When it comes to the hospitality industry, Rohit Verma, Ph.D., knows his stuff. A professor of Service Operations Management at Cornell’s School of Hotel Administration and executive director at the Cornell Institute for Healthy Futures, Verma has spent his career researching everything from service design to quality management to operations and marketing. We asked him to share his thoughts on technology, disruption, and tips for great customer service.
Q: Let’s start with a backgrounder. According to your CV, you originally studied Metallurgical Engineering before making the leap to your Ph.D in Business Administration. What prompted this switch?
I grew up in India, and at that time, engineering was generally considered to be a good career for people who are good at science and math. I applied to engineering colleges and was fortunate to get into one of the top programs in the country at the Indian Institute of Technology. I liked many aspects of engineering, like the use of mathematics and analytics to solve complex problems, but I didn’t like the subject matter of my assigned department.
Once I graduated from my undergraduate degree, I came to the University of Utah for graduate school. I started looking at different ways to apply my skills, and some of my colleagues in the university suggested that I look at courses in the business school, because they apply analytics and mathematics to solve complex problems across different industries instead of one specific domain.
Q: Metallurgical Engineering and Business Administration seem like total opposites in terms of career choice, but has any of your knowledge from your undergrad and Master’s degrees informed the work you do in business administration?
If you go to business schools and look at the profiled MBA students, more than half of them are coming from engineering backgrounds. It’s very common for engineers to think about business administration as a career for a couple of reasons. This is because many of the skills needed to be successful in business are the same as in engineering — things like systematic analysis, analytics, knowledge of data, using scientific matter, and so on.
Q: You’ve obviously found success in the hospitality service field. Between the time you embarked on your Ph.D. to the present day, what have been the most disruptive changes in the hospitality service industry?
There are four big changes that have happened here. The first was in 1995, right around the time I got my Ph.D., when the world wide web was starting to get a lot of publicity in the marketplace. For the first time, people started using the internet to make reservations instead of going to travel agents or picking up the phone and calling a hotel or airline. That was the first major disruption. It completely changed how hotel rooms and travel were bought and sold, and how people searched for information.
The second one was the rise of social media, and by that, I mean things like TripAdvisor, where the customers can talk about past experiences, and how big a role that’s playing in the distribution channel.
The third is the rise — I would say in the last three years — of the sharing economy, of companies like Uber and Airbnb, and another company called Flatbook that’s coming up. All of these models of individuals sharing existing resources are completely disrupting the travel and tourism industry, because they are creating alternate channels for consumers.
The fourth and most recent one, which is just getting started right now, is a renewed focus on health and wellness. Increasingly, we are seeing many hospitality companies revisit their value proposition in terms of the types of spas and fitness centres they have and the types of food and dining they’re offering, because consumers are starting to ask for healthier options. This is something which we’ll see become more prominent in the next two to five years.
Q: Technology has brought a lot of change to a lot of industries very quickly, but the hospitality sector has been slower to evolve, until recently. What do you think has contributed to this delay and the new-found emphasis on catching up with other players within the industry?
But which industries have been using more technology than hospitality? Oftentimes, when people compare hospitality to other industries, they are actually comparing it with the company that makes mobile phones or computers. That’s not a fair comparison. Typically, the technology companies are suppliers to hotels and other companies. There’s a little bit of perception issue that some industries move faster than others.
Having said that, I think there are a couple of things that are happening here. One is that within the hospitality industry, we have very unique ownership and management structures. If you look at any major brand, they don’t own most of their locations. They are the management companies; the actual owner of the property is somebody else. Therefore, what happens is a financial arrangement where no one is really responsible for investing many of their own resources into innovation. The ownership of innovation and technology then goes on the suppliers. Hotels are not innovating themselves, but they are partnering with companies who do.
Q: In Hotel Executive magazine, you wrote that appropriate messaging is key to success on social media. Why should hotels develop a message that, in your words, “fits their brand and is genuine”?
I actually don’t remember that article at all! But I think what I must have been talking about is authenticity. When businesses create a message in the social media world, they have to be very, very clear about who they are. If they try to create a persona for what they are not, then consumers will quickly figure it out, and it will only have negative consequences.
Q: On a more general note, what would you say are the top three things hotels should focus on in terms of driving quality service? Do you have any tips for hoteliers out there who may be looking to improve in this area?
Every hotel company has to figure out their core market segment and their core value proposition. There are many options available to consumers, so hoteliers have to identify why people come to their property. Is it because they are the cheapest, or is it because of their location, or is it because they are known for a certain niche market? Whatever that core is, it has to be done really, really well, because that’s where they’ll get most of the customers from.
Next is attention to detail. Quality first starts by noticing what’s going well and what’s not going well. Every good hotel company I’ve been to, I’ve noticed that whether it’s a senior executive or front-line staff, if they see something wrong, they immediately fix it. Attention to detail is a skill that has to be developed in the entire workforce, so a lot of emphasis needs to go into training and education about this issue.
Third is technology. Technology is a double-edged sword. Technology solves a lot of problems: it can give you instant feedback, it can give you more data and analytics, it can tell you people’s preferences. But technology still cannot solve all customer service problems. For example, people may talk about how easy it is to get a mobile check-in service. They go directly to their room and there’s an RFID device that lets them check in. So people say, “Wow, this was an amazing check-in experience.” The reverse of that would be getting their room key and trying to open their door, but it doesn’t work. And they say, “Okay, it was a horrible check-in experience.” In both cases, technology was the cause of both. It’s important to really pay close attention to technology, but from a customer service perspective.
Q: With the amount of technological change going on in the industry, what is your advice for hoteliers who may feel overwhelmed by how rapidly things are changing?
The first is to accept the fact that things are changing rapidly. When I talk to many people in the industry, some are more willing to embrace the change and say, “Okay, well, how do I go ahead and be successful in a new environment?” But many of them are in denial that this is happening. When a company’s in denial, they try to take action to protect the old status quo, but unfortunately, that’s not going to work anymore.
The second is that hotel companies have realized that, because of their ownership structure and the way the whole industry is modeled by franchising and management contracts, they will not be able to invest the resources necessary to innovate in many of these dimensions. The alternative is to find technology partners, and those partnerships, if well executed, will be able to help them continue to be on top of the latest technological change.
Q: Any final thoughts?
One thing I would add is that trends show that travel, tourism, and the food service industry is continuing to grow. There was a time period where many people said that business travel would decrease because of technology like video conferencing. There was also concern that leisure travel would decrease because of the downturn in the world economic market. But both of those trends have reversed. People are realizing that for business travellers, face-to-face meetings are still very important. And on the leisure side, people are realizing that, yes, they can see every place on the computer screen, but it’s a completely different experience to be there in person. So the travel and tourism industry is actually growing, and it’s one of the largest industries in the world. If hospitality companies do it right, they still have a lot of opportunities.