cust engage
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A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O
FINDINGS ON HOW
YOUR COMPETIT ORS
ARE ENGAGING GUESTS
From mobile tools to social sites, hotel and restaurant execsreveal what is and isnt working
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WWW.HTMAGAZ INE.COM CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 HOSPITALITY TECHNOLOGY 3
Table of ContentsA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
TECHNOLOGY GROUP
www.edgellcommunications.com
PUBLISHER
Lenore OMeara
EDITORIAL
EDITOR-IN-CHIEFAbigail A. Lorden
[email protected] EDITORDorothy Creamer
STUDY AUTHORS
Jungsun Kim, PH.D.
William F. Harrah College of
Hotel Administration, UNLV
Daniel J. Connolly, PH.D.
University of Denver
SALES
ACCOUNT EXECUTIVELeah Segarra
ACCOUNT EXECUTIVEHope Corcoran
ASSISTANT TO PUBLISHERJen Johnson
ART/PRODUCTION
CREATIVE DIRECTORColette Magliaro
ART DIRECTORKelly A. OLeary
PRODUCTION MANAGERLynn S. Wilhelm
ONLINE MEDIA
VP, MEDIA INTEGRATIONRob Keenan
[email protected] OF LEAD GENERATION
& AUDIENCE DEVELOPMENTJason Ward
WEB DEVELOPMENT MANAGERScott Ernst
ON-LINE EVENT PRODUCERKaren Carvelli
MARKETING/EVENTS/CIRCULATION
DIRECTOR, EVENT PLANNINGPat Benkner
CIRCULATION MANAGERJeffrey Zabe
SUBCRIPTIONS978.671.0449REPRINTS: PARS Intl, 212.221.9595 x319
CORPORATE
CEO/CHAIRMAN Gabriele A. Edgell
PRESIDENT Gerald C. Ryerson
VICE PRESIDENTJohn Chiego
CORPORATE OFFICE
4 Middlebury Blvd. | Randolph NJ 07869
973.607.1300 FAX: 973.607.1395
FOUNDER DOUGLAS C. EDGELL 1951-1998
CONTENTS[INTRODUCTION]
4 | Customer Engagement Tech Goes MainstreamThe evolution of customer engagement technologies is leading to deeper and more meaningful
connections with guests, and hospitality operators are hoping -- ultimately to increased sales.
Last years rst ever Customer Engagement Technology Study, through a research partnership
with University of Nevada, Las Vegas and University of Denver, proved the importance of CETs
in the industry. This year, the study was repeated to learn how the segment has changed and
how CETs are contributing to guest loyalty, differentiation, competitive advantage and bottom
line. Insights were culled from execs who collectively oversee 81,748 restaurant units and
5,705 hotels worldwide across all market segments.
[HIGHLIGHTS]
6| Snapshot of Customer Engagement Tech in HospitalityThis infographic highlights several key ndings from the Customer Engagement Technology
Study. Insights range from what technologies rank highest in impacting business performance
and customer engagement to what percentage of restaurants and hotels will have mobile
websites by the year 2015.
[RESTAURANT REPORT]
8| Restaurants Sharpen Focus on CETs with ImpactFor hotels, mobile technology is dubbed the greatest priority among customer engagement tech-
nologies. Its the best suited technology to enhance customer engagement, and the most likely to
improve business performance. Opportunity hinges on creating integrated applications, custom -
ized incentives and rewards, and memorable experiences at every phase of the guest life cycle.
[LODGING REPORT]
16| Guest Devices are Re-Architecting the Hotel ExperienceAs todays hotel guests are more tethered to personal devices than ever, naturally, mobile tech -
nology is of top priority in the lodging industry. Not only is this impacting bandwidth needs, but
mobile technology is the highest ranking in terms of both customer engagement and improving
business performance. For the second year in a row, mobile technology was named the greatest
priority among customer engagement technologies. Its the best suited technology to enhance
customer engagement, and the most likely to improve business performance. Great opportunity
lies in mobile websites and mobile apps, however, the caveat is that hoteliers must ensure that
these technologies work well and perform the functions that guests want and expect.
Copyright 2013 Hospitality Technology. All rights reser ved. No part of this pub-
lication may be reproduced or transmitted in any form or by any means, elec-
tronic or mechanical, including photocopy, recording or information storage and
retrieval systems without permission in writing from the publishers. For article
reprints & e-prints, please contact PARS International at (212) 221-9595, Fax:
(212) 221-9195 or email: [email protected]. POSTMASTER: Please
send address changes to HOSPITALITY TECHNOLOGY, P.O. BOX 261, LOWELL, MA
01853. PRINTED IN THE U.S.A.
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4 HOSPITALIT Y TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGA ZINE.COM
IntroductionA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
Hospitality is about creating unique, memorable experiences
that impress and delight guests. Information technology (IT) has
become an enabler in delivering guest service throughout every
phase of the guest life cycle and is quickly becoming a key de -
terminant of guest satisfaction. Consequently, a new category of
technology is emerging called customer engagement technologies
(CETs). CETs can be dened as technologies and/or applications
which are utilized to create deeper, more meaningful connections
between a company and its customers to enhance the overall
quality of their experiences, drive customer loyalty, and ultimately
lead to increased sales and protability. Last year, we launched
the industrys rst-ever study on the use of CETs in the hospitality
industry. Because interest was so great, we repeated the study
this year to learn how things are changing. Many CETs are now
becoming mainstream and consuming a signicant portion of IT
budgets. More importantly, they are contributing to differentia-
tion, guest loyalty, competitive advantage, and the bottom line.
