Digital transformation and agility in hospitality
About this podcast episode
For a hotel brand to succeed, leadership must embrace innovation 👇
Today, Are Morch joins Bill Raymond to discuss agility and digital change in the hotel industry.
While we may still be amidst significant change and disruption, hotels still have plenty of opportunities to embrace digital transformation. In this podcast episode, you will learn the following:
✅ The latest innovations in hotels
✅ How to identify and lead change
✅ The importance of community outreach
✅ How to embrace change
✅ Re-thinking and re-educating your teams
(transcripts are auto-generated, so please excuse the brevity)
Bill Raymond: Hi, and welcome to the podcast. Today we are joined by Are Morch, author and digital marketing coach for hotels.
Bill Raymond: Hi Are. How are you today?
Are Morch: I’m doing pretty good. How about yourself, Bill?
Bill Raymond: I’m doing great. Thank you.
Bill Raymond: Today, we’re going to be talking about digital transformation and agility in the hospitality industry, which I’m excited about because we’ve been doing a lot of podcasts lately about software development, so it’s going to be fun to talk about a whole industry that we have not covered on this podcast before.
Who is Are Morch?
Bill Raymond: Before we get started, can you share a little bit about yourself?
Are Morch: Yes, Bill.My name is Are Morch. I’m originally born and raised in the beautiful country of Norway. And my background is from technology and also from hospitality, and particularly in the hotel industry. And I work with digital transformation towardsparticularly the hotel industry, that’s what I’m working with.
The Hotel and Hospitality Industry
Bill Raymond: can you just set a context for what you’re talking about today?
Are Morch: The hotels that mostly that we work with is what we define in somewhat boutique and also independent hotels, which typically is hotels from 50 up to 300 rooms. I also work with hotels as a little bit more up to 500 rooms, butthe most common hotels that I work with is from 50 to 300 hundred rooms. So it is midsize hotels, it is what I would say.
Post-pandemic challenges in the hospitality industry
Bill Raymond: I think we all know that during the pandemic, when that originally started, shelter-in-place and things of that nature, it really shook up our travel industry in a number of ways, and it probably also shone a light on some opportunities for change.
Bill Raymond: So I’m wondering if you can share some of the challenges that you see in the industry right now that are ripe for innovation and digital transformation.
Are Morch: TheThe most pressing challenge is of course related to staffing issues.
Are Morch: That’s one of the challenge we see. Another challenge is adoptions to new technology in general. And that has a lot to do with the existing technology, which is a little bit old school. There, a lot of the technology that we have in place in many of the hotels today is what we define as silos, that they are separate systems. One system for check-in, one system for the housekeeping department, for events and so on.
Are Morch: So there’s a lot of silos that makes it a little bit challenging when we’re moving towards the next part or to try to connect it all into, to more cloud-type of technology or the new technology that we see is available for hotels today.
Are Morch: And of course, there is one thing that we see also today is thatwe see new competitors like Airbnb, it started to tap into, to the whole hotel market and take in those type of customers that, that traditionally have booked with hotels.
Are Morch: So there’s several aspects of uh, that we see that is challenging for the hospitality industry.
Challenges of silos
Bill Raymond: I suppose, if you don’t have these connected systems, it’s going to be harder to serve a customer.
Bill Raymond: That is correct.
Are Morch: Traditionally, its like, when they make bookings, they go to, to like a call center or something like that. Then call centers, they set up the transformation through the digital technology that they have available to make sure the process goes as smooth as possible.
Are Morch: But that doesn’t always happen.
Staffing in Hotels
Bill Raymond: So how about staffing? I know that the hospitality industry as a whole, has had a lot of changes going around. I mean, living here in San Francisco, sometimes our restaurants are open from 5:00 PM to 8:00 PM. Now we’re well known as a city that opens late and closes early, but some of the situations here are, you know, they’re only open for a few hours. And we also see this with some of the hotels, there’s a lot more of self check-in and things like that. But I know that some of it has to do with just technology, but I think a lot of it probably has to do with people wondering what career they want to be in and there being a staffing shortage.
Bill Raymond: Are we seeing that in the hospitality industry as especially in the hotel business?
