The Price of Convenience: What Are Hotel Guests Willing to Pay for Contactless Services?

The adoption of contactless services in hotels has surged, driven by the need to create safer, more seamless experiences. Technologies like keyless access, robotic services, and touchless smart rooms are becoming industry standards, but at what cost to both hotels and guests? Researchers highlight that while these innovations enhance safety and streamline operations, they come with high implementation costs and uncertain returns. Not all guests are willing to pay more for such services, and in some cases, they may expect lower prices due to the perceived operational savings from reducing human labor.

Contactless Innovation vs. Guest Preferences

The rapid expansion of contactless services—ranging from automated check-ins to robotic room service—reflects hotels’ efforts to meet new safety expectations. However, this raises a key question: what do guests value, and how much are they willing to pay for this convenience? Research suggests that there is a mismatch between the contactless services hotels invest in and those customers actually prioritize. For instance, while many hotels offer contactless check-ins and smart room devices, guests tend to value and are more willing to pay for simpler, more familiar services like contactless payments and keyless room access.

Understanding WTP: Factors That Shape Guest Decisions

Willingness to pay for contactless amenities varies widely depending on guest demographics, hotel type, and familiarity with technology. Luxury hotel guests, for instance, are more likely to pay a premium for these services, while budget hotel patrons often expect cost-saving benefits rather than added expenses. Older guests tend to appreciate contactless services more, seeing them as both safe and convenient, whereas younger customers may resist higher costs for what they see as standard technological offerings.

Interestingly, while health concerns like virus transmission initially fueled the demand for contactless services, they are no longer the primary driver of WTP. Instead, guests now view contactless options as a technological advancement. This shift suggests that hotels must focus more on improving guests’ comfort and trust in these technologies, rather than merely positioning them as safety measures.

Investing Wisely in Contactless Services

The study highlights that hotels can boost revenue in the short term by investing in the most familiar and preferred contactless services, such as keyless entry and digital payments. However, less familiar services, like robotic housekeeping or contactless front desk operations, have lower WTP due to guests’ limited exposure to these technologies. To maximize long-term returns, hotels need to enhance guests’ awareness and comfort with these newer services through education and positive experiences.

Additionally, the results indicate that hotels should balance contactless services with human interaction. While robotic services may appeal to some, many guests still appreciate personal touches in service encounters. The ideal strategy, researchers suggest, is one where technology augments human interaction rather than fully replacing it. This balance will allow hotels to maintain guest satisfaction while embracing the efficiencies of automation.

Strategic Insights for Hotels

1. Focus on Familiarity: Guests are more willing to pay for contactless services they already understand, such as keyless entry and contactless payments. These should be the primary areas of investment for hotels looking to recoup technology costs quickly.

2. Target Older and Luxury Guests: Senior travelers and guests at luxury hotels have a higher WTP for advanced contactless services. Tailoring marketing efforts to these demographics can increase adoption and profitability.

3. Educate Guests on New Technologies: To drive long-term acceptance of less familiar services like robotic room service or automated check-ins, hotels need to educate guests and create positive user experiences. This can increase comfort and, over time, willingness to pay.

4. Combine Tech with Human Touch: Even with contactless options, hotels should maintain a balance between human interaction and technology. Guests appreciate efficient, automated services, but they still value the warmth of personal interaction in their stays.

Conclusion: Pricing the Future of Hospitality

The hospitality industry is at a crossroads, where investing in contactless services is necessary to meet evolving guest expectations. However, hotels must be strategic about which technologies to prioritize and how to price these innovations. By focusing on guests’ WTP for specific contactless services, tailoring marketing to the right demographics, and ensuring a balance between automation and human interaction, hotels can navigate this transition effectively and enhance both customer satisfaction and profitability in the post-pandemic era.