Hotels need to develop a business strategy for the digital age


“Digital can play a role in unleashing your potential – Making your eCommerce channels more profitable and developing customer value propositions that are centred on delivering better outcomes for your guests.”

Carlo Gagliardi, Strategy Consulting Partner, PwC

Online travel agencies have the advantage of retaining the entrepreneurial, agile mindset of the tech company, combined with lower overhead costs. But they are also investing heavily in developing new business models and concentrating on mobile and last-minute booking. Hotels who fail to do the same could see their margins eroded, and their businesses coming under threat; but those who seize this opportunity are more likely to be able to set the agenda for the sector, rather than lag behind.

Digital technology (including mobile) has the potential to change all aspects of the traveller’s journey – enhancing experiences from before they go, while they’re away and when they return. This opens new possibilities for the hotel brand to forge a deeper emotional bond and loyalty with the traveller/guest.

At the same time the plethora of channels has made it complex for hotels to optimise channel mix and costs. The involvement of the other players in the journey, such as airlines, and the lack of much detailed data filtering through from booking systems makes the challenge of providing a consistent customer-focused approach at every step of the journey even more complex.

We are not advocating a “if you can’t beat ’em join ’em” approach when it comes to the Online Travel Agencies/hotelier conundrum. Hotels can use the opportunities of the digital era to enhance their offering. The opportunities are immense, because unlike other sectors which have already faced a similar threat from new digital competitors – from music to retail to publishing – the hotel industry has an unassailable advantage. However far the new players may encroach on the administrative aspects of finding and booking a hotel, the online operators can never provide the core service at the heart of the offering. The hotel itself will always ‘own the stay’.

The customer experience becomes an opportunity to grow revenue. Those who really understand who the customers are, what they want and what drives their buying decision, have a huge advantage.

We’ve seen from our customer research that 65% of all guests are likely to re-book hotels where they’ve had a great experience, and staff attentiveness ranks as the top driver of great hotel experiences. Delivering memorable experiences reliably all the time, however, requires lots of cross-functional collaboration. For example, a CIO, COO, CMO, and perhaps the ‘Chief Guest Experience Officer’ would need to work closely to enable seamless communications with guests across multiple channels, over time, and across different hotels of the same brand/group.

Rather than thinking in terms of ‘just channels’, hotels need a business strategy for the digital age that focuses on helping the customer achieve the goals they care about, rather than ‘just’ providing a set of inputs.

They need the courage to be the trusted brand of the consumer before, during and after their stay.

  • Hotels need to develop a business strategy for the digital age
  • Overview