It might have sounded almost heretical when we asked in our last article whether Europe could be considered a developing country in digitalisation, but unfortunately, this cannot be denied. Too many companies that are both world-renowned in their industry and seen as digital pioneers just do not come to a neutral observer’s mind. However, there have been and still are some fruitful European projects that deserve to be mentioned, such as Skype, originally a Danish-Swedish start-up. Some industry experts will probably also be familiar with one of our hidden champions, but trying to find a successful digital company from Germany, known to the wider public, will inevitably lead to a dead end. Why is Germany lagging behind so much?
Digital Discrepancies – the European Union
If you broaden your perspective from Germany to the whole of Europe, the situation does not look quite as dramatic. Here, concrete examples of successful and comprehensive digital policy come to mind. Estonia, for instance, has a strict e-government strategy. Estonians only have to consult the authorities when they get married, divorced or buy a house, all other “administrative procedures” are available and actively used electronically! Another example is Scandinavia. It seems, the willingness of citizens there to include digital services in their everyday life is much stronger than in Germany. Beyond the Arctic Circle, the virtual attendance of school with a laptop or cashless payment are much more common. It has been predicted, that in 2025, gastronomy and retail overseas will only handle cashless payments. Not utopia for the Swedes. In 2017, 74 percent of all payment transactions in Germany were still processed in cash as opposed to only 19 percent in Sweden. In Stockholm, Malmö or, even further north, in Luleå, even purchasing a street newspaper only requires a swipe on your phone. The discussion about completely getting rid of cash money has already started in the country that was the first to produce paper money at all. These trends prove that the pace of disruption remains steady. It is absolutely necessary to demand that our society finally tackles digitisalisation in a comprehensive manner. Otherwise, we and our economy are in for a rude awakening.
German Hotels Under Pressure
When we apply this to the hotel industry, it means we need to be aware of the challenges and try to tackle digitalisation. After all, today’s customers, and even more so those of tomorrow and the day after tomorrow, are already relying on digital products and are increasingly expecting this comfort and service from hotels. Smartphones are constant companions and, of course, guests also want to be able to stream their favourite series on Netflix or Amazon Prime to the television installed in their hotel room. The business customer, on the other hand, is pleased about the time-saving digital registration, the matching digital key or getting their invoice sent to them directly after checking out. The pressure on hotels will only rise given foreign participants will push into the Germany market. Here, we might cite the current takeover of the German Steigenberger Group by the Chinese Huazhu Group. As we have already described previously, Chinese people already think and act completely “digitally”!
Thus, the hotel or the hotelier has to change again, but this is not new either. To adjust to different situations and guests every day is part of the essence of this profession. The task now is to preserve the existing and expand it through digital processes. Digital transformation requires an active intervention in the internal processes. What is new is the required rate of change. For this reason, transferring these tasks to the management or a digital native employee has proved of value. This way, those involved are in a position to consistently review all processes and initiate improvements without impairing day-to-day business. If this is not possible due to a deficit in capacity, it might be advisable to consult an external partner who not only has the required technical know-how but also confident industry knowledge.
Lighthouse Projects Exist – But Only Partially
Examples such as the Smartel in Ahaus show that the number of digital hotels is also slowly increasing in German-speaking countries and that they can even be built into the basic structure of a house. The two concept houses deliberately rely on their digital character. The Innspire Hotel in Munich addresses digitally interested guests with an “intelligent” room control system, while the Opera Hotel in Zurich advertises their online check-in, room access via smartphone or a specifically designated “Smart Room”. However, all of them have one thing in common: they focus on individual aspects of digital transformation. On the other hand, some focus on a holistic digital approach, but are lacking connectivity interfaces. This has several disadvantages because the integration into other ecosystems in sales or a change in branding is significantly more difficult. In addition, very few guests are willing to install a proprietary app on their smartphone for each individual hotel or hotel chain. It is probably more sustainable to rely on a platform concept. Platforms flexibly interconnect all products that already exist on the market or are able to do so with new solutions. In the next article, we will discuss which other areas of technology will also become a pivotal factor or even obstacle in the future.
Yours sincerely
Frank Gerhardt, VINN CEO
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