FOUR TRENDS FUEL THE GROWTH OF CETS:
1) CONSUMER TECHNOLOGIES The consumerization of IT contrib-
utes not only to guest expectations but also to the types of tech-
nology and content guests carry with them and use during their
experiences. The rise in BYOD (bring your own device) and BYOC
(bring your own content) creates challenges in offering sufcient
Internet bandwidth and power outlets to support the sophisticated
needs of todays and tomorrows guests.
2) SOCIAL Social media connects travelers throughout every
aspect of the guest life cycle, creating greater transparency and
more informed consumers having greater expectations.
3) MOBILE The ubiquitous nature of mobile technologies enables
travelers to be always connected to the Internet anywhere and ev-
erywhere. Seldom is a mobile device out of arms reach.
4) CONVERGENCE The convergence of consumer technologies,
social media, and mobility create new expectations and opportu -
nities to deliver guest services and to enhance guest experiences.
With social media apps integrated into every new mobile device,
most social media usage and Internet activity now occurs through
mobile devices. Travelers are at the epicenter of this convergence
trend; it epitomizes their lifestyles.
To assess the state of CETs, we surveyed a diverse mix of hotel and
restaurant executives (owners, managers, sales and marketing pro-
fessionals, and technology professionals from corporate, franchised,
professionally managed, and independent hotels and restaurants
across all restaurant and lodging industry segments) in April 2013 on
a broad range of CETs and then delved deeper to explore specic mo -
bile applications, social media networks, and interactive marketing
technologies. We inquired about current (2013) and planned (2015)
implementation rates, and compared them to 2012 use rates. Each
CETs effectiveness at enhancing customer engagement and busi-
ness performance was determined by asking respondents to express
their opinions using a ve-point Likert scale (from 1=strongly dis-
agree to 5=strongly agree). In total, we heard from 269 indus-
try executives who collectively oversee 81,748 restaurant units and
5,705 lodging properties (an estimated 1.5 million rooms) worldwide.
The results of our 2013 study follow; in all there are 143 nd -
ings, analyzed for practical signicance. We explored CETs im-
pact on both business performance and customer engagement.
By juxtaposing these, we were able to create directional compass-
es, which should serve as useful tools in setting future priorities
and developing IT budgets.
JUNGSUN (SUNNY) KIM, PH.D.
Assistant Professor,
William F. Harrah College
of Hotel Administration
University of Nevada, Las Vegas
DANIEL J. CONNOLLY, PH.D.
Associate Professor
Fritz Knoebel School
of Hospitality Management
University of Denver
ABIGAIL A. LORDEN
Editor-in-Chief
Hospitality Technology
CUSTOMER ENGAGEMENT TECH GOES MAINSTREAM
Annual research measures impact of social, mobile and more on hospitality
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of restaurantscurrently accept
MOBILE PAYMENT
Plan to by 2015.
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Restaurant ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
RESTAURANTS SHARPEN FOCUS ON CETSWITH IMPACTMobile websites & apps proving to be a smart investment
Technology is profoundly impacting the restaurant industry, caus-
ing disruptive innovation in nearly every facet of the business. Cus-
tomers routinely consult social media and consumer reviews prior
to selecting dining venues. They perform a number of activities
online, ranging from nding restaurants and making reservations, to
ordering food and buying merchandise, to searching for coupons and
checking in on social media sites to share their whereabouts with
friends. They then post their experiences, good and bad, to share
with the world. While dining, customers expect to connect their mo-
bile devices to free wireless Internet services (WiFi). Consequently,
restaurants must modify how they deliver service and how they meet
ever-growing customer expectations. These adaptions require in-
creased investment in technology and infrastructure, especially In-
ternet bandwidth. Like hotels, restaurants are quickly learning that
they can never have enough bandwidth. Technology advances also
require changes in operating procedures, restaurant design, and how
service delivery processes are architected.
MOBILE AND DIGITAL DEVICES
Restaurateurs are looking to prot from technology-savvy customers.
Our study revealed upticks in adoption for all CET categories in 2013
and continued growth based upon expressed priorities and IT invest-
ment plans (see Figure 1). Mobile websites, mobile apps, and digital
signage top the list of CET usage in the restaurant industry. Interest-
ingly, our 2012 study predicted a decline in kiosk usage due to the rise
of other technologies, namely tablets and smartphones, but instead
kiosk adoption jumped by nearly 10% and is expected to more than
double by 2015. Most of this growth is in the quick-service sector,
where the technology is contributing to increased average checks and
higher customer volumes.
