This is the second post in our three-part series on digital trends in the travel and hospitality sector. In our first post, we discussed overall travel industry trends, as well as specific airline and hotel travel trends. Today, we’re going to continue our series with some case studies to illustrate what digital transformation for travel looks like in the wild.
Interestingly, while travel has been one of the most heavily disrupted industries of the past decade, the high complexity of products and services purchased means digital investment isn’t always straightforward or immediately successful.
Delta Success: First Biometric Terminal
In September, Delta became the first airline to launch a biometric terminal in the United States. Delta’s Terminal F, which was unveiled in Atlanta – the world’s busiest airport, allows travelers to use facial recognition “from curb to gate”. Additionally, Delta has plans to roll out biometrics technology in Detroit – another Delta hub.
The airline began rolling out biometric features in October of last year and launched the complete biometric experience on December 1 of 2018. Says Gil West, Delta’s COO, “We’re removing the need for a customer checking a bag to present their passport up to four times per departure – which means we’re giving customers the option of moving through the airport with one less thing to worry about”.
Delta customers who are traveling direct to an international destination can use a kiosk to enter their passport information, use the screen to capture data for facial recognition, and proceed through the terminal when they have been recognized by the system. Early reviews have been favorable – helped in large part by the fact the system saves travelers an average of 9 minutes and cuts down boarding times on a trial flight to 10.8 seconds per passenger.
Delta Failure: In-Flight Wi-Fi
Given the increasing reluctance of travelers to disconnect while they travel, it’s no surprise that Delta was one of many major carriers to invest in implementing Wi-Fi on its flights. By Q1 of 2018, Delta had installed in-flight connectivity systems by Gogo 2Ku – a provider of satellite-based in-flight connectivity – on more than 400 aircraft. However, a leaked memo published in February of 2018 showed the systems had massive reliability and maintenance issues:
- The systems suffered widespread outages, some of which took more than 30 days to correct – sparking complaints on social media.
- The design of the system made it possible for de-icing fluid to seep into the system and gum up antennas.
- Because the system is “fragile and difficult to maintain”, techs were not able to repair the system during nightly downtime, but instead had to set aside hangar space to make repairs to the system.
Further, apparently not trusting Gogo 2Ku to be up to the task, the memo announced that Delta’s own TechOps team would design needed improvements to the hardware.
Mixed Success: KAYAK and Alexa
In 2016, KAYAK created a skill that allowed users to ask KAYAK questions about flights, like “how much is a flight to the Bahamas” or “where can I fly for $400?”. Then, in late 2017, KAYAK became the first online travel site to allow users to make hotel bookings through Alexa. When the skill first launched, the functionality was extremely limited; users could ask KAYAK questions like “where can I go next month for $2,000?”. And after getting an answer, they would then have to re-do that search on KAYAK from a screen device and look for a matching result.
Later, a partial fix was implemented that causes the tool to search from a pool of hotel rooms with free cancellation. However, the process for setting up payment methods is rather involved, with many typical online payment methods not currently accepted. For the foreseeable future, it seems that KAYAK’s Alexa skill will be limited largely to people asking curious and aspirational questions about travel possibilities, rather than using it to make actual travel decisions.
Mixed Success: Starwood Hotels
Starwood Hotels and Resorts, which was acquired a few years ago by Marriott, has made a name for itself by offering a superior digital customer experience, with such features as smartphone check-in and keyless entry. However, perhaps Starwood’s most successful digital investment has also been the least visible.
The hotel chain invested $50 million between 2013 and 2015 in an analytics software program that uses machine learning to automatically recalibrate the pricing of its properties based on hundreds of variables. According to David Flueck, Starwood’s VP of Global Revenue, this system helped the chain improve its demand forecasting 20 percent from 2015 to 2016. This success is a large part of why Marriott acquired Starwood for $13 billion – making it the largest hotel chain in the world with 30 brands and more than 5,700 properties.
However, the lynchpin in Starwood’s customer experience strategy was customer data, which the hotel chain didn’t adequately protect, leading to a massive data breach that exposed sensitive personal and financial information of 500 million guests who had booked rooms with Starwood over the course of four years. Worse, the hotel chain could not confirm that complete credit card information was not exposed.
And now when you search for the hotel chain, news about the data breach are among those crucial top ten search results – signifying a massive branding problem that will need to be addressed. This highlights the danger of relying on digital technology to improve customer experience. Customer data can be the most powerful engine for personalized customer experience, but equal investments need to be made in data security.
One to watch: Marriott IoT Guestroom Lab
In November 2017, Marriott announced a new partnership with Samsung – a laboratory built in the Marriott corporate headquarters in Bethesda. The Guestroom Lab consists of two different model rooms. One room is a showcase of all the IoT bells and whistles that might be built into a completely new hotel room to demonstrate what hyper-personalized customer experience controlled by a guest’s smartphone might look like. The other room is built to show what personalized customer experience with IoT could be like in existing hotels, with only small changes or additions to infrastructure. The laboratory has been used to conduct focus testing to determine how best to design pilot programs to be implemented in Marriott hotels.
Of course, it will be quite a while before IoT hyper-personalization in hotel rooms becomes common, as there is a number of challenges that must be overcome. Perhaps first and foremost is the issue of scale; outfitting all the objects in a room that a guest would expect to be part of a connected experience is tremendously complex and expensive. Further, there are issues of connectivity, made even more complex by the proliferation of mobile platforms. Would IoT hotels need to follow the current format of restricting users to one platform (i.e. all Google or all Apple)? Or is there a way to support all guests regardless of what platform their devices run?
Lastly, given Marriott’s previous difficulties with data security, how will Marriott appropriately safeguard the massive amounts of data that a fully outfitted IoT guest room would generate? It’s too early to predict how this might end up, or how successful it will be, but definitely this will be a future trend to watch.