Self-Service Technology Trends in the Hospitality Industry

Introduction

The service industries have always played a significant role in the economy of the United States, and the projected growth of the service sector in the next decade and beyond is so significant it has become the stuff of legend. Reflecting its historical dominance, the service-providing sector is projected to account for all of the growth in non-agriculture wage and salary employment. Specifically, this sector's employment is expected to reach 129 million by 2014, accounting for almost 4 out of every 5 jobs in the U.S. economy (Berman, 2005, p. 45).

As this nation and the global economy in general change with regard to the development of technology as well as a broader conversion to a service industry emphasis, it is clear that the hospitality industry is and will remain a major player in economic change. "The availability and use of appropriate technologies govern the success of a service encounter" (D'Souza & Menon, 1995, p. 481). The realization of this fact is an essential element in continued success for both the smallest and the largest hospitality industry businesses. Self-service technology is, in fact, the present standard in many areas and offers substantial advantages and opportunities if implemented correctly and appropriately in the hospitality industry.

Technology in general has often been made or broken in the service sector, and a more recent trend — though it goes back decades — is self-service technology. Self-service technology, or any technology utilized by the consumer to purchase or procure the services and goods he or she needs, has become almost second nature to the hospitality industry. Expansion of existing SST is likely to occur in the hospitality industry, partly as a result of the exponential growth of the service industry but also as a result of increased consumer confidence in such technology.

Technology Infusion in Service Encounters

Self-service technologies (SSTs) are technological interfaces that enable customers to produce a service independent of direct service employee involvement. Examples of SSTs include automated teller machines (ATMs), automated hotel checkout, banking by telephone, and services over the Internet, such as Federal Express package tracking and online brokerage services (Meuter, Ostrom, Roundtree, & Bitner, 2000, p. 50).

SSTs appear almost daily in existing hospitality businesses and are in near-constant trials, introduced in forms that challenge consumers to meet their own needs through advanced vending and service acquisition technology. Consumers can now book a hotel room, a rental car, a seat on a flight, and find out what is happening at their destination — all from their home or office PC. Interestingly, they can also accomplish all of this without ever meeting a service delivery employee at most locations they visit, other than standard security and key pick-up interactions. In other areas of the hospitality industry, such as restaurants and bars, SST exists to some degree in much the same way it has for decades. In general, the higher the price paid for service, the less likely a guest is to engage in self-service beverage vending or similar SST-based transactions, yet a great deal of convenience-oriented SST is available across the industry.

The hospitality industry has been a leader in business, technology, and innovation since its beginnings in the United States. Restaurants, hotels, travel agencies, and even bars and nightclubs have historically led the way in the use, trial, and implementation of technology and in finding more cost-effective and ultimately profitable ways of doing business. In light of this history, the question arises: has the hospitality industry begun to lag behind in the acceptance of new technologies, or does it continue to lead the way and demand the creation of new technology to meet its growing needs? This paper analyzes this important question by offering a short introduction to the history of SST in the hospitality industry and then moves toward the future to determine the need for more of it — examining the demand offered by different hospitality providers and looking at possible future trends that must be met to maintain a hand in the growth market.

Without a clear understanding of the innovative manner in which the hospitality industry has grown, both domestically and internationally, it might be easy for the modern consumer to assume that advances in technology are not a priority in the industry. This would be an assumption made in error. Historically speaking, the hospitality industry has been demanding and producing innovation since it began. The industry has led the way in the development of food and beverage transportation, storage and preparation, business strategy, and communications technology — all to provide the consumer with quality at an increasingly rapid rate of delivery.

Brief History of SST in Hospitality

The restaurant industry in particular has developed a clear position as a leader in innovative business practices — demanding and even creating the specialized technology it needed to provide sustenance for a growing nation, as well as influencing the structure and function of all businesses. The word "franchise" is synonymous with food and beverage delivery systems and is now a foundational part of all industry in the United States. To create such a system of business, original innovators had to create technology — or demand it of manufacturers — that would help them produce products more quickly and consistently. Currently, SST plays a significant role in the franchise arena in hospitality, as it is first adopted by business collectives such as franchises, which have a unique ability to shoulder cost burdens due to their size and to test new approaches at delivery locations to gauge consumer demand and acceptance.

The very first and arguably most successful business franchise, Kentucky Fried Chicken, is a paramount example. Colonel Sanders had to create an entirely new cooking device to quickly and consistently provide a product consumers wanted. Sanders did not originally serve fried chicken in his restaurant because it took too long to prepare, and he believed in fresh-cooked food. His innovation — a pressure deep fryer — along with a replicable business concept, are both still in use today to deliver the product and many others. Another fascinating example of innovation in the hospitality industry is the famed — and not entirely successful — Automat restaurant, where the entire establishment was automated and customers could choose pre-prepared foods from an elaborate vending system (Meyers, 2003, p. 222). Though Americans clearly preferred at least some degree of personal service, the Automat demonstrates that many entrepreneurs in the hospitality industry are adventurous and innovative. The consumer ultimately becomes a co-creator of SST as he or she accepts or rejects specific aspects of it in any given hospitality business. Other co-creators are the businesses themselves, which often utilize the beta testing of other businesses and industries to determine where best to allocate funding for SST additions to their own operations (Hilton & Hughes, 2008, pp. 22–34).

