Make the Case for a Room-as-a-Platform Initiative

An industry strategic foresight trends report

Gaming & Hospitality Research Center powered by Info-Tech

Analyst perspective

"The role of the hotel CIO has been reshaped. You’re being asked to deliver much more as your role transitions into a more front-end one. As a business partner and technology advisor, you are expected to be an expert on technology and how it will affect the business.

"Driven by demand, many technology trends have accelerated, and so have the CIO’s pain points. Faced with the challenges of the pandemic, meeting expectations of guests while keeping up with the change in consumer demands, and an increased workload in the IT department, IT needs to help their hotel adopt technologies while considering their long-term technical and business impacts.

"An in-room technology initiative is not a hotel’s top priority – but it should be. The hospitality industry must realize that in-room technology is key in the success of a guest experience and can accomplish initiatives that hoteliers are already seeking, such as guest loyalty, trust, and analytics. IT’s barrier to implementation is two-fold: prioritization and persuasion. What technology does the CIO prioritize, especially with limited funds and resources? And how does the CIO pitch this initiative to their stakeholders, who often disagree or are reluctant to invest in projects?

"Info-Tech’s approach focuses on an analyst’s investigation of strategic foresight, a methodology that helps IT and the business process what is happening in the external environment in a way that guides ideation and opportunity identification. As a methodology, strategic foresight flows from identifying signals to clustering the signals together to form trends and uncover what is driving them to determine which strategic initiatives are most likely to lead to success on an industry level."

Larry Fretz, Vice President, Gaming & Hospitality, Info-Tech Research Group

Monica Pagtalunan, Research Specialist, Gaming & Hospitality, Info-Tech Research Group

What are the current initiatives of a hotel CIO?

There is a lack of understanding of the advantages that in-room technology can bring. In fact, the right guestroom technology can enable all these initiatives.

94% - Driving guest loyalty

90% - Improving physical safety of guests and staff

90% - Reducing physical touchpoints at the property

80% - Enhancing privacy of guest and staff data

78% - Improving analytics

66% - Reducing cost of managing technology

60% - Increasing employee productivity

In-room technology is not a top priority for the hotel CIO

50% - Percentage of hotel CIOs that consider enhancing guestroom technology to be a current initiative

The CIO must consider guest and room expectations

Guestroom technology is not a top priority, but it should be.

50% - Percentage of hotel CIOs that consider enhancing guestroom technology to be a current initiative

In-room technology can provide what guests seek:

• Flexibility: Give guests the flexibility to do what they want when they want in the room.
• Control: When guests have control of the technology, they can create and personalize their own experience from their room. This technology would work seamlessly across devices and channels and provide communication between the guestroom and the rest of the hotel.
• Simplicity: Guests want technology that’s stress-free and easy to use.
• Service: In-room technology can affect the outer hotel experience, bringing more convenience and speed to service times.

Guest want control of their experience in the guestroom:

Guests’ biggest frustrations about hotel stays:

38% - Front desk is taking too long to complete requests

34% - Outdated technology in rooms

31% - Service delays from hotel staff

The labor shortage in the hospitality industry will be long-term

The right in-room technology can help

According to the Singapore Hotel Association, Swissôtel The Stamford Singapore saw productivity savings between 30% and 35% after installing electronic do not disturb signs and applicable software. (NBC News, 2021)

Currently, many hotel operations are labor intensive, time consuming, and ineffective. The adoption of in-room technology presents an opportunity to solve the labor shortage challenge by:

• Eliminating valueless processes and tasks.
• Driving operational efficiency.
• Operating more with fewer staff.

“38% of former hospitality workers report that they are not considering a hospitality job for their next position after COVID-19.” – Joblist’s US Job Market Q2 20211 (“Joblist Survey Finds…” Hospitality Technology, 2021)

“Labor has been an issue in this industry long before the pandemic. In 2019, our industry had 10 million jobs available and only 9 million were filled.” – Geoff Ballotti, President & CEO of Wyndham2(“Wyndham CEO Talks Labor…” Hospitality Technology, 2021)

Consider how your guestrooms stack up against competitors

The guestroom technology competitive landscape

Examine the following statistics that demonstrate what other hotel operators currently offer or plan to offer in the coming year so you don’t fall behind. Ask yourself, are your competitors making changes and investments you’re not making?

