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Digitalization in Estonian hotels

Digitalization in Estonia

In today’s world, technology has become an irreplaceable part of our daily lives. The advancement of technology has transformed the way that products and services are offered to the customers. From sports to education to economics and even to the field of health, technology is surrounding every part of our society and its influence on our behavior is increasing at an ever expanding rate. 

For a rather small country, Estonia has made a big impression on the global stage. The Baltic nation of just 1.3 million people has attracted the attention of world leaders, academics and venture capitalists thanks to its high-tech digital society. The numbers speak for themselves: Taxes are completed online in under 5 minutes, 99 percent of Estonia’s public services are available on the web 24 hours a day and nearly one-third of citizens vote via the internet.

However when in many industries we have witnessed the benefits of rapid automatization, fast improvement of the digital services and products available and much higher work efficiency with reduced costs, then the hotel market in Estonia could be easily described as slightly disadvantaged when it comes to offering a wide range of digital solutions to their customers. 

Estonia is probably the only country in the world where 99% of the public services are available online 24/7. E-services are only impossible for marriages, divorces and real-estate transactions – you still have to get out of the house for those.

The use of technology in the hotels

After making the initial booking, which is indeed usually made online using either the hotel’s own website or one of the online booking platforms the customer usually shows up at the hotel without any prior invitation to check in online nor any access to the digital keys. Some hotels do send out automated pre-arrival letters, offering the guest to book airport transfers, massages or just a bottle of wine upon their arrival and there are a few who even ask the guest to register their details so the check in would take less time. However when the guest finally gets there, they will still need to check in at the reception desk and collect their keys from either a receptionist or in some cases a self service check in kiosk. 

If we look at the typical pre-stay processes in the hotels then it is fairly easy to book a hotel within minutes online and most hotels have spent a lot of time and resources making sure that their prices are always compatible, and available throughout all the different channels possible. Most of the larger hotels use channel managers to manage their online distribution channels in order to sell their hotel inventory to various agents across the globe. Many have also deployed price robots and high level revenue optimizing programs to their everyday revenue related operations. 

So we can say that the part, which precedes making an actual reservation at the hotel, is normally already quite automatized and meets the standard expectation for most of us. 

In addition to automatizing the rate handling and revenue optimization, you can also find other technologies for customer communication such as chatbots, different reputation platforms for online feedback management and also tools for upselling services. 

The pre-stay phase of the customer journey is already handled quite well in Estonia. Hotels use a large variety of revenue and pricing systems and the booking platforms are also highly advanced.

Digitalizing the customer journey

However there is a large void when we look at the in-stay part of the customer journey in an average Estonian hotel, the availability of contactless/smart services, self-service terminals, smart room controls and IoT ecosystems. Most hotels do not offer online check in and check out, or have a system in place for digital room keys. There are some that have digitalized their information booklets and display them to the guests either via a built-in TV system, tablet or a web page but most of the hotels are still taking first steps when it comes to digitalizing the entire guest journey. 

Digitalization helps the hotels to reduce the operating cost through service automation and is the emerging phenomena among all hotels across the world. So how come that Estonia, that is so well developed in all digital aspects, is so left behind when it comes to the digitalization of hotel guest services? The main reason behind that is that usually relatively high investments are required to introduce a full digitalization of customer journey in hotels. Besides the financial part, it is also crucial for the systems to interact smoothly with the hotel PMS and any other guest platforms in use, be compliant with the fiscal systems of hotels and GDPR and offer high level security of all aspects of data handling. Also the hotels expect a high level customer support, which unfortunately is often unavailable on the satisfactory level. 

Hotels are looking for the new solutions

Kairi Jürisson,the Rooms Division Manager at Hotel Lydia in Tartu says that they are moving towards digitalizing their entire guest experience in addition to the current services offered, however it is not as easy as there is a lot that needs to be factored in before making the final decision. Also the financial restraints put on to the hotels due to the pandemic have not helped in terms of speeding up the process. Currently Hotel Lydia is using a channel manager, reputation platform and a cloud based PMS system with an integrated module for housekeeping. They are also looking into online check in options with payment solutions and self check out possibilities and would like to implement these features as soon as possible. 

