Bots, bottled water and search - a varied snapshot of industry issues in 2018

Here is a fairly unknown fact: the Hospitality Sales & Marketing Association International is as old as Mount Rushmore in the United States.

In 1927, while the Borglum family (and some 400 workers loaded with dynamite) was carving virgin rocks into the silhouettes of U.S. presidents in South Dakota, the HSMAI was founded in Chicago.

Over the years, HSMAI became a 7,000-member global organization, operating in 35 different countries and representing all segments of the hospitality industry.

This short video, published in 2017 to celebrate its first 90 years, goes over the major milestones of the foundation, and it was used by Ingunn Hofseth (president of the European division), to open the full-day conference in Madrid, during which speakers such as Google, TripAdvisor and NH Hotel Group had their say on the current state of travel.

What follows are a series of remarks from the event that shine a light on the current state of the nation, as it were.

Is bottled water free? Where robots fail (and where they do not)

Akemi Tsunagawa, founder and CEO of Bespoke, an artificial intelligence company from Tokyo, has a confession to make about the rush to introduce new technology into travel-related services.

"Our first chatbot was a huge failure," she admits. "Few users were using it and, even when they did, they did it only for a bunch of seconds."

Ed Catmull, Pixar Animation Studios’ co-founder and current president of Walt Disney Studios, once said that "mistakes are an inevitable consequence of doing something new," and with everything AI-related, this seems to be, pretty often, the case.

"The majority of question guests ask robots are way different to the ones they ask humans," continues Tsunagawa.

"And here’s where we failed. Because we based our bot on the assumptions of the product team, not on the reality of the industry.

“Believe it or not, 'Is bottled water free?' is one of the most-asked questions to our bot. Why? Because it is an embarrassing one: People are thirsty but they don’t want to look cheap.

"It’s one of those questions people feel more comfortable asking a bot rather than a human. And once we understood certain patterns for the user behavior, our bot went from a 10-second interaction time to 49 minutes”.

Still, it's worth remembering this comment from Tsunagawa: "Almost 90% of U.S. travelers feel comfortable using a chat to communicate with hotels. And bots can do it in real-time, 24/7 and with no bathroom break."

On rate parity, hotel franchises, rebranding and multiple touch points

There are, of course, more pragmatic industry problems.

"Metasearch engines made hotel rate disparity extremely evident," says Natividad Perez Granados, who runs business development at OTA Insight.

"And the more distribution channels a property has, the harder it is to control its distribution. Fifty-two percent of the time, independent hotels in Europe are more expensive than online travel agencies than on their brand.com.

"The situation is slightly better (44%) for major chains, but it gives some perspective on how much this problem is intrinsic within our industry."

With a twist on the famous Field of Dreams line: "If you build an amazing hotel, guests will come. But will they?”

This is the view of Philipp Weghmann, executive vice president of Europe at Preferred Hotels & Resorts, highlighting another dilemma of the industry.

"Brands always have a vision, but that vision does not necessarily match with the actual customers’ needs."

Similarly, Fernando Vives, chief commercial officer at NH Hotel Group, talks about the challenges (and how he overcame them) of the recent group rebranding.

"When I first joined in 2014, I knew nothing about NH. I went on its website and said to myself: 'Wow, these guys have quite a lot of properties!'. 

"But, in only three years, NH brand recognition in Spain went up to 54%, becoming one of the most recognizable brands in the country”.

At first, the company cut all the fancy stuff out and looked solely at RevPAR. Then it moved to step two: advanced pricing strategy.

Now it is in a so-called "super-revenue phase," focusing on NET TRevPAR.

Mercedes Sánchez, senior key accounts manager at TripAdvisor, shows some data on the role of the review site/metasearch engine/social network in the traveler’s digital booking funnel.

"Seventy-four percent of travelers who book accommodations make TripAdvisor a part of their online journey,” she says, echoed by similar data by Customer Alliance.

Going further, Enzo Aita, vice president of marketing at RateGain, says: "Hyper-personalization is the new direct. Today's guests are not stupid, and trying to force them to do something they do not want to (like: clicking on BOOK NOW buttons) is not going to work any more (if it ever worked on the first place...).

"We need to move out from our comfort zone of the one-size-fits-all marketing approach and reconsider the way we: communicate and strategize.

"Predictive analysis, turning Revenue in Product management where 1:1 price and dynamic web content can be of great help to provide a real tailor-made UX, these are some sample of what would meet and match the right demand.

"Guests do not want personalization. They expect it."

It's worth pondering, as the confluence of technology and operations continues, between getting a fax room confirmation and being asked for a passport by an animatronic velociraptor, there must be a healthy sweet spot in the use of technology in our industry.

The Britney Spears paradigm

The highlight of the day, predictably, is Google’s presentation. Industry manager in travel, Edward Lines, explains what’s like to be one of the 10,000 new Googlers (a.k.a. nooglers) that get hired every year. 

"When you join Google, there’s no instruction on how to be innovative. The only thing I got when I arrived was the Googler Handbook, a 16-point list explaining the DNA of the company."

Lines listed each point, varying from the famous “Don’t Be Evil” (curiously at number 13, if you care about numerology or suffer from Triskaidekaphobia) to the “70/20/10 principle” (70% of Google revenue is reinvested in its core business, 20% in emergent projects and the remaining 10% is used for more unconventional, funky projects).

He continues by playing Google I/0’s video of the Philip Dickian call between its assistant and a Chinese restaurant, highlighting (again) the virtues of failure (“Google Home actually came from the failure of Google Glass”).

He then focuses on travel.

"When it comes to travel, Google wants to be immediate, relevant and assistive: Immediate, because over the past two years 'where to go' searches have grown over 60%.

"Relevant, because we saw an even greater growth (5x) for queries such as 'attractions near me.' And, finally, assistive, because 57% of U.S. travelers feel that brands should tailor information based on personal preferences or behaviors."

Lines closes the presentation with a peak of what’s new in the Mountain View company, from the new location tab on mobile SERPs to Google Trips’ predictive algorithm.

But as we all know, search is a tricky element that still requires a lot of attention by travel brands.

And at Google itself, as Lines explains: "In the last month, the name of Britney Spears was spelled in 197 different ways on Google. We actually had to build an algorithm for that."

Conclusions: Two million years from now

According to calculations, the faces of the four presidents on Mount Rushmore should last up to two million years. Impressive.

I wonder what challenges (if any) our industry will be facing by then. Maybe less fascinating challenges than what we think.

Let’s be honest, when it inevitably becomes present, the future is rarely the way we imagined it.

Don’t you believe me? Then you should remember that 2015 went by and we still haven’t seen Marty McFly of Back to the Future's power lace Nike shoes nor his hoverboard. 

Or have we?