Recognizing that mobile users will soon dominate the Web, res-
taurateurs are investing appreciably in mobile websites and mo-
bile apps in anticipation that prots and customer loyalty will fol -
low. As was the case last year, mobile websites continue to show
stronger penetration than mobile apps (53% versus 29%) and, as
seen in Figure 5, higher scores for contributions to both businessperformance (3.56 versus 3.4) and customer engagement (4.16
versus 4.01). Mobile websites likely outpace mobile apps due to
lower development and support costs, portability across different
platforms, synergies with existing websites, and challenges in mo-
tivating customers to download their apps.
While more respondents this year reported having implemented a
mobile solution, the numbers increased only slightly due to tight bud-
gets, but this will change. By 2015, 85% of all restaurants expect
to have a mobile web presence, and 70% plan to have a dedicated
mobile app; many will have both. That leaves 15% of the industry on
the sidelines, waiting to see how mobile will unfold. The time is now
to get engaged and build mobile competencies. Mobile is quickly be-
coming a competitive necessity; restaurants lacking mobile solutions
will be disadvantaged.
The most common functionality included in restaurant mobile apps
is depicted in Figure 2. The top ve functions are (1) access to menus,
(2) restaurant search with location-based/GPS integration, (3) access
to nutritional information (4) integration with customers social mediaaccounts, and (5) the ability to place food orders. Last year, the ability
to download coupons and access time-sensitive deals were among the
top ve functional features, but not so this yearperhaps because an
improved economy reduces the need for discounting and undocument-
ed correlations between discounting and customer loyalty.
Having mobile solutions, though, is not enough. Operators need
to ensure their mobile implementations truly add user value and
convenience (with minimal data entry and functionality optimized
to work on a variety of mobile devices having different capabilities
and varying screen sizes).
Digital signage implementations are also on the rise. We used cross-
Mobile
Website
Mobile App
Static Digital Signage
Mobile Payment
Nutritional Info on Digital Signage
Kiosks
Interactive Digital Signage
Tablets for Digital Menus
Tablets for Tableside Order ing
Tablets for Tableside Payment
Tableside Ordering, non Tablet
Tableside Payment, non Tablet
70%29%27%
56%29%26%
53%8%
36%8%4%
36%15%5%
35%10 %9%
25%5%1%
24%10 %1%
23%6%3%
19%8%4%
18%6%3%
2012 INSTALL BASE
0 25 50 75 100
53%46% 85%
2013 INSTALL BASE 2015 PROJECTED
Figure 1 Use Tracker: Customer Engagement Technologies
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tab analysis to identify the major users. Currently, quick-service restau-
rants account for the preponderance of all restaurant digital signage;
full-service family/casual restaurants follow at a distant second. Digital
signage can be an effective vehicle to display and promote menu items
through suggestive selling and item pairings, particularly in quick-ser-
vice environments, and offer an efcient, cost-effective way to update
menus and pricing across multiple units. Digital signage implementa-
tions are coming in two forms: the static variety (often used to display
menu information), and the interactive variety, which incorporates dy-
namic content such as touch screens. In 2012, 26% of our respon-
dents reported the use of static digital signage versus 9% who reported
usage of interactive digital signage (Figure 1). In 2013, these gures
increased slightly to 29% and 10% respectively. Over the next two
years, digital signage adoption should increase signicantly as technol-
ogy costs decline and as competitors continue to embrace this technol-
ogy. By 2015, 56% expect to adopt static digital signage, whereas 35%
will select interactive digital signage. Because more states require
restaurants to report nutritional information, many restaurants (36%
by 2015) are planning to use digital signage as a vehicle to report this
information in addition to reporting it on their websites.
Mobile payments have been slow to catch on but are expected to
increase dramatically in the years to come, given strong growth projec-
tions in general. Forrester predicts that the mobile payments market
will reach $90 billion in the United States alone by 2017, but implemen-
tation of a payment solution has yet to hit main stream. A mere 8% of
restaurants in our 2013 study have implemented a mobile payment
solution. Real growth is expected to occur by 2015, with an adoption
rate of nearly 53%an almost seven-fold increase.
Tableside ordering and payments via tablets or other technology
devices have experienced limited adoption. Interestingly and in an in-
dustry beset with security breaches, more than half of all restaurants
are passing over these technologies, especially given 1) the need to
improve credit card security to meet Payment Card Industry Data Se-
curity Standards (PCI DSS) compliance and 2) the widespread adop-
tion of tableside credit card authorization and payment technologies in
Canada and Europe. The use of tablets for digital menus and merchan-
dising also shows signs of slow adoption. While tablets are emerging in
some high-end restaurants and bars, particularly where there are large
menus and/or wine lists, only 5% of our respondents currently offer the
technology. Some traction is expected to occur two years out, with 25%planning to use tablets for their menus and wine lists by 2015. Con-
cerns over cost, theft, breakage, issues associated with point-of-sale
integration and/or other operational issues may be impeding adoption
of these CETs, along with a general resistance to change.
