Why All Hospitality Management Professionals & Businesses are Vulnerable…

In the realm of hospitality, customer satisfaction and fidelity are vital and technology can either nourish or damage that relationship. It’s probably one of the most vulnerable industries for tech fiascoes for three main reasons:

  • Technology is everywhere: Practically every step of the hospitality guest cycle, from booking to check-out is either digitized or automated
  • The data is confidential: Hospitality companies have access to sensitive client data including credit card numbers and intimate details about preferences or health issues
  • The customers talk: With the rise of OTAs and review sites, hospitality companies are highly exposed to social media outbursts.

So here are 5 of the most pressing (and very plausible) tech nightmares menacing hospitality businesses everywhere, plus some tips for how to reduce the risk and impact.

1. ‘Our Business’ Data Has Been Hacked!’

With nearly 62% of all Customer Relation Management (CRM) now done using remote cloud computing, there is very little tangible data available to steal these days. While that means that less damage can be done if a business’ main hub is compromised, it means we are inherently more vulnerable to cyber hacking,

32% of companies said they were hit by cyber crime in 2016, even affecting global giants such as Yahoo, Ebay, Sony, Hilton, FedEx (as well as Donald Trump himself) in the last 2 years alone.

This is especially dangerous to the hospitality industry, as it is paramount to instill a feeling of comfort and protection. Hotel databases not only store credit and debit card information, but with digital keycard information, actual access to an individual’s safe space.

Hackers find their way into systems through points of weakness. It seems that hyper-vigilance is the only way that hacking can be somewhat circumvented, with Ehotelier claiming that 95% of all data breaches can be traced back to human error. All it takes is one lazy password and a seasoned hacker has everything they need to install malware strong enough to watch and log everything that computer does from then on – and ‘keystroke logging’ is only the tip of the iceberg.

To reduce the risk, the experts at Cluboid, who specialize in CRM software for bar, restaurant and nightclub management, recommend good intrusion detection software, and staff training to encourage employees to routinely change their passwords, never open email attachments or allow the use of external pen drives/CDs on company computers. By taking these steps, businesses will avoid highlighting themselves as obvious targets and therefore better maintain the integrity of their data.

“In the very near future, cyber security exercises are going to be absolutely expected of all companies by regulators.”

– Michael Vatis, Formerly of The Justice Department and FBI

2. ‘We’re about to be replaced by A.I.’

Scarily, researchers from Yale and Oxford have predicted the actual dates that they anticipate A.I. to surpass human capability in a number of different fields. Experts put forward the idea that by 2024, A.I. will be able to translate languages more efficiently than humans, write high-school level academic essays by 2026, perform complex surgery by 2053 and eventually possess the ability to formulate a New York Times bestseller in 2049.

Whilst this concern certainly isn’t restricted to the hospitality sphere, as hospitality is about servicing basic human requirements, it does stand to uproot the industry at it’s core. One 5 star hotel in Japan is already equipped with its own lifelike robot concierges.

However, as A.I. is yet to be able to conquer the realms of feeling and complete creative thought, businesses can fend off the effects of A.I. by reinvesting in roles that require genuine empathy and a uniquely human touch.

‘The jobs that require finesse, and feeling and subtlety will still be needed long after the robots take over.’

– Craig Fisher, Branding Head TalentNet

Employees remaining well versed in areas such as: generating fruitful business partnerships, building human rapport, negotiation, liaison, strategy, recruitment and HR, will continue to be an integral part of each and every hospitality team.

3. ‘Bad Press Went Viral!’

Social media is ruthless, immediate, and around the clock. It only takes one viral disaster to destroy a reputation that took many years of hard work to build. Just ask United Airlines.

In addition to countless social media channels, the hospitality industry also has the most active websites for leaving feedback and reviews, second only to retail. Public perception is a big concern for all brands, but it is even more important to an industry where opinion forums are so prevalent.

When negativity spreads online – whether that be a review, leaked business information, a video or a photograph – it is practically impossible to keep it contained. That is one business nightmare entirely enabled by technology.

