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How Amazon is Transforming the Hospitality Industry

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Last week Jeff Bezos, founder of Amazon, briefly overtook Bill Gates as the richest man in the world. Amazon is the biggest online retailer in the entire world, accounting for more than 40% of every sale made online! This website revolutionized the retail industry and its effects are being felt all throughout. With all of these changes going around, you have to ask yourself: how is Amazon changing the hospitality industry?

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Businesses like Amazon, Uber, Netflix, and Airbnb have completely transformed the way customers and businesses relate to each other. People expect to be able not only to hire a service and pay for it online, they also want a lot less interaction with employees. Wait times are also required to be shorter than they used to be now that the immediate delivery of products such as Kindle e-books has become the norm. For us in the hospitality industry, this means that customers have different demands. They expect new services or old services delivered in a new way.

Online shopping is now the norm

First off, in a society accustomed to online shopping through Amazon, OTAs have taken on the role of online vendors. OTAs allow people to book hotel rooms online and some even let you book tables at restaurants. Unlike Amazon, OTAs will charge a fee for what they call a “success fee”. This means less revenue per room for hoteliers. For restaurants, booking websites don’t charge any fees, but they do charge for software which makes managing their bookings easier.

Unfortunately, the event industry was late to the party on this one. Many hotels and restaurants are implementing their own online booking options. However, OTA’s and other online concierge services have gained customer trust and are preferred. Although some hotels have developed apps most people prefer to use an OTAs app since they can have more options and functions.

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Guests expect instant satisfaction

Another area where Amazon’s model has affected what clients expect from the hospitality industry is in the customer service. This has specifically affected hotel check-ins. Customers expect absolutely zero queues and as little interaction as possible with hosts.

This has already been implemented in airport check-ins and was received very positively. Some hotels now have on-the-go check-ins where a host with a tablet will accompany guests to their room and check them in on the way. Other hotel chains offer an app that lets people go directly from the airport to their room! This speaks to guests’ desire for instant satisfaction born of the internet era.

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Tracking behaviors equals better service

Amazon has become an absolute expert at anticipating –or even creating—customer’s needs through their “Customers who bought this item also bought” feature. Amazon tracks behavior throughout their website and suggests articles that they might also be interested in using an algorithm. Customers expect that services they might enjoy will be offered while others they are not interested in will not be.

Tracking behaviors and preferences would be quite beneficial to the Hospitality Industry. OTAs still have not tapped this area, but it has already begun to be exploited. Some hotels offer guests a tablet where they can order –and even pay for—services. This tablet replaces the complicated and often un-used menu presented on hotel TV screens. Tracking behaviors will also allow hotels to anticipate what services a client is requesting and offer others they might be interested in.

This could also be done through an app. Having an app that would serve more than one purpose makes it more desirable for customers. This means that an app that could serve as a booking site, a room key, a service menu, and even the TV remote or a control for the lights in the room would be downloaded a lot more. An app like this will allow a hotel to track user preferences and even suggest room upgrades or other services that could be bought through the same app.

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Diminished human interaction makes it even more important

These kinds of personalized touches are exactly what the hospitality industry looks to provide. They can make a customer’s experience so much more fulfilling and this goes into another way in which Amazon has changed our industry: customer reviews. One of the cornerstone features on Amazon are the product reviews. Reviews allow buyers to learn from other’s experiences and make their decision based on them. This is also happening in the hospitality industry. Guests are basing their decisions more and more on previous guest’s reviews. This is why hotels and other businesses need to make absolutely every customer’s experience perfect since one bad review could chase away hundreds of future guests.

All of these changes sound possible enough, however, some believe that the hospitality industry should not go through with them. The main focus of this industry is providing great experiences for their guests. This makes some experts believe that these advances should be outsourced to other companies such as OTAs, marketing companies, or even Amazon! These experts argue that giving these responsibilities over to other companies will allow the hospitality industry to concentrate on the guest experience.

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This becomes even more important when you realize that people are having fewer and fewer interactions with hotel staff. These interactions are a key part of the experience in all areas of the hospitality industry. Having less of them makes them that much more important. Consumer experience is still the most important part of the hospitality industry and cannot be disregarded.

 

What’s next?

How do you feel this industry is changing? Let us know in the comments and follow us on facebook and twitter for more info about the hospitality industry. You might also enjoy our articles about venue design trends of 2017!

 

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