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Evolving in a digital world where convenience is the new loyalty

At a recent HSMAI event in London, keynote speaker Steven Van Belleghem spoke to local hoteliers about the role of digital in the human-centric hospitality industry. Entitled “When Digital Becomes Human,” the presentation challenged hoteliers to think about digital would evolve and the role it would play in consumer decision-making.

In his keynote, Van Belleghem made a bold claim: digital has changed consumer expectations so much that convenience is now what drives customer loyalty—not love for any particular brand.

The case of Booking.com

Van Belleghem made a point to ask the hoteliers how many of them loved Booking.com—and immediately a collective groan in the audience indicated the general opinion of the OTA giant. In contrast, however, when asked how many actually used the site to book hotels, the majority of the audience indicated that they had.

It comes back to convenience. As Van Belleghem explained, “We don’t fall in love with brands anymore, we fall in love with the interface.”

Booking.com isn’t necessarily a beloved brand among travelers, but they don’t need to be. Their customers aren’t returning because of brand loyalty; they’re returning because the site offers a superior user experience to most other online booking sites.

The entire interface is designed for easy browsing and booking, and the site itself offers many conveniences for travelers: free cancellations, instant discounts for members, mobile booking confirmations that can be accessed offline, city travel guides, and more.

Booking.com is certainly not the only booking site to have found success in convenience. A 2016 report by Phocuswright found that the majority (47%) of travelers prefer booking with OTAs because they find their website easy to use. In a list of top ten reasons, every other response was related to the practical advantages OTAs offer, including choice, best prices, and simple cancellation policies.

Phocuswright: Reasons Travelers Book with OTAs

In a similar fashion, sharing economy services such as Uber and Airbnb have built their own success upon delivering maximum convenience and hassle-free booking options. In short, the online interface and user experience have become a critical element of the brand itself.

Using digital to make life easy for the guest

During his keynote, Van Belleghem highlighted multiple examples of travel brands tapping into digital to create convenience and cultivate loyalty.

Disney MagicBand, an electronic wristband available to Disney guests, provides its wearers with a wealth of benefits, including skipping lines at the parks, instantly purchasing souvenirs and meals, and keyless entry into their Disney Resort hotel room. Not only does this make its guests feel extra special during their stay, but the MagicBand’s ease of use pays off its own costs—guests using MagicBand spend more on average than those who don’t.

KLM Airlines, in an effort to streamline and improve its customer service, has partnered with artificial intelligence firm DigitalGenius to create a new platform that can help customer service agents answer thousands of questions a day quickly and efficiently. With over 100,000 mentions on social media and 15,000 customer service cases a week, KLM’s AI-powered platform will analyze past interactions to serve a proposed answer to an inquiry; over time the machine will learn with new data and refine its methods. Ultimately, this will allow KLM to provide customer service through a multitude of channels that are most convenient to the customer, such as chat platforms like Facebook Messenger and WeChat.

These examples perfectly illustrate how travel companies are harnessing technology to create unparalleled levels of customer service. Rather than trying to engender emotional brand attachment, winning repeat business has become about offering small but tangible benefits.

At first glance this form of loyalty may seem superficial. But does that really matter? If consumers value ease and convenience above all else, a brand that consistently delivers on these elements can rightly expect them to return time and time again.

The new role of AI in customer loyalty

Far from an industry outlier, KLM’s partnership with DigitalGenius is just one example of how artificial intelligence is being used across the travel sector.

Almost 85% of travel and hospitality professionals have integrated AI into their businesses, mostly for processing bookings and credit card transactions. But many companies are looking to AI to play a bigger role in marketing. Platforms such as Kayak, Hopper and Hipmunk have been particularly progressive, utilizing AI to communicate with customers via chatbots, offering better pricing options, and suggesting the best times to book.

As AI becomes more widespread, it will also become exponentially more advanced. According to Google’s Director of Engineering Ray Kurzweil, AI will have human-level intelligence in just 12 years’ time.

This rate of technological growth is highly relevant in discussions about loyalty. As brands integrate AI into both backend and frontend operations, consumers will receive truly elevated and instantaneous levels of service. But they’ll also end up communicating more with a machine than a person.

This presents an interesting conundrum for the hospitality industry: will travelers accept a growing lack of human connection in exchange for increased efficiency and convenience?

The answer isn’t cut and dry.

Where hotels stand in the new paradigm

Digital tech in hotels

At first glance, hotels appear to be at a great disadvantage when it comes to a “convenience-first” model of loyalty. Tech giants like Booking.com, Expedia, Airbnb, and Google will continue to invest billions into research and development, gaining a deeper understanding of their customers and delivering even more personalized experiences and recommendations.

As this enhanced digital experience becomes the norm, hotels simply won’t have the budgets to compete—but they will be expected to keep up. That means consistent investment in their digital presence and maintaining a tech stack that is always up-to-date with the latest tools.

As Van Belleghem said, “Digital is not your ticket to get ahead, it’s your way to stay alive.”

Luckily for hotels, they have one advantage that OTAs and other online travel sites never will have: the human connection. As bigger travel brands rely more heavily on AI-driven technology, real human connection will become more scarce. Qualities such as empathy, passion and creativity will likely become more premium—and it’s here where hotels have an enormous advantage.

To succeed in a world where convenience is prized above all else, according to Van Belleghem, requires hotels to bring together digital efficiencies with human abilities. That means using technology to achieve operational excellence, and using humans to add the emotional connection.

In many cases, the tech is already there: from mobile check-in and messaging concierges to smartphone-enabled locks and room temperature controls, hotels are just beginning to discover a wide-range of digital possibilities for improving the guest experience.

These little conveniences do add up—add to that the element of surprise and delight that only a human can offer, and hotels can create a memorable guest experience that ultimately cultivates true loyalty.

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