Why aren’t hotels unlocking the power of start-ups?

At a glance the travel industry is spoiled for choice when it comes to tech companies working to improve the holiday and accommodation experience for millions of users globally. AirBnB, Culture Trip, Citymapper are brands so successful in this space even the most luddite of travellers are familiar with them. If some of tech’s biggest brands are in the travel sector why is the hotel industry so slow to adopt it at scale across their groups? 


Size matters in the hotel bedroom. 

Hotel chains are big. Big is good. Big is good when you’re bringing a consistent accommodation experience to multiple properties around the world. Big is good when you’re developing systems that ensure continuity of service. Big is good when you’re trying to get discounts on doorknobs and towel rails by buying volume. 

Big isn’t good for researching, testing, vetting and dealing with small agile tech companies. Big isn’t good for changing direction and updating systems as quickly as the world of tech (and clients expectations) change.


Out with the old, in with the old. 

Experience is what makes big hotel groups good at what they do. It’s also what makes them bad at adopting new systems. To be fair, if I’m paying for a hotel I like knowing they’ve got decades of experience. I want someone who knows how to turn down a bed and cook a great breakfast – true hospitality is a skill and many dedicate their careers to it. However, behind the scenes, those amazing experiences are run on legacy systems that are tough to modernise. Updates are often little more than a new version of an old system. There’s no doubt systems could be improved by vetted start-ups with controlled access but how does a massive company vet and manage that process?   


Testing, testing.   

When you’re good at what you do it’s tough to test new systems without disrupting a finely tuned operation. Large, international hotel chains are well-oiled machines. Furthermore, it could be claimed many of them operate with a “if it ain’t broke, don’t fix it” mentality. Testing new systems can lead to problems that an operating business in the service industry can’t afford. Especially in the day of online reviews and peer recommendations. Perhaps most important though, when it comes to testing, is knowing what to look for. Data analysis is a science in itself, and even those with an intimate knowledge of the business won’t know how to correctly judge the success or failure of tech integration. This is the type of role that a hotel chain won’t traditionally have on staff. And that opens the door onto our next point.       


The more you know…      

Large hotel chains are run and operated by experts in their field. And that’s the problem. It’s their field. These are business men and women at the top of their game but their game isn’t tech. The knowledge and skills needed to identify, vet, manage and analyse the tech start-ups that will take great hotels into tomorrow are not kept in-house. And maybe rightly so. Let’s be honest, they’re good at what they do but they can’t afford to ignore the benefit that tech will bring to the customer experience.


Where’s the front door?  

Getting in front of the decision makers of large international hotel chains is complicated and difficult for the biggest suppliers. For a small start-up without connections in the industry it’s nearly impossible. Navigating the management structure and decision making process is more complicated than using the television in a hotel room. The tech companies need a doorman who knows the corridors. Someone trusted on both sides of the boardroom table. A go between who can help them get to the decision makers while making sure c-suite management aren’t wasting time with a pitch that’s going nowhere. A partner with an understanding of the industry will help ensure the tech companies are compliant with the hotel’s systems and processes before the projector is turned on.  


Going up. 

Innovative and accountable General Managers within specific properties recognise that generating revenue through rooms is not enough. They have an entire guest journey to deliver. While making bars, restaurants and spas profitable. Many are trying partnerships but these aren’t visible to the hotel companies. The chains are missing an opportunity to learn, engage and replicate the successful partnerships. There’s a disconnect between what’s happening on the ground and what’s been discussed in HQ. The lift full of ideas needs to go all the way to the top floor. 


Where to from here?     

Big hotel chains are brilliant at clean sheets on every bed across thousands of properties. Excellent food in kitchens all over the world. Standardised guest experience in every language. They need to stay excellent at what they do while keeping up with guests’ expectations. How do they do that? By bringing in outside experts who understand the wider travel sector and the world of technology. By engaging with experts who have collaborated in some huge industry partnerships between travel giants and start-ups.


Check out the next article in our series to learn more about how a marketplace for travel tech can work to change the industry. 


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