Reflections on CES 2016: Imagining what will be

Dr. Lalia Rach, Partner Rach Enterprises, HSMAI Americas Board Member

What is at least 50 football fields long, has 340,000 feet, is as busy as Times Square on New Year’s Eve and could take weeks to view?  The 2016 Consumer Electronics Show held in Las Vegas at the Sands and Las Vegas Convention Centers not to mention additional events at Aria, Bellagio, Venetian, and the Wynn among other locations. 

HSMAI, as part of its Executive T.H.I.N.K. program, arranged a curated tour of the show, which meant that the 10 professionals who participated were included in a pre-event conference call lead by Shawn DuBravac, Ph.D., the chief economist and senior director of research for the Consumer Electronics Association (CEA).  The call provided logistical information and insight about digital advances since the beginning of the century that has forever changed the customer experience.  Shawn also narrated the on-site tour, which created an experience far more immersive than I had imagined, as he is an expert in the relationship of economics and digital advancements.  The companies we visited and received updates from on the trade show floor were selected based on a direct and indirect relationship with the hospitality industry and of course included the wow factor.  Ask anyone in our group – the OLED screens, connected cameras, drones, virtual reality headsets, refrigerators with gorilla glass doors and a robotic arm that made coffee grabbed our attention and fueled our imagination. 

CES is unlike any tradeshow I have ever attended – it made you think, so much so that at the end of the day my mind hurt more than my feet and I walked six miles!  There is so much to see, experience, and learn about from the nearly 4,000 exhibitors including giant global corporations such as Intel and Samsung, pioneers including Oculus Rift and GoPro to the startups in an area called Eureka Park.  If I have any advice for next year it is go to Eureka Park early and stay late.  This year there were more than 500 startups from one person with an idea, to entrepreneurial companies and universities from around the world looking for investors to bring mind-boggling ideas to market.  It was a glimpse into the near future, being able to see what technological wonders could be reality at the start of the next decade. 

So what did we learn? 

-        5-G (5^th Generation of wireless networks) is around the corner with faster data speeds to 10Gbps (40 times faster than 4G), ability to send packets of data in a millisecond, and expanded bandwidth for the expansion of the Internet of Things. 

-        The euphemistic “last mile” is about to be conquered which means at the neighborhood level the signal carrying issues will be solved with the advent of 5G.  Practically this means better streaming and delivery of information insuring the advancement of smart home technology and the adoption of gizmos we didn’t know we couldn’t do without such as Ultra HD and 3-D video. 

-        It was readily apparent that the connected era is in full swing.  Today homes have an average of 15 connected devices and soon there will be hundreds if not thousands connected objects assisting us with every day life.  In no time we will take for such advancements for granted and expect that what we experience at home will exist everywhere. 

-        This is the year virtual reality (VR) becomes a mainstay, with its relevance growing exponentially over the remainder of the decade.  Brands must decide their place in the adoption life cycle.  Relying on what your customer needs and wants will answer this question.

-        Presently technology is user engaged, think asking Siri or Echo a question.  The advances in sensors and connectivity will add another dimension as technology will initiate engage based on learning about the user’s environment (water sensors in your lawn connected to NOAA adding another layer of information) and habits (alarm times M-F versus the weekend). 

 The next day the group met once again with Dr. DuBravac for a debrief and a  facilitated discussion about technology and the hospitality industry.  The debrief reinforced that CES is about positioning technology brands within daily life and highlighting the technology solutions that are on the cusp of availability.  Insight from the facilitated discussion covered a wide range of technology related topics but was dominated by the reality that connectivity advances will generate overwhelming micro packets of data about consumers.  But participants raised concerns over the hotel industry lack of data infrastructure and intellectual capability to advance the current capture and usage of guest personal information much less utilize the supra-granular information gathered by ubiquitous sensors.  Building data infrastructure across multiple brands will be costly and time-consuming but fundamental to continued success.

Participants were asked to identify the major points of inspiration and insight from a hospitality revenue, sales and marketing perspective.

• Expanded means to connect and maintain customer relationships is increasingly more affordable and extensive providing layer upon layer of information.
• Customization is only beginning with the ability to personalize every environment just over the horizon
• For the past two centuries hotels were the showcases for technology innovation (think the elevator, box springs, air-conditioning even in-room toilets) but no longer as technology in homes will consistently trump the technology in the majority of hotels
• The cost of creating content will continue to rise so it is time to turn to the guest as publisher and the hotel as curator. 
• Content must be functional, correctly engaging the user demonstrating real people and real experiences.
• The industry has gotten more complex – from a technology perspective and for each individual brand based on the customer you serve.  Business models must change relative to building new brands, integrating information from sensors into the revenue management process, installing virtual reality capabilities into sales, marketing and training.  
• Current digital marketing tools are blunt instruments and have a limited impact manipulating data. The ability to market to individuals on a case-by-case basis is a near future reality. This will change pricing as it will be possible to price for the individual and by the occasion, not the room.
• If sales and marketing does not aggregate the data, others will – i.e. Google.  
• An unconnected sales force will have limited effect.
• Meeting planners and individual clients will demand virtual site inspections.  The ability to “be” in the meeting or guest room, to experience the view, the size, the environment will be expected of every lodging product. 
• The roles of chief marketing office, chief technology officer, and chief information officer are evolving.  Should 20^th century constructs for each continue to dominate our approach?  Is it time to begin discussing the coming convergence of the three roles? 

Participants were asked what they intended to share with company leadership which generated four universally agreed upon areas of focus:

1. What we saw and experienced has implications 3-5 years from now especially 5G  and last mile of fiber so we must begin to change our business model to take advantage of the advances. 
2. Technology companies are adopting a three-pronged strategy — product, experience, and sharing.  Our company should consider adopting a similar approach. 
3. We must accept that consumer behaviors and expectations are changing dramatically on a very basic level.  We should identify deeply held convictions about consumers to identify where we are lagging change.  For example, what has been verbal communication is now shifting to a digital exchange.  This is evidenced by consumers who don’t want to call someone when there is a need, instead they want to send a text asking for more towels!
4. Sometimes we forget that the real power of innovation is to delight people.  So the question to ask on property and within the C-Suite is what little innovation can be brought to customers that would make people smile?

This was a singular experience, a rare opportunity to think differently about change, technology and the hospitality industry.  Perhaps the greatest benefit for those who participated will be the ongoing moments of “connectivity” they will experience in meetings and conversations when traditional thinking dominates.  They will be able to present ideas and knowledge based on their exposure to future reality! 

I urge you to consider participating in next year’s event.  But don’t wait to commit as only 15 professionals are allowed on the HSMAI CES Curated Tour. Any one who was part of the inaugural tour will tell you – it’s a learning experience beyond compare.

 

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