Hotels and restaurants continue to embrace new technology to improve customer service and operating efficiencies. While the sectors have gradually embraced self-serve kiosks in their efforts to strengthen their competitive standing, mobile order-and-pay has recently stolen the limelight, thanks to rapid consumer adoption.
Will mobile technology stunt the expansion of self-serve kiosks in the hospitality sectors? Will the two technologies be pitted against one another as hospitality organizations fine tune their competitive playbooks – or will these organizations opt for cooperative technology strategies?
Interviews with restaurant and hotel decision makers indicate these companies are not following a uniform approach in their technology strategies. Kiosks and mobile technologies are both on the drawing board for many hotels and restaurants.
The most recent annual customer engagement technology study by Hospitality Technology Magazine quantified the extend to which restaurants and hotels are investing in both kiosks and mobile technology. The study indicates mobile adoption rates will surpass kiosk adoption rates in 2017.
Projected adoption rates for restaurants in 2017 are 19 percent for payment via a table-mounted device, 20 percent for ordering via a table-mounted device, 36 percent for ordering with a guest device, 40 percent for payment with a wait staff device, and 43 percent for ordering with a wait staff device.
When asked which of 17 customer engagement technologies they are investing in, restaurants cited mobile payment as the third top R&D project in 2016, with 33 percent investing in this area, trailing cloud-based software and CRM/loyalty. Seventeen percent cited R&D in tableside ordering devices and 7 percent cited interactive kiosks.
For hotels, mobile payments were cited as the third top technology rollout in 2016, following location based technology and tablets at the front desk. Twenty four percent of hotel respondents rolled out mobile payments in 2016.
While mobile technology has expanded rapidly in the past year, Starbucks' most recent earnings report indicates the technology brings some challenges.
Mobile order-and-pay accounted for more than 7 percent of Starbucks' total transactions, doubling that of the prior year, President and CEO Kevin Johnson said in an earnings webcast.
"The overwhelming success of mobile order-and-pay has increased rewards engagement and created efficiencies at the point of sale," said Johnson. "But the success of mobile order-and-pay has also created a new operational challenge that has been building in lockstep with volume growth." The mobile orders have resulted in congestion in the stores.
To address this issue, Starbucks is introducing new procedures and tools, adding new roles and resources to support mobile order-and-pay.
While Starbucks' experience signals complications related to mobile order-and-pay, what impact this has on other companies’ willingness to embrace mobile technology is uncertain at the present time. Starbucks, after all, holds a unique market position.
"Starbucks' app is popular because Starbucks is a part of daily life for millions of people," said Frank Olea, president of Olea Kiosks Inc., a kiosk manufacturer. "It's a unique case." Starbucks has been a pioneer in gift cards and loyalty rewards for years.
"Do most people want to download and configure an app for a hotel they may visit once and never visit again?" Olea said. "Probably not."
A dual approach
Several rapidly growing chains are embracing both kiosks and mobile technology.
Saladworks, a fast casual restaurant chain, has experienced a gradual increase in online orders in each of the past three years, according to Pat Sugrue, president and CEO. Nevertheless, the company is moving forward with plans to introduce self order kiosks.
Saladworks' Life Bar kiosk gives the patron the ability to match menu offerings against a variety of dietary needs. While the company website offers this capability as well, the kiosk version at the present time is more robust.
"Once you give what your dietary restrictions are or what your choices are, you can go through the menu and it will grey out any of the alternatives that don't fit with your stated dietary restrictions," he said.
The same capability will eventually be available online, Sugrue said. When that happens, will there still be a need for the kiosk?
Sugrue said he expects customers will be ordering both ways. The ones using the kiosks are more likely to be those who feel less time constrained.
"What that mix (kiosks versus mobile) will be we really need to understand," he said. "At this point, I think there’s enough business for both." He said Panera, which also takes online orders, has customers choosing to use kiosks.
UFood Grill, a fast casual restaurant that recently introduced its first self serve kiosk in a stand-alone restaurant, plans to deploy kiosks in all of its restaurants. The company is also working on an online ordering option, but it does not see online ordering replacing kiosks.
There will always be walk-in customers, said Samantha Rincione, UFood Grill’s vice president of franchise development.
"There are also people that would like to dine in and use the kiosk and pick out the meal while they’re in the restaurant," she said.
Hotel chain uncertain
Hotel RL, the latest concept from Red Lion Hotels Corporation, has offered self check-in kiosks since the brand launched in 2015. The company is also planning to offer mobile check-in.
"There is definitely a need for that," said John Edwards, chief information officer with regards to mobile check-in. "It’s coming from both the guest side because they’re getting used to it within the industry, as well as the ownership and the operating side, as they’re seeing the advantages for mobile check-in."
"We are finalizing the technology stack to offer mobile check-in, including digital keys," he said.
Regulations can impact adoption
One factor that could impact the growth of mobile hotel check-in is regulations requiring guests to check in at the front desk. The city of Anaheim, California requires this, and other cities are looking at it.
Some government officials don't want to make it easy for guests to check in with fake IDs.
Guests in Anaheim will still be able to check-in via a mobile device, Edwards said, but they will need to pick their keys up at the front desk.
Hotel RL will continue to deploy kiosks, which are provided by Ariane Systems.
But barring regulations restricting the issuance of mobile keys, Edwards thinks mobile check-in will replace many hotel kiosks.
"Other verticals within the travel industry (the airlines) are moving in the same direction and seeing the exact same trend, and I’m confident that the hospitality side of the travel industry will move the same way," he said.
Edwards feels the future of kiosks is still yet to be decided. "Many of the brands have tried it, and it’s never really created that watershed moment where you start to see a huge influx of kiosk technology," he said. "The future is going to be dependent on our guests' requirements and the technology solutions that can be delivered."
Competitor or ally?
"Mobile check-in and payment can augment self-ordering kiosks by handling the more common transactions," said David Anzia, senior vice president at Frank Mayer and Associates, Inc., a kiosk designer and manufacturer. "Self-ordering kiosks will be needed when large amounts of data and images are used to upsell the customer and provide product offering information to increase the dollars spent per session on the kiosk."
"It could remove the need for kiosks, or it could sit alongside and augment kiosks," said Richard Harris, CEO and co-founder of Ensygnia, a UK based company that recently introduced a mobile check-in and payment system. He said a user could scan one of his system’s codes on the kiosk and enable them to enter the information into their mobile device instead of the kiosk.
"Everything that they see on that kiosk after they’ve scanned the code could be secure, it could be personalized, and there is no credential transfer directly between the consumer and the kiosk," he said.
Olea of Olea Kiosks sees a cooperative arrangement emerging.
"One mobile app for travel allows the user to pre-check into a hotel, and when they arrive at the location, they can scan a code at a kiosk to get their room key dispensed," Olea said.
The ATM industry has had an application that lets a person set up a cash withdrawal remotely, he said. The same scenario could play out in the hospitality industry.
"A young person can text a parent that she needs some cash, for example," Olea said. "A code is sent to that child’s phone, and when the child gets to the ATM, the code is activated and the money can be withdrawn. In these scenarios, you get the best of both worlds; the privacy of your own device along with the simplicity of a kiosk to complete the transaction."
"Some hotels recently tried to rely exclusively on devices for check-in, check-out and even room keys," Olea said. "Guess what? They’re coming back to kiosks. It was not a great guest experience."
(Image courtesy of iStock.)