Latest / The Modern Hotelier / #304: How In-Room Tablets Are Increasing Guest Engagement & Unlocking Revenue | with Kevin Bidner
Transcript
- The Modern Hotelier #304: How In-Room Tablets Are Increasing Guest Engagement & Unlocking Revenue | with Kevin Bidner === David Millili: Welcome to this special HITEC episode of The Modern Hotelier, the most engaged podcast in hospitality. Please make sure to subscribe, follow, and like, and let us know in the comments what you think about today's episode. Steve, who do we have on the program? Steve Carran: Yeah, David. Excited to chat with our friend Kevin Bidner, founder and CEO of HCN, Hotel Communications Network. Thanks for joining us, Kevin. How we doing? Kevin Bidner: It's a pleasure to be here, and thank you for having me on your show. Steve Carran: Absolutely. So Kevin, it's been really fun to see your booth evolve over the past years. We started at a 10-by-10, now you're center stage at HITEC in a big booth here. Can you tell us a little bit more about the story and the growth of HCN? Kevin Bidner: Thanks for asking. So it's kind of the story of the growth of technology, from an obscure startup to center stage in the industry. Tablets started maybe 11 years ago now as a startup technology that was just being tried out in the industry, and I think this is the demarcation, maybe last year's show, when two of the industry leaders came together, when HCN acquired our biggest competitor, Crave. That kind of demarks the transition from startup into the growth and the world leader in the industry, and also in terms of the technology finding its way to the mainstream of the industry. So what we're seeing now is the transition from the years when we were building it, proving it, and getting it known to the years when we're rolling out at scale into the industry, which is now happening. Steve Carran: Exciting times. Kevin Bidner: Yeah, it is. David Millili: So tablets in the guest rooms, talk about the benefits to not only the guest but to the hotel. Kevin Bidner: First of all, when a guest passes the front desk and gets the key, and sometimes don't even do that anymore, it's really the only opportunity to impact that guest. Once they're in their room, how do you change the trajectory and open communication? A little bit of text can happen now, but you can't send too many. Really, communication ends at the front desk. That changes when you put a tablet in the guest room because the hotel can communicate directly to the guest: two-way interactive communication, one-way broadcast information, and continue that engagement during the stay. And if we think about what guest engagement means, an engaged guest is, A, a happier guest because they're making more use of the facilities that the hotel is proud to offer. Second of all, an engaged guest will remember that property, talk about it to their friends, bring their family back on the weekends. It's a continuing relationship with that property because you've made a deep impression. The history, the value, the amenities, the management's policies. So many hotels, the management is so eager to please the guest, but the guests don't know it. But here they are behind the door, and your message gets through as to your hospitality and your outreach to that guest and your service offering. That's the biggest value of all, guest engagement. And look at the different guest engagement platforms, starting with the TV years ago where interactive TV just never worked. Then about the same time as tablets came mobile apps, and mobile apps make perfect sense. Every hotel has them. Very few guests engage with them. So you get maybe, if a hotel's really doing a great job, 30% engagement on a mobile app. Text to the guest may be the same kind of engagement. Tablets, first of all, sitting beside the bed or on the desk, there isn't a guest in the hotel that doesn't see it and see it multiple times. We get 85 to 95% of the guests picking this up and playing with it five minutes a day. That's multiple engagements on the tablet every day. That is phenomenal traction. It's really the fundamental reason why tablets matter, because guests make them matter. Guests use them. And if you think about the uses, there's room controls to control the TV, the lights. Eventually this will do away with the phone. Nobody uses it except to reach the hotel anyway. This is something that can be easily done on a tablet. And then there's the guest communication, which is a breakthrough. Then there's meeting and convention communication, being able to target information to a room block or to a loyalty tier or to a specific... And the more that the hotel brand knows about that guest, the more that targeted information can be delivered to impact that guest's visit, journey, and travel experience. So all of that makes a big difference to the guest and to the hotel. And revenue impacting? Absolutely. At this point, validated 25% bump in room service order size if ordering over a tablet versus the phone. Documented