98% Free Wi-Fi

90% Contactless Payment

88% Smart TV/Streaming

84% Two-Way Messaging

76% Mobile Room Keys

56% Personal Devices

38% Voice-Controlled Devices

(“Lodging Technology Study 2021,” Hospitality Technology, 2021.)

Maturing IT can shift your organization from incremental improvement to business transformation

According to GHRC’s 2021 Benchmarking Report, IT innovation leadership, business applications, and client-facing technology are considered underrated services, with low importance and satisfaction metrics. Furthermore, from an IT staffing perspective, the heavy focus on infrastructure demonstrates that the industry has stalled on the IT Maturity Ladder as a trusted operator. By leveraging guestroom technology and placing more attention on applications and strategy, your hotel can demonstrate the value of IT and the satisfaction that can be provided. In the end, your IT department can establish credibility with business stakeholders and expand as a transformational or evolutionary innovator.

GHRC: Strategy, 14.2%; Applications, 38.2%; Infrastructure, 47.6%

All Segments: Strategy, 14.5%; Applications, 48.6%; Infrastructure, 36.95%

76% - GHRC Average Business Stakeholder Satisfaction

90%+ Satisfaction - Innovator *Aspirational

• Information and Technology as a Competitive Advantage

80% Satisfaction - Business Partner *Aspirational

• Effective Delivery of Strategic Business Projects

70% Satisfaction - Trusted Operator *GHRC Actual

• Enablement of Business Through Applications and Work Orders

60% Satisfaction - Firefighter

• Reliable Infrastructure and IT Service Desk

<60% Satisfaction - Unstable

• Inability to Consistently Deliver Basic Services

The obstacles of an in-room technology initiative: Prioritization

“We also may not achieve the benefits that we anticipate from any technology or system, and a failure to do so could result in higher than anticipated costs or could impair our operating results.” – Marriott 2020 Annual Report (Marriott International 2020)

In-room technology brings guest satisfaction and operational efficiency, but there are still barriers to implementation:

• The hotel must be selective in what projects to undertake, as COVID-19 has affected IT budgets.
• There is the concern that the technology won’t gain the expected return on investment (ROI).

In the end, investment in research and development is a key factor that influences an organization’s innovative potential. Moreover, the organization must invest in the right innovation that will create increasing value overtime.

IT Budget Barriers

Stakeholder Respondents

44% of hotel IT professionals anticipate decrease in spending

24% of IT budget goes to rolling out and implementing new solutions

68% of IT budget goes to maintaining existing solutions

Hotel IT Technology Concerns

32% - Inability to derive ROI for technology rollouts

63% - Unsure of the direction of technology investment and where to best allocate resources

(“Lodging Technology Study 2021,” Hospitality Technology, 2021)

The obstacles of an in-room technology initiative: Persuasion

“The nature of our responsibilities … will from time to time give rise to disagreements, which may include disagreements over the need for or payment for new product, service or systems initiatives, the timing and amount of capital investments …” – Marriott 2020 Annual Report (Marriott International, 2020)

In-room technology brings guest satisfaction and operational efficiency, but there are still barriers to implementation:

• Executives are reluctant to invest in digital technology.
• Depending on the type of hotel, there may be disagreements with owners of hotels that are managed or franchised.

The difficulty is justifying the initiative to gain support. As a CIO, operate IT as a business enabler by building business acumen and using terminology your stakeholders will understand, which in turn will help you gain trust for future innovations.

