Airline Check-In Kiosks in Hotel Lobbies: Benefits & Integration

Introduction

The hospitality industry faces the ongoing challenge of adding differentiated services that streamline and improve efficiency across its core business segments. Business travel is the core segment for the hospitality industry globally. The most problematic areas of business travel, however, are airline check-in, rental car check-in and check-out, and hotel check-in. Looking to differentiate their services and add value, hospitality providers have begun bundling airline and rental car check-in and check-out services. The widespread adoption of the Internet is also acting as a catalyst for enabling the integration of airline check-in kiosks and terminals within hotels.

With over 50% of Southwest Airlines customers printing their boarding passes at home or remotely in hotels, it is clear that business customers are leading a change in how boarding passes are obtained in hard copy (Aviation Daily, 2005). Making this trend even more pervasive is the lack of process improvement and quality control in the manual processes used for issuing boarding passes (Kirkpatrick, 2008). This paper examines the dynamics of how hospitality providers are capitalizing on the opportunity to differentiate themselves by offering customers the ability to check in to their flights while still at the hotel, saving significant time and reducing potential confusion at the airport.

Partnership of Necessity

The hospitality industry's quest for differentiation and its drive to continually add value for its core segment — the business traveler — is pushing hotels to consider airline check-in kiosks and terminals in their lobbies. Airlines, likewise, see the opportunity to cut costs. Specifically, concentrating on self-service significantly reduces operating costs and leads to greater customer satisfaction over time (Ody, 2005). Hotels are also experimenting with self-service to streamline their own check-in process for frequent flyers, further reinforcing the shared partnership between hospitality providers and airlines (Stellin, 2006).

The Hilton chain of hotels found through its own research that the most stressful and difficult time for business travelers is during the initial check-in process (Stellin, 2006). Developing more streamlined processes in conjunction with kiosks for their own systems has given the chain the ability to integrate more effectively with airlines as well. Studies have also shown a correlation between the percentage of total traffic managed through airline check-in kiosks and a reduction in airline service costs (Wilson, 2006).

To date, no revenue-sharing model has been established between airlines and hospitality providers. There is, however, a series of emerging best practices for integrating airline kiosks into hotels to ensure that the mutual objective of customer satisfaction is achieved, with greater loyalty and repeat business as the outcome. Ultimately, the partnership between airlines and hospitality providers is leading each to create more targeted strategies to maximize lifetime customer value. Based on the critical importance of lifetime customer value to both parties, this partnership is considered by many industry analysts to be one of necessity (Lane, 1986).

Conclusion

The immediate benefits of having kiosks in hotel lobbies are mutually advantageous: airlines achieve a reduction in customer service costs, and hotel chains gain increased service differentiation (Ody, 2005). Additional research suggests that the software applications available on kiosks can also contribute to business users' self-efficacy and learning when it comes to Internet purchasing and pricing applications (Kurata & Bonifield, 2007). This is a significant finding, demonstrating that the ROI of investing in application servers to host airline kiosks is well worth the cost and that kiosks actually become part of the learning process through which customers redefine how they interact with airlines.

Kiosks as learning tools for teaching customers what e-commerce applications can do for them have major implications for any Internet-based selling and service strategy for airlines and hotels. From this perspective, it is clear that kiosks offer far longer-term value than simply speeding customers through check-in on their way to a flight.

Initially seen as a means of overcoming the long and often painfully slow lines at airport check-in counters, kiosks in hotels have grown into an essential part of hospitality providers' service strategies. First, by including check-in kiosks, hospitality providers can gain differentiation through enhanced service. Second, by partnering with airlines, hospitality providers can increase lifetime customer value and build customer loyalty. Third, the integration of systems and processes that makes kiosks possible helps legacy hospitality systems become far more transaction-oriented — critical because it allows hospitality providers to serve customers in real time through an automated interface supported by the airlines.

The level of adoption and trust generated through kiosk integration, roll-out, and service strategy is central to driving long-term customer lifetime value for both airlines and hospitality providers.