Hotels in Thailand agree technology is key but 1 in 3 may suffer with digital strategies not related to business plans
The first Thailand hotel industry report by Grant Thornton in Thailand indicates 89% see technology and digital strategies as important, whilst almost 2 of 3 have a digital strategy linked to the overall business plan. Although 91% have confidence in their IT security and privacy, nearly half agree that it is a big concern and hampers further investment. There is also reluctance due to whether or not a fair RoI can be achieved and how staff capabilities will measure up to the new technology. This could mean that hotels need to invest more in their resources or risk missing out on prime growth opportunities. In addition to this, digital strategies and business plans should be aligned in order to support growth.
Andrew McBean, Partner at Grant Thornton and expert in technology, media and telecommunications, said, "The power of technology is phenomenal. There are many new trends available for us to consider, especially in social media. Hotels need to make sure their social media and digital strategy are strongly linked with their business strategy. They need to fully integrate their digital strategy and technological improvements into their overall strategic plan. And hotels need to invest effectively in technology in order to not only attract more customers but to personalise guest experiences."
Debrah Pascoe, Senior Vice President of Commercial at Onyx Hospitality Group, added, "Technology enables people to connect and share their experiences and it's a great tool to create inspiration. However, technology changes rapidly. It used to be that just having a website was enough, but OTAs are a big contributor of online business. Onyx is continuously evolving their digital strategy in order to engage customers, expand our reach to new and untapped markets, and showcase our product in an engaging and compelling manner. We also use it to personalise our service and inspire repeat business. The use of technology as a business behaviour continues to develop and it's important to Onyx to explore new trends and respond to evolving needs in order to align our strategy to these needs."
Results also show that investment in technology and digital strategy for budgets up to the end of 2016 is still growing among most Thailand properties. 73% are investing more in 2016 than they did in 2015. 56% have their own resource to manage technology and digital strategy, and 35% use both in-house/HQ staff and outsourced vendors. Only 10% were not confident in their digital strategy and these hotels were not part of global chains.
Many were worried about achieving a fair return on their technology investment, with 2 in 3 sharing this opinion. Other concerns included staff having the skills to utilise the technology being introduced. 51% voiced this as a concern with another 48% worried about guest privacy and confidentiality. A mix of slow response times for investment from owners, as well as a fear that the chosen technology would become outdated or more expensive once implemented were of concern, but time is of the essence and those who don't invest wisely and with some haste may lose opportunities.
Michael Marshall, Chief Commercial Officer at Minor Hotel Group, commented, "If used correctly social media will drive revenue. It has also become a big search engine so hotels need to ensure they are maximising all of these platforms. It's a very easy tool to use and it's very cost effective, which can be a big concern when digital strategies are being considered. New technologies are appearing every day, just look at Airbnb and how quickly that grew and continues to grow. Voice recognition is also becoming a more valuable tool. We need to be working with all this new technology rather than ignoring it."
The Tourism Authority of Thailand (TAT) is aiming for 12% growth in tourism revenue, bringing it to 2.89 trillion baht in 2017. This is in part due to the economic recovery but also the effective cooperation among tourism-related agencies and private operators. Hoteliers who can deliver great guest experiences by balancing technology and human touch should see a very positive ROI.
Added value to improve on guest retention should be as much a part of the digital offering as the opportunity to increase sales within the property. The modern guest will likely leverage technology to accomplish things that don't require interaction with staff or require them to stand in a line. The challenge will be retaining the personal touch with guests, and developing a more meaningful relationship, whilst enabling them to stay connected with the hotel during their stay and use technology to make their lives easier.
Aline Massart, Regional Director of Digital Marketing for Accor Hotels, commented, "Hotels started out creating a product and brand but sites like Airbnb allow people to experience a dream by playing to their emotions. Hoteliers need to shift from the product and brand thought process to be more about the customer concept and be at each step of the customer journey. Only 20% of people will mention the hotel name on social media but by using digital tools, such as Local Measure, to tap into that other 80%, hoteliers can create emotion and personalise a customers stay making them feel valued and recognised."
Andrew concluded, "Hotels need to fully integrate their digital strategy and technological improvements into their overall strategic plan. We all have a lot of information about our customers now but the key is having the technology to support the use of that information."