“The reluctance to invest in digital technology comes from the lack of understanding that we are serving technology obsessed travel consumers who demand a hotel technological experience to be equal or better to what they have at home.” – Max Starkov, Founder of HEBS Digital (Hotel Technology News, 2019)

“When you are managing other people’s hotels, you then have to convince others to invest behind that technology in order to create a brand standard across all hotels.” – Michael Hobson, Chief Marketing Officer of Mandarin Oriental Hotel Group (Delporte Hospitality, 2018)

Transform your in-room technology initiative into a room-as-a-platform strategy

Room-as-a-platform brings together two overarching trends (systems):

Digital Ecosystem

• Refers to the environment that businesses must compete within.
• A key component of this trend involves laying the foundation for upcoming high-value implementations.
• To accomplish this, your environment must allow for the connectivity of systems and processes so that your organization is in a better position to take advantage of projects in the coming years.

Connected Systems:

• Technology
• People

Connected Processes:

• Channels
• Strategy

Marketing Platform

• Refers to a system that manages both operational and customer experiences with the ultimate objective of driving engagement. It’s after your guests have arrived that the bulk of the marketing begins. Prospects are already halfway down the sales funnel by the time they pass through your doors. By enticing your guests with specific technology, you’re enhancing the guest experience while driving present and future sales.

Key Components of a Marketing Platform

• Organization
  • Track and maintain guest information in a database.
• Design
  • Design and coordinate customer experiences.
• Personalization
  • Drive relevancy in the content that the customer sees.
• Management
  • Support operational aspects of the experience.
• Optimization
  • Measure and maximize ROI across channels.
• Knowledge
  • Present guidance, best practices, and knowledge to improve services.

Room-as-a-Platform: Framework

An in-room technology strategy should embrace the elements of a digital ecosystem and a marketing platform, which in turn will create and enhance a seamless guest-centric experience.

Foundational Elements

Establishing a Room-As-A-Platform strategy will require the incorporation of these IT components.

• IoT
  • Brings connectivity
• AI
  • Identifies patterns
• Big Data
  • Amplifies analysis
• Advanced Wireless
  • Optimizes network
• Data and Integration
  • Breaks down data silos

Digital Ecosystem

The environment that businesses must compete within; brings connectivity and removes legacy items.

• Connected Systems
  • Technology
  • People
• Connected Processes
  • Strategy
  • Channels

Marketing Platform

A system that manages both operational and customer experiences with the ultimate objective of driving engagement through enhancing data, personalization, and efficiency.

• Personalize the message
• Learn best practices
• Orchestrate the guest experience
• Organize your database
• Optimize the ROI
• Manage the operations

Driving Trends

Trends that empower and drive a room-as-a-platform strategy

• Consumer Adaptive
  • Adjusting services to in-home experiences
• Contactless Service
  • In-room we trust
• Digital Sustainability
  • Designing with the future in mind
• WOW! Guest Experiences
  • Exceeding guest expectations

ROOM-AS-A-PLATFORM Business perspective

As hoteliers incorporate new technological innovations, they must remember that hospitality has always been and will always be about the people. A room-as-a-platform strategy begins with management’s needs but ends with the creation and enhancement of a customer-centric experience.

Potential Management Takeaways

• Brand differentiation
• Improved reputation
• Increased revenue

Potential Staff Takeaways

• Effective internal communication through streamlined operations
• Operational efficiency and productivity savings
• Employee confidence, satisfaction, and engagement

Potential Guest Takeaways

• Increased convenience and accessibility of information and services
• Expanded value
• Met or exceeded expectations for various consumer segments

Build IT integration for connectivity and value

• Integration breaks down data silos and connects data, applications, APIs, and devices across the hotel.
• Integration also adds value through the new functionalities provided by connecting different system elements: AI, Internet of Things (IoT), big data, and advanced wireless. These elements set the hotel up for future innovative projects.
• The Gaming and Hospitality industry benchmarking data illustrates the extreme structuring around infrastructure. Typically, integration ties into applications, and based on GHRC data, less time is spent here in comparison with other industries. Ensure that your hotel is spending more time in this area.
• The enablement of data and integration is the first step necessary to make the guestroom a “platform” because it provides a better understanding of guest preferences and the ability to act on them.

