Dean Mozrall for RBJ: Use of Technology Becomes More Prominent in Hospitality Industry

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Dean Mozrall's Advancing Business column, as seen in the Rochester Business Journal on March 4, 2019

Use of technology becomes more prominent in hospitality industry

Hospitality-related industries are contributing more than 10 percent of the world’s GDP; tourism alone employs roughly one in 10 people globally. It’s big business—with huge opportunity for technology disruption. Restaurants, arguably the lowest tech segment, make up over 72 percent of the $799 billion travel industry revenues in the United States alone.

Service businesses are grappling with the best ways to use the latest technologies, including implementing information systems, robotics, internet of things (IoT), blockchain and voice-based assistants, as well as harnessing data to drive service using analytics. Technologies are being integrated to make services more effective and efficient—but, what makes service “better?”

Service businesses are finding ways to implement technologies that are not customer-facing, in areas such as ordering, cleaning, warehousing and inventory control. This strategy can allow them to expand the bandwidth of their front-end by dedicating more people to customer-facing positions. Hotels are implementing voice-based assistants, for room-service and other functions, that can enhance operational efficiencies as well as the guest experience.

As consumers, we are sometimes alienated by an impersonal approach, and we appreciate personal attention. Who doesn’t enjoy going out for dinner and receiving exceptional service? Who hasn’t struggled with getting through a self-checkout lane without the frustration of needing assistance? Wegmans, well-known for their service, has implemented self-checkout lanes in a very thoughtful and deliberate manner—while redundantly maintaining traditional checkout lanes.

Other food service companies, like Panera, are introducing touch screen menus while also keeping traditional order-taking service lines. Will these tasks be fully relegated to touch screen menus as we all become more accustomed to using ordering kiosks? Remember when we used to make an airline reservation with an agent? Over time, this function has been nearly eliminated, and we seem to prefer it. Statista indicates that as of 2017 more than 88 percent of Americans actually prefer to book their hotels online.

Determining the use and penetration of technology will be a key decision for businesses attempting to optimize the customer-service experience. Every business, based upon their associated customer base, must strategically decide when, where and how quickly to implement technology. These implementations could be significantly different in resorts versus healthcare facilities.

There is an increasing proportion of consumers, particularly in luxury hotels, who are ready to embrace these solutions. For example, customer interfaces in the “Augmented Luxury” hotels (high tech, high touch) are using both visible and invisible technologies. Ian Schrager’s latest concept, Public, incorporates technology and outsources housekeeping and telephone operations. Great emphasis is placed on aesthetics and redesigned customer-facing job descriptions to create a sense of luxury.

On the other hand, hotels in the “Tech” category (high tech, low touch) incorporate the greatest level of technology both in customer-facing and in back-office operations. There are now hotels in Japan that employ as many as 20 times more robots than people. The Alibaba Group’s new FlyZoo Hotel in China incorporates robots and face-scanning technology in support of fully automated check-in and room service. There are concerns about this use of advanced technology, but reports have shown that the Chinese public seems more comfortable with these technology integrations.

The willingness of the customer to be self-sufficient and interact with technology to meet their needs often requires a conscious effort by the organization to redefine the customer expectations of the service provided to them. Managing these expectations to enhance customer experiences and build brand loyalty is a critical part of strategic workforce development plans for the future of organizations. They will need managers that plan these integrations and understand how best to redeploy personnel to other functions.

A recent hospitality technology conference (HITEC) explored how technologies are converging and this industry is being disrupted in significant ways. Events systems enabled by real-time analytics will allow service providers to anticipate guests’ needs and serve them more effectively—but, this requires organizations to have strong data management infrastructures.

A large resort, or healthcare facility, could shorten room service delivery times by adding RFID technology to their service trolleys and trays, to allow for the identification of operational issues causing delays and focus improvements. This approach could also be applied to other areas, like housekeeping and maintenance. Automated systems and predictive models can be used to analyze data and send messages, such as sending guests instructions if an elevator breaks down while also requesting maintenance.

Artificial intelligence can leverage these infinite amounts of data to assist in personalizing the customer experience at hotels, food venues, healthcare facilities and travel websites—based on previous choices and interaction data—and this can also drive procurement based on predicting customer preferences. Integration with booking engines, loyalty program management, hotel concierge systems and room service systems is also starting to happen.

Seeing some of the recent security breaches, cybersecurity and the implementation of blockchain technology is also critical. Loyalty programs, with blockchain, can also facilitate integration, where we will be able to use our “points” for all different types of services, including food and gifts, earning points through all these services. Connecting dining, entertainment and leisure reservations systems, based on customer preferences, will be powerful.

Due to the rapidly changing nature of services and the incorporation of technology in many more service and hospitality management roles, the job of the hospitality and service professional is changing as well. Organizations are restructuring their operations systems, for example, and many hotel managers are predicting the demise of the traditional hotel reception desk. In addition to the development of more IT hospitality and service professionals that must
consider how best to integrate and use technology, workforce development will be critical. Hospitality and service organizations will not be able to use “grow your own” approaches—industry growth and employee development requirements are demanding companies compete for this high-tech talent.

As we look ahead, there is a growing need for hospitality and service-related professionals who are educated in hybrid business roles with technology at their core. In fact, service and hospitality is so crucial to the success of a business that RIT has made the timely decision to move service-related programs in Hospitality and Tourism, Service Leadership and Human Resources into Saunders College of Business starting next fall. The service opportunities are endless.

Jacqueline Mozrall is dean of Saunders College of Business at Rochester Institute of Technology.