Expert Insights - Laurent Cardot - part 1

As part of our “Expert Insights” series, we had the opportunity to talk to Laurent Cardot, Founder and CEO of Ariane Systems, to understand the current challenges and the future of the hotel industry.

What are the current challenges, as you saw them, for the hotel industry?

The hotel industry is facing several challenges for sure. The first challenge is how we can welcome guests in a safe environment with sufficient social distancing. Probably the biggest challenge is still ahead of us - the reduced amount of travel between countries and fewer visitors everywhere. Hotels are experiencing a very low occupancy rate, which means profitability is going down and hotels have the challenge to become profitable again. Unfortunately, low occupancy necessitates reducing the fixed cost to a point where you can be profitable with only 20% or 30% occupancy were before the requirement was up to 50 or 55% occupancy in order to be profitable. So that is definitely a big challenge.

Probably the last part will be about the staff. In a market like ours, costs are fundamental but finding the right people is going to be an even bigger challenge. A lot of employees in our industry are unfortunately furloughed mostly everywhere. A lot of these people have moved on to other jobs and industries and have found other jobs in other industries.

So overall, those would be the main challenges, I think hospitality needs to address in 2021.

What kind of advantages do self-service and Ariane solutions bring to the hotel industry?

There are multiple benefits, but usually, when we work on our ROI (Return of Investment) model, we like to categorize the main reasons to buy this type of technology.

The first benefit is really about the guest experience. Guest experience brings mainly two things; a safe way of checking in using either your own device or a kiosk in the hotel – both will help achieve a contactless experience. The second one is more long-term - everything is going digital. We have more and more guests that are expecting to find digital experiences and the ability to book a room on your own, check in on your own, pick up a lot of options for your room. This is definitely in line with the market evolution and guest expectations.

The second reason why a lot of people are interested in self-check-in is of course the cost. Because self-service cost is only 15-20% compared with physical check-in, and this can bring tremendous savings especially in a time where hotels are going to need to lower their costs as much as possible.

And the third is interesting because that is something new for us. We see that self-service brings a lot of opportunities for upselling bringing additional revenues for the hotels. This include services like room upgrade, the ability to buy additional packages or services, offering early check-in/late check-out, and more. There is a long list of services that can be provided during a check-in experience. Recently we have seen that guests are more encouraged to buy when they are using self-service than when they are facing a person.

So overall; Guest experience, Cost savings, and additional revenue are the three main drivers for a good Return of Investment from enabling self-service technology.

How do you see that self-service products can help hotels during the current pandemic and the situation they are facing right now?

The first thing is that this is a technology that can be implemented pretty fast. We are not talking about a technology that requires months and months of implementation, this is a technology that can be delivered hopefully in weeks rather than months. Of course, hotels are going to need to train their employees to become way more polyvalent, in the sense that they are going to do the check-in, but also take care of the hotel, take bookings, talk to guests, and at the same time handle the breakfast… So there are a lot of tasks that employees are going to be faced with. This means that if you can free your employees with the check-in and check-out that are a pretty busy time and take a few hours off an employee away every day, then you are in a position where you can lower your costs and reduce staff whilst focusing on more tasks. So really in the short term, it’s the ability for hotels trying to lower their profitability point and use the technology to be more efficient in their operations.