Three Midprice Chains Introduce Lobby Checkin Kiosks

Holiday Inn Hotels & Resorts, Hilton Garden Inn and Hampton are testing lobby checkin kiosks and plan to roll out the timesaving devices in U.S. hotels starting this summer. While such upscale hotel chains as Hyatt Hotels Corp. and Hilton Hotels, which like Hilton Garden and Hampton are part of Hilton Hotels Corp., started installing lobby kiosks in 2004, this is the first application of the technology at the midprice tier.

In addition to expediting checkin and checkout, the version of the technology developed by Holiday Inn, which is part of InterContinental Hotels Group, allows travelers checking out to print airline boarding passes, another valuable time-saver.

Many travel buyers appreciate these kinds of technological advances, especially when they provide greater options for their travelers at no additional cost. Unlike complimentary high-speed Internet access, another recent technology advance in which midprice chains took the lead, upscale hotel brands pioneered kiosks.

In both the upscale and midprice segments, hotels that have introduced the self-service kiosks emphasized that the machines are intended to supplement the service provided by front desk agents, not replace it.

Kiosks check travelers in through wireless technology and identify the reservation, state the room rate, taxes and fees being charged, generate the room key and confirm such selection criteria as bed size and whether the room is smoking or non-smoking. The machines give travelers any messages they have received in the previous 24 hours. The kiosks also confirm that travelers' frequency program number is in the system and how many points they will receive for the stay.

The machines mostly appeal to travelers who are under a lot of time pressure, according to Holiday Inn senior vice president for the Americas Mark Snyder. "Businesspeople want to travel the most conveniently they can in every aspect of their trip," Snyder said. "If you think of the way they access bank ATMs while on the road to get cash or checkin kiosks at the airport, business travelers are savvy embracers of technology. They appreciate having it at their disposal."

The overall strategy is to give guests more options, according to Mark Nogal, Hilton Garden Inn vice president of marketing.

"Travelers who have had a rough day or delayed flight may want to bypass the front desk and check themselves in," according to Nogal. "Kiosks make the process easy. If, on the other hand, travelers want to interact with a front desk agent, they still can check in the traditional way."

Snyder agreed travelers still needed access to the front desk. "We're giving them a choice as to when they want to bring in the human element," Snyder said.

Frequent business travelers are prime candidates. "Many frequent travelers at this price tier return to the same hotel on a regular basis, sometimes as often as weekly," Nogal said. "These are the real road warriors, so it's understandable if they prefer to use the kiosk. By comparison, first-time guests may not feel that comfortable with the property and want a front-desk agent to help orient them."

The beta tests are important because they help measure travelers' larger interest in these kinds of technology upgrades, according to Phil Cordell, Hampton senior vice president of brand management.

"We think kiosks will have a place with the brand long-term," Cordell said. "We just have to determine how to ensure they add the greatest value to our guests' experience."

Snyder sees the ability of Holiday Inn's kiosk to provide boarding passes as a competitive advantage.

"After checking out at the kiosk, travelers can print their boarding pass before heading to the airport," Snyder said. "The room folio comes out first, then you're directed to log on to the airline Web site. You take the boarding pass right out the door with you. It's a major convenience."

Given that midprice hotels are largely franchised, property owners have to agree to any improvements that entail a capital investment.

"Individual owners have to sign off on the cost of features such as this," Holiday Inn's Snyder said. "With kiosks, the business case will be easy to prove. Not only does it improve the customer experience, but it also increases the owner's return on investment. It's clear once you compare the cost of a unit against the cost of additional staffing."

An owner may schedule two clerks on a particular shift, for example, to make sure everyone gets checked in promptly. "However, a flight is delayed, the second clerk leaves at 11 o'clock and the night auditor is left the only one on duty to check in the late arrivals," Snyder said. "Can the owner justify the expense of having a second clerk on duty all night?"

Reflecting the fact that many midprice properties are in secondary or tertiary destinations, where many travelers arrive by car, the next generation of kiosks will offer maps and directions, as well.

"Imagine you've arrived in a small town and are trying to find a local corporate office 25 miles away," Snyder said. "Being able to use the kiosk to activate a map finder service means you will be able to print driving directions to take with you."

Considering that Holiday Inn and Hampton each have more than 1,500 hotels in their systems, the rollout of a feature such as kiosks can take from one year to 18 months.

"The rollout will focus first on large downtown and airport hotels," Snyder said. "Urban locations might do convention business, while at airport hotels there's typically a quick turnover of rooms and it's programmatic how those rooms turn over." Larger properties also might get multiple machines.

At Holiday Inn, the kiosks are being tested at a company-owned property that opened last year in Duluth, Ga., near IHG's Atlanta headquarters.

While Hilton had experience with kiosks from the rollout initially at Hilton Hotels and subsequently at Doubletree Hotels & Resorts and Embassy Suites Hotels, HHC's other upscale brands, Holiday Inn is the first IHG brand to install the machines. For their test, Hilton Garden Inn and Hampton chose a mix of downtown, airport and suburban properties.

Midprice hotels, which fared strongly during the 2001 to 2003 industry downturn, relative to other lodging categories, in 2004 continued to show positive occupancy and revenue results. Gains, however, were not as dramatic as those logged by upscale, upper upscale and deluxe hotels.

This trend has continued into 2005. For the week ending April 2, for example, average occupancy at U.S. midprice hotels that offered food and beverage was 61.7 percent, according to Smith Travel Research. Midprice hotels that do not offer F&B, had a weekly occupancy of 68.3 percent. Upscale, upper upscale and deluxe chains, by comparison, had occupancy levels of 70 percent to 71 percent.

Results were similar with revenue per available room, which is a key indicator of hotel profitability. While RevPAR for midprice with F&B hotels in 2004 grew 5.8 percent, it jumped 8.7 percent, 7.7 percent and 10.2 percent, respectively, for upscale, upper upscale and deluxe hotels.