Hotels and motels are equally innovative, answering the call of changing transportation technologies — many franchising in a similar fashion to restaurants and building on the needs of the personal automobile and the cultural shifts it brought. The industry responded by moving services to where the roads moved during the interstate highway era and implementing ergonomic changes to meet ever-shifting consumer demands (Goode, 2000, p. 10). Hotels have since become innovators in SST on the internet, offering purchase and confirmation technologies at the click of a button for consumers who wish to handle their own bookings.

Traditionally, bars, nightclubs, lounges, and taverns are among the most longstanding entities in the service industry, and they too have adapted and innovated, providing SST that is both integrated into the consumer experience and offered as a convenience — such as ATMs and high-speed wireless internet. This category of SST has grown substantially as more and more people have become comfortable with internet-based transactions (Davis, Bagozzi & Warshaw, 1989, pp. 982–1001). Each entity has changed with cultural demands and even legal shifts, particularly in the case of Prohibition in the United States. To stay afloat, businesses that served alcohol had to reinvent themselves; in doing so, they created a market for other beverages and even helped develop those beverages. Root beer and sarsaparilla are prime examples, adapted from soda fountain creations to better serve a crowd accustomed to beer or liquor (Gershman, 1990, p. 3).

SST beverage technology has become nearly universal in convenience locations, hotels, restaurants, and other venues to meet the demand for faster service. While a customer waits for food, he or she can reduce the workload on service employees by obtaining his or her own beverage. In a hotel, a guest can use vending technology to meet immediate needs without leaving the establishment, thereby continuing to spend money at the primary location. It must also be noted that personal service delivery still very much influences consumer satisfaction in many hospitality settings, primarily hotels. To some degree, SST has improved the ability of staff to provide additional personal services, as they are freed from routine tasks by SST-offered services (Beatson, Coote & Rudd, 2006, pp. 853–880).

Some examples in a hotel would be the opportunity for the front desk clerk to provide personal morning services because the wake-up call service has become self-driven in many locations — either through automated phone systems, integrated television technology, or a simple alarm clock. Though most establishments still offer the service personally, the need to do so is lessened, and one staff member is no longer tied up for hours ensuring wake-up calls are fulfilled for every guest each day. Another example is messaging services, which have evolved from the front desk taking personal messages and delivering written notes to guests. Now guests can see from their room phone that messages are waiting and listen to them at their own leisure. This frees clerks to provide other personal services or assist with other tasks.

Conclusion

Aging populations in most developed nations will also bring about change in the travel industry. Expected trends include more grandparents traveling with grandchildren; higher wages in the service industry as there will be fewer people to serve an expanding market; an increase in leisurely vacations rather than highly programmed ones; greater demand for all-inclusive, family-oriented resorts; and more urban vacations featuring all-weather activities and 24-hour service. Convenience will be paramount to travelers in the twenty-first century. Airport delays caused by security concerns, a lack of runways, overcrowded skies, and the hub-and-spoke system will make air travel less practical and more frustrating. Both business and leisure travelers will seek ways to avoid air traffic delays, resulting in a trend away from short flights. Businesspeople in particular are concluding that by the time they arrive at an airport, spend two hours in security lines, fly to a destination, and rent a car, they would have been better off taking a train or driving (Tarlow, 2002, p. 48).

Travel agencies must ensure consumers feel they are getting a good deal, or at least that they are willing to pay a little more for a service that makes the ease of travel worth the cost. Agencies will find it increasingly important to continue to support customer service excellence or they will have to find another means of generating revenue. If consumers do not have a vested interest — for cost reasons or otherwise — they are very unlikely to seek out such services, especially as improved technology and increased competition from web-based do-it-yourself services continue to make self-booking a perceptually desirable option (Rayman-Bacchus & Molina, 2001, p. 589). There is no question that increased technologies make this not only possible but are demanded by the industry to meet this growing need (Barrett, 2002, p. 46). There is also, to some degree, a spur in the technology-driven building materials industry as it applies to public spaces, and the design of nightlife venues may soon become an essential specialty in design schools, especially as more modern designers begin to win awards and receive recognition for innovation in this area (Owen, 1991, p. 16).

Creating systems that lead the rest of the market toward change, and moving and adapting with the flow of the road and the market, have always been the stuff of hospitality legend. SST is a great example of this technology trend, as it clearly dominates technological innovation and to a large degree aids both service employees and consumers — enabling users to access some services independently while simultaneously freeing service employees to provide personal service where it is most needed (Bitner, Brown & Meuter, 2000, pp. 138–148).

The hospitality industry has always responded to change with technological innovation and adaptation. Providing a good, solid consumer product is nearly always the greatest common denominator in the industry, and this will not likely change any time soon. Though technology developed outside the industry does play an increased role in the ways in which hospitality businesses currently invest, it does not mean that industry-specific technology is no longer being generated. The food and beverage industry has always been on the cutting edge of consumer market change and will continue to advocate for new and better ways to create products that consumers want as efficiently and healthily as possible. The travel booking industry will likely continue to diversify and demand greater technological freedom to better compete with growing do-it-yourself competition. The lodging industry will likely continue to innovate technology that serves customers' needs while maintaining their security and safety. There is nothing remotely far-fetched about assuming that the hospitality industry will continue to grow and, more importantly, continue to demand technological SST advances to better meet its needs and the needs of consumers in this new global service market.