Publication Name: businesstoday
Date: June 2020
Tech-tonic Shift in Hotels
From smartphones doubling up as room keys to real-time data access for staff to new solutions for cleaner air, technology is transforming the hospitality sector
During his stay at the Sheraton Grand Bangalore Hotel at Brigade Gateway in January, Delhi-based executive Rishabh Gupta did not have to stand in queue at the front desk. Instead, he used the hotel's mobile key to check-in, and accessed the room key using his smartphone.
While hotels have been investing in consumer-connect technologies for over a decade, it has now found more takers after the Covid-19 outbreak, with social distancing being the new norm.
According to industry experts, technology can bring down the operation cost of a hotel by 15-40 per cent, or even more, depending on the property (boutique or budget hotel), footfall, and the kind of systems deployed.
"Travel and tourism is among the fastest-growing sectors in India, contributing nearly a tenth to the countrys GDP ($247.3 billion) and accounting for roughly 42 million jobs (direct and indirect). The role of technology will be key in the post-pandemic world. Most states have already put in conditions of 'contactless' check-in/check-outs. QR codes, artificial intelligence and machine learning will soon replace physical menus in hotels and restaurants," says Vivek Agarwal, Partner, Infrastructure, Government and Healthcare Services, KPMG in India.
This year, due to the virus outbreak, the domestic hotel industry is likely to see a 57 per cent decline in revenue at Rs 90,000 crore, against Rs 1,58,113 crore in 2019, according to consulting firm HVS. "RevPAR (revenue per available room) in the organised segment is expected to decline by 58 per cent. The industry has not seen such an unprecedented decline in RevPAR in the last two decades, since we started recording this data. The unorganised segment, which is 10 times the size of the organised segment, is also likely to witness a similar quantum of decline," says Mandeep Lamba, President (South Asia), HVS ANAROCK.
From managing bookings to guest interactions, resource procurement to accounting, the industry preference has shifted towards cloud-based solutions, from the earlier practice of storing data on-premises. This saves time and minimises chances of errors, while leading to increased accuracy and efficiency.
"By migrating from on-site software to Cloud-based (SaaS) software, we have lowered the cost of hardware, maintenance, manpower and other operating system licences. Online training and adoption in our team have also become easier," says Shiv Kumar Mehan, Chief Operating Officer, Leisure Hotels Group.
For instance, Oracle Sales Cloud helps hotels manage the sales cycle, while keeping a tab on interactions with customers. "Today's sales representatives don't just need data. They need to be able to access and leverage timely and relevant insights that empower them to serve customers better," says Rakesh Jaitly, Senior Sales Director, Customer Experience (CX) Solutions, Oracle. Tata group-owned Taj hotel chain is already using the software to provide its sales team with real-time insights into customer behaviour.
"We offered ITC Hotels a customer-experience platform to handle thousands of guest queries, ensuring that nothing slipped through the cracks and each communication received a prompt response. This has resulted in a 43 per cent increase in guest satisfaction and 24 per cent cost-saving," says Raj Mruthyunjayappa, Managing Director, Talisma Corp. It helped the hotel chain drive collaborations across teams with ease of information sharing, enhanced monitoring and tracking, all of which were also available to the management.
In fact, hotels are leveraging technology at every step. "Until recently, hospitality was all about human interactions, with high dependence on manual processes. Technology was only seen as a good-to-have feature. The Covid crisis has turned our world upside down with social distancing mandating strict safety checks, resulting in service delivery issues," says Anupam Verma, Co-Founder, Revo-Ex Technology.
Hotel Sarovar Portico in Naraina, New Delhi, is using the company' guest management platform, including mobile/kiosk check-ins, mobile smart locks and smart power control, among other things, for better customer experience.
Across Oberoi's properties in India, an e-mail with a link for online registration and submitting photo identity proofs is being sent to guests before arrival. Government-mandated self-declaration forms are available through QR code/URL displayed at the front desk, which guests can access on their personal devices. Even invoices are available through e-mails along with a digital payment link to minimise contact during check-out.
"Digital invoices reduce time and costs involved in processing paper invoices by eliminating two frequent sources of error-mail sorting and data entry. As the digital system is integrated into a software management solution, it also facilitates data exporting," says David Mathews, General Manager, Trident Bandra Kurla, Mumbai.
Premium chains, as well as independent hotels, are installing solutions such as mobile locks, Internet of Things (IoT) for automation of temperature and light controls and smart charging stations, among others.
Since digital keys often malfunction, hotels are putting up mobile locks on doors, which can be unlocked from a particular application on the guests smartphone. iPads with custom apps are placed in each room, which double up as remotes for controlling lights, blinds, temperature, changing TV channels, and even for placing requests for room services. In The Oberoi, Bengaluru, in addition to all these, guests can see who is at the door before activating the electronic unlocking system. Some of the hotels are also giving access to premium streaming services, including Netflix and Amazon Prime, that can be streamed on t0 the TV through mobile devices.
Even traditional flat-panel TVs are being replaced with specially designed hospitality TVs for digital signage and in-room entertainment. Besides customised greetings, they provide information on latest offers to guests. There are dedicated pages for information and services, in-room dining, and ongoing events and promotions as well. "This helps in optimising costs as hotels can minimise or completely avoid individual promotions," says Hemendu Sinha, Vice President and Business Head, Business Solutions, LG Electronics India. LG's Hotel TV has been installed at the Marriott, the Oberoi, and the Taj, to name a few.
Data Privacy Issues
The technology push has, however, put the spotlight on data security. Post the implementation of General Data Protection Regulation (GDPR), organisations are liable for financial penalties in case of data breach, even outside the European Union. Then there are concerns around brand reputation as well. Only recently, Marriott International confirmed a breach where confidential data, including names, addresses, phone numbers, loyalty member data, date of birth, and airline loyalty numbers of 5.2 million guests, was leaked. According to US-based software firm Salesforce, 59 per cent of customers think their data is vulnerable to security breach.
