How Much ROI Can Hoteliers Make With Digital Keys?

When exploring new hotel technology, it’s natural for hoteliers to ask what the Return On Investment will be should they implement a particular solution.  Evolving from traditional plastic keycards to mobile keyless entry is one of those hotel tech investments that require a broad understanding of what’s involved and what to expect.  There are a few elements to consider when exploring mobile key; upgrading guestroom locks to add Bluetooth communication capability is one, considering whether guests will use a branded hotel app or universal app like OpenKey as a mobile key is another.  Understanding the options available builds awareness of the various ways evolving to keyless entry can deliver ROI for your hotel.

Before we dive into ways hotels realize ROI with digital keys, let’s quickly examine why hotels should invest in a keyless entry solution to begin with.

Plastic keycards have been a staple of the hotel business for decades.  Magstripe keycards replaced most of the metal keys being used in hospitality back in the 1980s.  While proving to be relatively cheap, magstripe keycards are prone to demagnetization and driving guests back to the front desk for replacement, which any hotelier will concede is a customer service issue.  RFID locks and keycards are rapidly replacing the old magstripe hardware, providing a more dependable access experience but at a substantially higher keycard cost. Whereas most hotels aren’t concerned with whether you return your magstripe keycard at check-out or not, hotels are starting to charge guests a fee when they don’t get an RFID keycard back.

Back in 2014, Starwood began to pilot Bluetooth-enabled keyless entry in their Aloft brand as a means of driving membership in the SPG loyalty program.  When it worked, hotel guests loved it. Not long after, Hilton adopted the same strategy to build up their Rewards program membership and when Marriott acquired Starwood in 2016 the mobile key program became mandated across a global portfolio.

Of course, this rapid shift was also led by the desire of travelers to have an expedited check-in experience using their smartphones. That being said, there are additional reasons that hotels are increasingly evolving to mobile keyless entry:

  • Guest convenience from mobile check-in and check-out
  • Increased guest security from multi-factor key authentication
  • Improved Guest online reviews (on average 7pt improvement)
  • Ability to feature hotel amenities on mobile key
  • Loyal guests enjoy ‘straight to room’ privilege via mobile key
  • Hotels benefit from environmental credits by reducing plastic

The Cost of Unsatisfied Guests

As referenced above, keyless guest entry allows hotels to offer remote check-in as well as send a secure room key directly to their guest’s smartphone prior to arrival. Of all the features that draw the attention of hoteliers, the ability to allow guests to skip the front desk is the most attractive. Waiting for check-in is one of the most common complaints from American travelers. In fact, it’s been reported that as short as a five-minute wait causes average guest satisfaction to drop by 50%.

Hoteliers are increasingly recognizing the importance and impact of mobile key technology, especially with millennial guests, and are quickly looking for efficient ways to cater to this lucrative demographic. In 2017 for example, nearly half of hotels planned on making significant investments in new hotel technology, with over a quarter specifically considering an upgrade to their door locking systems – necessary for mobile keyless entry.

To Put It In Numbers

  • Nearly 2/3 of travelers preferring to use their smartphone as their room key.
  • Mobile key technology saves hotels an average of $1,000 per month in discarded RFID keycards.*
  • Mobile key can result in decreases in front desk wait times of 40% or more.
  • Guests that use mobile keyless entry rate their stay on average 7 points higher on social media.

Digital Keys Aren’t Always Cheaper

So far we’ve talked about some of the values and benefits hotels may see following an upgrade to mobile keyless entry and it’s easy to make the assumption that simply upgrading to mobile key will result in a sharp cost reduction. But the fact is that from a purely financial perspective – comparing mobile keyless entry to plastic keycards will deliver a positive ROI if you’re using RFID, but certainly not for magstripe keycards. Magstripe keycards will continue to be the cheapest form of room access in hotels for the foreseeable future, due to the fact that many hotels sell the back of the magstripe keycard for advertising in exchange for a free supply.  RFID keycards are too expensive to be attractive for advertisers under the same model.

The Value of a Competitive Advantage

Hotels implementing mobile keyless entry today enjoy an added benefit of gaining a competitive market advantage since 49% of hotel guests prefer staying at a property that offers tech engagement via smartphone to improve their stay experience.

As the industry leader in mobile key technology worldwide, OpenKey now offers a Universal Bluetooth Upgrade Module which adds mobile key capability to any hotel guestroom lock while maintaining the plastic keycard functionality.

The  Bluetooth upgrade module completes a keyless entry platform offered by the company that includes a cloud-based key-management platform for hotels and the OpenKey mobile keyless entry app for guestroom access.