The real cost of developing your own hotel app
If you’re in the hotel business, there are a number of reasons you might want your own app: mobile technology is now approaching ubiquity; hospitality bookings are increasingly made online; while social media and travel review sites have pushed the bar for customer service to new heights. However, the cost of developing your own app can be huge, and there’s no guarantee that customers will actually use it. When does it make sense to take the plunge, and what, if any, are the alternatives?
The travel booking landscape is evolving at a rate of knots, and purchases made on mobile are rising, rapidly. Just a year ago, travel companies with an app reported that 41% of transactions were done via mobile, but that figure has already jumped up to around 60%. By this measure, $65 billion of travel sales will have been made on mobile devices by the end of 2018, a $20 billion increase on 2017.
This number is even higher for last minute bookings. 89% of last minute traffic is conducted over mobile, of which almost half (41%) is done through a dedicated app.
As a hotelier on the hunt for more direct bookings and more onsite revenue, there’s clearly a strong case for riding this wave, especially considering that conversion rates on apps are five times higher than on mobile web.
Even beyond the potential increase booking volume, and boost to revenue from on-property services and amenities, there are a good many reasons why it would made sense to spin up a bespoke app, not least the improvements to customer service and staff efficiency.
Any hospitality professional can tell you that a lack in service is a loss in customer retention, and some of the most well known apps have a track record of getting it right. They integrate their booking process into their app, even tucking curated guides and recommendations into the same platform.
The Ritz-Carlton, Marriott, and Hilton all have well established offerings, with value-add features such as allowing guests to unlock their room with a digital key, or sending out push notifications to tell customers exactly when their room is ready.
For the most part, these features are a draw for the modern traveler, to the extent that three in five people claim that a smartphone-enabled hotel is more likely to catch their eye than one with just a website.
Underneath the guest experience, an app can also oil the wheels behind the scenes. They can reduce workload for concierges, channel requests automatically to hotel staff, and tack charges directly onto a client account. By becoming the link between the hotel and their guest, offering multiple products and faster service in one place, they can streamline the whole process from check-in to check-out in the eyes of the guest and the hotelier.
There is another reason that hotels in particular are so suited to apps. Travel and hospitality companies currently offer some of the most comprehensive and sought after loyalty programs, and apps show their strength in this corner of the market. Customers can see with the tap of a finger how much they have racked up in rewards, and then book affiliated products through the very same platform.
For a hotel chain or high-end boutique all this might seem like a no brainer, that is, until you look at the cost. The average hotel app will typically cost anywhere from $30,000 to $150,000 to develop, and take at least 12 weeks to complete even a beta. This does not include the consistent updates, feature upgrades, and app maintenance, all of which can pile on hundreds of thousands more in cost, depending on how deep a property wants to go in their mobile experience.
Even after all this investment of time, money and effort, hotels can find that the technology falls short. What about the integrated services guests love? Unfortunately, they are often poorly executed and frustratingly limited when guests try to use them. Even with the best app in the world, getting customers to download it, use it, and keep it, is not a foregone conclusion. It requires a huge amount of time and resource to market the app, and drive ongoing engagement.
A recent study in Germany found that only 2 guests out of every 100 will actually end up downloading a hotel’s own proprietary app during their stay, even with concerted efforts to market the product to customers as they book their room and then again when they enter the building and log into the WiFi. This begs the question, how many will then keep the app when they have left the country? Very few indeed. So if they do return, the process of capturing their attention must start all over again.
The upshot of this inefficiency is that hotels can spend huge sums developing an app, and yet more marketing it, only to end up losing revenue from on-property services and amenities if the product hasn’t been well designed. Unless you’re a global chain with thousands of hotels and a steady stream of repeat customers, the return on investment is very hard to justify. What then is the alternative?
The reality is that all of the features that customers love: in-app booking, concierge communication, tourist information, push notifications, online check-in and check-out, billing, room service, loyalty programs, all of it, can be done by one single app that travelers needn’t delete and re-download every time they move on.
Such an app could still have all of the personal touches and bespoke design that are unique to the hotel, and capture the usage data that helps to inform marketing efforts, but can be developed in a matter of hours, not months. What’s more, as part of a wider ecosystem, one where the developer makes money from a small commission on reward points spent during the booking process, rather than on app development itself, the hotel can have all this for free.
With the solution we are building at KeyoCoin, there is no three month waiting period, no deeply involved briefing and management process. Only a matter of hours, and any hotel (or other property type for that matter) can have their own customized app, complete with mobile check-in and check-out, guest messaging with live translation, inventory management, bookings, room service, and a fully integrated travel rewards platform. But importantly, all this comes as part of a wider platform. In the same way that the single Airbnb app (a permanent feature on millions of travelers phones) is a central platform for over a million properties, KeyoPass is the single key to thousands of individual hotel apps.
The financial case speaks for itself, but the technological side has something to say, too. We are building a future-proof ecosystem where blockchain-based protocols bypass a whole host of the traditional problems in hospitality: commission-hungry OTAs, data ownership and management, credit card fees, inventory management and double bookings. By harnessing the best of incoming blockchain technology, our mobile solutions are being built to be 10x better than existing solutions, and all with one clear purpose: shift power back into the hands of independent travel businesses, and give value back to travelers.
To find out more and follow our progress, visit www.keyocoin.com, and join our Telegram channel on https://t.me/KeyoCoin
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