Leverage Info-Tech Integration Resources

Build an Application Integration Strategy

Build a Data Integration Strategy

Build Effective Enterprise Integration on the Back of Business Process

ROOM-AS-A-PLATFORM Foundational elements

Unlocking the potential of a room-as-a-platform strategy, which is enabled by data and integration, will require implementing the following elements:

ARTIFICIAL INTELLIGENCE

AI is the ability for machines to simulate intelligent human behavior. Dependent on both algorithms and data, AI can interpret information to identify patterns. Some of the ways in which hotels will use this technology include making recommendations for activities, restaurants, and the best time to book hotels. The goal is to behave in a similar way to a human.

INTERNET OF THINGS

IoT is a constellation of connected devices with embedded sensors providing real-time information to an application layer. IoT describes the enhanced connectivity we now experience with everyday devices and appliances that would not typically boast such capabilities. From personalized guest experiences to a reduced ecological footprint, there are many reasons why hotels would consider using IoT technology.

BIG DATA

Big data is rapidly increasing amounts of data generated by multiple sources in many formats. To gain actionable insights, the data must be analyzed. Hotels can capitalize on the information about guests to drive business decisions, make the guest experience memorable, and improve the working conditions for associates. Both IoT and AI depend on big data to function at optimal levels.

ADVANCED WIRELESS

Two connectivity methods gaining visibility are 5G and Wi-Fi 6. Room-as-a-platform technology requires a strong technology infrastructure. This will require hotels to provide free Wi-Fi to guests to further the hospitality experience. With guests continuously ranking free Wi-Fi as their top priority, it becomes even more important because of the implementation of advanced technologies.

ROOM-AS-A-PLATFORM Four driving trends

Info-Tech’s strategic foresight for guestroom technology flows from identifying technology signals to categorically clustering the signals together to form the following impactful trends:

Consumer Adaptive

Adjusting Services to In-Home Experiences

The typical consumer lifestyle has become digital, and guests are starting to expect that what they can get at home, they can and should get in a hotel.

Contactless Service

In-Room We Trust

Investing in guest trust initiatives has become more of a priority. The implementation of technologies under this trend will add to the concept of a “new normal.”

Digital Sustainability

Designing With the Future in Mind

Increased stakeholder concern, shift in consumer preferences, and extreme variability in weather patterns has led to the implementation of technologies in this trend.

Wow! Guest Experiences

Exceeding Guest Expectations

As guests become increasingly tech-savvy, hotels must consider the unexpected – emerging technology that replaces or remanufactures existing furniture.

Room-as-a-Platform: Four Driving Trends

These tech trends and their corresponding technologies can empower a Room-as-a-Platform strategy by embracing elements of a digital ecosystem and a marketing platform. Our Info-Tech Pulse scores can help hoteliers evaluate the trends against their priorities.

The INFO-TECH PULSE SCORE represents the weighted impact across two sets of criteria:

1. Trends Radar
2. Business Capability Map

The higher the pulse out of 100, the more available, applicable, and impactful the trend is to the industry.

Consumer Adaptive

Pulse Score: 69/100

Adjusting services to in-home experiences

1. Voice Assistants
2. In-Room Tablet
3. IPTV Display
4. Streaming Device
5. Wireless Charging Station

Contactless Service

Pulse Score: 71/100

In-room we trust

6. Electronic Do Not Disturb
7. Keyless Door Locks
8. Fitness Mirrors

Digital Sustainability

Pulse Score: 63/100

Designing with the future in mind

9. Lighting Control
10. Thermostat
11. Smart Curtains
12. Occupancy Sensors
13. Digital Showers
14. Low-Voltage PoE

Wow! Guest Experiences

Pulse Scoe:46/100

Exceeding guest expectations

15. Smart Mirror
16. Wine by the Glass
17. Smart Beds
18. Room Service Robots
19. Digital Art

The room-as-a-platform’s trends and technologies are not mutually exclusive

Technologies can fall in multiple buckets, which means that they can be more available, applicable, and impactful for the hotel than originally intended.

