Alexa for hospitality – Data privacy and smart speakers

Smart speakers have huge potential for hotel rooms, but are they compatible with the industry, and how can they be successfully integrated?

Smart speakers are increasingly finding their way into private households with Amazon, Google, and now Apple all releasing their solutions to the market in the last few years. Customers can now ask Alexa, Google, or Siri to do their shopping, play their favorite playlists, or ask them any number of mindboggling questions — and expect a coherent (and correct) answer. In both Europe and the US, the uptake of these new and exciting solutions had been generally positive. In fact, 2020 was a bumper year for smart speaker sales in Europe. According to businesswire.com, over 150 million smart speakers were sold in 2020 globally.  Amazon's Alexa led the way in sales to consumers, retaining an impressive 28.3% share of the consumer market while Google occupied a close second place with 24.9% of the market share. With such impressive sales in the previous year, is there a use case for Google, Siri, or Alexa for hospitality?

How compatible are smart speakers with the hotel industry?

The idea of having your own personal digital concierge – who won’t judge you for any of the questions you ask or requests you make – seems like an ideal solution. Yet, there are still some hurdles that need to be cleared before these innovative designs can be rolled out in hotel rooms around the world. The main issue with smart speakers and integrating them into hotel rooms is privacy.

Smart speakers work by reacting to an activation word, and even if the platform is not constantly activated or recording, the idea of having an active microphone in a hotel room just doesn’t sit well with some guests.

Aside from the likelihood that guests will feel uncomfortable sharing their room with an active microphone, there’s also the issue of meeting privacy regulations. In the US, hotels have been experimenting with hotel room smart speakers since 2017 due to relatively relaxed regulations on customer privacy. In contrast, the introduction of the EU’s GDPR in May 2018 has made the widespread adoption of these solutions in hotel rooms virtually impossible for the time being.

There are three major problems that need to be resolved before we start seeing Alexa for hospitality used in hotel rooms across the EU.

Problem 1: Smart speakers are not yet optimized for the hotel room

All smart speakers require an account to be set up before they can be used. In most situations, this would make the hotel the service provider, rather than the end-user. It is, therefore, the hotel business or company that downloads the app and signs in with an account. This means that the guest would not have had the opportunity to clearly view the terms of use and give their consent for their information to be stored or used.

Under the EU's GDPR directive, users have much more control over how their information is used and stored, meaning that companies that don’t meet the EU’s regulations for storing all information collected within the EU are breaking the regulations and therefore risking a fine of up to €20 million!

Andreas Thurmann, data protection officer at SuitePad, explains this further:

“From a data protection point of view, the guest must agree as a user but the ability to appropriately consent is missing. The strict legislation that’s there to protect the customer doesn’t consider turning off the microphone as adequate proof of consent, so it’s up to the hotelier to ensure that every guest has signed and processed the relevant legal documentation before they can enter a hotel room that contains a smart speaker.”

As smart speakers have been designed for private use, the issue of multiple user privacy consents has not been worked around adequately. This means that for now, in Europe, it’s unlikely that hotel businesses would be willing to traverse the tricky legal terrain that surrounds gaining sufficient consent for data to be collected and used.

Problem 2: Storing the data on hotel room smart speakers

Another problem is that under many smart speaker terms and conditions, the hotel owner or business would have legal access to all information such as messages and interactions that the guest has with the speaker. For example, under Amazon’s terms and conditions for using their Amazon Echo smart speaker, the user is required to consent to have all voice messages stored indefinitely which can then be retrieved by the Amazon account holder.

Under the EU privacy laws, all data must be deleted after the purpose of use unless the user otherwise gives their consent for it to be stored. While the Amazon Echo allows individual voice commands to be deleted manually, the fact that it doesn’t happen automatically straight after use also puts the hotel business in a bit of a grey area with regards to privacy and customer data protection.

For large hotel chains that can afford to employ a team of customer data specialists, this issue may be worked around, but for smaller chains or independent hotels, it’s unlikely that the money spent on employing specialists would be justified by installing smart speakers in hotel rooms.

Problem 3: Storing information abroad

As the servers that the data from most smart speakers is stored on are distributed across the world, there’s a conflict with how this meets EU regulations. Currently, the GDPR regulations state that any information collected in the EU or by businesses that operate within the EU must meet the security standards for the storage of data outlined in the regulations. As the major players in the smart speaker market largely store their data on servers around the world, and also share information between them, they would need to ensure that all of their servers meet the EU regulations — a step they’re unlikely to take.

The lack of transparency regarding where and how customer data is stored and used by Amazon led to the Echo being awarded the 2018 “Big Brother Award” in Germany — awarded for its lack of customer protection and described as “the bugging operation in a can for your home”. It’s clear that European governments still have some reservations about how smart speak providers should use and store customer data.

The verdict on smart speakers in the hotel room

There’s no doubt that integrating smart speakers into the hotel room would be a huge asset for hotel businesses, providing a much-desired digital concierge service for guests and helping to bring the customer experience in line with modern expectations. However, the complex issues surrounding customer data protection make it unlikely that this will be brought in any time soon.

The whole smart speaker industry is still young and as teething issues are tackled and solutions that work with the data privacy regulations are developed, we’re sure that there will eventually be smart speakers gracing hotel rooms in Europe and further afield.

At SuitePad, we hope to one day provide an integrated smart speaker solution as part of our service but our commitment to the protection of customer data, of course, takes priority. We’re constantly at the forefront of research and development in the hotel tech industry and so our mission to find the perfect solution that works for our customers but is also safe for their use is an ongoing task.

Find out more regarding the use of smart speakers in the hotel room and how the industry is evolving to meet the demands of digital guests with SuitePad’s free ebook – How to reach hotel guests digitally.

_{- Published on May 28, 2019}