• Brands and blockchain drive innovation

The sector is continuing to see a proliferation of brands, as hotel groups attempt to match changing consumer demands. Technology is impacting at the property level, while delegates at the Hotel Distribution Event also heard how blockchain technology has the potential to drive lower costs throughout both customer acquisition, and real estate management.

James Bland of BVA BDRC said brands now need to respond to a changing world. Gone are the days of strong brands with uniform standards and the individual no longer adapts, but rather expects their world to adapt to them. “I think that has a real implication on what hotels will look like.” He expects to see the growth of soft, collection brands, which offer the promise of uniform brand quality standards, yet deliver unique and more locally connected individual properties.

The change was echoed by brand specialist John Rogers from Hilton. He said the additional brands Hilton has introduced, many of them within the last five years, answer the need of different audiences to find something that resonates. It also provides Hilton with internal rebranding options, and he noted several instances where traditional Hilton properties have been relaunched – and delivered greater returns – as a DoubleTree or Hampton. The group’s Curio brand, designed to incorporate strong local connections and currently represented in just a handful of locations, was tipped by Bland as one to watch.

Part of meeting that need for choice and individuality is the roll-out of new tech. Hilton claims the lead on the deployment of smartphone door locks, and now gives its loyalty members the option of choosing a specific room in a hotel, when they make a reservation.

But perhaps the most exciting innovation – and one that delegates struggled to get their heads around – is the potential blockchain revolution. David Brillembourg, chairman of Brillembourg Holdings, has studied and invested in a number of startups in this nascent niche, which promises to use distributed ledgers to share information. The shared platform promises to do away with costly intermediaries, with improved online security, bringing down transaction costs and improving information flow between business partners.

The technology of the distributed ledger has already been deployed by those who created the leading cryptocurrency, bitcoin. While bitcoin has seen limited use as an exchange of value, and been seen more as a speculative investment bubble, Brillembourg said there was the potential for other tokens to be issued in future.

“Potentially 10% of hotel bookings could be on the blockchain within ten years,” he suggested. Blockchain remains a concept rather than a practical option as yet, and Brillembourg acknowledged he is in at the early, high risk stage: “I predict that 90% of startups in blockchain will fail.” He said part of the impetus driving blockchain is the distrust Millennials have of centralised banking systems. And, to the sceptics in the audience, he noted that 20 years ago, few would have believed that the early, stumbling attempts to create the first OTAs would have had such a major impact on the hotel industry.

One hotelier who has taken a close look at blockchain is Rajesh Vohra, director of Sarova Hotels. “We have had some discussions with potential vendors, but I’m not sure we’re there yet.” And to those wondering what a blockchain transaction would look like, he noted the mechanism should deliver a seamless experience, in order to succeed. “It’s not about how the consumer sees it, as it should be transparent to the consumer.”

HA Perspective [by Chris Bown]: Hype or a step change? Only time will tell whether blockchain becomes a key part of the hotel landscape in the future. And, as Brillembourg pointed out, two decades ago many ignored or dismissed the early attempts by a bunch of IT nerds to try and sell hotel rooms online, and crowdsource reviews for sharing.

Blockchain has become somewhat entangled in the wider public perception with bitcoin, the exciting new virtual currency that you can’t do much with, except speculate. But beneath the froth of bitcoin, it is the technology it uses to manage its transactions that is on the secret sauce of blockchain – and it is blockchain that holds out the promise of delivering another streamlining that cuts out intermediary costs, and improves information sharing. Other sectors, such as mainstream commercial property, have done well from sharing information (albeit that was via an old-school information exchange). The hotel sector stands to gain much from greater transparency.

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