If you haven't heard the iconic Thomas Friedman quote about technological change, it's about time you heard his poignant reflection back to just several years ago.

"When I said the world is flat, Facebook didn't exist. Or for most people it didn't exist.  Twitter was a sound. The Cloud was in the sky. 4G was a parking place. LinkedIn was a prison. Applications were something you sent to college. And, for most people, Skype was a typo. That all happened in the last seven years. And what it has done is taken the world from connected to hyper-connected. And that's been a huge opportunity and a huge challenge."

While historically hotels have been thought of as a slow to evolve industry, we're really not so different. Twenty years ago hotel companies owned hotels, travel agents booked rooms and people only stayed at their friends' houses. Today Starwood barely owns any hotels, Accor is becoming an online travel agent and people open their doors to strangers from around the world.

Early last year Marriott announced that it had won a bidding war with Chinese Anbang for my old employer, Starwood Hotels & Resorts. The catalyst — online travel agents had begun consolidation which would hurt supplier power. Expedia purchased Ortbitz and Travelocity then Priceline countered by purchasing Chicago darling Rocketmiles. This meant one thing to corporate hoteliers — higher fees.

Most hospitality c-suites have turned all their might towards tactical responses. Marriott launched a partnership with the NBA then Starwood followed with an MLB partnership. Hilton launched its "don't click around" campaign and Marriott followed with "it pays to book direct". Charlie Munger (Warren Buffett's muse) likes to say, "to a hammer every problem looks like a nail." Partnerships directors want to solve industry woes with more partnerships, marketing wants to solve with (direct bookings) media campaigns and development wants to solve with more lenient owner contracts (i.e. soft brands).

Let's all take a deep breath and reset. What we're seeing is not consolidation, it's convergence. In 2013, AirBnB hired Joie De Vivre founder and boutique hotel guru Chip Conley. The idea was to create consistency of product standards like hotels have — categorization standards, amenities packages,etc. There have also been grumblings in the industry about AirBnB building physical hotels, not a bad move given increased regulatory scrutiny. Personally, I believe AirBnB will launch hotels in the next 5-years. Most people outside our industry don't know this but the majority of hotel companies don't really own much real estate anymore. The shift has been towards asset light where a company like Starwood merely sets brand standards and "flags" (franchises) hotels. Recently, the trend has shifted even further to "soft brands" like Marriott's "Autograph Collection" and Starwood's "Tribute Portfolio". What this means is that a hotel owner can plug into these company's distribution and loyalty platforms without much upfront investment.

Ok, so now Starwood is bringing non-branded hotels into its distribution and loyalty program and taking fees. Well that sounds a lot like what Expedia does to me. Accor is taking that one step further with its acquisition of France based FASTBOOKING where it now allows independent hotels the ability to sell inventory through its website — that's exactly what Expedia does. Accor is refreshingly playing the long game and serving real customer needs; namely variety and transparency throughout the booking process.

So AirBnB hired the top boutique hotelier and there are rumors that they're building hotels. Accor's "digital strategy" is centered around building an OTA like Expedia. These are massive changes but many top firms are responding with tactical responses focused on competitive positioning rather than customer insights. The hotel companies that will win in this next generation are the ones who stop responding to competition and start listening to our customers. These are the companies who are less reactive and more empathetic — they center their organizations around customer needs and don't take their industry at face value because "that's how it's always been done". These initiatives are game changers like Accor's acquisition of homeshare player OneFineStay and AirBnB's ambitious campaign centered around guide book functionality with a push into the full travel journey.

My advice to the c-suite hotel executive  — swim in your own lane. It's important to keep a pulse on the competition, but we've lost focus on what's most important — listening to our customers so we can surprise and delight them. Rather than spending all of our energy at the top of the funnel, we need to get on property and listen to our customers. What was the last initiative we launched to really surprise and delight our guests once they've booked?  

Kimpton built an iconic brand by focusing on customer needs with first to market initiatives like ubiquitious wine hours and dog friendly hotels.  AirBnB founder Brian Chesky has a laser focus on helping his guests experience the city once they've booked in ways that lodging providers historically haven't. Similarly, CityKey gives hotel marketers cutting edge tools to curate local experiences that meet these evolving customer needs.

In the end, the cheapest form of customer acquisition (return visits and word of mouth) happens in the middle of the funnel (guest experience/post-purchase) and incumbents should spend a little more time here or they'll be ripe for disruption from the outside.