Magic Technology Connected Customer Blog

The Magic of Technology & The Connected Customer

By , Chief Evangelist & Development Officer


Deluged by ever-growing oceans of data, we must trust technology and automation to keep us afloat and better serve the connected customer

As we gear up for the year’s first flurry of industry trade shows, including Opportunity2019 in London, the Hotel Revenue Forum in Milan, and ITB in Berlin, I continue to track the development of three key trends in the industry:

  1. The connected customer
  2. Personalized pricing
  3. The adoption of artificial intelligence

These trends make sense as the hotel industry continues to shift from old to new technology stacks in order to better incentivize the software and hardware opportunities designed to automate decision-making.

In a world where structured data is exploding, the reality is there are far too many data points to look at. And certainly, too many decisions to be made for any human. Frankly, automation is inevitable.

How Big Is a Zettabyte? (In terms we can understand…)

The amount of data created by devices is nearly 100 times greater than the amount of data stored, according to the Cisco Global Cloud Index. Devices are expected to produce 847 zettabytes (ZB) of data annually by 2021—nearly four times the amount created in 2016.

And if that doesn’t blow your mind, IDC reports that the “global data sphere” will increase from 36 ZB used in 2018 to 163 ZB by 2025.

So, let’s put that into terms we can understand.

Imagine a rice grain is equal to 1 bit (B) of data. If we extrapolate that out, a bowl of rice contains approximately 1,024 grains of rice, which would be equal to 1 kilobyte (KB) of data. And further, 125,000 bowls of rice would be needed to represent one gigabit (GB) of data, or 125,000 KB.

Put your kitchens on alert, because 1 trillion GB is equal to 1 ZB, which would be the equivalent of the Pacific Ocean filled with rice grains of data. So, next time you eat a bowl of rice, consider that as data continues to increase, we are looking at 163 Pacific Oceans filled with rice grains of data by 2025.

Where is all this data coming from? Essentially, everything collects data today. From self-driving cars to the computer you carry in your pocket, d world is data. The emergence of platforms and applications are not immune to this trend, and within the hotel system space, the collection and use of data will be a key driver for how we utilize technology going forward.

Meeting the Connected Customer’s Demands

It is our job as an industry to better understand the demand drivers of the traveler so we can proactively influence demand throughout the customer journey. This begins at the dreaming stage. A recent survey by Google found more than 57% of U.S. travelers feel that brands should tailor their information based on personal preferences or past behaviors right from the beginning.

The real magic of staying in touch with customer demands happens when technology, and the data that drives it, puts more power into consumer hands. Think Uber and Lyft.

An interesting use case of providing power to the consumer and its relationship to the customer experience is Disney’s MagicBand. The company provides an all-in-one wearable device on a colorful wristband. This wristband syncs with the traveler’s hotel room key, Fastpass, and even their park tickets. It also allows the customer to charge food and merchandise to their hotel room, alleviating the need for the customer to bring a wallet while on property. Princess Cruises and Carnival Cruise Line also introduced similar devices last year.

For the customer, these are simply a matter of convenience that have a definitive “cool” factor. But for the organization, it provides a wealth of digital information on customer preferences that allows them to target customer needs, wants and desires in future encounters. It is not surprising to learn that 69% of travelers are more loyal to a travel company that personalizes their experiences online and offline.

Arthur C. Clarke, well-known futurist and writer, said, “Any sufficiently advanced technology is indistinguishable from magic.” In my opinion, the true magic is when a technology is simple to use, frictionless and makes our lives better, not harder.

The same is true from a revenue-generating perspective.

Bringing It Back to Revenue Management

Today in our industry, while we are still far away from magic, there are tools that have been designed specifically to help revenue managers tackle the influx of data. Decision-making tools are not only necessary but critical in enabling us to outperform and outsmart competitors.

Revenue managers must make any number of daily decisions and do it quickly. We have calculated that there are more than 100 million daily revenue decisions, 52 million daily pricing decisions and 48 million daily overbooking decisions calculated by IDeaS’ revenue management systems alone. You can see that without the proper tools to help us understand this data, there is no way for any human to stay ahead of the onslaught of incoming information.

Ultimately, as the machines take over, it is critical to establish the right balance between human intelligence and artificial intelligence. It is also important to accept the fact that everyone has a place in this process. The very least of which is using AI and technology wisely.

This includes learning how we can best integrate these processes to achieve the fundamental goal: providing today’s customer with the insights they need to make a decision, at the right time, and ultimately increasing overall revenue for your organization.

I will dive into these topics more with my upcoming speeches at Opportunity2019 in London on February 12, the Hotel Revenue Forum in Milan on February 28 and ITB in Berlin on March 6 and 7.

Are you going to ITB? Let me know!

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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