Wednesday, March 12, 2014

Smartphones Forever Changing The Hospitality Industry

Written by: Gary Kinseth -Vice President

It's hard to believe the modern Smartphone is only 5 years old, and has already dramatically changed our world and how we do business. By the end of 2013, 57% of all Americans owned a Smartphone. By the end of 2014 it's estimated that over 85% will make the move to a Smartphone. And, why not? Smartphones "ROCK!" delivering information and services consumers want, when and where they want it. 
Smartphones have forever changed how we do business, and the changes are just getting started. In the hotel industry popular brands of course, are rushing to upgrade their systems and provide apps, changing forever the future of how guests interact with our hotels and services. Thus far, 71% of all Smartphone users have downloaded one or more travel apps. 

Many of the selections are made specifically for loyalty or rewards offers, however many are also downloading apps like Trip Advisor (65 million downloads to date) or Priceline. Consumers are looking for deals but also quality seeking recommendations from fellow travelers on Yelp, Trip Advisor, Travelocity, Priceline, Facebook and many others. In fact over 72% of consumers say they read online reviews, and 89% say they are influenced by a hotel reviews.
Smartphones have also dramatically changed the booking windows for hotels. As a young general manager I can recall looking out 2 weeks, and seeing that 40% of my incoming bookings were already on the books for the month. However, over the years, this window has continually narrowed as more people have transitioned to using online booking engines, and now to mobile booking platforms. In 2013, a full 32% of reservations were made via a Smartphone or tablet. 

This trend is expected to escalate to over 50% by the end of 2014, and over 95% by 2018! According to Priceline 70% of reservations are made for the same day and 60% are made within 20 miles of their destinations. All of this has narrowed the booking window for mobile reservations from 0 to 72 hours.
The integration of Smartphones has also changed how we market our hotels and restaurants. Consumers on average are researching hotels online by typically looking at 3 to 5 different sites and consuming up to 30 pages of content, including reviews. 

The utility consumers used to derive from yellowpages, travel guides and billboards have dramatically changed. Instead they utilize their Smartphones for research, bookings and navigation. Yellowpages are read by less than 2% of the population, travel guides have given way to apps and billboards need to be scrutinized as guest coming to our hotels are booking over mobile and are often utilizing gps navigation to find their way. 
All these changes require an intense focus on revenue management from the hotel manager, revenue managers and the brand. Kinseth Hospitality Companies remains focused on the future. From a revenue management and e-commerce perspective, our focus is on the guest experience, access of online information, good photography, and assuring each hotel is properly positioned on every relevant distribution channel.            
What's Next? In short order hotels, restaurants and other businesses will see dramatic and sweeping changes. Mobile Check-in and check-out was recently released by many brands and will become mainstream in the next 18 to 24 months. Mobile wallets will force businesses to upgrade the credit card processing. Mobile access to rooms will continue to become a feature and will replace electronic key cards over the next decade as hotels upgrade their systems. 

The front desk in many hotels will give way to auto kiosk, and smaller more efficient concierge or “socialierge” services will be available to guests both in person and via mobile platforms. At Kinseth Hospitality Companies we are looking forward to a ROCKING decade of change and innovation both for our guests, our hotels and restaurants. Are you Ready?
Kinseth Hospitality is a leading hotel management, development and ownership company. Kinseth has a proven track record of developing and operating award-winning hotels, restaurants and meeting facilities. Kinseth Hospitality is based in North Liberty, Iowa with offices in Clear Lake, IA and Council Bluffs Iowa. The company currently operates 81 hotels and 9 branded restaurants in 13 states.

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