"Privacy and cyber security is another big issue hotelier need to keep at the forefront of their minds when they make decisions to be part of the digital world. As this is a critical issue and important part for their digital strategy, the investment cost to ensure all parties have confidence is very high, but there really is no other choice. However, outsourcing should be considered if it reduces costs and improves efficiencies so that hotels can focus on their core-business and to help save money for future investments."
Andrew McBean, Partner at Grant Thornton and expert in technology, media and telecommunications, said, "The power of technology is phenomenal. There are many new trends available for us to consider, especially in social media. Hotels need to make sure their social media and digital strategy are strongly linked with their business strategy. They need to fully integrate their digital strategy and technological improvements into their overall strategic plan. And hotels need to invest effectively in technology in order to not only attract more customers but to personalise guest experiences."
Debrah Pascoe, Senior Vice President of Commercial at Onyx Hospitality Group, added, "Technology enables people to connect and share their experiences and it's a great tool to create inspiration. However, technology changes rapidly. It used to be that just having a website was enough, but OTAs are a big contributor of online business. Onyx is continuously evolving their digital strategy in order to engage customers, expand our reach to new and untapped markets, and showcase our product in an engaging and compelling manner. We also use it to personalise our service and inspire repeat business. The use of technology as a business behaviour continues to develop and it's important to Onyx to explore new trends and respond to evolving needs in order to align our strategy to these needs."
Results also show that investment in technology and digital strategy for budgets up to the end of 2016 is still growing among most Thailand properties. 73% are investing more in 2016 than they did in 2015. 56% have their own resource to manage technology and digital strategy, and 35% use both in-house/HQ staff and outsourced vendors. Only 10% were not confident in their digital strategy and these hotels were not part of global chains.
Many were worried about achieving a fair return on their technology investment, with 2 in 3 sharing this opinion. Other concerns included staff having the skills to utilise the technology being introduced. 51% voiced this as a concern with another 48% worried about guest privacy and confidentiality. A mix of slow response times for investment from owners, as well as a fear that the chosen technology would become outdated or more expensive once implemented were of concern, but time is of the essence and those who don't invest wisely and with some haste may lose opportunities.
Michael Marshall, Chief Commercial Officer at Minor Hotel Group, commented, "If used correctly social media will drive revenue. It has also become a big search engine so hotels need to ensure they are maximising all of these platforms. It's a very easy tool to use and it's very cost effective, which can be a big concern when digital strategies are being considered. New technologies are appearing every day, just look at Airbnb and how quickly that grew and continues to grow. Voice recognition is also becoming a more valuable tool. We need to be working with all this new technology rather than ignoring it."
The Tourism Authority of Thailand (TAT) is aiming for 12% growth in tourism revenue, bringing it to 2.89 trillion baht in 2017. This is in part due to the economic recovery but also the effective cooperation among tourism-related agencies and private operators. Hoteliers who can deliver great guest experiences by balancing technology and human touch should see a very positive ROI.
Added value to improve on guest retention should be as much a part of the digital offering as the opportunity to increase sales within the property. The modern guest will likely leverage technology to accomplish things that don't require interaction with staff or require them to stand in a line. The challenge will be retaining the personal touch with guests, and developing a more meaningful relationship, whilst enabling them to stay connected with the hotel during their stay and use technology to make their lives easier.
Aline Massart, Regional Director of Digital Marketing for Accor Hotels, commented, "Hotels started out creating a product and brand but sites like Airbnb allow people to experience a dream by playing to their emotions. Hoteliers need to shift from the product and brand thought process to be more about the customer concept and be at each step of the customer journey. Only 20% of people will mention the hotel name on social media but by using digital tools, such as Local Measure, to tap into that other 80%, hoteliers can create emotion and personalise a customers stay making them feel valued and recognised."
Andrew concluded, "Hotels need to fully integrate their digital strategy and technological improvements into their overall strategic plan. We all have a lot of information about our customers now but the key is having the technology to support the use of that information."
"Privacy and cyber security is another big issue hotelier need to keep at the forefront of their minds when they make decisions to be part of the digital world. As this is a critical issue and important part for their digital strategy, the investment cost to ensure all parties have confidence is very high, but there really is no other choice. However, outsourcing should be considered if it reduces costs and improves efficiencies so that hotels can focus on their core-business and to help save money for future investments."
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