So, hotels are now investing in data protection. Systems are being put in place where communication is received in a secure and encrypted format. Information flow is monitored through emails, and by keeping a track of uploads on external shared drives, unauthorised copies on pen drives and unusual computing behaviour within and/or outside organisational boundaries.
A Data Leakage Prevention (DLP) tool (In-Defend) has been deployed at The Oberoi, Mumbai. At Sheraton Grand Bangalore Hotel at Brigade Gateway, data is captured in a secured way with the help of tools such as the Oracle Sales Cloud, and emails are automatically deleted after seven days. Even when guests use a public computer and download data, the hotel deletes the entire history after the guest logs out.
Electricity and water consumption across lighting, boilers, kitchen equipment, gardening and air conditioning systems contribute significantly to the overall cost of hotels, which often go unnoticed. Investments in in-house solutions can reduce resource consumption by 20-30 per cent across properties, say industry experts.
At Andaz Delhi, the in-room air-conditioning system is integrated with the front office check-in system, which automatically leads to a two-degree drop in temperature during check-in, and a two-degree increase during check-out. The Leela Palace New Delhi is powered by a 24-hour gas-fired generator set that uses water and steam bi-products in the air-conditioning system.
"Managing electricity usage has been vital for us as it saves costs, which ultimately benefit the customer. More than 80 per cent of power is generated through solar panels at the property and we have a preventive maintenance system for all electrical equipment," explains Abhilash K Ramesh, Executive Director, Kerala-based Kairali Ayurvedic Group, famous for authentic ayurvedic wellness treatments.
Hotels are also using sensors and aerators to reduce water consumption. For instance, installation of water flow controllers in guest rooms and public area taps at Radisson Blu Faridabad has reduced water consumption from 20 litres to 5 litres per minute, resulting in savings of Rs 36 lakh. Similarly, disposal of wastewater is big on operational costs, and hotels are using sewage and wastewater treatment plants to recycle wastewater for gardening and circulation in cooling towers.
"To keep pace with the influx and service demands, plenty of wastewater from all en-suite bathrooms, laundry rooms, gardening, etc. is generated. A large amount of wastewater has an impact on costs and environment, making it vital to have a water treatment system at the hotel to cope with the load," says Koichi Matsui, Chairperson and Managing Director, Toshiba Water Solutions Private Limited. The company has installed membrane bioreactor (MBR) wastewater treatment technology for modified-to-fit sewage treatment plans at The Oberoi Rajvilas in Jaipur, The Oberoi Udaivilas in Udaipur, and The Trident, Mumbai.
With over hundreds of guests walking in every day, hygiene at every touchpoint - lobby to dining areas, rooms to washrooms - becomes paramount, especially in the current situation.
With a focus on sustainability, hotels are setting up their own automated water bottling plants that include UV-sterilisation of bottles, without human contact. Hyatt Regency Delhi and Park Hyatt Hyderabad have water purification and glass bottling plants that use IoT-based technology for real-time monitoring of the cleanliness of water. "This initiative will help the hotel save over 3.5 lakh litres of water, 200 MW of energy and reduce over 20 tonnes of carbon emissions per year alone at Park Hyatt Hyderabad," says Arif Patel, Regional Vice-President, Sales and Marketing, Hyatt India.
Even the amount of upholstery (textile covers on furniture) a hotel has to clean isn't an easy task. They either end up investing in industrial laundry machines, including washer and driers, or outsource it to the laundry company. There are now hygiene washers that disinfect the upholstery using proprietary technology. An intelligent laundry system helps hotels automate the system, reducing labour costs and cutting down on the use of water through an optimised cleaning process, thereby also setting the wash cycle right.
"In future, clothes and linens will have tags that will contain what type of fabric they are made of, and where and how the garment is worn and/or used. These tags can be read by the system, which can then decide the best way to wash it," says Milind Gandhe, Head of Systems Business Unit at Tata Elxsi.
Air circulation is another focus area. Global organisations are looking for hotels with clean indoor air for their executives to stay. In fact, air quality issues are common in hotels, especially odours in rooms, which leave a negative impact. Volatile organic compounds found in cleaning supplies along with dust, mold, pollen, allergens, etc. can remain airborne for long and trigger allergies.
"To handle these issues, the air is filtered through mechanical solutions and high-efficiency filters before being distributed. In addition to this, even the carbon dioxide (CO2) levels are controlled at less than 1,000 ppm (parts per million), while adequate air changes per hour (ACH) of 6-15 are also maintained," explains Barun Aggarwal, CEO, BreatheEasy Consultants Private Limited, a full-service indoor air quality (IAQ) solutions provider.
While new constructions have such solutions installed from day one, existing properties are going for retrofit air purification devices. The Oberoi, New Delhi, for instance, has an air purification technology integrated into the air-conditioning system, resulting in public area measure at around 30 ug/m3 (microgram/cubic metre) and guest rooms measure under 10 ug/m3.
Though India is among one of the most digitally advanced traveller nations with hotels upgrading fast in terms of digital tools and managing operations, there are enough challenges.
The first relates to data privacy. There have been instances of personal data being stolen, and hotels need to ramp up their systems, especially with 'contactless' services emerging as the new norm.
The second is enabling high-speed connectivity at peak and adventure locations. While telecom infrastructure has improved over the years, concerns remain. The third is integration of digital payments with core banks, wallets, points of sale and more. Lack of consistency in deployment of technology solutions across properties of the same group also remains a problem.
One thing is clear though. As hotels look to reopen with strict sanitation and social distancing protocols across properties, there will be a new technological order in place.