SOCIAL MEDIA AND INTERACTIVE MARKETING
One of the greatest shifts within the restaurant industry is the empha-
sis being placed on both digital and social marketing versus traditional
marketing methods. In fact, these are the next big competitive battle-
grounds. Almost daily, a restaurant company captures headlines for a
new initiative involving social media or interactive technologies in hopes
of capturing additional market share, driving revenues, and/or engen-
dering customer loyalty. The trend is currently lead by games and con-
tests in which customers are encouraged to participate in photo, video,
and blogging activities to compete for various prizes. Points are often
awarded for posts, and drinks, appetizers, and discounts are used to
reward customers for checking in via social media sites. Scavenger
hunts, daily deals, and special promotions provide additional examples
of how to engage customers, build followings, and drive business.
Between 2012 and 2013, use of interactive marketing tools slipped
in almost all categories of our study (see Figure 3) except for social
media, traditional loyalty programs, and quick response (QR) codes.
New investments are planned in all areas over the next two years. We
attribute the temporary declines to experimentation, time needed to
assess the results of various pilot tests, and shifting resources across
categories to test different tools. The industry is still learning aboutthese tools and how best to use them to generate business value.
By 2015, nearly all restaurants are expected to embrace social me-
dia: 89% currently engage with consumers via social networks and by
2015 well hit near full-market penetration at 97%. What will trail is
restaurants ability to integrate their social media initiatives with their
loyalty programs (currently at 7%, and projected to be 52% by 2015).
This is due to the costs involved, the technological complexity needed
to achieve integration, and the need to take incremental steps. Not
surprisingly, Facebook and Twitter are the social media sites of choice
because they are the most popular (1.11 billion Facebook users, 5.5
million Twitter users). As shown in Figure 4, most restaurants use Face-
Menus
Restaurant search w/location-based (GPS)
Nutritional information
Integration to customers social media accounts
Ordering food
Coupons
Restaurant search, non-GPS
Payment
Gift certificates/gift cards sales
Area information
Consumer reviews
Loyalty program access & signup
Games
Real-time feedback via customer survey
96
%
65%
52%
48%
43%
35%
30%
26%
26%
22%
35%
35%
22%
22%
Figure 2 Use Tracker: Restaurant Mobile App Features
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Restaurant ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
book (94%), and over three-quarters (77%) use Twitter. Yelp, YouTube,
and Foursquare round out the top ve social media sites used. While
LinkedIn is somewhat popular with a 37% response rate, we suspect
this service is used more to recruit new employees and connect with
suppliers than to generate new customers. Pinterest, while relatively
new, is growing rapidly among restaurateurs; usage increased to 28%
in 2013, up 11 percentage points from 2012. Because of the rate
of subscriber growth, many believe Pinterest shows great promise. A
number of early-adopter restaurateurs are positioning themselves to
cash in when Pinterests time comes.
Consumer review sites are also gaining in popularity and inuence.
Respondents reported signicant increases in actively using Yelp (up
10 percentage points), Urban Spoon (up 8 percentage points), and Tri-
pAdvisor (up 17 percentage points). Moreover, these services can be
goldmines for those who mine the data to gain important customer
feedback and insights and incorporate these into their continuous im-
provement process.
Location-based services such as Around Me and Poynt barely regis-
ter, with 3% and 2% of restaurants participating in these sites, respec -
tively. With an 12 percentage-point drop in location-based marketing
since last year, restaurants must determine how to turn this into an
effective tool, especially given consumer reliance on global position-
ing technology and maps when traveling. Daily deal sites like Groupon
and LivingSocial continue to make moderate gains despite frustrations
regarding the costs of these services, mixed results in their ability to
build customer loyalty for restaurants, and shifts away from discount-
ing; their popularity seems to be waning.
While we see growing interest in marketing through social media
and numerous innovations surfacing, it is premature to dene a clear
set of best practices as empirical results are not widely known at this
time. The jury is still out. Where there seems to be promise are appli-
cations that 1) are novel yet consistent with brand values, 2) attract a
critical mass of users, 3) engage users in multiple ways over long peri-
ods of time, 4) provide notable customer value, and 5) drive customer
visitation and purchase behavior. Our general advice is that restaura-
teurs should experiment with various social media tools based upon
how well their subscriber bases match targeted audiences and then
monitor their ability to produce results that justify the time and re -
sources invested.
GOING FOR VALUE
When it comes to IT usage in the restaurant industry, weve witnessed
slow adoption rates based upon a followership mentality, but just be -
cause a restaurant is using a particular CET doesnt necessarily meanthe strategy is adding value or worthy of copying. Therefore, we asked
respondents to rate their agreement, using a 5-point Likert scale, with
the following statements: this technology is effective at deepening
customer engagement, and this technology helps enhance restau-
rant performance (whereby 1=strongly disagree and 5=strongly
agree). We calculated the averages recorded for both engagement
and performance and placed them as intersecting midpoints to cre-
ate a four-quadrant Impact Compass. We then plotted each technol-
ogys value for performance and engagement as a single point on the
compass. (Figure 5 shows the impact of CETs and Figure 6 shows the
impact of Interactive Marketing Tools).