Are Morch: Yeah, there’s most definitely staffing shortages is in the hospitality and they have challenge in also finding the right talent, which is also a challenge itself. Because it’s like, it’s easy to find people today with service experience. That’s not complicated. But today, because of the technology that we are talking about, we need whole new skillsets, which includes technology and not only technology, but innovative technology that comes to things that deals with artificial intelligence, visual tools and everything that we deal with, particularly social media tools. And that’s a little harder to get for hotelsto acquire those type ofemployees because they will, they’re so much, well, that’s a competitive set of employees for, so they will usually go to other segments that’s appear to be more attractive than what the hospitality industry is.
New digital transformation technology for hotels
Bill Raymond: Right. So what are some of the hot new digital transformation technology things that we’re seeing in this space right now?
Are Morch: The technology that we see, we see more hotels in implementing what we call the kiosk, similar to what you have seen on airports for a long time. Hotels is now starting to get more in tune with using these tools,particularly after, after Covid.The hotels are really in forefront, where you can do everything from your mobile device, from making the reservations, getting the information about your room, and the progress if it’s ready. Once the room is ready, you can go directly to your room and check-in. Use your mobile device as a key to check-in and do all the service options that you have, room order, wake up calls, whatever… You can even connect it with your TV in the room to order the movies You can also connect it with your Netflix or whatever streaming service you prefer. And then also in the back end when you come out, check out, you can also use your mobile services to check out and get your bill directly to the mobile device. So you actually don’t have to interact with any front staff in many cases on the new hotels using this technology today, which is something that we see more customers actually requiring or requesting today.
Bill Raymond: I remember my first trip after shelter-in-place ended and I went to a hotel, it was down in Phoenix actually, and it was great. They checked me in, I could have checked in without going to the front desk, I think.
Bill Raymond: But I, you know, I still kind of like that check-in process for whatever reason, maybe it’s nostalgia or what have you.
Bill Raymond: But I do appreciate going there and learning about what the property has to offer.
Bill Raymond: But I remember that once I was in the room, the whole thing was, you know, I was still a little, this is quite literally right after a lot of shelter-in-place sort of was alleviated. And so I was still standoffish about leaving my room, so I made sure that I got a room that had a sitting space outside. And one of the things they said was, text us.
Bill Raymond: And I’m a frequent traveler, but I haven’t been for about two years because of the issues with the pandemic. And I will say, I was a little surprised that was the case, especially for this hotel chain, which is not well known to be the most technologically savvy by most people, and I just really appreciated it. I could text them and say, Hi I would like to have a meal delivered to my room. I’d like some water, can you bring me an extra pillow? I remembered there was a little gas stove outside of my room, and that actually was not connected to the gas in the building, so they had to bring a tank. I texted them and someone actually came from the outside, up to the room to do it and never even entered through my room.
Bill Raymond: And I just thought, wow, you know, I love being around people and I don’t necessarily want to be all that locked in, but the wonderful part of that was, I had a person that I was talking to and I was communicating with, and however that happened in the back end, you know, I don’t know if it was a person or a chatbot, but it felt right and it didn’t feel forced, and I was able to get a lot of the services that I’d normally need to pick up the phone and wait on hold for someone to do for me.
Bill Raymond: And it’s not a big deal, but it just seemed like a major transformation to me because it took a lot of the stress out of, you know, even just calling for a toothbrush in the morning that you forgot to get.
Are Morch: We, see in the hotels that is getting really innovative with this type of service, and because we have learned from other service providers that utilizing SMS or mobile devices, smart devices, that you can send like you said, text messages to welcome. Because we can see, the hotels can now see that when for customers, they see or guest is using the mobile device to check-into the room and you can send a message: Is everything to your satisfaction and things like that.
Are Morch: But let’s say that you come into your room and you say, hey, I would now like some extra towels, and you can text the message that, okay, I’d like some extra towels sent up to your room. And then what we see is some hotels is doing that, they are personalizing it, that there was will not only saying that we are going to bring you some extra towels, but they will say that, or even in some instances, they will bring the message with picture of that person that’s going to deliver it to you.
Are Morch: That’s a great way to personalize the experience in a unique way. So this is something that we’re seeing a whole lot more of.
Using the available data effectively
Bill Raymond: It’s very interesting to see from a customer perspective.
Bill Raymond: I’d like to talk a little bit about the hospitality perspective, the hotel perspective, and I want to talk a little bit about some of the new markets that we’re going to see.
Bill Raymond: But before we do that, one of the things, actually, you said this a few times just as we’re starting, you talked about data and how it’s not being used effectively.
Bill Raymond: Can you share a little bit about what you mean by that?
