Skift Take

We've all known for some time this day was coming. Virtual reality is eventually going to completely disrupt how people consume travel marketing and sales, and this is the birth of that shift at scale.

Shangri-La Hotels will officially announce tomorrow that it’s the first international hospitality brand to roll out Samsung Gear Virtual Reality (VR) headsets for each of its 17 global sales offices and 94 individual hotel sales teams.

If you haven’t tried today’s most advanced VR headsets firsthand, it’s difficult to appreciate the immersive experience that resembles stepping into a movie. Another way to imagine it is standing inside a giant round ball where every square inch of interior surface is covered with seamlessly integrated video screens.

So while wearing the VR headset, when you’re looking up or down, left or right, even behind you, the imagery in the goggles depicts the changing 360-degree scene your eyes are looking at in real time.

Virtual reality is going mainstream in the next two years when VR headsets enter the consumer market and more VR content is developed for both consumer and commercial applications.

Shangri-La is getting a jumpstart on that today. By the end of January 2016, Shangri-La expects to have produced 2-minute VR videos for 50% of its hotel inventory, with full production complete by mid-2016. As the content builds, the sales teams can give VR headsets to wholesalers, travel agents, meeting planners, and other customers to virtually explore the different areas of the properties.

During a Shangri-La Hotels VR preview yesterday at Skift HQ in New York, we visited Tibet to “walk” around the new Shangri-La Hotel Lhasa near the legendary Potala Palace monastery. We also participated in a virtual site inspection of Shangri-La Hotel Kowloon’s main ballroom in Hong Kong.

It goes without saying that the sense you get of the properties’ overall environment and ambience is more informed than you do with typical 2D video and photos.

According to Steven Taylor, chief marketing officer at Shangri-La Hotels, the VR initiative is part of a larger visual content strategy to elevate the Hong Kong-based brand into the forefront of consumer-facing hotel technology. We spoke with him to learn just what he and the brand are planning for 2016.

Skift: What motivated Shangri-La Hotels to roll out the VR technology brandwide at this point in time?

Steven Taylor: It’s because virtual reality is really on the cusp of transforming the way we do business today. A lot of research and experts are indicating that within the next year, there’s going to be mass adoption of VR technology. An interesting survey recently from Walker Sands indicated that 63% of consumers surveyed believe that virtual reality will impact their shopping experience in some way.

We’re very excited about this because we do think that virtual reality offers powerful opportunities for hotel sales and travel buyers worldwide. There’s certainly been a degree of experimentation by other travel and retail companies, but I think this is an industry first for Shangri-La, because we are the first to really take that leap forward and fully integrate virtual reality technology deeply into the sales process, and across the global sales organization worldwide.

Skift: We were impressed with the level of reality and quality of the visual imagery in the Samsung Gear headsets. What has been some feedback so far from clients?

Taylor: It’s really rewarding seeing customers’ reaction because it’s almost one of wonder. It takes people back to a childlike state of discovery, and I think that’s what travel is all about today. It’s about experiences, and Shangri-La offers an incredible array of experiences. Virtual reality gives us a great opportunity to tell that story in a new and immersive way.

Skift: When you say that you’re doing something different than previous brands, we’ve seen similar videos from other companies. Are you saying this is innovative because of the scale of the rollout?

Taylor: Yes that’s right. There have been pilots, and a lot of brands have focused on offering it in one hotel, or offering it on a plane, or in one particular office, and it’s also been primarily consumer focused. So I would say previous efforts have been quite niche. This is about accepting virtual reality for the revolutionary new sales tool that it is, and integrating it across an entire global sales organization. This is a giant leap forward beyond anything that anyone has done around the space in the past.

Skift: You mentioned that each hotel will have a 2-minute, 360-degree overview video. Will the hotels eventually have any other videos looking at specific elements of the hotel, like F&B or meetings?

Taylor: Yes, this is part of a broader content strategy. The virtual reality videos are essentially a 2-minute tour, but these can actually be split into mini experiences that showcase the destination, that showcase our guest rooms, that showcase the restaurants. I think the opportunities here are quite literally endless. Imagine a travel counselor who will be able to virtually tour hotel rooms to better guide their clients’ choice. They will also be able to share these videos with the client to heighten anticipation of the upcoming stay. Meeting planners could do an online walk-through of a Shangri-La that they’re mulling over with their CEO prior to a big product announcement.

Skift: Are all of the hotels onboard with this?

Taylor: The hotels have really jumped onboard very, very quickly because of the feedback we received from customers. We anticipate by the middle of next year we will have a full organization-wide rollout.

