Worldwide: The coronavirus will not arrest the march of technology within accommodation – it will accelerate it with new use cases and even newer applications.
As the battle against Covid-19 intensifies, technology is proving an indispensable weapon in the fight against future pandemics with many successful applications saving lives like Trace Together: the recently launched app that uses Bluetooth to record the distance between users and the duration of their encounters by the Singaporean authorities. Similar ground-breaking products are already being used in the proptech space like Gooee’s IoT Building Intelligence Platform.
When hospitality and real estate does get a grip on what the future landscape looks like as a function of Covid-19, the democratisation of technology, machine learning and artificial intelligence will likely be the ‘life-savers’ of many accommodation providers over the next few years.
Hospitality’s future is not business as usual
Whilst hotels and other hospitality asset classes continue to furlough and lay off thousands of staff to deal with the crisis, it seems unlikely it will be business as usual on re-opening.
The longer the Covid-19 pandemic lasts, the more likely it is that we will see attitudes and habits shift among travellers seeking short-term accommodation, as well as other hospitality properties. Those who participate in frequent international trips for business travel purposes will start to question the practicality of travelling long distance for short-term periods if the opportunity for video conferencing through webinars or technology platforms such as Zoom is available. Furthermore, as operators have their supply chains tightened, consumers may well look closer to home in local destinations for leisure travel due to wariness of paying for rising air travel costs and the now-real threat of having their mobility limited should a similar situation arise in the future.
Though it is difficult to foresee what the prolonged effects of Covid-19 will be, operators are already focusing their sustained attention towards more mid-term lets, however it begs the question whether they will return these units to short-term rental offerings in the future when these provide better margins on the whole. Moreover, guests will likely place greater emphasis on services such as remote access to properties, cleaning and security monitors, which are accurate and efficient to facilitate the best possible guest experience. Driven largely by accommodation providers’ attention to a somewhat leaner P&L, we can also expect digital check-in / out, [online and offline] experience planning and digital concierges to be big winners from this instability.
Many manual, analogue and legacy systems already exist and are common finds in today’s modern hospitality and real estate enterprise – think PMS, GDS distribution. Other emerging technologies have the ability to positively change the way accommodation providers operate their buildings and how they communicate with guests who stay, live and work within them. Gartner highlights application development, data and analytics, design, and knowledge will experience tremendous growth in business. With time, better architecture and middleware software will form a more centrally connected hub that will provide more detailed and ‘cleaner’ guest profiles – therein lies the opportunity.
RIP the eye-popping market valuation
With populations and businesses currently experiencing new and unprecedented remote learning and digital engagement tools, it makes sense they will continue and expect to do so more freely in their daily lives and on their travels pre, during and post stay. The rise of WFH [working from home], once a moonlighter’s paradise, has already jolted the co-working and private members club communities, corporate travel buyers and relocation professionals to name a few, instigating a rethink on organisations’ approach to flexible working and doing business. You don’t need to look far to see the casualties of Covid-19 mounting, not just in the hospitals but also in the hospitality and real estate market. The liquidity frenzy is over for trendy new tech-enabled companies that could command punchy market valuations while quickly leaking money in search for growth. There have already been casualties pre-crisis like Hostmaker, Central Working, The Clubhouse and The Devonshire Club in the UK and they won’t be the last. Pre-pandemic I wrote extensively about the punchy valuations and ‘bubble’ propelling short-term rental master leases. A model, not dissimilar to WeWork, the most hyped start up in the world, currently hanging by a thread as Japanese conglomerate and major shareholder SoftBank recently decided not to buy $3 billion USD in WeWork stock, dealing a major blow to stakeholders.
‘When the tide goes out, that’s when you find out who’s wearing swimming trunks’ – Warren Buffett
A lot of hospitality and real estate businesses will fall victim to bigger, better-capitalised rivals, or simply not survive. Banks are well capitalised after 2008, but the signs are they remain hesitant about lending. Conventional thinking has been shattered, but there will be opportunities for those with a leaner relevance and purpose. Wise hospitality and real estate professionals should be planning ahead, leading in their own roles and responsibilities even as we agree that, for now, all that matters is survival.
By Piers Brown, IHM CEO, and Paul Stevens, news editor of ShortTermRentalz