Tell Newsletter #62
Food for thought on Overtourism, McDonalds massive tech transformation, Uber's history and evolution and hotel website friction and more. Also, I've moved to substack! But it's still free for you :-)
Hello ,
I’ve changed sending platform to Substack. Newsletter is still free, at least for everyone who is currently subscribed. I really believe in newsletters - I know it is quite old-school, but it’s a whole lot better than reading news on a website. At least I know I have it with me when I want to read them. In fact I pay more for newsletters today, than I pay for traditional media. So let’s see how this new platform is. Enjoy the newsletter, I’m still working on my regularity.
Best, Martin
About me: I'm a fractional CMO for large travel technology companies helping turn them into industry leaders. I'm also the co-founder of 10minutes.news a hotel news media that is unsensational, factual and keeps hoteliers updated on the industry – in their language.
Looking up to McDonald’s?
The hotel industry sometimes blames the franchise model on the slow adoption of technology, it’s a constant conversation at brand level - how to convince owners to cover the CAPEX. I believed it was a real problem, until I saw McD execute a global digital transformation that not only added kiosks, but also changed the whole workflow within the locations and brought table service to the quick service restaurant industry which is unthinkable. And they too had to convince owners to change everything (and pay for it). It has fascinated me how they’ve done this because it was no small feat, in the hotel industry there’s a lot we could learn from this. This interview with a McDonald’s franchisee is a bit of insights worth the read.
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Website friction and revenue
The current model of a hotel website + a booking engine was a great solution about 20 years ago when websites didn’t do sales and suddenly someone found a solution to take online reservations with almost zero setups. But that was a long time ago. On the up-side, the travel industry is probably the most digitally advanced from a commercial side. But on the other hand, the model is stuck 20 years ago. Ecommerce is essentially a booking engine with (maybe) a cover page. The first comment will be “but luxury doesn’t work that way” and I’ll say go check out Louis Vuitton’s page. I think revenue managers should take a look at basket abandonment on hotel websites. I really wonder how much additional revenue could be made with less friction and better designed hotel website. Here’s some data from Stripe on friction and conversion rate.
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15 years of Uber
The story is that due to bad service from Parisian Taxis some 15 years ago, two entrepreneurs built Uber. The catalyst was “a computer in every pocket” (Gates wanted one in every home, Jobs got one in every pocket). This new platform opened the door to new industries and quite a disruptive change. In 15 years, the way humans interact with the world has changed a lot. It all happens through that computer in our pockets. Hospitality, which was formerly a showcase for technology, missed that shift. But luckily (as with McDs above) even old industries can adapt. I’m quite confident that soon hotels will soon have shifted to the mobile era. And with cloud-PMS becoming the norm the shift will be easier.
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On overtourism
Yes there are a lot of tourists. And a lot of them come at the same time. And it does put a lot of strain on the ecosystem. But I think we’re looking at the wrong end of the problem. Firstly, I actually believe tourism has the ability to help mankind appreciate others and thus improve global relations. It’s utopic maybe but I’m an optimist. Second, the right end of the problem is how can we better distribute travel. Distribute more evenly across the year, and more evenly geographically. Overtourism is, in my opinion, a self fulfilling prophecy. The more we look at it the worse it gets. Yet there are hundreds of thousands of places around the world which need more tourism.
READ THE REST
Apple finally adds Language Models
As everyone has pointed out too many times, Apple is late to the AI / language model game. This week they announced how they are integrating it and it seems they’ve done something more practical than their peers, even if less impressive from a technical point of view. The example of checking the flight status from Siri, which will be able to get data from emails, live flight data, traffic etc is a good one. It’s not as impressive as creating an image of the pope in a Montcler jacket, but a lot more practical. As this accelerates, hotels should be asking themselves how they’re going to be part of the game. OTAs and Airbnb will have an easier time to integrate to these practical AI system. Incredibly, some hotels still have on-premise PMS systems with llimited connectivity capabilities.
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FROM THE ARCHIVE:
Hotel loyalty and technology
What if guest experience technology was the real solution to Hotel Loyalty? Loyalty programs are rewards programs, they're fine. But they are transactional relationships thus limited. Nobody pays you to use Prime or your iPhone, quite the contrary. But if staying at a hotel was as easy as arriving home where all one's gadgets were connected and worked, (you know the "it just works" concept – because usually it just doesn't) that hotel brand would be the top of mind. We all have our "portal to the world" in our pocket. But in our interactions with hotels it is mostly ignored.
If one can get systems to work so one's guest profile logs in to the wifi, where one can cast Netflix to the TV without the hassle and 50/50 chance of failure, where payments are managed in the background and one can track expenses if one wants to on one's device. And one can ask Google Assistant or Siri to turn off the lights in the room (instead of running around to find the right switch - only to be by the door in the pitch dark and needing to start all over again). Where the room temperature would be adjusted in advance - including the night setting. These aren't science-fiction level options, surely you have some better ideas than that.
Just like using Google's ecosystem or Apple's we are willing to pay more just because we don't want to deal with the hassle and because of the guarantee that it will work. Those companies earned our loyalty through great product design and execution, not by paying us. Look at how hard it is to move off that warm and fuzzy Apple environment. What if hotels made it so comfortable to stay with their brands that guests would think twice (or more) about going elsewhere.
Technology could be the glue that makes it happen. If one can design the experience and implement it.
Or one can just keep paying guests to come back, hoping the competitors don't pay them more.
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