Skift: What application of VR-enhanced hotel sales are you most excited about?

Taylor: I think the potential for cross-selling across Shangri-La is enormous, so we have 17 global sales offices, and they have multiple headsets. For me, one of the great opportunities is that in our sales team at The Shard in England, or Paris or Sydney, when they meet with clients with the virtual reality headsets, they don’t just have access to videos for their specific hotel. They can actually showcase the videos through these headsets for almost all of the properties for Shangri-La worldwide.

There’s also an app, which is not a customer-focused app yet, whereby the properties can access all videos worldwide. It really does connect our sales teams like never before, actually allowing them to cross-sell properties they would probably never have been able to experience or talk about before.

Skift: Can you provide more details about the larger content strategy beyond VR, and where you started with that?

Taylor: We are very focused first of all on understanding our customers, so we’re undertaking a lot of customer segmentation work, and then mapping that out across the decision-making process or customer journey. I think the first opportunity for any hospitality or travel brand is to break down the silos of data that exists around your organization and bring those together so that you get a holistic view of your customers.

We also have about 5,000 Shangri-La loyalists who allow us to engage them in new initiatives or new ideas. That allows us to build a broader picture of our target audience. We pose questions to them about our loyalty program, about what content they engage with, questions relating to the overall guest experience. It is invaluable community that validates opinions, validates initiatives, and gives us deeper insight into what motivates our customer segments.

We did an analysis on our existing customer base, and there were a couple of interesting insights from that. Historically we’ve been very focused on the business traveler, which makes up about 60% of our customer base. But this analysis indicated that leisure travel is very much a growing share for Shangri-La. So that inspired us to reemphasize our campaigns and shift from being potentially too highly focused on corporate, to focus on customers like the Chinese domestic leisure travelers. It’s allowed us to see how the guest segments shift, the value that is derived from each segment, and adjust strategy accordingly.

Skift: With all of that consumer insight you collected, how did that then inform your content creation and distribution strategies?

Taylor: We’re developing a content strategy that seeks to add value for our customers as they go through their travel decision-making process. We’ve used Shangri-La Maldives as a pilot to produce very large amounts of content that can then be used across the customer journey. We’ve created aspirational videos that inspire people to travel based on their trip persona. We’ve created very short product videos that really tell the story behind each room type. We’ve created videos for restaurants. We’ve created destination videos.

We started in the Maldives with a very clear understanding as to who were the customers there, the trip personas, that ultimately we were trying to appeal to. Then we mapped out the decision-making process, identifying potentially either value that we could deliver, or barriers or hurdles to making that decision that we could remove with content.

We integrated these videos into a rich media campaign that drove hundreds of thousands of dollars of business. There is clear evidence that rich media advertising is something that consumers engage with. The entire distribution strategy behind that’s been very successful for the mobile user, so we’re in the process of rolling that out across the entire organization. That involves retargeting people based upon if they’ve visited Shangri-La or Maldives destination portals. It was quite an integrated content strategy that drove about half a million dollars of business to the resort in about a 3-month campaign that we just wrapped up this month.

Skift: What is your strategy moving forward for the Shangri-La web and social media platforms?

Taylor: We’re not necessarily ready to announce our other initiatives, but we are looking at how we can integrate user-generated content across all platforms in a more prominent manner. And how we allow our hotels to go forward with partnerships, to allow our hotels to re-create high-quality photography at less cost. We are very much looking at our web presence. We are plotting a major full-scale site redesign in the next twelve months. That will absolutely encompass a blog or magazine, which will showcase our content and act as a content repository for our brand to engage our audience.

Skift: What keeps you up at night when it comes to implementing modern technology and digital content at Shangri-La Hotels?

Taylor: I think the greatest challenge probably is that there are so many channels. There is so much technology that I think organizations can quite often get lost or can’t see the forest for the trees. So they sometimes embark on technology initiatives and ultimately don’t place the customer at the center of their efforts, at the center of the organization. I think the biggest challenge is making sure that everybody’s focused on the customer, and building a compelling value proposition around your core customer.

Really the greatest challenge is there is almost too much choice for travel brands today. I see many hotels bewildered by the array of social media channels, different mechanisms for customers, and sometimes they get lost trying to be all things to all people. Customer segmentation, putting the customer at the center of your organization, and building your value proposition across the customer journey is the path that we’re focused on taking at Shangri-La.

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Tags: shangri-la, virtual reality, VR

Photo credit: Promo photo depicting the Samsung Gear VR headsets, which hold a Samsung smartphone in the front chamber. Shangri-La Hotels

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