Bitter roots, sweet fruit — the current state of marketing automation in hospitality | PhocusWire

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Bitter roots, sweet fruit — the current state of marketing automation in hospitality | PhocusWire

As personalized, one-to-one guest communication becomes the standard in our industry, pretending to stay in business without some level of marketing automation (MA) is, at best, entrepreneurial myopia.

There are undeniable advantages in implementing MA in hotels: better guest segmentation, man-hour optimization, workforce allocation and business scalability, just to name a few.

Thanks to increasingly accessible technologies and infrastructures, moreover, even the smallest bed and breakfast can choose whether and what to automate.

Autoresponders, communication automation, database segmentation and upselling tools: These systems are no longer offered exclusively by massive (and expensive) all-in-one monolithic systems, but by lean, agile and affordable micro-service startups as well.

But what is, exactly, the current state of MA in hospitality?

This is the condensed version of a paper first published here, for which we interviewed 50 authoritative voices in the industry to find out — and what we discovered is not very comforting.

The real cost of non-investment

Although the concept of automation is strongly implemented throughout other industries, it is still relatively young in hospitality, with hotels struggling to figure out all the opportunities it can offer.

That being said, according to all those interviewed, the main reasons for this resistance seem to be merely economic.

European hotels (which, don’t forget, are usually family-run, independent or part of micro-chains), especially, tend to be more resilient to MA adoption, because of the initial economic investment needed. While change is certainly worthwhile in the long run, it’s a daunting prospect for many.

A further reason seems to be cultural: Today’s guests expect a frictionless, tailor-made experience, and satisfying their needs should be at the heart of any marketing strategy.

However, most hoteliers don’t see customization as a priority and MA software is still largely perceived as something superfluous, indistinguishable from property management systems or channel managers.

On the one hand, thanks to affordable, modular cloud-based technologies, hoteliers can now implement virtually whatever they want without the need to remodel their entire companies, but, on the other, these same hoteliers suffer from severe cognitive bias.

Often, past traumatic experiences with software implementation make them look at the process with fear, overestimating the probability of something going horribly wrong (loss of data, staff retraining, etc.) rather than looking with excitement at the improvements the new technology will bring.

Software suppliers have their ration of challenges, as well: While they play an important role in raising awareness of the benefits of marketing automation, they face a difficult task getting this message across if they’re seen as just selling their own products.

The final reason for this adoption resistance relies in our innate skepticism toward machines: If MA gives the ability to replace virtually all the processes where a human being is not strictly necessary, in fact, no real automation will be reachable until hoteliers decide to hand over some tasks from human beings to machines.

Over the years, I’ve heard dozens of hotels afraid to lose their “human touch,” but it’s worth remembering that, according to a recent Gallup poll, more than 20 million United States employees (humans, of course) have a negative attitude toward work, and are responsible for an annual loss in productivity of $300 billion.

Moreover, we (humans) are creatures of habits, and it is not unusual for hotel staff to be reluctant to software change too.

As one interviewee pointed out: “Receptionists become so accustomed to having a function at the top right of the screen for the last 20 years that, if moved, they lost their minds.”

It is crucial to realize, therefore, that traditional, human customer service and automation complement each other, rather than compete against each other.

Online travel agencies and the integration problem

OTAs recognized the value of customer data early on and have followed a test-and-learn process to improve their MA systems.

In this scenario, it is unlikely that a small chain or a group of independent hotels will be ever able to compete with such personalized guest experience, especially when paralyzed by this general level of resilience and inertia.

Yet, another possible interpretation for this dichotomy is intrinsic in the different business models of hotels and OTAs: Business travelers aside, in fact, travelers book a hotel on average two to three times a year, and usually in different locations.

OTAs and large chains have the advantage of being able to offer accommodation on multiple locations, and automation makes their model extremely scalable, something that independents properties cannot offer.

However, to a certain extent, competition with OTAs is still possible: Hotels store a lot of useful details and data about their guests and have the advantage of managing directly the in-house guest experience, a realm OTAs cannot access (with the exception of brands such as Ctrip, which recently made its move into hotel management with the launch of the Rezen Hotels Group brand).

The problem is that, more often than not, precious data is stored in different silos and is, therefore, hard to access and use for automation purposes.

Even hoteliers willing to innovate, in fact, are often bound by multiyear contracts with archaic, legacy systems. On the bright side, as new players get bigger and gain market share, on-premise software will be forced to adapt.

Last year I wrote an extensive piece on the PMS integration problem, which raised remarkable controversies.

When it comes to MA, the feeling of helplessness is very similar: Without standard, shared languages, open APIs and predefined protocols for cross-software integration, in fact, no effective automation will ever be possible in hospitality, especially with legacy software, where integrations remain expensive, slow and complex processes.

Privacy and data entry

To perform at its best, MA needs a very large amount of guests data, and this could be challenging in a historical moment in which privacy (or the illusion of it) has become a real obsession.

Customer fears of having their information online is still very much felt, even though today digital security has greatly improved, reaching the lowest risk point of the entire history of computer science.

That said, especially in Europe, the introduction of GDPR has undeniably added an additional level of complexity to effective automation and, equally crucial, is the problem of human error during data entry: If the information entered into the systems is incomplete, inaccurate or inconsistent, in fact, it becomes useless for automation purposes. Or, even worse, dangerous, as hoteliers would end up making assumptions that have no basis.

Conclusions: It can be easier

Concluding this piece was more difficult than expected. With so many different industry opinions, any additional comment on my side would be redundant, so I decided to end the article with the words of Bas Lemmens, co-founder of Booking.com and currently CEO of Meetings.com, which perfectly sums up the issue: “The major challenge is to educate the hotels and explain to them that processes can be made easier.”

And educating hoteliers is our duty, because, as Aristotle wisely said more than 2,000 years ago: “The roots of education are bitter, but the fruit is sweet.”

Originally published at https://www.phocuswire.com.

Written by

Digital Übermensch | Renaissance Futurist | Artificial Bodhisattva | Founder @Travel Singularity | 20Y+ EXP Points in the Travel Industry

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