Are Morch: the data we are collecting is typically through our reservation systems. That’s where we get the most data. But today, we know that it’s like the customers is using mobile devices, they are using social media to connect with hotels, to share information about the hotels, to talk about the hotels in different type of ways. And the data we see there is more than what we can get from typicallya reservation system. Because here, the datathey will talk about what the experience they enjoyed outside the hotels, how they got to the hotel, who they met on the way. So there’s a whole perspective of information that we see unveiling or is kind of laid out to the hotels that we can use to improve the experience and help them connect.
Are Morch: Because that’s what we’re seeing actually, which is really interesting.
The community around the hotels
Are Morch: Several hotels were in particular that deals with events and meetings. They want the hotels to be, let’s call it, a mediator or something where we can help them connect withother guests or the community, to set them up with this can be, if you are an electrician or whatever, plumber that can help with setting them up for a service, not necessarily at the hotel, but in the community. So you are actually helping the customers in new, unique ways that we have never seen or done before. So this is really helping us thinking outside the box to add something totally unique to the customer experience.
Bill Raymond: That’s pretty interesting. So it’s not even for customers, now you’re thinking outside of that and thinking about the community that’s around
Are Morch: **This is something what we could define, it is what I called embedded hospitality. And embedded hospitality, that means that we are now, what we encouraging or training employees to do in the hotel industry, is to go outside the hotel, go outside and learn what the local community has to offer. Not just by reading their website information, but actually go into, use their services. So you have a feeling of that experience. **
Are Morch: And then coming back to the hotel and sharing that experience, be the customers. Because customers like there’s, we will have all the time customers coming onto the hotel. They might have forgotten something at home or they might need a certain service, there can be like a cleaning service, whatever.
Are Morch: ** And we want to make that experience as transparent and as easy and help them doing it for them. We don’t want them to use a lot of time to, where can I find the closest whatever business. We want to be there, you have to be a concierge at every touch point today and with data and the digital tools, we have that opportunity to do that today.**
One big system or more specific systems?
Bill Raymond: So there’s going to be systems that are more tied together and interactive. Are we starting to see sort of a big system getting implemented that takes care of all these things, or is it now going to start being more of specific systems that they’re going through in digital transformation, but they’re just smarter and can interact with other systems more easily?
Are Morch: Yeah, it is going to be the latter to begin with, that there’s going to be more the specific systems. Because the bigger system to come, that will take a little bit of time, because it’s, like I said earlier, a lot of the systems in hospitality is in silos and to change it all at one time, that’s going to be very costly or expensive.
Are Morch: And so most of the process we look at today is we want to make sure that it’s cost-effective, but that we can still differentiate with the system that we have and use the tools that is available to take a step. The transformation is more like, this is a step by step system.
Are Morch: This is what we define as speed with incremental drips. It’s take it small drips at a time, and then we will get there to that point where we see the total system come together.
Bill Raymond: Well, and that’s agile, right? I mean, we’re talking about getting out there, finding some new things, some new ideas, and incrementally developing them so we ultimately can serve the customer better.
Are Morch: Well, yeah, that’s the main idea because we see there’s so many businesses locally that is actually ahead of the hospitality industry or ahead of hotels when it comes to innovations.
Are Morch: So instead of rushing our own innovation, we will take advantage of the innovation outside. So we can kind of use that to level our own innovations.
Are Morch: So using a brands to help us, and learn from their experiences, what system is working, what’s not working, and so on. And of course, then we have to learn, because not all the systems, what the local plumber is, he might not, of course he’s not using the same data system that the hotel is using, but it’s the principles, it’s the transformation. How did they work with their customers? How did they generate awareness and all those things.
Are Morch: That’s what we have to do and collaborate with the community to learn and see, okay, we don’t have to take all the pieces, but the pieces that’s is most relevant for the hotel industry to move forward.
Bill Raymond: Right. And you already touched on a few things such as the community driven approach to managing the hotel, but also having this social engagement with your community and other engagements with them. And you also talked about social media.
Bill Raymond: But one of the other things that you mentioned there was, you know, competitors.
Bill Raymond: So there are certainly a lot of competitors out there in the market space right now that are, if you will, I mean, I don’t know if this is true or not, but it feels like they’re going after the hotel industry. The likes of Airbnb, which I guess would be sort of a universal one that everyone knows, or VRBO, vrbo, What are hotels doing to differentiate themselves from that?