in many, many hotels. If the hotel has a spa, a restaurant, the engagement at anything they offer, if advertised here, puts it top of mind, of course. And then there's the whole virtual concierge concept, which I'll be showing a little bit on screen. But the welcome message welcoming a guest to the room—we put music on the tablet when you enter the room. You walk up to the... Even if it's just to get rid of the music, even though it's nice spa relaxing music, sooner or later you're walking up to that tablet. The minute you touch it, that hotel's message comes through loud and clear with a virtual spokesperson. And if it's St. Paddy's Day or Lollapalooza in Chicago, that message can be changed and tailored to that guest's visit that week. So it's all done by AI in terms of the programming of that video delivery, and the GM or the marketing department can change that message or can even target it to a group, welcoming them to a specific group and assigning that virtual message to that room block. So that starts the whole communication off with the tablet, and then you've upgraded everything in terms of the hotel's ability to communicate with that guest. Steve Carran: So smart. I have to ask, though, why didn't you just build an app, and why did you decide to go with tablets? Kevin Bidner: Well, we knew from the beginning that apps would only be a partial solution, and we were right. I mean, the most any hotel is getting—they'd be happy to get 40%. Most are under 15%. So, 15% of your guests downloading your app during your visit, what are you doing to communicate with the other 85? So apps have a place, no doubt about it, but they can't really compete with a tablet in terms of that kind of 100% communication. Just like the old compendiums that used to be on the desk. They're all gone, replaced by a QR code, which is a downgrade. Why? So few people will interact with a QR code, and rightfully so. Someone could put a sticker over that, and that QR code suddenly becomes a trap for the user. So QR codes are not adopted, and less and less people use them. Tablets, the opposite. More people see them, the more they use them. There it is. That's why. David Millili: Makes sense. So you touched on it, but dive more into how the tablets are not only driving revenue but saving the hotel money. Kevin Bidner: Good example: when do you want your housekeeping tomorrow? Morning, afternoon, evening, or skip the housekeeping, privacy please. Even in a union hotel, that still flies. We get 5% of the hotel opting out of housekeeping every day. That's a massive operational savings and better shift loading as well. You know, disturbing fewer guests equals better guest satisfaction, et cetera, et cetera. And that's just one of many, many, many. Tipping on screen helps the staff and helps the guests. Everybody's happy. It just comes down to better communication equals a happier guest, and happier guests spend more, while the hotel saves more. David Millili: It makes sense. Kevin Bidner: A lot of savings. Steve Carran: So I feel like tablets have been out for over a decade, but when we go to hotels, we rarely see them in hotel rooms. So why do you think we don't see more of them? Kevin Bidner: And why are we gonna see a lot more soon? Can I finish your question? Steve Carran: Yeah. Kevin Bidner: Good question. So here's the problem. Even with a very compelling ROI, prying CapEx and OpEx dollars out of the hotel industry, especially at the three- and four-star level, is very, very slow and difficult. With so many people in the decision, you really only see these at the five-star and resort level. Very few four-star hotels can manage getting the budget. That's where HCN has changed the game, and starting this year will change the industry. It took us many years, and we had to reach a certain scale to get the ad and promotion machine running sufficiently so that these could be given free to the hotels with a share of the revenue. The DNA of the company is all in the name, the Hotel Communication Network. We're a network. This is the node of the network. The hotel gets the benefit, but other members of the network that will pay to be on the system will pay for this unit, and the hotel will get not only the unit installed free, but a share of those revenues. There are many promotional opportunities and parties that want to use the tablet and the access to the guest and are willing to pay for it. And right now, as we speak, we share 20% of those revenues back to the hotel and give them the tablets free, which means they not only get the tablets and the customization to their property, we give them a check every month with a percentage of the network revenues that they get to share. And the hotel has full control over anything on the network that would come into their hotel. So that's one, and the other one is promotions that the network is also sponsoring. As a good example, we're sponsoring this month: Kim Kardashian has a new non-alcoholic energy drink called Upfront, and they are