2012 INSTALL BASE 2013 INSTALL BASE 2015 PROJECTED
0 25 50 75 100
Location-based Marketing
27%16% 59%
QR Codes
33% 34% 55%
Rich Media on brand.com
37%35% 52%
Social Media & Loyalty Integration
11%7% 52%
Traditional
Loyalty Program
42% 47% 80%
Social
Media
77% 89% 97%
Daily Deals
29%27% 49%
Poynt
Around me
Tumblr
Flickr
LivingSocial
Groupon
Google Plus
Pinterest
TripAdvisor
Blogs
LinkedIn
Google Places
Urban Spoon
Foursquare
YouTube
Yelp
Twitter
Facebook78%
94%
65%
77%
43%
53%
42%
49%
36%
42%
31%
39%
27%
39%
30%
37%
32%
35%
16%
33%
17%
28%
14%
26%
14%
20%
11%
19%
12%
17%
5%
3%
1%
2%
9%
2012 USE RATES 2013 USE RATES
Figure 3 Use Tracker: Interactive Marketing Tools
Figure 4 Use Tracker: Social Media
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Restaurant ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
Given limited budgets and resources, these Impact Compass-
es can provide guidance on how and where to invest in order to
achieve optimal engagement and performance results. While it
is ideal to strive to maximize each scale so as to attain Top Per-
former status, it is important to recognize that 1) it can take time
to achieve this status; 2) it is wise to employ a portfolio strategy;
and 3) placement of a given CET on the chart can vary with time
due to the dynamic nature of business, technology, and consumer
trends. Value can be context- and mission-specic, and some
CETS might be needed simply to maintain competitive parity.
Our study revealed that mobile websites and mobile apps lead
the way when it comes to CET adoption. According to Figure 5,
these technologies are top performers in terms of engaging cus-
tomers (4.16 and 4.01 respectively) and contributing to the bottom
line (3.56 and 3.4 respectively). These are closely followed by dig-
ital signage, both static (performance=3.41, engagement=3.53)
and interactive (performance=3.49, engagement=3.64). Accord-
ingly, these are areas in which to invest and innovate; they offer
the greatest all-around potential.
Tableside payment technologies and tableside ordering via
tablets contribute positively to performance. They are good for
business, but fail to fully engage customers in meaningful ways
perhaps because servers rather than guests use these devices.
Because they contribute to the bottom line, they should not be
scrapped, but a key question to explore is if they can be deployed
differently to create better, more engaging customer experiences.
Conversely, nutritional information presented on digital signage is
rated high when it comes to customer engagement (3.63) but low
when it comes to impact on business performance (3.12). Be-
cause reporting nutritional information is a legal requirement in
LOW CUSTOMER ENGAGEMENT HIGH CUSTOMER ENGAGEMENT
LOW
BUSINESSIMPACT
HIGH
BUSINESSIMPACT
LOW CUSTOMER ENGAGEMENT HIGH CUSTOMER ENGAGEMENT
LOW
BUSINESSIMPACT
HIGH
BUSINESSIMPACT
2.8
2.8
MID POINT 3.42
MID
POINT
3.36
4
3.8
3.6
3.4
3.2
3.0
2.8
3.0 3.2 3.4 3.6 3.8 4.02.8
Kiosks
Nutritional info ondigital signage
Interactive Digital Signage
Static Digital SignageTableside payment,
not tablet
Tableside ordering,not tablet
Tablets as menus
Tablets for
tableside payment
Tablets fortableside ordering
Mobile payment
Mobile app
Mobile Website
TOP
PERFORMERS
LOW
PERFORMERS
GOOD
FOR
ENGA
GEMENT
GOOD
FOR
BUSINE
SS
Figure 5 Impact Compass: Customer Engagement Technologies
The Impact Compass (Figures 5 and 6) measures technology performance, on a 1-5 scale, in two categories: customer engagement (the horizontal axis) and busi-
ness performance (the vertical axis). Technologies that scored high in business performance but low in customer engagement are Good for Business (top left);
technologies with both high business performance and high customer engagement scores are the Top Performers (top right); technologies with high customer
engagement scores but low business performance scores are Good for Engagement (bottom right); and technologies that scored low in both engagement and
business performance are Low Performers.
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Lodging ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
GUEST DEVICES ARE RE-ARCHITECTING THE HOTEL EXPERIENCEMobile web is major player in driving business and customer wins
IT is signicantly altering the competitive nature of the lodging
industry, including what customers expect when they travel, how
guest services are delivered, and how hotels interact with their
guests. IT impacts every facet of the guest life cycle. Perhaps the
most sweeping changes and greatest area of focus is on guest-
room technologies to enhance the quality of ones stay. The con-
sumerization of IT represents opportunity for differentiation yet
and can also be a major threat. Recognizing that hotel rooms
must be equipped with the technologies to which guests have
grown accustomed in their homes and places of work, hoteliers
struggle to keep pace with the ever-changing needs and expecta-
tions of their guests and the technologies they bring. This puts
increased pressure on hotel budgets, technology infrastructure
(most notably, Internet bandwidth), and employee training to as-
sist guests with connecting and using their devices during their
stays. To succeed, hoteliers must empower guests through tech-
nology while ensuring that the technology adds to the experience
rather than detracts from it. While seemingly obvious, technol-
ogy is often reported to be one of the greatest contributors to
guest dissatisfaction.