Companies can put themselves in a position of strength by using social media scheduling and monitoring software such as Hootsuite, Buffer, Tweetdeck and SocialSprout to set alerts on keywords relative to their respective company. This means you are notified the moment something about your business is put out into the public sphere, and gives you the best chance to turn the customer experience around before it escalates.

A Harris Poll revealed that 68% of customers that left negative reviews online got a response, and 18% of them went on to then become loyal customers because of how the brand turned things around. 33% of the original 68% then endeavoured to post a positive review, and 34% even deleted the original negative one.

Prevent bad press circulating by making sure you are on the ball with feedback and and when it arises.

4. ‘We Had a Marketing Malfunction Using Big Data’

Most big, tech-savvy brands are accustomed to automating their marketing using large sets of customer information known as ‘big data’. It makes light work of things such as promotions, customer service, outreach, market research and sales. For example: we can see that a certain group of people on file are interested in wine-tasting events, spend an average of X on a holiday or live within a certain distance and therefore our computer algorithms know to contact them with things that may be of interest.

However, another tech nightmare borne of the big data shortcut seems to be that companies are sourcing their data wrongly. US Office supply store, OfficeMax, sent one poor, unsuspecting customer a disturbing letter after purchasing a mailing list from an unverified third-party provider, which also held personal information obtained from press clippings and web searches.

Often these data sets are taken by crawling the internet, or shared in some sort of agreement much like the medical data exchange between the NHS and Google earlier this year.

The problem lies in that the computers have no way of gauging the authenticity and often context of any of the information provided. Such huge volumes of data have now been collected that often they hold incorrect, skewed or inaccurate data, which unwitting companies then use this to push a sale. If big data isn’t analysed thoroughly it can result in spam as well as frustrated users unsubscribing, unfollowing and ultimately, taking their custom elsewhere.

To avoid such mishaps, it is important in hospitality management to not cut corners and instead carefully curate data using credible sources and public record repositories. Alternatively, customer experience tools such as HotJar, Kissmetrics or IBM Analytics can provide thorough audience data and are also platform-neutral. This means they watch not just desktop activity, but also mobile and tablet so you can be sure it is a fair representation. No more foolhardy outreach which damages your brand.

“Information is the oil of the 21st century, and analytics is the combustion engine.”

– Peter Sondergaard, Senior Vice President of Gartner Inc.

5. ‘We just can’t capture the Millennial/Gen Z Market’

Millennials and the Generation being referred to as Gen Z (anyone born after 2004) are digital natives, and thanks to internet access and vlogging culture, they’re also among the most self-taught generation of all time. This has created a generation eager to engage and interact, which traditional marketing has a hard time keeping up with.

Study after study has shown a positive correlation between engagement and improved TripAdvisor reviews, increased revenue, and more loyalty. (Coincidentally, 80% of millennials polled by Expedia are active users of online reviewing platforms, responding better to peer evaluation and transparency than more traditional advertising.)

If businesses are neglecting engagement in their strategies moving forward, they will fail to capture a market with an expected annual spend of $3.39 trillion in 2018. For the digital native, engagement is best achieved through technology.

Hospitality companies should look to improve user experience in an interactive way where possible using things such as gamification, mobile integration, digital information points, chatbots, apps, digital loyalty schemes and smart alternatives to the services that they currently offer such as virtual menus, mobile ordering and interactive jukeboxes. Aloft Hotel Group have even premiered voice activated rooms, and a text service enabling room service solely through the use of emojis.

What more can you do?

To stay up-to-date on industry trends and learn the latest strategies, hospitality managers should continually invest in further training. Glion offers tailored hospitality management training courses for companies on the campuses in London and Switzerland, as well as an MBA in Hospitality that prepares hospitality management professionals to assume higher levels of responsibility and meet future industry challenges.

This article was prepared in collaboration with Cluboid CRM software for bar, restaurant and nightclub management.

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About the author

Glion Institute of Higher Education
Glion Institute of Higher Education is a private Swiss institution offering bachelor’s and master’s degrees in hospitality, luxury and event management to an international student body across three campuses in Switzerland and London, UK.
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