Hotel Apps – Nightmare or Blessing?

By Michael Toedt - Managing Director at Dailypoint Gmbh

Visit us at HITEC booth 2246
28 October 2015
Toedt

Most hotel chains and many individual hotels have their own hotel app – a small program for smart phones, which is supposed to facilitate the check-in process, provide additional information, replace the room key card, and eventually support and facilitate the next booking at the hotel.

But are apps really the ultimate solution? These small programs can easily turn into an expensive exercise and they have to be programmed for the various operating systems. Most importantly, an app should be embedded in a centralized guest-oriented IT structure.

The hotel business is often compared with the airlines business. This is, however, misleading, as frequent travelers – the target group hoteliers like to attract – mainly use the same airline. Surveys show, however, that this is not the case when it comes to choosing a hotel. On average, a frequent traveler has four loyalty cards from different hotel companies and eventually has to get used to several apps. Is this a client-oriented approach or just an IT trend, which managers cannot resist to follow?

At the beginning of the Internet age IBM's slogan was "Jump in!". But not the ones who just jumped in and followed the latest trends have become or are successful, but those who took some time to verify, analyze and then deliberately chose the right – client-focused – strategy.

On the one hand, an app has to suit the respective overall concept; on the other hand, it has to be accepted by the guests. This is the main difference between the OTAs that focus on the guest, and many hoteliers, who just love their product. The guest should always be in the focus. This rule is taught to every trainee or student in the first year of apprenticeship or studies.

The figures show that consumers increasingly consider apps as annoying. The result is that downloads are stagnating considering the increasing share of smart phones in the total market. Travel apps only come in seventh in the download ranking. There is not even a separate category for hotel apps.

The New York Times wrote about Hilton's attempt to win back guests from the OTAs by offering a special benefits and services and to thus create loyalty. One million users per month sounds quite impressive. The Hilton hotel app – a success story? Considering that Hilton has 4,200 hotels with on average 160 rooms, only 7% of the guests are using the app. It remains to be seen if this can be considered a real success.

This number correlates with our experience and research, according to which so far only 5% of the guests use their smart phone to check-in or open the hotel room door. This number does not really show a comprehensive market acceptance.

Does it really make sense to make considerable investments in building an app or is it just a prestige project for the management? Rocco Forte recently launched their app, which is hard to beat for its latest technology and features. But are Rocco Forte guests really using it? Or has management become experimental and IT taken the lead?

Whether the app is really the tool guests are enthusiastic about remains questionable. Most mobile websites nowadays offer the same features. Location-based services and real-time marketing automation – the next big trends – do not require apps. In certain circumstances, an app can, of course, make sense. But as with any investment it is advisable for every hotelier to question the investment and to analyze in detail if it really makes sense. Only then should an investment be made. My experience shows, however, that in the hospitality industry the question "why" an investment is made is still asked much too rarely.

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dailypoint™

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Munich, 80333
Germany
Phone: +49 89 189 35 69 0
www.dailypoint.com

Michael Toedt

Operating at the intersection of business and technology, Dr. Michael Toedt helps hoteliers with the software dailypoint™ to use the tremendous increase of data in order to become data-centric. Dr. Michael Toedt has over 25 years of experience in operations, technology and marketing. He is the author of several books – among others the German version “Big Data – Herausforderung und Chance für die Hotellerie (ISBN: 978-3-8751-5305-7) and “Data Revolution – How Big Data Will Change the Way of Doing Business” (ISBN:978-3–7375-1688-4) and his articles are published by journals on a regular basis. Dr. Toedt holds a doctoral degree in management science. He is lecturer at several universities and assistant lecturer at the University of Applied Sciences of Munich for the subject “Customer Relationship Management in Tourism”. Apart from this he speaks at various hospitality events and fairs such as ITB, HITEC, Internorga, Austrian Hotel Society ÖHV or Cornell Hotel Society.

Michael Toedt

Managing Partner, CEO
info@TS-and-C.com