Be the disruptor or become the disrupted

In Shakespeare’s "Hamlet," Prince Hamlet postulates that, "Something is rotten in the state of Denmark," but he doesn't put his finger on it until a play in the royal court revealed who killed his father, the king.

There's similar dramaturgy reeking through the halls of the recent hotel industry: Are asset values too high? Is money too cheap? Have we reached the peak of the cycle?

And while the actors with the answers (or opinions) usually converge on investment-focused conferences, it's technology-centric gatherings that could serve them some competing intel.

In one such event, which brought together startup companies and innovators from throughout the world of travel, including hotels, cruises, airlines, tours, and attractions, here to answer the question: How do you keep up with the technology that continues to evolve and dog the travel industry?

The New Asset Class

 Airbnb leads all lodging brands in loyalty, even without a loyalty program. “Membership does not equal loyalty,” A word of caution that the pace of change impacting brand perceptions continues to quicken, with hotel brands lagging behind.  

Fortinbras on the Horizon

The debate between hotels and OTAs rages on, with the brands’ direct-booking efforts center stage. And it’s clear that some progress has been made. “Distribution and the OTAs are still the main game in town, Even so, there is a larger, more ominous challenge on the horizon—category killers, such as Amazon, Google and Facebook. They have emerged as the new gatekeepers of technology, and have turned their attention to travel, including hotels.

Google, for example, is investing heavily to tie together user data across its products to enable the company to “own” the customer relationship with the traveler, beginning at the top of the funnel and throughout the traveler's journey. 

It’s a complex task, but with thousands of engineers plugging away at the problem, Google is poised to be able to dominate the traveler experience, from beginning to end.

Google's future of digital assistance, will be a world where the Google Assistant will become multi-modal and live in multi-devices—from your watch to your phone to an assistant in your home. 

In the mobile age, these consumer digital touchpoints far outstrip anything a hotel brand can hope to create. And Google Assistant is already on more than 100 million devices.  “If you are working with Google on flight and hotels search, you will be included in the future. If you want the booking function, then one can work with Google on booking functionality.”

Speculation also continues to swirl around the travel industry plans of Facebook and Amazon, which have perfected the art of building fanatical customer loyalty and communities of online users.

Disrupting the Disruptors

Innovators such as Duetto and Roomkey came on the scene in the past few years to help hotels recapture the technology edge in areas, such as revenue management and distribution.

Now, a new crop of startups is challenging the disruptors themselves, attempting to take over small niches within these areas. For example,  Splitty Travel breaks apart reservations into component stays at different hotel properties, allowing consumers to make a single booking that results in stays in different properties in the same city—all via the same booking, and on the same trip.

For consumers who don’t mind packing and unpacking, this can provide a better price; for hotels, it permits selling off bits of inventory as part of a more complex reservation, rather than holding a room unoccupied.

“Reservation splitting” and other technologies promise to provide new levels of flexibility and predictability for hotel revenue managers.

Other startup presenters included Waylo, which bills itself as the “first hotel price prediction app”, and Pablow, which is innovating in travel insurance in the vacation rental market. Redeam, a ticketing distribution solution for tourist attractions, won the General Catalyst Award for Travel Innovation at the show

Facebook is already a major gateway for travel bookings and it’s advertising platform is quickly starting to swallow hotel marketing budgets whole. Let’s be clear: The financial and marketing clout of these companies outstrips that of the entire hotel industry taken together, by magnitudes.

With new innovations such as artificial intelligence (AI), augmented reality and blockchain already impacting the way hoteliers think, plan and interact with guests, the new gatekeepers have what looks like an insurmountable edge in controlling the application of these technologies for the future trave.

Fintech Solutions and the Rise of the Global Innovation 

A new generation of financial solutions applied to travel also has the potential to open new revenue channels. Uplift, a financing company founded by the technologists who created mega-search, enables travelers to “buy now and pay later," with monthly installments offered at low rates. This has the potential to help boost conversion rates for travel providers, build customer acquisition and help merchandise-specific products to increase total traveler spending.

While Uplift aims to grow first in the airline and cruise verticals, its technology seems ripe to help hoteliers grab ancillary revenue and stay on track via latest in-trip financing technologies.

Uplift won in the “Emerging” category of companies recognized for innovative potential at the conference.

Another company, Connexpay, offers a combined virtual card issuing and merchant acquiring solution to large and mid-size corporations, claiming to result in lower processing fees and lower credit risk.

Many startups focused on digitizing hotel operations, such as check-in and checkout.

What It Means for Hotels

It’s becoming increasingly clear that there are two main conversations shaping the future of the hotel industry. On the one hand, there is the asset conversation, focused on operating and financial trends, the proliferation of new brands, labor issues, and other factors impacting the valuations of brands and properties. These issues never go away and should be central for industry decision-makers.

But there is also an increasingly complex conversation about innovation, including the continuing impact of OTAs; the flood of new technologies coming to the market to help hotels do their jobs better; the future of the guest experience on the property; and hotels’ ability to acquire, retain, serve and monetize guests as they have done in the past. 

The 'State of the Play' in innovation, and the complexity of the challenges facing the industry. From OTAs and new gatekeepers to micro-innovators in the revenue management space, everyone wants a piece of the hotel revenue pie. Many of them are poised to take it, and some already have.