Technology Trends in the Hotel industry
Technology is poised to be the biggest disruptor in the hospitality industry. Traditionally, hotels were not considered as technology centres as most of the hotel-related activities were done manually. Moreover, most technology systems used by hotels were legacy products developed in a different era, and still follow closed architecture cannot seamlessly integrate with new modern technology. However, in the past few years, the growth in technology in the hospitality industry has been so rapid that most of the industry along with training institutes and learning centres have struggled to keep up with the changing trends and best practices. Hotel technology can be broadly categorized into three main categories: Sales & Marketing, Guest Experience, and Guest Relationship.
In terms of sales & marketing, AI and automation has been the biggest driver of change when it comes to dynamic pricing and automated revenue management. Most hotels are seeing a major percentage of their bookings come from smartphone and internet users, and the usage of integrated pricing and distribution systems has become even more important to maximize revenues and minimize efforts. The use of AI and ML in determining optimum rates for hotel rooms that are then pushed to all marketing channels, can increase the potential to maximize revenues and ARRs (Average Room Rates) for the hotel, and reduce operational inefficiencies and manual costs. Hotel websites now have chatbots that automatically provide the fastest response times to guests looking for any customizations in their stay.
In terms of guest experience and operations, hotels have seen a fast adoption of cloud-based and integrated technology in Property Management Systems and hotel ERPs. This has been further enhanced with smartphone and tablet usage in in-room guest services and basic services like checkin, checkout, and usage of hotel facilities with further enhancements like augmented reality. The use of kiosk for self-service checkins using biometric authentications and facial recognition can make the entire checkin and checkout experience fast and seamless. In-room dining, entertainment, and facilities have now started being controlled by voice-command and tablet-based gadgets, which can make the entire experience more automated and digital.
The back of the house services like housekeeping, room cleaning, and food preparation are also digitally tracked using cloud-based integrated technology which can reduce delivery time and wastages, while increasing efficiency and guest satisfaction. Air-conditioning, heaters, lights, and kitchen equipments are now increasing controlled with IOT sensors that adjust for environmental changes and guest preferences providing a better quality of experience and higher efficiency.
In terms of guest relationships and CRM, hotels have started storing the digital profiles of guests which can increase the personalization of service and guest preferences. Every interaction of the guest in the hotel is stored and advanced systems use AI to predict and deliver ‘wow’ experiences to the guest. Augmented reality in conjunction with SMART devices can increasingly deliver better experiences like providing virtual tours, traffic oversight and video-conferencing and meeting experiences.
Technology adoption is needed in the hospitality industry because of several reasons. The ubiquitous availability of internet and smartphone have made millennial and modern guests more discerning who want more experiential and personalized services. Moreover, increasing competition makes it even more important for hotels to differentiate themselves, and technology is turning out to be a big USP for hotels. Those who are quick to embrace the modern trends of technology and automation can stay ahead of their competition in terms of both superior service and higher profitability. The use of AI and automation can increase efficiency and deliver predictable experiences to guests by reducing manpower overheads.
The biggest challenge of embracing modern technology in hotels is the existing mindset of old hoteliers who have always been used to running hotels with minimal technology and automation. Most existing technology in hotels is rather archaic and those products are not designed to integrate with new innovative add-on services that are required in today’s generation. The inertia around changing existing infrastructure and training existing manpower always presents a big challenge for most hotels who are keen to embrace new technology but are hesitant to do so.
Investment required in technology has in-fact reduced as technology has evolved. The clunky large scale on-premise server-based applications have given way to light cloud-based plug and play systems that can be adopted and changed overnight. These systems are easy to install, easy to use, and often cheaper than existing legacy systems.
However, most 5 star and branded hotels still use old legacy systems for most of their operations and marketing requirements. One of the main reasons is that these larger hotels are more complex to switch overnight to lighter cloud-based systems and also it is a much bigger challenge to train staff in an existing hotel with running operations to switch systems instantly. The smaller independent hotels that do not carry baggage are the ones that have transitioned to cloud-based PMS systems easier.
Having said all of this, things are changing really drastically and with the availability of efficient, cost-effective solutions, it is not too long before the hospitality industry goes through a technology revolution and keeps up with the rest of the industry.
