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Travel is a sector where the TLA is king. Many three-letter acronyms - NDC, LCC, RFP, OTA - no longer need to be spelt out, but for now at least “ABB” needs to be defined.
ABB is short for “attribute-based booking” an umbrella terms which covers “attribute-based selling” and “attribute-based shopping”. The difference between the booking/selling/shopping qualifier is negligible - what really counts is the attribution.
In simple terms, ABB allows guest to personalize their hotel stay by giving them a menu of attributes to select and book according to their preferences. Attributes could relate to the room (swapping the desk for a yoga mat), the property (streaming their own content through the in-room TV) or out-of-hotel activities (such as tips about unique things to do in that location.)
ABB has been mainstream in the airline sector ever since the low-cost carriers unbundled the fare and gave passengers options in terms of seat assignment, baggage allowance, early boarding. ABB allowed the ancillary revenue phenomenon in airlines to happen.
The idea has been doing the rounds for a few years as part of long-tail conversations about hotel distribution. However, a new report brings attribute-based booking firmly into the mainstream.
Drivers of Change in Hospitality is a new study, commissioned by Amadeus and IHG , prepared by global consumer trends research agency Foresight Factory . The widely-respected Chris K Anderson from Cornell’s Center of Hospitality Research also contributes to the findings.
His top-line take on attribute-based booking is that: "Technology will support collaborative experience customization, with guests and staff working together, and it will also create an era of micro-customization, where guests will be able to personalize details that were previously too complicated to break out as unique elements of a stay.”
Elsewhere, the report states that ABB “spells the end of room types as we know them”. The days of booking a generic single, twin, double or family room are numbered.
To an extent, this has already started to happen. Most people reading this blog will have booked a hotel room based on the most basic of attributes. The demand is there.Drivers of Change in Hospitality includes consumer-facing research from 7,500 travellers in 12 countries. It found that “61% of global travellers prefer hotels to be priced in a way that allows them to add additional features at an extra cost”.
Guest expectations are changing and the hospitality industry needs to keep pace. Technology helps but - and there’s a theme emerging here - corporate culture also needs to be shaken up so the transformation towards ABB and away from room types is managed successfully.
Context from airlines and Amazon
The airline industry’s experience of attribute-based booking is a valid reference point, although hoteliers are entitled to say more attributes can be attached to a hotel stay than a flight. Nonetheless, when airlines are making $65 billion a year in ancillary revenues, hotels and their tech providers need to pay attention, not only to the cash but also the context.
Passengers can personalize their flight and pay for what is of value to them on that specific trip - aisle seats, priority boarding, extra bags. Passengers do this in the context of personalizing their shopping list on Amazon, their playlists on Spotify, their viewing list at Netflix.
Context of complexity
There are many layers of complexity for hotels to consider before, during and after introducing attribute-based bookings. Joe Yousseff, EVP for Amadeus Hospitality, made the case for “smart unbundling” when discussing the report with media. Hotels need to decide what attributes of the room and property add value to the trip and which guests will pay for.
His co-presenter Clodagh Brennan from Foresight Factory framed this around hotels’ ability to “monetize individual assets”.
For some hotels, the value-adding monetizable attributes are obvious – a resort property can (and should already be) charging more for a room with a sea view than for one overlooking the car park. But the value and price point difference between a sea view with a balcony and one without is more nuanced. A/B testing is one way to quantify how much value the guest really puts on specific attributes, Yousseff added.
Smart unbundling, he continued, has two major challenges: “simplify the options” and “connecting with different systems”. Simplifying the options means that the customer is not overwhelmed with choice. The hotel will already have curated the attributes based on what can add value, but within this there is what adds value to that individual guest.
Access to data about guest preferences helps here. The consensus is that guests are comfortable sharing data if they get something in return, and the report confirmed this. Customers prioritise discounts and promotions but, in an attribute-based context, nearly seven in ten (68%) are willing to share their preferences in exchange for a better booking experience.
With permissions in place, hotels can leverage predictive analytics, CRM, loyalty scheme data, social media footprint, previous bookings and other sources. Hotels know the customer and the trip purpose. Data will power the personalisation.
But there’s more to think about. None of the above will work unless, as Yousseff said: “there is tight integration at the back-end so that execution happens when the guest arrives”. In summary, can you provide the guest all components of the personalized experience you curated for them in the booking flow and which they have paid extra for?
Context of co-operation
Humans and technology need to be aligned so that the full potential of both can be fulfilled. Front-desk staff, housekeeping, food and beverage managers and others all need to know what the guest have paid for and what they expect. Systems can correlate the information but the execution is delivered on-site by people.
As an example, the report found out that “64% of global travellers are interested in having access to a voice assistant (e.g. Alexa, Google Home) in their hotel room”. Upon first glance, this is a great opportunity – two in three travellers! Stepping back and filtering this with a “smart unbundling” approach may present an alternative view.
Initially, the hotel would need to decide whether in-room voice assistants “add value” to a stay. If the hotel decides it wants to offer this, then “tight integration” is needed between the property management and booking systems, ensuring that the attribute is recognised across all channels.
The IT provider can provide the connection, but delivering this on-property, seamlessly and in real time, is even more complicated. Does the guest want Alexa or Google Home? What about Apple’s HomePod? Can the hotel offer both in the same room or have Alexa rooms and HomePod rooms? Does the guest expect the device to connect to a voice-activated Smart TV? Do we have someone onsite 24/7 to troubleshoot if the device isn’t working?
Revenue management would work out what price could be charged cover the cost of delivery and if the margins are strong enough.
In this specific example, the hotel might decide that in-room voice devices for guest is not an attribute it wants to offer. Curation at an early stage about what is presented to the guest can save a lot of time in the long run.
Context of commercials
ABB - attribute-based booking - is coming to the hotel industry because guests want it – even if the phrase means nothing to them. Everyone with a smartphone likes how web pages work on their device but no-one talks about responsive design and HTML5.
For hospitality operators and their IT providers, attribute-based booking is starting to get the internal investment needed to take hospitality into what Chris Anderson calls “attribute-based trip building”.
The context for ABB is that consumers expect their digital shopping to be personalized and (most) are willing to share data to get be better deal or a curated offer.
Anderson came up with “the Billboard Effect ” concept back in 2009. His research found that hotel direct bookings increased if a brand was listed on an OTA. And while a lot has happened in the past ten years in hotel distribution he recognized earlier than most that the relationship between direct and indirect hotel bookings was a complicated one.
His take on attribute-based booking is worth ending on. ABB is “of paramount importance for hotels to adopt as online intermediaries continue to consolidate, focusing consumers on price and much less differentiated offerings. The ability for hotels to customize room, service and amenity offerings to direct bookers could not have come at a better time.
There are many reasons why hotels need to start thinking about ABB and “smart unbundling”. Continuing to rebalance the hotel distribution landscape in favour of more direct bookings might be the most compelling.