The state of customer experience in hospitality 2018

The state of customer experience in hospitality 2018

The state of customer experience in hospitality 2018

In the hospitality industry, where "experience is the product," the ability to deliver excellent customer experiences is the only path to overall business success. If you’re a leader at a hotel, casino, airline, restaurant, car rental agency or other hospitality company, you intuitively know what’s at stake.

What’s not so readily apparent is how guests and other hospitality customers are constantly changing their definition of what constitutes an excellent experience. Equally elusive is to know precisely what your company can do to ensure it changes fast enough to keep pace with changing customer expectations.

The proper strategy will inevitably involve how you treat your customers in the physical world as well as the digital world. Every successful hospitality company has a good understanding of how to deliver excellent customer service in the physical world. But each year, the digital world takes on more importance. And now the two are intertwined.

What do hospitality customers expect?

What consumers expect from hotels, casinos, airlines, restaurants, and other hospitality companies has changed at a fast pace. Each year guests and other hospitality customers want more personalized, higher quality experiences that can be procured more easily. But to meet these everincreasing demands, hospitality companies can’t focus solely on their own company or even hospitality industry overall. Instead, they have to study and understand how customer experiences are changing in business more generally. For most hospitality and travel consumers, their perception of what constitutes personalized and high-quality experience is defined by their experiences with brands outside of the industry. As noted in Deloitte’s 2017 travel and hospitality industry outlook, other than frequent business travels, most people only travel a few times per year. “Consequently, their exposure to travel brands is relatively limited,” the report says. “Everyday brands such as Amazon, Starbucks, and Seamless, however, showcase their innovation and services to their consumers often—sometimes daily. Many of these brands are leading on the customer experience front and setting the bar high for consumers’ brand expectations.”1 Here are some prevailing consumer expectations with direct impact on the Hospitality industry: Self-service—Consumers increasingly prefer self-service over getting help from a company representative. According to a 2017 customer service trend report by Forrester Research, “Customers of all ages are moving away from using the phone to using self-service—web and mobile self-service, communities, virtual agents, automated chat dialogs, or chatbots—as a first point of contact with a company.” Each digital self-service channel reported growth while phone volume reported a 12% decline.2 This helps explain the popularity of airline and hotel self-service check-in and other recent developments in the industry. Fast service—Consumers don’t want to wait. It’s a changing expectation driven in part by the proliferation of mobile devices in recent years, and the Internet in preceding years. 

Obstacles to delivering excellent customer experiences

Successful hospitality companies have made enormous progress in the past decade changing the experiences they deliver to customers in the both the physical and digital worlds. But each year there are new obstacles to delivering on customer expectations for self-service, fast service, intelligent service, consistent service across all channels, and an overall high value experience. The obstacles can be divided into three major categories: Internal operations—Front of the house (property management and guest management) and back of the house operations aren’t tied together well enough, so workflow is sometimes inefficient and glitches occur. These behind-thescenes problems directly spill over to your interactions with guests and other types of customers, adversely impacting their experiences. There also is an indirect impact on customer experience when internal operational inefficiency adversely impacts the bottom line and requires more financial resources that could better spent serving the needs of guests

Marketing operations—Hospitality companies often lack a way to seamlessly and intelligently interact with guests across all touch points. This includes not having a system that enables you to know at the time of interaction an individual guest’s preferences and what their current or recent experiences have been. In a recent report, Forrester Research quoted a chief digital and distribution officer of a global hospitality group, who said, “The two metrics that are the hardest to solve are starting on one device and visiting us on a second device within the same experience, so just trying to understand how people are interacting across devices. It’s very difficult to understand whether you visited us on multiple devices and track that as a unique item.”22 Technology foundation—Many hospitality companies lack multi-departmental software that ties all areas of the business together to foster efficiency in internal and marketing operations. Often there isn’t a way to collect, manage, and make accessible data about individual customers. This results in interactions with individual customers that aren’t delivered efficiently and intelligently across all touch points. There isn’t a complete customer view across all channels that can be used to better plan and execute marketing strategies and deliver optimal experiences—before they book, during their stay, and after they’ve left.

Online reviews matter—For hospitality customers using a travel booking site, 81% consider reviews to be important in their decision making and 49% of travel booking site users won’t book a room without first seeing a review.10 According to an article on CMO.com, 95% of leisure travelers read at least seven reviews before booking their holidays

There is a common theme across these obstacles: the need for better customer personalization. According to the Deloitte travel and hospitality industry report, “Most travel brands realize that making a traveler feel special and appreciated can go a long way. Ultimately, the goal is to leverage data to automate personalization and drive conversion but, so far, much is left to be desired in terms of the travel industry’s effort on the personalization front

The answer: Personalize at scale When marketers talk about personalization today, they mean doing 1:1 marketing at a mass scale. However, there are right and wrong ways of personalizing guests’ experiences. It isn’t about merely adding “Dear John” to an email blast. Instead, personalization is about providing guests with the right information and/or offer at the right time over their preferred channel. It’s about context, convenience, and taking the customer’s point of view. In hospitality, personalizing at scale means that personalization occurs with all guests, across all channels, and all of a brand’s properties. It’s a major focus for industry executives today. For example, attendees at a recent travel industry conference were asked what they thought would be the big game-changer in the travel industry. Data-driven personalization was ranked first by an overwhelming 78% of respondents. Other results paled by comparison: 14% for application programming interface (API)-led distribution partnerships, 5% for block chain technology, and 2% for conversational commerce.

Best practices for creating personalized experiences

To create personalization at scale, hospitality companies need an omni-channel marketing strategy. Deloitte’s 2017 industry report summarized the expectations of hospitality consumers and the stakes for companies in the industry. “Today’s hotel guests, for example, will define a brand by the quality of their experiences across a proliferation of touch points, including smartphones, desktops, wearable apps, over the phone, and on property. Brands, which make an effort to infuse elements of on demand, personalization, and authenticity into these channels will likely fare much better than brands which do not, generating more revenue by driving loyalty, positive reviews, social likes and shares, and word-of-mouth recommendations. Experience is now integral to core travel product offerings.

Implementing an omni-channel strategy is a massive undertaking that requires support from the top down. To truly be successful, a company needs to put the following elements into place

  • C-level executive support
  • Strong chief marketing officer (CMO) and chief information officer (CIO) partnership
  • Customer-centric company culture
  • Reorganization to incorporate digital throughout the business
  • Integrated customer data and marketing technology tools

 

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