CUSTOMER ENGAGEMENT TECHNOLOGIES
We surveyed a group of hoteliers regarding their current and
planned use of various CETs. The results are reported in Figure 7.
The mobile movement is driving CET application deployment and
utilization across all segments of the hotel industry, particularly
as hotels look to attract younger generations of travelers. Hotel
respondents reported a sizeable increase in mobile website adop-
tion but a slight decrease in mobile app usage. In 2013, 76% of
hoteliers reported having a mobile website versus 60% in 2012;
by comparison, mobile apps dropped slightly during this same pe -
riod from 43% in 2012 to 40% in 2013. Clearly, mobile websites
are the preferred mobile solution due to portability and ease of
implementation. That said, respondents indicated that they will
continue to invest in both mobile websites and mobile apps. By
2013, 91% of all hotels are expected to have a mobile website,and three-quarters are expected to have mobile apps. Mobile is
quickly becoming a necessary competency for all hotels; yet nearly
10% of all hotels are seemingly missing the boat.
In terms of mobile apps, the most common functionality is de-
picted in Figure 8. The ability to make room reservations leads
the way with a 72% response rate, indicating a strong empha-
sis on driving commerce and creating revenue. Property search
without GPS (50%), collecting real-time guest feedback (44%),
and local information or concierge-type functionality (41%) round
out the top app features. Just over one third of apps offer GPS-
based property search and loyalty account access (both at 38%),
and the ability to book restaurant and spa reservations (34%).
Integration with social media trailed at 25%, and surprisingly,
mobile check-in and check-out fell to near the bottom of the
functional priorities, coming in at 9%. We expect this to change
given the popularity of mobile check-in in the airline industry and
recent announcements by some large chains regarding new ini-
tiatives in these areas. In fact, more than half of all respondents
indicated plans to offer mobile check-in abilities by 2015 viasmartphones and/or tablets (Figure 7).
Mobile is denitely the wave of the future. To be successful,
hotels must re-architect and streamline their service delivery
processes. They must also master how to provide personalized
and customized service on small screens and across devices
(i.e., laptops, tablets, and smartphones) in a consistent, conve-
nient, and user-friendly manner. Unfortunately, many of todays
solutions are cumbersome, slow, and require too much data en-
try for travelers on the go.
Digital signage ranked third in terms of CET usage (behind mo -
bile websites and mobile apps). Static digital signage implemen-
MobileWebsite
Mobile App
Static Digital Signage
Check-in on Guests Mobile Phone
Interactive Digital Signage
Tablet/iPad at Concierge
Tablet/iPad for Check-in
Mobile Payment
Room Control Devices
Smartphones as room keys
Kiosks
Tablet/iPad In-Room Amenity
60% 76% 91%
43%40% 75%
48% 53% 66%
11% 58%6%
28% 29% 56%
20% 53%
50%9%6%
39%4%
17%16% 38%
38%8%
24%23% 33%
6% 8% 28%
20%
0 25 50 75 100
2012 INSTALL BASE 2013 INSTALL BASE 2015 PROJECTED
Figure 7 Use Tracker: Customer Engagement Technologies
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tations increased ve percentage points to 53% while interactive
digital signage remained relatively at at 29%. By 2015, digital
signage adoption rates are expected to grow considerably to 66%
for static digital signage and 56% for interactive digital signage.
Common features include event listings, weather and news feeds,
and maps. Interactive devices also include concierge-type func-
tionality and way-nding.
In our 2012 study, we predicted that kiosk usage would decline
and be replaced with other technologies, namely smartphones
and tablets, that guests would carry. In 2013, we report a very
slight decline but are projecting a modest increase by 2015. Ap-
parently, many hoteliers still see value in these devices for check-
in, check-out, and local information, but tablet technology is ex -
pected to grow at a much faster rate for these same services.
Tablets as an in-room amenity grew marginally to 8% in 2013,
up from 6% in 2012. By 2014, usage is expected to grow nearly
fourfold to 28% of all hotels. Luxury and boutique hotels lead the
way in providing in-room tablets, but because of the personalized
nature of these devices and the content loaded on them (i.e.,
reading materials, video, music, and games) and so long as trav-
elers expect to use these devices throughout all aspects of their
journeys (for example, in ight), we expect consumers will prefer
to bring their own devices rather than rely on hotels to provide
the technology for them. That said, consumers will expect to be
able to connect their devices wirelessly to a hotels television and
Internet services as well as to use the devices to control various
in-room features and to arrange for various in-stay services.
