What model for tomorrow´s hotel industry: hotelkeepers without a hotel to keep?
This article has been written by Réda Berrehili, co-founder & CTO at Squarebreak and daphnipolitan.
Airbnb, apartment exchanges, host families, bed and breakfast… Accommodation means have already diversified for tourists looking for different experiences. These new ways not only attract a wider and wider public, but also cause difficulties to the classical hotel industry model.
An Airbnb operator´s job is limited to bringing 2 parties in contact to facilitate a transaction and that is it.
The pursuit of profit has taken over quality of service and the renter´s experience.
Levels of cleanliness, welcome, and service are absolutely not qualified. This therefore greatly contributes to people walking away from this type of services not only when it comes to providers (owners) but also customers (renters).
Hospitality cannot be improvised and constitutes a trade of its own. Initially, it seemed totally “scalable” and was not forecast to bring in a lot of profit. That was before the contribution of technology and process rationalisation.
A new trade is coming: franchised hotel chain agent.
Vacation rental management has been around for many years, but was generally a “side activity” or performed “under the counter”. This implied certain advantages (flexibility, financial gain…), but also quite a few drawbacks (illegal character, tax liabilities, renter´s protection, limited generated income…). Such activities have traditionally never been more than an additional revenue source for real-estate agencies or an occupation for retirees. There were several reasons for this, mainly because managing a vacation property is a seasonal job and requires 3 skills that are almost impossible to find in one single person: a business sense (looking for owners and potential renters, optimizing the availability of the property…), a sense of logistics (linen management, supplies, deliveries, etc…), and operational skills (welcoming patrons, cleaning services management, added services, …).
We are living in a rich era where innovation allows for centralization and automation of low value-added operations and the redistribution of high value-added services to human intermediates than can then focus on excellent operational management.
The human factor would not be completely taken out of the equation since it remains an important aspect in the hospitality business.
All in all, the objective is to integrate all the existing technology innovations into one single product, joining hotel business, tourism and service provide by one partner, namely the franchised hotel chain agent.
The first steps toward the hotel of the future
As experimentations and analogies with the hotel business increase, it is more and more obvious that a hotel linked to a robust software infrastructure defines what will be the hotel of tomorrow.
It is already clear that the change of strategy by the Accor Hotels group will shift the focus more and more onto real-estate exploitation rather than management.
This change of strategy will allow re-imagining hotel organization.
Tomorrow´s model is « On Demand ». We only spend on what we consume and, when we do so, we want it now.
The consumer is no longer passive to the offer, but will lose the emotional bond he shared with suppliers and will give more importance to 3 aspects:
- the availability of the need he is expressing;
- the quality of the service he is seeking;
- the price.
The last parameter directly impacts and drives the first 2, and that is expected since in yesterday´s hotel, quality was strongly linked to the human factor, which comes with a high price.
Classical hotel organization chart:
The classical hotel organization is rigid, slow, and very costly.
A first prototype for an autonomous and automated hotel is currently being
designed. It first and foremost centered around the reduction of the dependence on energy resources and network fluids, which can represent up to 8% of the operating costs of a hotel. In second place, it also rests on replacing human interaction with low value-added services. The human acts « On Demand » and on « scalable » needs with a high added-value cost.
Through this model, we can reach a point where we have the footprint and the keys to duplicate it to several parts of the world. All the more so as the profitability rate of this type of real-estate projects can be exceptional.
The autonomous automated hotel would therefore no longer be a classical resort but a futuristic neighborhood where streets replace hallways, houses replace rooms, and room service is provided by drones.
Such technologies are knocking on our doors and are primed to revolutionize the hotel business and the service industry.
