Travel & Hospitality Customer Experience Trends for Tech Founders

Consumers expect more personalization, unique experiences, and plenty of choices when it comes to the way they book, pay, check in, and communicate with staff at hotels and other accommodations.

While hoteliers and property managers know that digital transformation is an essential part of enabling staff to meet these customer expectations, the reality is that most organizations are just trying to keep their legacy systems up and running. It’s incredibly daunting to take that leap to overhaul everything when your daily operations depend on long-established systems that have been added to and modified over many years.

What does that mean for tech founders in the Travel & Hospitality (T&H) space? There may be some tangible ways that your unique solutions can help property managers move swiftly to integrate modern technologies, so they can provide the kind of customer service that elevates a stay to an experience. Making innovation a mentality rather than a checklist is what enabled the likes of Airbnb to shake up the space so dramatically. With accessible data, a small property manager can provide the kind of personalization and care that luxury brands like IHG and Four Seasons strive to deliver.

The following areas could present opportunities for T&H tech founders to provide value:

• Personalization
• Guest Experience Technology
• AI

Personalization

McKinsey reported that 71% of consumers want businesses to provide personalized interactions, and 76% get frustrated when this doesn’t happen. For example, travelers reported that they wished hotels anticipated their needs such as providing a customized welcome gift or refreshment upon arrival, tailoring itineraries to fit their interests, or enabling them to request their favorite cocktail or dessert in advance, according to IHG.

When McKinsey wrote about "How the world’s best hotels deliver exceptional customer experience," they found that customers feel pampered when staff address their needs before they are expressed. Customer relationship management systems, just the kind of cloud-based software we mentioned, and processes that help track and distribute returning customers’ preferences could result in the kind of personalized service and attention to detail that travelers crave. McKinsey reported that Gen Z values this type of service 2.5 times more than baby boomers, meaning personalization will continue to gain importance.

Individually-managed properties may have an advantage over slower-moving, mid-level hotel chains in terms of communicating with consumers beforehand to find out what they want to do, offering unique experiences, making local recommendations, or pointing guests toward activities that match their interests. But, they could use the help of cloud-based software to keep track of and access this data. A connected ecosystem enables property managers to be creative in their approach to providing memorable experiences. Software founders who are building CRM solutions that can easily integrate with other cloud-based property management software could be on the right track to capitalize on this trend.

Guest Experience Technology

SiteMinder found that 50% of travelers will abandon a reservation if a website or app is too slow or clunky, doesn’t seem secure, or the payment process is too complicated. And that’s just getting them through the front door. Travelers want digital check-in and check-out options, mobile room keys, and even digital tipping capabilities because few people have cash on hand these days.

According to a survey of 7,000 travelers by technology provider Criton, 80% of hotel guests would download a hotel app that would enable checking in or out and getting information about the hotel. Mobile-first is a given for many hotels after the pandemic. In the Skift and AWS survey, IHG Hotels and Resorts said mobile accounted for 58% of all digital bookings. Hilton won "The Best Hotel App" from Global Traveler in 2023 for their Central Reservation System which enabled fast booking, mobile keys, and personalization. Hilton’s own 2023 survey found that travelers want digital efficiencies to expedite transactional activities while craving friendly, personalized interactions for more complicated situations that require a personal touch.

Software providers that enable independent check-ins, keyless entries, or digital tipping should be paying attention to these trends since property managers will want to stay up to speed across multiple, diversified properties as these functions become industry-standard.

AI

As artificial intelligence takes the world by storm at an accelerated rate, there are a growing number of ways that AI can be utilized. Here are a few interesting case studies from Digital Defynd regarding AI use that illustrate how it can help travel and hospitality providers, including:

• Marriott Bonvoy’s Renaissance properties introduced an AI-powered virtual concierge service called RENAI. It uses AI algorithms, including ChatGPT and open-source data, and was trained with human inputs to offer a dynamic list of local recommendations.
• KLM Royal Dutch Airlines reduced customer service wait times from 15 minutes to 2 minutes with the use of an AI-powered chatbot.
• Carnival Cruise Line uses a wearable IoT device called the Ocean Medallion to connect each guest to a network of services like payment, keyless entry, and interactive digital experiences.

As these bigger players spend time and effort building AI-based tools to add personalization, increase efficiency, and enhance customer experiences, software providers who can think creatively about how property managers can do the same may offer a novel way to entice more customers.

M&A Implications

If you’ve been reading these trends and finding yourself inspired to add features, integrate new technology, or acquire companies that can enhance your solution, then you might be at a point where you need to seek additional investment.

If you’re recognizing your company’s capabilities in these stories and have been seeing strong growth, then you might want to consider whether to keep up the pace or decide to sell into growth.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. The material may contain "forward-looking" information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns and proposed or expected portfolio composition.

Clicking some links in this article will take you to websites independent of and unaffiliated with Vista Point Advisors. The information and services provided on these independent sites are not reviewed, guaranteed, or endorsed by Vista Point Advisors or its affiliates. Please keep in mind that these independent sites' terms and conditions, privacy and security policies, or other legal information may be different.