ITB Berlin 2019 Blog

Responsible Personalization, Seamless Intelligence and the Road to Nowhere – Dispatch from ITB Berlin

By , Chief Evangelist & Development Officer

 

Another ITB Berlin behind us, another fresh look ahead at key trends in hospitality and travel

Why do over 160,000 hospitality experts from 180+ countries every year brave packed, cavernous halls and insanely long waits for transportation while getting whipped by winds and soaked in rain?

Because it’s Berlin and it’s ITB, the largest tourism trade show in the world. It’s where the global tourism industry meets to network, exchange ideas, learn about the latest developments and sign deals. Along with other events taking place that week, it is for sure the most concentrated agglomeration of hospitality experts. It is exhausting, exhilarating and high energy, but at the same time, it is the perfect place to get a pulse of the industry’s heartbeat.

Throughout the week I had the chance to catch up with many senior executives of global and regional hotel brands, independent hotels, asset owners, investors and startup founders. Of course, each of them had their own nuggets of wisdom to share, but as the week progressed, some common themes emerged:

  • Personalization, yes! But please do it responsibly
  • Experience matters
  • Big data needs a home—and a lot of intelligence

Let’s look at each of these in more detail:

Personalization, Yes! But Please Do It Responsibly

At the International Hotel Investment Forum (IHIF), traditionally held the days before ITB, a number of panels and conversations addressed the growing desire to serve up more relevant offers. Consistently, research has shown people want higher relevancy and personalization and are willing to give up some of their data in return. Of course, over the last year, with data breaches affecting a larger and larger swatch of the population and the implementation of GDPR, this topic has been hotly discussed.

What is the right balance between collecting the data necessary to offer these highly relevant offers and maintaining secure custodianship of the data entrusted to them? Maud Bailly, chief digital officer at AccorHotels framed it best at one of the IHIF panels when she talked about responsible personalization as the way forward: with great power comes great responsibility, and it is every company’s responsibility to keep their customers’ precious data safe so they can trust in personalization. A few tech companies are working on secure, digital IDs, and in the next three years or so, we will see these popping up in more and more areas of our digital lives.

Experience Matters

The time of buying “a thing” is over. Consumers want tailor-made products with the buying process itself becoming part of the experience, be it for sneakershigh-performance cars or soft drinks. The same is true for travel, arguably the most experience driven (or dependent) category.

Customers want customization, and while the industry is not yet there (have you ever Googled “hotel with Central Park view” and become overwhelmed?), it’s working hard to get there to “unbundle” the stay experience and extend it beyond rooms and beyond hotels.

In a panel discussion I led with experts from industry giant, Amadeus, startup Apaleo and IDeaS’ chief operating officer, Sanjay Nagalia, we discussed how through “attribute-based shopping” the industry will be able to provide more granular offerings and let the consumer choose what they value most. Attribute-based shopping is not some esoteric concept. Leading hotel brands have spent hundreds of millions developing their technology infrastructure to start offering it, and we will see the first iterations in the coming months.

Chris Nassetta, CEO of Hilton, made a strong case at IHIF saying if you only compete on price, it’s a road to nowhere. Premium and differentiated experience for customers who can pay for the premium will ensure Hilton’s survival.

Big Data Needs a Home—and a Lot of Intelligence

It is undeniable that we live in the era of big data. Chris Silcock, EVP and chief commercial officer at Hilton stated publicly that Hilton collects one billion(!) guest data points every day. A typical hotel makes about five million pricing decisions every year and the amount of structured data in the world is expected to increase from 36 zettabytes to 163 zettabytes by 2025.

The whole world is becoming data, and it is not rational to believe humans are able to effectively extract information from the data and turn it into insights and decisions. The move toward automation is inevitable. No human can get five million pricing decisions right, but with the right technology taking on the heavy load, no human should have to worry about that. More and more hotel technology providers not only are capable of converting the data into decisions, but they do so automatically with accurate and actionable outputs requiring minimal input.

New partnerships are emerging which enable hotels to leverage a combination of hotel providers to create more value and greatly improve the guest experience. Case in point is the partnership IDeaS announced with startup MeetingPackage. For the first time it is possible to distribute meeting inventory seamlessly on brand.com and other channels (through MeetingPackage) and have it dynamically priced (through IDeaS Smart Space). The future is more intelligent and more integrated with data-driven decision-empowerment systems.

After a busy week of networking and listening, I have come to the conclusion that the hotel tech world only gets more and more exciting. Hotels in the future will be able to tap into capabilities like never before. Judging by the increasing number of technology companies represented at ITB, I could imagine that soon instead of ITB standing for “International Tourism Borse,” it will stand for “Innovative Technology Berlin.”

Klaus Kohlmayr
Chief Evangelist & Development Officer

Klaus began his experience in the hotel industry while studying at the Hotel Management and Catering School in Austria. He also studied business at Henley Management College, real estate investment and asset management at Cornell, and finance and strategy at the Singapore Management University. Klaus participates in various advisory boards, including HSMAI in the Asia Pacific and the Americas and the Cornell-Nanyang Institute of Hospitality Management in Singapore.

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