One of the most prevalent trends in almost every industry is the internet of things or otherwise known as IoT. What a few years ago seemed futuristic; it is now becoming a reality. The Internet of Things (IoT) refers to the inclusion of connectivity in everyday devices that do not usually count with those capabilities; it allows us to turn appliances “smart” by enabling them to receive, send data and communicate with each other. This will significantly increase the quantity of data available to us as well as levels of automation. It will also enhance the control and monitoring we can exert on such devices. IoT will ultimately allow us not only to turn devices smart, think thermostats and security systems, but also the environment and the real estate in which they operate.
The scope of IoT is vast; it ranges from guest-facing solutions to operations optimisation and ultimately, real estate fracking, i.e. the ability to use technology to monetise buildings in a new way (Steve Weikal Head of Industry Relations at the MIT Center for Real Estate). Its wide range of uses is the reason why it should be seriously considered by hotel managers and owners alike. Some examples of how, we, as hoteliers can make use of IoT, are presented below.
From preventative to predictive maintenance
Hoteliers have introduced appliances that make the guests’ stay more gratifying in virtually almost every hotel room in the world until they stop functioning. A prime example of introducing technology to increase guests’ satisfaction is air-conditioning and ventilation in hotel rooms, once a luxury, now commoditised. As exemplified in a survey conducted by TripAdvisor in 2016, 63% of travellers said that air conditioning is a must-have when choosing a hotel, more of a deal breaker than free in room Wi-Fi (46%) or breakfast (40%). Meaning, 63% of global travellers would choose a property over another simply because of air conditioning or lack of thereof.
Traditionally, employees engage in preventative maintenance, check each room before the guest arrives to make sure every device is in order. Regular maintenance checks help reduce complaints and increase useful life. By connecting everyday devices to a centralised database, hotel staff will receive real-time data on whether any device is posing any trouble, all before the client realises and before it brings dissatisfaction, shifting from preventative to predictive maintenance. This shift will allow hotels to identify issues before they pose a real problem, saving employees’ time and ultimately reducing costs. Predictive maintenance is predominantly relevant for infrastructure management, particularly pertinent to larger properties and resorts.
The spill-over effect of predictive maintenance would result in customers experiencing less friction with technology throughout their stay and ultimately increase guests’ satisfaction. It would not only serve to reduce friction but to enhance other more superficial aspects of their stay by providing hyper-personalised experiences, i.e. in “the connected room”, smart devices allow customers to choose things as lightning, temperature in advance and in real time. IoT is not a substitute to hotel staff but can help in the kinds of tasks were involving staff would be more cumbersome than helpful, e.g. waiting hours for a room service tray to be retrieved vs. a connected tray that will alert hotel staff when the customer is finished, without having to place any notice or waiting for maintenance to check the air-conditioning unit vs maintenance be automatically informed if there is a failure in the system.
According to PwC’s Customer Experience Survey, customers do not want to choose between human interactions and machine: they want automation to be embedded in their experiences but to still maintain a human element – keeping the high human interaction found in hospitality yet enabled by a seamless technology experience.
By choosing wisely which assets we want tracked and monitored, we can provide guests with the invisible benefits of technology by leaving human interaction to value-added tasks. Allowing for guest-facing devices such as trays to be connected can also help in operations optimizations, for instance, inventory management. The data provided by these connected devices can be used to save employees time and in turn, use it in a more productive manner or in allowing them to have more valuable contact time the guests.
Technology beyond screens
PropTech start-ups, i.e. companies that specialise in providing technological solutions to enhance the way we buy, rent, design and construct buildings are booming, 2018 alone showed an investment of US$4 billion in the industry compared to a mere $20 million in 2008. These start-ups main focus is to make buildings smarter, monetise them in an entirely new way and to ultimately increase their overall value, otherwise known as real estate fracking.
The motion of converting a large number of appliances to smart devices will lead to higher-performing buildings. However, the introduction of so many new connected devices would result in unprecedented amounts of data being sent and received as well as shared. This could result in two potential challenges: 1) congestion of the network and 2) making the data and devices more vulnerable to breaches. Consequently, we propose two solutions for hoteliers: introduction of the 5G network and processing the data through fog and edge computing systems.
5G, which is starting to be rolled out in specific locations and will become widespread in the next two years, promises a much friendlier environment for IoT with unprecedented data speeds, 100x traffic capacity and network efficiency and 10x connection density.
Gartner research speculates that by 2020 over 20.4 billion devices will be connected, a number that cannot be supported with the current wireless infrastructure, if we want to ensure that real-time data is produced and processed instantly with virtually no lagging time, we will have to switch from 4G to 5G. However, 5G also comes with some limitations, and to use this technology to its full potential, we should plan how we renovate and build infrastructures adapted to the new network.
5G operates at a much higher frequency, up to 95Ghz compared to 4G which operated up at 2.5Ghz, higher frequencies allow for beamforming, meaning the waves of information can be targeted to specific devices. The challenge is that 5G antennas while being able to handle much more information, beam over shorter distances and also get interrupted with objects. To combat this issue, a much larger number of cell antennas will be needed to ensure uninterrupted connexions, almost an antenna per room. With this knowledge, we could assume that 5G could potentially substitute Wi-Fi routers. Ultimately, it is up to owners and operators to determine the investment needed to make this transition.
Data architecture as important as building architecture
Fracking hospitality real estate as well as introducing a new 5G network will result in unprecedented amounts of data being collected, which could make us more attractive to data and device breaches. Thus we need to ensure smartification and security come side by side. A proposed solution is to introduce fog and edge computing versus the already wide-spread cloud computing. Until today, the majority of data produced by hotels is transported to the cloud for storage; once in the cloud, the data is analysed and sent back to the device, the constant transmission of data back and forth could result in a heightened risk of violations.
On the other hand, fog and edge computing aim to store, analyse and process the data in a more efficient way at the edge of the network, i.e. at property level in the case of hotels instead of in the cloud or a central data warehouse. Both edge and fog computing’s goals are to bring data processing capabilities closer to where they originate, but the key difference between these two architectures is where this intelligence is produced: in fog computing the information is pushed to the local network, whereas in edge computing the information is processed directly in the devices. Edge and fog computing are attractive for two reasons: 1) the costs of storing and processing data in the cloud will increase the more information we send to it and 2) if an attack on data were to occur at cloud level, the entire network could be taken down. Although cloud computing counts with many benefits, it is probably not the best option for IoT, the best solution to protect our hotel and guest data is to find a combination of cloud and edge or fog architecture.
There are 3 main advantages of using a combination of edge computing for IoT in hotels: 1) increased data security, because the data is decentralized distributed among all the different connected devices it is harder to take the entire system down, this approach is particularly useful for GDPR compliance, the less information is sent through alternative networks, the better. 2) Improve efficiency and reduced operational costs; lower data traffic and reduced cloud storage, in turn, lead to cut costs and faster data analysis 3) Unlimited scalability, if the information is processed at the network level without being sent to the cloud, you will not be susceptible to space limitations to data storage.
All in all, as the future approaches, we will have no choice but to take part in the race of smartification of our properties. We can ensure that these advances will result in higher operational efficiency and increased guest satisfaction but as more unconnected devices become connected and buildings become smarter, how will that ultimately affect hotel valuation?
The key to being able to support the increased communication between devices efficiently is to embrace new technologies such as 5G network and consider how, when and where information is being processed by choosing the best kind of data architecture for your needs.
Finally, is real estate fracking the next innovative way to add value to our hotels and a new tool to differentiate properties?