Monday, 11 July 2016

After 8 years, the hotel giants finally awaken to adopt smartphone apps, mobile check-in and digital keys

It was way back on June 29th, 2007 that the first generation iPhone was released. Around a year later, July 9th 2008, the App store was born. And it was about this time that a new expression emerged, "there is an app for that". 

Within the next couple of years, hundreds of thousands of apps appeared in the online stores for just about anything you could possibly imagine. Of course the online app stores also spawned many new successful companies such as Uber and Airbnb, and there were millions of game apps that followed, plus banking apps, government services apps, and just about everything in between was changed by the app revolution. Over the next 8 years smartphones (and apps) had an adoption rate faster than the internet, the radio, and TV at around 60%.


Smartphones and apps adoption in 8 years is fast

But if you follow mainstream media, or if you follow news in the hospitality space, then you could be mistaken for thinking its 2008 again by the number of stories circulating now about hotels offering smartphone apps. For example see this story here in USA TODAY about large chain hotels offering loyalty apps from July 11th 2016 titled 'More Hotels Offers Discounts for Booking Directly'. 

When we first started our company, LEAPIN Digital Keys back in 2011 with our 'mobile check-in app with digital keys' product offering for hotels, a lot of hoteliers told us, "no we are not interested in smartphone apps - hotels are all about service, good old fashioned service, that's what people want - not digital". 

We tried to convince hoteliers, that smart phone apps will actually make the hotel's service even better, but we found a lot of resistance. Fast forward 5 years later, and a quick look at the financial charts of Online Travel Agencies such as Expedia (who adopted apps about 5 years ago) and whose share price/valuation has grown over 5 times from around 26 cents in 2011 to 112 cents in mid 2016) compared to the big chain hotels such as Hilton Hotels (which didn't adopt smartphone apps until recently) and whose share price over 5 years has remained pretty much the same at around 22 cents, it tells a pretty compelling story about the value of apps. 

And we could use thousands of other examples of how adopting digital and smartphone apps actually improves service and valuations of companies, but we don't want to get too sidetracked here other than to point to the example of the new Pokemon Go app adding $10 billion to Nintendo's market valuation in only two days!

Returning back to hotels and apps, lets have a quick look at the Tripadvisor story. 5 years ago, Tripadvisor didn't even exist. Expedia spun out Tripadvisor in late 2011, and it quickly grew to a valuation of $10 billion with over 290 million app downloads. In short, people wanted to be able to leave online comments/reviews about hotels, and there was no platform for this provided by the hotels, so in stepped Tripadvisor and 5 years later its worth over $10 billion.

But alas, at last, the hotel giants are finally waking up and realizing that their service/product can indeed be improved by adopting apps and offering digital services. The hotels are also learning that not only can they improve their service/product but they can also increase their profits too. The opening line in the USA today story summarizes it perfectly, "Hotel companies are aggressively battling for online bookings by offering their most loyal customers discounted rates for reserving directly with them". If a quest books at the hotel and not the OTA, then the hotel can save 10-30% in OTA commissions. And hotels are using "Guest loyalty apps" as the tool for getting back their online bookings. Other perks the hotels can offer guests for downloading their 'loyalty app' include earned points (frequent flyer like), free Wi-Fi and the ability to check-in, choose your room from a digital floor plan and use a digital key to unlock your door.

So now with a 'hotel loyalty app' the guest has a really simple choice to make when it comes to staying in hotels;
1. Do I choose to book a hotel at an OTA or
2. Do I choose to book a hotel at the hotels guest loyalty app, where I can save 10% on the booking, choose my room/view, earn frequent flyer points, get free Wi-Fi, self check-in, not have to line up to check-in, go straight to my room, open my door with my digital key and not have to worry about going down to the reception desk during my stay to get my keycard remagnetised after it stop working because its held against my smartphone.


If you are a hotel and you would like to learn more about our "Guest loyalty app with mobile check-in and digital keys + more" and how it can help improve your hotels service, and your profits, then please get in touch with us at admin@leapin.com.au



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