Out of the crisis with smart hotels
How can a hotel emerge stronger from the COVID-19 Crisis? In her study “Future Hotel – The Smart Resilient Hotel” (original available in German + English) Prof. Dr. Vanessa Borkmann, head of research at the Fraunhofer Institute for Industrial Engineering (IAO), points out fields of action and possibilities. One result: Digitalization promotes resilience in hotels.
Prof. Dr. Borkmann, in the field of psychology ‘resilience’ is the ability to use crisis management for one’s own development. How did you decide to apply the term to the hospitality industry?
At the Fraunhofer IAO we are working in various research fields on resilient systems and solutions, including resilience in the working world or the resilient city. The resilient hotel can be assigned here. In research the term resilience is increasingly used also outside of psychology. In the context of the COVID crisis, it gets a new relevance.
What do you understand by a “resilient hotel”?
The term resilience describes a hotel that succeeds in navigating its way through a threatening situation caused, e.g. by the COVID crisis. The minimum is to keep the business running and the employees busy and not to lose customers, guests or cooperation partners. Ideally, the company emerges stronger from the crisis. This can include positioning oneself in a new competitive environment and being prepared for the next difficult period.
What role does digitization play?
The goal is the smart hotel as a comprehensive solution. The term smart stands for a networked digital ecosystem. This means that all the technical components involved are interconnected. We are building on the results of a study that we published in December 2019 under the title ‘Future Hotel – Smart Hotel Room’.
As a so-called “high touch industry” the crisis is hitting the hospitality industry particularly hard. What are the consequences?
Up to now, the industry has lived from personal interaction as the central aspect. Service quality depended on face-to-face-interaction with friendly and helpful service staff. Now this is changing dramatically and the hotel industry is becoming a ‘low-touch economy’. Due to the crisis, the industry must prepare for a new economy in which personal touch points are avoided wherever possible. This is exactly the focus of the study: by digitalizing process flows, personal interaction can be replaced in many places. That is a clear advantage. For the guest, this new ‘low-touch economy’ means health protection and thus safety. This is an essential factor for well-being. The demands of guests for a correspondingly health-oriented service are currently changing.
The study analyses four fields of action: Smart Service, New Work, Digital Business and Smart Building. What is the best way to select and prioritize measures?
That depends on the business, the different requirements and general conditions as well as the degree of digitization. The study is structured in a way that everyone can check the potential of measures individually. In a crisis, there is little time and capacity for comprehensive analyses. Therefore, when selecting measures, it is important to check whether you really have to start from scratch or if there are measures that have been considered before.
What is important in advance of implementation?
Who is responsible for the implementation of the measure as project manager and leader? Who is part of the team, and how to involve the employees affected by the changes?
Just a few weeks ago, the search for professionals was exhausting, now many employees are losing their jobs. Is this really the time to deal with this topic?
In fact, this is an absurd situation. In the end, we assume that tourism will get back on its feet, even if it will take a few years to come. The labor market will need skilled workers again, despite the changes due to digitalization and automation.
However, because of the crisis, the structural change is initiated faster than previously thought. At the same time, there is a discussion about future skills and new job profiles in the hospitality industry. Some occupations will change significantly, some activities will be highly supported by technology and some will be completely substituted. There will be a divergence: A high significance of leadership, using data analysis and artificial intelligence for decisions and work on the one hand side, and employees who are visible to guests in the service environment and accordingly require above all social skills on the other side. In future, more cross-entries, unskilled workers and life artists will work in the industry.
Finally, the organizational structures will change. More flexible working time models are required and the new achievements will remain with us after the crisis.
What opportunities does the crisis offer in general?
There is a great opportunity for the industry to open up to digital solutions. However, digitization is not a switch that you simply flip, but a transformation process of back and forth, with a constant progress being made.
Four strategic fields of action
- Smart services
While the digitization of services was neglected because of a rather impersonal character, it turns out to be a competitive factor in the current crisis.
Examples: Digital concierge services, crowd management, shop functions for product purchases and service bookings
- New work
The Corona crisis requires a rapid change from inflexible, rigid work to flexible forms of work with concepts from the New Work area.
Examples: digital data management system with collaboration functionalities, virtual/online meetings, home office
- Digital business
The linkage of different IT systems into a complete system enables the demand-oriented control and monitoring of digitalized processes and the automation of process-related workflows. This makes quick adaptations and reactions to changing needs possible.
Examples: automated purchasing processes (demand and price controlled), automated billing, smart contracts
- Smart building
Facility management is led to an economic and ecological optimum, based on data and rules and in a demand-oriented way.
How does that affect the NTG skills?
It is clear that the NTG future competences are heading in exactly the right direction. In addition to important soft skills such as resilience, smart digital systems need to be both understood and applied. All this with a view to sustainability and protecting the environment. An important set of skills that will make future employers and employees fit for the New Work Area.