Since the term was first coined in 1999, the internet of things (IoT) has been touted as the next big technological leap, generating hype and misgivings in equal measure. Referring to connected, ‘smart’ appliances, its applications range from shopping to crop monitoring.
Perhaps the classic example would be the internet-connected fridge, a staple of early 2000s sci-fi films. The idea is that you can keep track of what’s inside, even ordering a replacement carton of milk once it starts to go bad. While such fridges remain a niche – and oft-criticised – appliance, IoT itself no longer sounds futuristic. According to IT research firm Gartner, there were 6.4 billion connected ‘things’ by the end of 2016, with that number set to surge to 20.8 billion by 2020.
As more devices get connected, the implications will be profound. Although typically discussed in terms of consumer technology (think Fitbit activity trackers and the quantified self), every industry will feel the effects.
New wave
GE has gone so far as to describe the industrial IoT as the next "wave of innovation”, following on from the industrial and internet revolutions. It argues that “the deeper meshing of the digital world with the world of machines holds the potential to bring about profound transformation to global industry and in turn to many aspects of daily life”.
Hospitality is no exception. According to a study by Tata Consultancy Services, travel, transportation and hospitality companies spent an average of $128.9 million on IoT initiatives in 2015, the highest figure of any sector. A PwC report, meanwhile, states that hospitality is the industry with the fifthhighest investment in sensors.
“Everyone is trying to figure out how IoT applies to hotels,” says Doug Carrillo, vice-president of sales and marketing at Virgin Hotels. “Our point of view is if it doesn’t add to the guest experience, then what’s the point? That’s why we call it ‘smart disruption’ at Virgin Hotels.”
Carrillo’s take on the matter – that there is no point blindly implementing IoT for the sake of it – is perhaps indicative of the stage of maturity the technology has reached. While the industry is moving in this direction, it’s still early days, and hoteliers are trying to work out how best to derive value from their investments. As a result, many discussions on the subject focus more on the near future than they do on the present day.
“AccorHotels believes that IoT, and more generally the use of AI, will help it to accompany tomorrow’s uses and habits in the travel sector,” says Guillaume Bazin, VP of digital operations mobile at AccorHotels. “Our teams are working on all aspects of our customers’ stay and future experiences.”
He adds that while AccorHotels has started work on various IoT applications, it does not yet use the technology for customer data collection or internal processes.
Carrillo is similarly keen to downplay its current importance, arguing that IoT is only important to the extent that guests feel it improves their experience. “So much of IoT is being driven by at-home experiences; we just need to see how that translates into hotels,” he says.
What, then, might IoT mean for the hotel industry over the next few years and further ahead? One use that’s already widespread is room control – where guests control temperature, lighting, curtains and so on from an in-room iPad or television. This interface might also be used to communicate with housekeeping, or to connect with a ‘home away from home’ network that can stream films or music.
Make it personal
Some properties, like MGM Resorts City Center hotels in Las Vegas, have been incorporating ‘smart tablets’ since as early as 2009. Other hotels are experimenting with voice communication, such as Amazon’s Alexa. AccorHotels began rolling out Samsung’s SMART Hospitality Display portfolio in 2015, and Virgin Hotels’ mobile app, Lucy, fulfils a similar function.
“Lucy enables guests to integrate their device into the hotel experience,” explains Carrillo. “She gives users a seamless and customised stay by transforming their digital ecosystem into a personal assistant – fulfilling requests for services and amenities, functioning as the room thermostat, streaming content, and more.”
Another common application is keyless entry, which enables people to enter their hotel room by holding their smartphone to a sensor.
Since Starwood implemented the technology on a wide scale with SPG Keyless in 2014, most large international operators have either adopted, or piloted it, which can be taken as a sign of things to come.
Moving beyond guest-oriented applications, IoT is also linked to the concept of the ‘smart’ hotel. Guestroom automation forms a part of that – for instance, lights that automatically turn on once the door is opened, or automated climate control systems that can detect whether someone’s in the room.
Notably, the technique called ‘daylight harvesting’, which adjusts the lighting based on how much sunlight is filtering in from outside. Through technology of this kind – along with systems that monitor guests’ energy and water use – IoT will have a big role to play in hotels’ sustainability efforts.
On top of this, any smart hotel worthy of the term is likely to involve a level of predictive maintenance. In essence, properties will be kitted out with sensors that can detect anomalies and send an alert to staff if something is wrong. It will no longer fall to the guest to complain about a water leak or malfunctioning air conditioning.
The most hyped application for IoT, however, concerns personalisation. At a time when the big chains are often seen as loyalty reward programmes first and foremost, the guest experience is the thing that makes or breaks that bond. If a hotel can deliver a truly personalised service – tailoring its offering to each person, in accordance with their preferences – then guests are far more likely to remember their stays.
“Let’s imagine a personal assistant that could assist a client by booking a taxi to the airport, accompanying them when they arrive at the hotel, proposing personal activities, booking their favourite restaurant in advance and pointing out the best places to visit,” says Bazin. “That would make for an extraordinary experience for every guest.”
Data-based
AccorHotels is developing a chatbot named Phil Welcome precisely for this purpose. Already live on Facebook Messenger and Google Home, and soon to be available on the hotel group’s website and app, this AI will be able to propose a series of services to clients and answer their questions.
The more far-reaching vision, however, involves interactions at every point in a guest’s journey, guided by sensors and beacons. After checking in via their app, guests could tweak their preference settings and would find their hotel room already adjusted to their comfort levels. As they moved through the property, they would receive location-sensitive alerts and suggestions, and could order, say, drinks by the pool with a swipe of their phone. In theory, the more information a customer gives the hotel, the easier it should be to predict their future preferences. If IoT technologies are harnessed for data collection, together with sophisticated analytics, the platform could be used to build a profile of each guest and to pre-empt their wishes ahead of time. Most people are already familiar with this concept from online retail and targeted advertising.
“All businesses are chasing what personalisation means to the consumer,” says Carrillo. “We need to look outside our industry to understand the direction Virgin Hotels needs to take consumer data and personalisation via IoT, and we are on that path.”
Of course, this technology is still evolving, and hotels will need to tease out what levels of implementation are most appropriate. After all, an app won’t be worth investing in if customers find its suggestions intrusive, rather than helpful.
“Several teams at AccorHotels are working on questions related to customers’ data protection and IoT. Customers and the protection of their personal data take absolute precedence over everything else,” says Bazin.
On top of that, devices may be vulnerable to hackers, and it can be costly to retrofit hotels with IoT connectivity. C Scott Hansen, director of guest technology at Marriott, has stressed these challenges, adding, “I don’t foresee a significant effect in the next five years”.
All this said, hotel groups remain optimistic about the possibilities, realising that in the medium-to-longer term, IoT has scope to affect almost every aspect of their business.
“We share the same concerns as most industries that incorporate IoT into their consumer-facing experiences and operations,” says Carrillo. “So much of it is documented, but some of it is evolving. It’s all about having the right team – internal and consultants – that are diligent with these concerns. We never stop evolving, so that what we offer is not only disruptive but revolutionary.”
