedback and a decrease in the number of infamous ‘no-shows’. Such technological developments are rapidly becoming a mandatory facet of the whole experience.
Hospitality will always retain an analogue element within its operations. It is an industry fundamentally underpinned by people with sociability and individual experience being some of its key driving factors. However, like most sectors of the economy, it is embracing and adapting to the digital age. What is vital for individual businesses across the scale spectrum is to incorporate new innovations where applicable that may benefit their current and future clientele. If restaurants, hotels and pubs are reluctant to do so, they will no longer be able to rely on customer loyalty to survive. Hospitality has always been an advocate in putting customer needs first, but it must understand that with the advent of digitalisation, these same customer’s needs are changing and thus they must accommodate this culture shift in order to thrive in an increasingly technologically savvy and digitally dependent world.