In a podcast interview for EHL Hospitality Insights, EHL professors Achim Schmitt and Cindy Heo share their views on the hotel room of the future.

 

Here are excerpts of the interview:

How critical is technology in a hotel room in terms of attracting hotel guests?

Achim Schmitt: For a real estate provider who owns the hotel (property), it was in the past very beneficial to have a commoditized hotel room: a bed, a bathroom and a table, and that would be basically a nice hotel room that you could then apply to various contexts. For hotel operators, it was very easy to run, operate and clean those hotels because they didn’t need training because everything is going towards the standardization of the hotel room.

Today the industry transforms itself into a new direction due to market changes that are happening right now. We have more and more tech-savvy consumers, Generation Y is very demanding and due to their consumer habits very tech-savvy. And they want, when they stay in a hotel room, the same technological features they have at home or they even want to be surprised.

Whether every hotel room in the future needs to be tech-savvy and high technology, probably not because then there’s no diversity anymore in the market. However I would rather suggest that the hotel room and the technology in the hotel room should always support the strategic positioning of the hotel.

So whether or not you would like to have a high-touch experience and keep it in a luxury segment you should enrich it with technological components to a certain extent, but you need to find the right balance between technology and the high-touch, service experience in the future hotel room. Overall, the hotel room should always support the strategic positioning of the hotel itself. Whether the room should be always created and designed for the market, I think that’s not the right way to go in the future.

Cindy Heo: Technology will be the driving force for the future hotel room – that’s for sure. However something new or novel (in terms of) technology may not be right for the hotel. First of all they have to think about return on investment and also whether this technology can really enhance the customers’ experience. Second, whether it can improve operational efficiency. So hotels need to think whether it’s really the right technology for them. And as for simplicity, the hotel room may look simpler, but it doesn’t mean the hotel service will be simpler.

But hotels by and large are trying to introduce a ‘wow’ factor, right, especially at the high end? You really want to see the best of the best there. And presumably once we see virtual reality introduced on a mass scale, we will see elements like those seen in the video.

Cindy Heo: From the customer’s view, it may look simpler in terms of design but inside there will be more complicated technology. For example, artificial intelligence should be installed in the room connected to the voice control system. So they may have customization and personalization. But from the customer’s perspective, (where) they used to have a lot of remote controls, now many hotels control the rooms using mobile phones but even some hotels have started controlling the temperature and lighting using the voice.

Achim Schmitt: I’m a little bit conservative (regarding) virtual reality. You need to create a context to (how) virtual reality helps you to deliver an experience. When you go into a high luxury experience, it’s all about how you treat the guest and how you develop the experience for the guest throughout the touchpoints that the guest has during the hotel stay, even before and after. So whenever you can use virtual reality to enhance this experience of a hotel guest, then virtual reality/AI is well suited to support this. Whenever you over-engineer it and you may sacrifice the experience of the hotel guest, you need to scale back a bit and see whether it really makes sense to have all these features in the room. It’s a bit of a double-edged sword for me. You need to strike the right balance to support the customer experience and journey, and if we walk into a hotel room and don’t find the light switch anymore and don’t know how to turn the water on, then it has probably been over-engineered.

To go back to the YouTube video that EHL has done, is that way off in the future, the idea of touching a wall and you think you’re going to be lying next to Lake Geneva?

Achim Schmitt: I would say the use of artificial intelligence and virtual reality will definitely come. The video on our EHL platform pictured a city hotel where you wanted to create an escape for someone that wanted to have a relaxing environment and I think there you can use virtual reality heavily to support the strategic positioning and competitive advantage of a hotel in a certain market environment. But here there’s no single bullet that you can apply to any hotel out there. In Switzerland we have beautiful hotels. For instance, in Zermatt, where you have a nice view of the Matterhorn, I don’t think you need virtual reality that blocks the view of the Matterhorn. In that respect, virtual reality and the use of artificial intelligence always have to support the strategic alignment of the hotel room and always have to be supportive of the competitive advantage that you want to have in the local market.

But hotels are going to look at the bottom line with all this. In terms of the technology, they (will want to) see if it’s going to generate revenue, whether it’s going to improve the bottom line. Whether or not it helps in terms of differentiation is perhaps another issue, in terms of attracting customers. By and large the industry is quite incremental in the way it approaches things so we’re not going to see radical change anytime soon, right?

Cindy Heo: I think it will be pretty soon too, especially as there are some trials of robots, like the concierge or even some restaurants have started to use robots. So those technologies may not be seen by all customers but hotels are using technology to reduce costs and it could be viewed as something new to customers as well.

In Japan, there’s a hotel without any human touch. It’s all run by robots and assistants and there’s no human touch at all. It is in testing mode but I think the time may come much earlier. I’m not saying it’s ideal for hotels but we’re talking about the future: could it be very near to us?

Achim Schmitt: I think in the future we will certainly face a hotel environment which is enriched by artificial intelligence and virtual reality. The question is how fast we go and with which scope and magnitude. By 2020, the statistics say 50 per cent of millennials will be the hotel guests. Providing that 50 per cent with a high-technology, tech-savvy experience in every hotel environment will mean we would cut down on the other 50 per cent in the market. If I’m a consumer that has 30 years of experience (of staying in hotels) I need to slowly adapt to the use of artificial intelligence. If (the changes) are too radical, I would probably not be as attracted as I was to a certain hotel environment. Consumers always need to adapt and changing behaviors takes time. So in a radical way I would probably see this happening for certain hotel positionings that are new to the market and disruptors come into the market where we slowly start seeing what has been done and what can be done in the hotel environment. But in the future, established market players will slowly and carefully look at what works and what doesn’t work with their strategic positioning, and then smartly integrate the use of artificial intelligence technology and virtual reality into their overall hotel experience.

 

Dr Achim Schmitt is Associate Dean of Graduate Programs at EHL and is an Associate Professor of Strategy. He will also teach on the school’s new online MBA in Hospitality program.

Dr Cindy (Yoonjoung) Heo is an Assistant Professor in Revenue Management at EHL. She will also be teaching on the MBA in Hospitality program.

Related Links

Back to Top