testing it in hotels. They will be delivering it to the room as a gift to the guest. The hotel gets to give the guest the gift. They are getting a significant share of the revenue from the promotion. So they get a gift to give, they get money to administer the promotion, and it also helps HCN support the cost of the network, and that's just one. We have shampoos and hair products being given in a gift basket, non-alcoholic and alcoholic beverages, all kinds of other promotions. We have Netflix and, I think, one or two of the streaming platforms looking to put promotions on the screen. Then you pick it up, then you watch the show on the screen. What a perfect way to get them to subscribe, and the hotel makes money off that. So it's the delivery of a 360 experiential promotion. It's not just using the screen, it's using the presence of that hotel guest room to drive promotion, and that's the network. David Millili: Yeah, so we touched on it a little bit earlier, but here at HITEC, as Steve said, you've grown and grown and grown while your competitors continue to shrink. What are some of the key things that you're doing that really are separating you from the pack? Kevin Bidner: Well, it's kind of like an extension of the last answer. David Millili: Right. Kevin Bidner: So it really comes down to the difference between having to buy a product and justify it to the ownership versus taking a product that's paying you and giving a check back to ownership. So that is the difference between a company building a product for sale to the industry, which is the normal business model. But in my past career, I was a digital platform executive with a major success. When I evaluated the hotel industry, the travel industry at large, and saw the opportunity to establish a digital platform for travel with a terminal in the hotel room, this was something I couldn't resist, and that really is the differentiator. Steve Carran: So you mentioned the promotional options. For hotels that might be interested in this, can you share maybe best practices or ideas for promotional options? And I have to ask, how much money can a hotel make from those promotional options? Kevin Bidner: It's also a really good question. So it comes down to this: we're at the start. Last year when you were interviewing me, I was talking a little bit about the future being a free-to-hotel with rev-share model. I think we had installed three hotels. Now this is shipping out to the industry at large and maturing, but we're still only one year into getting this model working. So a hotel might earn somewhere between $1.50 and $6 a month per room— Steve Carran: Wow. Kevin Bidner: —depending on the promotion. We think it's going to double and triple in no time as this reaches some scale. So it's not going to be less. It's going to be more. As we get more scale, and this network picks up momentum and widespread knowledge within the business community of potential participants in the network, it gets that network effect of gathering more and more value for the stakeholders— Steve Carran: Sure. Kevin Bidner: —on all sides. David Millili: Yeah, tell us what's coming up next for guest engagement technology for HCN specifically, and tell us about the future. Kevin Bidner: The future is AI. And if you think about it, what better place to have AI working than in the guest room as part of that guest engagement experience that you want your guest to enjoy? So it comes down to a digital concierge with complete personalization, starting with greeting you by name and then having all the hotel's offerings and all the city offerings at your disposal— David Millili: Yeah. Kevin Bidner: —on a verbal voice-to-voice communication where you can say, "What's here at the hotel? Is there any room service?" And the AI can come back and give you options and help you place the order. Or, "I'm looking for sushi nearby. Can you give me a couple of recommendations?" And up will come a couple of recommendations, and you can peruse the menu. I'm just going to show you a video that gives you a taste of that experience, and I should mention that this is what's in development this year. It's in testing now. We're showing it at the booth in real time, but it's not generally distributed yet. But here it goes. David Millili: Super cool technology that I think every hotel needs in their room for the guest and for the staff, to your points. Kevin Bidner: Yeah. Thanks. David Millili: So that does it for another episode of The Modern Hotelier. Kevin, this is where you get to plug away, let people know how they can get in touch with you, how they can find out more about HCN. Kevin Bidner: All right. So HCN is www.hcn-inc.com. Feel free to email us or have a look at our website. On the contact page, fill it out and we'll be back in touch. David Millili: That does it for this special HITEC Modern Hotelier episode. The most engaged podcast in hospitality, so whether you're watching or listening, we look forward to seeing you again. Thanks for joining us.