Note: Info-Tech Pulse scores do not reflect the mutual exclusivity of their trend’s technologies.

Understand the priorities of each stakeholder to gain support

Encompass the business, operational, and technical feasibility and impact into your rationale.

Owner/Franchise/Management Leaders

• Focused on understanding business imperatives of technology and seeking areas of opportunity that are deemed necessary or provide crucial impacts to the business holistically.

Head of Hotel Departments

• Desire to understand the importance of the technology specifically for their own departmental function and how it could potentially eliminate pain points and boost productivity.

IT Leadership and Department

• Focused on identifying technical requirements and considerations when adopting technology solutions with the business’s context at the top of mind.

Who will be impacted?

Where you should gain support for a solution and how it impacts the stakeholder

Owner/Franchise (Impacts)

Business Growth, Brand Impact, Revenue, Sustainability, Cost Savings

General Manager (Impacts)

Guest Value, Cost Savings, Labor & Productivity Savings

Engineering (Impacts)

Heat, Light & Power; Repairs & Maintenance; Productivity Savings

Housekeeping (Impacts)

Guest Value, Labor & Productivity Savings

Guest Services (Impacts)

Guest Value, Labor & Productivity Savings

Marketing (Impacts)

Guest Value, Brand Impact, Revenue

This legend appears throughout the trends report to demonstrate where your hotel should gain support for each respective trend.

Impacts

Does not impact

Use Info-Tech’s methodology to identify, prioritize, and gain support for a room-as-a-platform initiative

1. Identify: Trends Report Analysis

As a methodology, strategic foresight flows from identifying signals to clustering the signals together to form trends and uncover what is driving the trends to determine which strategic initiatives are most likely to lead to success on an industry level.

2. Prioritize: Technology Shortlisting

Further customize the scores to your hotel by tailoring the generalized weightings on an organization-specific level and determining the relevancy and timing to your hotel. By doing so, your hotel can determine which trend and technology to prioritize for your room-as-a-platform initiative.

3. Persuade: Minimum Viable Business Case

After establishing what trend and technology to prioritize, develop a minimum viable business case with the help of the trends report elements to make the case for stakeholders.

ROOM-AS-A-PLATFORM Guiding principles

#1 Don’t forget the basics of design

Functionality: Consider the infamous electrical outlet, always in the wrong part of the room away from where it’s needed most – a desk, mirror, or bed. In many cases, hotel room designs and technologies are poorly thought out. When leveraging room-as-a-platform technology, there needs to be a standard of functionality: Technology needs to be in the right place for the right time and easy for the guest to operate. For example, implement room controls by the bed rather than on a distant wall.

Branding: Your hotel should connect the guest experience with the brand by using your logo or through loyalty programs. But you need to ensure you’re not overrepresenting the brand, which can overcomplicate the encounter and lead to a messy, negative guest experience. When implementing technology, ensure you balance your brand logo with user experience (UX).

#2 Automation means personalization

The key to leveraging technology is not the implementation but how you strategize its use. We want to create convenience and flexibility for customers, but any industry can do that. What makes the hotel industry different is hospitality, and hospitality requires hyper-personalization. Ensure that your hotel is leveraging the meaningful data provided by the technology to offer a personal experience for a guest during all aspects of their stay. For example, it’s one thing to implement IPTV, lighting controls, and a voice assistant, but it’s another thing to use these technologies to develop a room arrival experience: favorite music playing, television turned on with the guest’s name appearing on the screen, and lighting to set the mood.

#3 IT/OT hand-off

For the hotel industry, the role of IT is to select and implement the solution. Once it’s implemented, the responsibility of the solution is mostly transferred to departments of the hotel such as Front Desk, Engineering, and Housekeeping. The concept of the IT/OT hand-off is that knowledge transfer needs to happen for the support staff. They need education so they understand how to fix technical issues and awareness that these solutions will be handed off as operational technology and will no longer be the IT department’s responsibility.