There is some evidence of mobile payment adoption, but this
still seems to be in the experimental stages and led by early adopt-
ers. The real growth will come in the next two years, as 39% of all
hotels seek to implement mobile payment solutions. We see a
similar trend with the use of smartphones as room keys. In 2012,
none of our respondents reported the usage of smartphones as
room keys. This year, 8% reported adoption, and by 2015, that g-
ure is expected to grow to 34% as more hoteliers seek to replace
and upgrade their current guestroom door locks.
SOCIAL MEDIA AND INTERACTIVE MARKETING
The hotel industry has been quick to embrace social media and
interactive marketing tools to attract the younger generation oftravelers, who are considered to be the primary growth vehicle for
increased market share. In fact, hotel social media and interac-
tive marketing adoption rates far outpace what we observed in the
restaurant industry.
Hotel marketing budgets are being redeployed to focus on new
media rather than traditional marketing channels. By far, social
media is the driving force. In 2012, 73% of hoteliers indicated
using social media as a marketing tool. Today, that gure is at
91% (Figure 9), outranking every other interactive marketing tool
we measured, including traditional loyalty programs. Hotels use
social media to create games and contests, to promote consumer-
to-consumer marketing, and to engage customers in on-going con-
versations. Many use social media to promote special benets
and promotional offers, and the more advanced companies (13%
of our respondents) integrate their social media and loyalty pro-
grams. Some companies have even gone so far as to incorporate
their booking engines into Facebook. Not surprisingly, Facebook
(98%) and TripAdvisor (95%) dominate hoteliers social media at-
tention (Figure 10). Twitter (81%) and LinkedIn (73%) follow at a
distant third and fourth respectively. Moving from only 17% ho-
tel adoption rates in 2012 to 44% in 2013, Pinterest showed the
biggest gain. Interestingly, Groupon showed a noticeable declinewhile LivingSocial experienced a modest increase.
Traditional loyalty programs continue in their popularity. In
2012, 70% of all respondents indicated having a guest loyalty pro-
gram (Figure 9). This gure grew to 78% in 2013 and is expected
to exceed 88% by 2015. Rich media on a brand.com website also
ranks high, particularly given the role brand.com websites play
in hotel bookings. Guests want to preview options and property
surroundings prior to making purchasing decisions. Hotels also
report greater interest than restaurants in the use of daily deals
and QR codes. Today, 36% of hoteliers reported using daily deals/
ash sales and 43% noted the use QR codes. Respondents sug-
Room reservations
Property search, non GPS
Real-time feedback via guest survey
Area information
Property search using GPS
Loyalty account access
Restaurant & spa reservations
Property maps
Integration to guests social media
Daily deals
Interactive way finding
Coupons
Mobile check-in & out
Schedule wake-up calls
Bill retrieval
Gift certificate/gift card purchase/ and reload
Specific room selection
72%
50%
44%
41%
38%
38%
34%
28%
25%
16%
13%
9%
9%
9%
6%
6%
6%
Figure 8 UseTracker: Hotel Mobile App Features
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Lodging ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
gested these numbers will grow to 57% and 64% respectively by
2015. Again, this is a very different picture than what restaurant
operators reported. Perhaps the cost of the purchase, the extent
of guest planning, and the length of time guests engage in the
purchase decision and in the actual experience itself contribute to
explaining the difference in patterns of adoption.
GOING FOR VALUE
As with the restaurant portion of this study, we asked hoteliers
to rate various technologies based upon two key categories:
their ability to engage customers and their impact on hotel per-
formance. Using a 5-point Likert scale, hoteliers were asked to
provide agreement levels with the following statements: this
technology is effective at deepening customer engagement,
and this technology helps enhance hotel performance (where
1=strongly disagree and 5=strongly agree). The midpoints
(average of responses given) were calculated for both catego-
ries, and are represented by two intersecting lines (customer en-
gagement, horizontal axis; and business performance, vertical
axis). Results for each technology were then plotted on the four-
quadrant Impact Compass (see Figures 11 and 12).
The resulting Impact Compasses provide directional tools and
guidance for how and where to invest in CETs and interactive
marketing tools, especially given constrained resources and the
need to capture the most overall value for the dollars and re-
sources expended.
In Figure 11, we charted the impact of various CETs on hotel
performance and customer engagement. Interestingly, all of the
CETS we measured fell squarely into our Top Performers or Low
Performers categories, but nothing in between. As we observed
in the restaurant portion of this study, mobile clearly ranked as
the top performer. Mobile websites scored 4.26 in customer en-
gagement and 4.27 in business performance, whereas mobile
apps scored 3.81 and 3.86 respectively. Also, interactive digital
signage scored high on both dimensions, but static digital sig-
nage scored lower on both. Although adoption rates for mobile
check-in were reported to be low (at 11%, as shown in Figure 7),
the impact of this capability on customer engagement and busi-
ness performance both ranked high. This observation reveals an
untapped opportunity, one that hoteliers plan to embrace based
upon what they reported in terms of their future plans and pri-
orities. Use of tablets for service delivery at the front desk and
concierge also show promise in delivering strong results and
customer engagement.Integrated room control devices also landed in the Top Perform-
ers category, but this technology is close to the midpoint line for
both engagement and business performance. Customers seem
to like the technology, but current implementation rates hover
around 16%. As more hotels implement energy management sys-
tems and automate the guestroom, well likely see an increase in
use rates (projected to be 38% by 2015), and increasingly higher
scores in terms of performance.