Bill Raymond: Are they directly trying to compete there or are they finding some new market segments that they can move into?
Are Morch: That is a very good question. At the moment, they are not so much. The hotel, you see, is still more or less competing with themselves, within the known markets, traditionally known.
Are Morch: And usually, they compete within what we sort defined as the commodity services that deals with the price, quality and features that the hotels have to offer. What we see is like when you look at, for example, Airbnb focus on a whole another aspect. They don’t look so much on the commodities when they look at their products, the way they differentiate, they look at the beliefs of others. If you look at Airbnb’s mission, which is more about, their mission something like, to create a world where everyone can belong and focus on creating an end-to-end travel platform that will handle every part of your trip.
Are Morch: And that’s something that makes totally sense to me because that is something that, going back to what I talked about, that’s what we want with this embedded hospitality.
Are Morch: **That’s why we want to work with the community, so hotels can create a belief that works with us, you’re more dealing with the why all the big beliefs, that you’re creating a service where everybody belongs and an end-to-end platform that if you want to call it a travel platform, that’s fine, but the key is that you want to be part of every moment of the trip. **
Are Morch: And because what we see with the hotel industry, which has traditionally been a service industry, is no longer a service industry. Now it’s a experience industry. We’re part of the experience industry, and the experience starts way before the customers haven’t even put their foot in.
Are Morch: They start once you start, the customer is starting to dream about the next trip, that’s when the experience really starts.
Are Morch: And now we have the tools and the technology and today that we already can be at that point where the, **dreaming starts. **
Are Morch: So this opens new doors that we’ve never seen before and that it’s really exciting for the future of the hotels.
Are Morch: But we have to start one place and then its like we said earlier, take it step by step, the small incremental drip that we talked about. So we do it cost efective and find new ways to differentiate and that’s where we want to work with a local community.
Citizen M hotels
Bill Raymond: Are there any examples that you might be able to share, some real life examples that you are seeing of organizations or hotels, someone in the hospitality industry that’s embracing this digital transformation?
Are Morch: Citizen M M it’s like, they don’t have employees, they have ambassadors. That’s what they define the people that work there, at Citizen M. And customers are not customers, you are a citizen.
Are Morch: So they use it both ways, which is a really smart way to deal with the market today.
Are Morch: But there’s like, when you look at Citizen M, they are focused on creating unique experiences in every aspect, every little touchpoint is something unique. You can come into to a Citizen M hotel and go into the room and they’ll have a map outside the room, for example, and on the map it will say something like, nice shoes.
Are Morch: So, So it gives you a feedback on your shoes when you come into the room and they will have, come into the room and you will have, you will see comments that talks to the guest on even to the small things like the shampoo bottles,that they say something like the shampoo is the, you had the, even the longest hotel traveler can turn into a sparkling, clean and nice smelling traveler from the shampoo.
Are Morch: So they use even the shampoo bottle to have a nice conversation to create a story, and these are the teams that we know, that the customers, they find it appealing. They share these experiences. Even in the hairdryer case, it will say, shh, the hair dryer is hiding.
Are Morch: So the technology, the guest is using, is to share this experience. They share it with their network, they share it with their community, so the customer becomes a natural or a volunteering ambassador for the hotel.
Bill Raymond: So the hotels, they don’t have to almost put out any marketing campaigns because the customer becomes their marketing campaign. And I’m guessing that a company like that has all those little fine touches and also has this sort of ambassador-style approach where everyone can work with everyone else. A customer can just communicate with anyone. They must build their systems in such a way that they can provide that experience. I can’t imagine that they don’t have some unique innovations so that they can do that.
Are Morch: Yeah, it’s all down to training of the employees, you empower the employees on behalf of Citizen M I should call them ambassadors.
Are Morch: On Citizen M they don’t have a front desk. Their ambassadors can check you in if you prefer, like you said earlier that if you like to have that personal check-in, you can check in with an ambassador.
Are Morch: Or you can also use a kiosk or you can use the app, the mobile application to check in.
Are Morch: They give you alternatives, which is great, but it’s all about the trainings, provide not only training on the technology and the people, but also what we define as alternative training, which as I said earlier that you have to allow the employees to go outside the hotels, go and see what’s going on in the community.
Are Morch: Also let your employees kind of participate on industry events,to get new inspirations and ideas. Because this is not what we see. This is encouraging for the employees and they become happier and more than anything, we know happy employees are productive employees.
