Smarter than the average hotel

A new stage in the evolution of hospitality is taking place: the receptionist-free, fully-automated ‘intelligent hotel’. Is this the shape of things to come – or is the traditional format with room service and porters here to stay?
Nathan North

Norwegian company Genfer is to openthe first ‘intelligent hotel’ in the CEE region: The Puro Hotel Wrocław. This state-of-the-art facility is scheduled to welcome its first guests as soon as February 2011, and according to the company it will be followed by eight more intelligent hotels located in major Polish cities by 2015. However, the welcome awaiting guests in intelligent hotels might be one that is unfamiliar to people living in this part of the world. It will not involve porters offering to carry your luggage, or your keys being handed to you by receptionists. Upon entering you will be greeted by a touch screen monitor displaying options for the various types of stay. If you haven’t already made an online reservation, this can now be done, and payment made via credit card or internet bank transaction. The “key” is then handed to you in the form of a pin code that opens the door to your room, along with further instructions on how to use the many hi-tech devices to be found within. And unless some kind of more problematic situation arises, a normal stay could involve little or no contact at all with any human personnel.
The virtual becomes reality
So far, so space age. But why are they being introduced now and does a market really exist for such hi-tech hotels? Rune Askevold,  the CEO of Puro Hotels, is certain that one does: “Intelligent means the ability to quickly comprehend and adapt to new situations and solve problems. The modern traveller has different needs than before. Therefore we have created a concept that serves such needs.”
It might seem that faced with the dawn of the age of the intelligent hotel, a developer of the more traditional format would be forced to adapt or die. However, Alexander Jurkowitsch, the chief development officer of Warimpex, an Austrian company that is mainly involved in the development of hotels, believes that eliminating the human touch is neither inevitable, nor, for a lot of guests, desirable – in particular for those from Europe. As he explains: “Some chains are bringing such technology to Europe, especially the Asian ones. But many Europeans are not ready for this, as they often find it too complicated and need to feel immediately comfortable. The majority of European guests prefer simple systems that don’t take an hour to learn how to use.”  Mr Jurkowitsch adds, moreover, that “most guests expect to see human faces as they check in.”
The gender and the generation gap
Adrian Flueck, an analyst for the CEE hospitality market for CB Richard Ellis based in Prague, also points out that intelligent hotels may only be attractive to a certain demographic – that of the younger businessman: “People need to feel reassured. So, for example, a woman travelling alone would not want to stay in this type of hotel – a warm, safe atmosphere is needed for this type of client,” claims Mr Flueck. For similar reasons automated hotels would also deter families and older couples, who tend to require extra help and security. So it would seem that such facilities might only appeal to a very narrow, niche market.
Nevertheless, intelligent hotels and increased automation are not something that can simply be dismissed by the traditional developer and operator. Alexander Jurkowitsch of Warimpex accepts this much, but points out that “a lot of the features associated with intelligent hotels can already be found in our hotels, for example individual control of heating and lighting.” As he sees it, in the future a convergence will occur between the different new media, such iPhones and iPads (which are already being used on a more professional basis). “They are also very likely be used to develop hotel infrastructure – for example, control of the air-conditioning via an iPad,” argues Mr Jurkowitsch.
Blurring the boundaries
Since more traditional hotels are already adopting such automated systems, something of a blurring of the distinction between traditional and intelligent hotels might already be occurring. Indeed, Adrian Flueck of CBRE stresses that it is important to define and differentiate between the different types of intelligent hotel that are already on the market. For him the first type is the intelligent ‘budget hotel’, which is the segment in which Puro and German rival Orange Wings operate. These feature auto check-ins and self-cleaning baths. Only house-keeping staff is required to clean the bedrooms and make the beds. “The cost of the hardware and software has to be recouped from the room rate, but with this type people expect the price to be extremely cheap because there is no room service,” argues Mr Flueck. The second type is ‘design-budget’, featuring vending machines, the delivery of fresh products, and maybe a person attending at breakfast. Mr Flueck adds that “‘design’ is maybe not the best word – maybe two-star intelligent hotel would be better.” The third type, into which Warimpex’s offer falls, is that of more standard hotels integrating IT solutions, such as ordering though the TV and auto check-ins. According to Alexander Jurkowitsch, Warimpex will continue to introduce many such features, but as long as they are viable, workable products. The problem with adopting cutting edge solutions is that often they have not had enough time to be fully tried and tested – and it is not difficult to imagine how teething problems with such technology could seriously damage a hotel’s reputation.
Tried and tested Đ by airlines
However, many of these systems have already been put to the test in airports, which provide one model for how automated hotels might develop. Alexander Jurkowitsch suggests that “maybe the best way is to have a transition period in which both the new and old technology is available – similar to the situation in airports, where you have both the traditional check-ins with clerks alongside the new electronic check-ins.” In fact, according to Rune Askevold, this is exactly what Puro intends to do: “We will offer solutions which do not need any special supervision.” Adrian Flueck adds to this that airports will help to educate guests about such technology, and that this is “the most important task to be faced if the intelligent hotel segment is to take off. As people get more used to automated check-ins in airports, they will become more familiar with such systems, and then they will be ready for intelligent hotels. But this education is a vital step.”
One of the biggest drivers behind the whole shift towards greater automation is, as it always has been in history, to reduce costs. Rune Askevold, who prefers to describe Puro Hotels as ‘affordable luxury’ rather than ‘budget’, claims that it will be possible to pay as little as EUR 29 per night for rooms in his company’s facilities. However, the design and installation of such hi-tech systems requires quite a substantial initial outlay before the long-term benefits from savings in terms of reduced personnel costs can be felt.
Another problem for developers, therefore, is raising the finance for such projects, which entails selling the intelligent hotel concept to a banking sector that might well be wary of a new format in the current financial climate. According to Adrian Flueck of CBRE, the market is not going to develop overnight: “It is important to reach a critical mass. Hilton took two to three years to sell the mid-range Doubletree concept to owners and the banks. After that the growth curve was exponential.” In his view, it should be easier to establish the concept in the larger countries in the region where there is lots of long distance domestic travel, such as in Poland, Romania, Russia and Ukraine. “These countries are at different stages of development, but there is still a lack of good standard hotels on offer,” claims Mr Flueck. However, he goes on to say that: “In the Czech Republic, Hungary and Slovakia it would be more difficult to find a place on the market – three to four such hotels in the Czech Republic would be a good achievement. But we are still looking at around 100-150 intelligent hotels in Europe, rather than thousands. The critical mass of 20-25 hotels is likely to be reached in 5-7 years, and in 10-15 years there should be around 100-150.”