A number of CETs appeared in the low performer cell, including
kiosks, mobile payments, use of mobile devices as room keys, and
providing tablets as an in-room amenity. Interestingly, our respon-
Social Media
TraditionalLoyalty Program
Location-based Marketing
QR Codes
Rich Media
on brand.com
Social Media & Loyalty Integration
Daily Deals
73% 91% 94%
70% 78% 88%
44% 55% 79%
24% 43% 64%
34% 36% 57%
15% 19% 55%
10% 13% 43%
2012 INSTALL BASE 2013 INSTALL BASE 2015 PROJECTED
0 25 50 75 100
82%
98%
78%
95%
66%
81%
62%
73%
54%
64%
43%
68%
26%
38%
17%
44%
39%
43%
37%
43%
34%
48%
17%
23%
14%
25%
15%
21%
7%
2%
10%
20%
12%
2%
Facebook
TripAdvisor
Twitter
LinkedIn
YouTube
Yelp
Google Plus
Pinterest
Blogs
Foursquare
Google Places
Flickr
Urban Spoon
LivingSocial
Tumblr
Groupon
Around me
Poynt
2012 USE RATES 2013 USE RATES
Figure 10 Use Tracker: Social Media
Figure 9 Use Tracker: Interactive Marketing Tools
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20 HOSPITALITY TECHNOLOGY CUSTOMER ENGAGEMENT TECHNOLOGY STUDY 2013 WWW.HTMAGAZINE.COM
Lodging ReportA S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
dents indicated increased investment and long-term adoption in
each of these four technologies. Hoteliers may want to investigate
further and re-evaluate their implementation plans to see if they
can generate more productive results and to see if it makes sense
to continue investing in one or more of these areas. Of course,
implementation and results may vary by industry segment, type,
and location of hotel. Given that most guests own and carry one
or more mobile devices, it may not make sense for most hotels to
also provide in-room tablets, and it is probably more prudent to
look for ways to move kiosk functionality to guests own devices
to negate the need for future kiosk implementations. Regarding
mobile payments and the use of mobile devices as room keys, we
suspect that these scored low on both accounts because of their
relative infancy, but anticipate reporting noticeable improvements
in future studies. Certainly, these will be technologies to watch
carefully in the coming years.
Figure 12 maps engagement and performance for interactive
marketing tools. Once again, we see divergent results in two cat-
egories: top performers and low performers. Scoring highest are
traditional loyalty programs (4.42 for engagement, 4.26 for per -
formance). This is no surprise, given the competitive advantage
these programs provide and their longevity. It is widely known that
frequent traveler points drive customer behavior and loyalty. So-
cial media scored a strong second with an engagement score of
4.33 and a performance score of 4.19. Again, this is consistent
with our restaurant industry ndings and no surprise, given how
LOW CUSTOMER ENGAGEMENT HIGH CUSTOMER ENGAGEMENT
LOW
BUSINESSIMPACT
H
IGH
BUSINESSIMPACT
2.8
2.8
MID POINT 3.68
MID
POINT
3.62
4
2.8
2.8
4.2
4.0
3.8
3.6
3.4
3.2
3
3 3.2 3.4 3.6 3.8 4.0 4.2
Mobile website
Mobile Payment
Mobile App
Check-in onguests mobile device
Guests mobile phonesas room keys
Tablets as anin-room amenity
Tablets for check-in
Tablets at concierge
Static digital signage
Interactive digital signage
Integrated roomcontrol devices
Kiosks
TOP
PERFORMERS
LOW
PERFORMERS
GOOD
FOR
BUSINE
SS
GOOD
FOR
ENGA
GEMENT
The Impact Compass (Figures 11 and 12) measures technology performance, on a 1-5 scale, in two categories: customer engagement (the horizontal axis) and
business performance (the vertical axis). Technologies that scored high business performance but low in customer engagement are Good for Business (top left);
technologies with both high business performance and high customer engagement scores are the Top Performers (top right); technologies with high customer
engagement scores but low business performance scores are Good for Engagement (bottom right); and technologies that scored low in both engagement and
business performance are Low Performers.
Figure 11 Impact Compass: Customer Engagement Technologies
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HOSPITALITY TECHNOLOGY THANKS THE STUDY SPONSORS AND ACADEMIC PARTNERS
OF THE SECOND ANNUAL CUSTOMER ENGAGEMENT TECHNOLOGY STUDY. THEIR SUPPORT
HELPS TO MAKE THIS LANDMARK RESEARCH POSSIBLE.
STUDY SPONSORS
ACADEMIC PARTNERS
A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y