Bill Raymond: If there is a hotel or someone in the hospitality industry right now, thinking, I’m listening to this podcast and I’m hearing about this digital transformation, and I’m also hearing about agile and agility. I want to get to some other point where I’m focused on community and I’m focused on providing these new experiences and unique experiences for my customer. That can be a lot. I have to imagine there’s a fairly significant change that needs to happen both organizationally, in systems and also of course, data and even maybe how people work together.
Bill Raymond: So if I’m an executive or a leader in this space and I’m trying to get my arms around it, what are some recommendations you would provide?
Are Morch: We start with small incremental drips, and because we want this to be, yeah, transformation. But we also want to make sure that this is a cost effective transformation. I think if it happens too fast, it becomes more change, and change will create fears and fear is something that will tear down any type of change or transformation. So we don’t want to get it into that part of the process. The first thing that I think is what I advise hotels to do is start with discovering what you have and be thankful for what you have.
Are Morch: You have to know what you have. If not, we don’t know where to start the transformation. And if you are, all, everything that you have at the hotel is, or everything is in silos, okay, that’s cool. We want to know that. The second part is like, once you discover what you have, then you have to start building relationships and making friends first.
Are Morch: you have to start with the employees and then your customers, and the community. That’s why I said a couple of times, like, we have to empower employees, allow them to see what’s out there in the community so they can know and be part of creating these new experiences that we know that we have to do. This has got to be a culture change so you want to make thatchange together with your employees. and of course, once you started working with employees and customers, you start seeing the new opportunities that you now can unlock and what I defined earlier as to embed hospitality, working with the community and the community will help you.
Are Morch: When you understand that, will you see how fast and how slow you need to make this process. And it will be different for every hotel because of course, if you have hotel in New York versus a hotel in a small city, it is going to be totally different. So you have to understand your community.
Are Morch: Collaboration is so essential today in every aspect,co-designing, co-creation, that can be co-creation on content that’s could help that. Where your community is going to help you with generate awareness of what you are doing, what’s happening in the process, so it doesn’t become a surprise for neither the employees or a surprise for the guests, but involve everybody, so that they understand what’s going on.
Are Morch: And then once you have the process going,is optimizing with small steps. we want to optimize and then improve and then we have to be thankful and celebrate and reward those that is taking part of the process. That’s the best way to do it.
Are Morch: Because if you try to run over everybody, it’s going to be creating fears and the customer is going to be unhappy, employees is going to be unhappy, and nobody will want to come to a hotel like that.
Bill Raymond: Yeah, and I hear what you’re saying. I think what we used to do,is define a large system, scope it all out, and then build it as a big project. And usually, that project that we thought was going to take six months, takes three years. And then we don’t necessarily deliver on half the scope that we want.
Bill Raymond: And I think what you are saying here, coming back to that theme of agility and digital transformation, is that you do those incremental drips, as you said, and then also continuously improve. So we’re not looking at this as, well, we’ll just build this new system and then we’ll be digitally transformed.
Bill Raymond: You’re continuously building upon the system and making changes and improving, and if things aren’t working, remove them or fix them. And you’re just continuously doing this as part of your ongoing digital transformation as opposed to the digital transformation that will hopefully end at this.
Are Morch: Yeah, we don’t want to turn it into a carrot and stick process.
Are Morch: Because that’s going to be disastrous. Because you know there’s always going to be a shinier tool, a shinier software, and we know things is changing dramatically faster.
Are Morch: So we want to make sure that hotels, when they go into this, that they make it an investment that’s going to be for, for the future, not for just for next month or next year, but something that’s going to last for the future. And so that is important that we look at the longevity of the whole process.
Are Morch: Even though that we want to do this small step by step, we also want to look at the bigger picture.
Bill Raymond: Thank you for that. I think that’s a great way to wrap up the podcast.
Bill Raymond: Are Morch, I really appreciate your spending the time with us today. I am curious if anyone wants to learn more about you and what you’re doing, chat with you about this further, is there some way people can reach out to you?
Bill Raymond: They can find me of course on LinkedIn. I’m on active on LinkedIn. Also they can find me on my blog or website, which is aremorch.com. I am pretty much on most of the social media channels. All right. Wonderful.
Bill Raymond: Well, thank you so much for your time today, I really appreciate it.
Are Morch: Thanks for having me today, Bill.