The same applies to the Palace Hotel in Tallinn. The Hotel Manager Andra Piirsalu comments that they have recently launched a new highly advanced cloud based PMS system that offers many integrated solutions on its own and in addition to that there are also solutions in use such as a channel manager, reputation management systems and digital screens in the elevators and public areas. In the near future they would also like to deploy a fully automated check in and check out solutions, interactive TV system with built in chat and service ordering tools, however these solutions would be provided as an additional service to the guest and would not replace the existing service outlets- for example the reception desk.

Citybox Tallinn offers contactless check in possibility for their customers via check in kiosks in the hotel lobby.

Implementing new technologies

There are however some hotels in Estonia, who already have deployed and are offering a full range of automated guest services to their customers. One of the hotels which actually doesn’t have a standard reception available and offers a multitude of their services digitally is Citybox Tallinn, which only recently opened their doors, right in the midst of the of COVID19 pandemic. Teele Lepp, the General Manager of the hotel quickly lists different platforms and smart technologies that they are using in their hotel, which main business model is built on offering self-service and smart solutions to their guests. Their solutions include an online check in and check out via self service kiosks with a key dispenser, a fully integrated cloud based PMS system, revenue and price optimization platform, chat platform, casting options in the hotel rooms and digital keys (the functionality has not been activated yet due to the current market situation). In the future they are also planning to implement an integrated document scanner and data transfers to their PMS system as well as special notifications informing about upgrades and upgrading their concierge screens and adding anti-theft secured robot vacuum cleaners and bluetooth speakers to the guest rooms. According to Teele there has been a noticeable saving in terms of money and resources thanks to the automated systems and also the guests have been very happy with the automated systems and satisfied with the extra safety that the contact-free technology gives them during the current situation. 

Although the COVID-19 pandemic has brought a new demand for the contactless services to the market, it has also made some hotels pause some of the aforenamed services. “We quit several systems during the first lockdown, when we saw how serious consequences it is bringing to our sector, ” says Killu Maidla, who is the Manager of Hektor Conteiner Hotel in Tallinn, which is another new concept hotel, which unfortunately opened their doors just in the beginning of the COVID-19 pandemic last year. “Today, in addition to our PMS system we just use a channel manager and guest reputation system. As our PMS system is very modern then it already includes a special housekeeping platform as well as the pre & post arrival communication tools. It also has a built-in instant messenger as well as automated billing and invoicing options.” Killu believes that contact-free services are essential to the hotels nowadays and said that was an important criteria for them choosing the PMS system, long before the COVID pandemic. “We can clearly see financial savings with our systems, but in addition to the savings it has actually helped to improve our service. The guests assume that the hotels are offering contactless and online services and to be honest- filling out a paper registration card is a bit from like last century- why would you want to waste the guest’s time on formalities, while they could spend that time on something much more nice?”. 

The future is technology. All the hotels that we spoke to, expressed the need for upgrading their customer journey and adding new technologies to their existing services was considered essential.

The solution

Hotel customers experience digitalization in the day to day life and expect digitalization in hotels as well. Hotels which are digitalized are offering a wider range of services to the guests and also benefiting from extra savings thanks to the automation. Hence, digitalization acts as a competitive edge for the hotels to differentiate their brands among other hotels. We are quite convinced that the next few years will bring a wave of automatization and digitalization to the hotel market in Estonia and mobile check in and digital key will become the new normal and an expected part of the customer experience. 

Hotelbuddy offers a great solution for hoteliers looking to digitalize your customer service and internal operations. We offer solutions such as online check in, payment, check out, digital keys, upselling, extra service sales, room service, in room device casting, and much more. Check out our solution and get in touch with us for more information!

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EAS Enterprise Estonia

Projekt HotelBuddy on uudne lahendus hotellidele külalisteekonna digitaliseerimiseks ja automatiseerimiseks. EAS toetab projekti 270 645€ ulatuses “Perioodi 2014-2020 ettevõtja tootearenduse toetus COVID-19” meetmest.