Industry Update
Opinion Article31 January 2018

Digital Transformation of Business - Hotel Trends 2018

The digital transformation of the market is a fact

By Waldemar Antonowicz, R&D Director at Profitroom

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The first technological revolution is called XaaS (everything-as-a-service). Today, virtually every type of business software is available in the socalled cloud or as a subscription-based model. The latest report by Technavio indicates that by 2020, XaaS technology will rise globally by 38%. In practice, this means supersession of obsolete solutions to give way to cloudbased, integrated (suits or API) tools, in the case of which the entry threshold is increasingly low (easier configuration and lower costs).

A similar trend may be observed on the consumer market, stormed by subscription services such as Spotify or Netflix. Clients are willing to pay a monthly fee to gain access to limitless libraries of movies and music. In reality, they only use a fraction of the content, however, they are free to do it the way they want to. On top of that, the commonly popular concept of the so-called "sharing economy" is based on hyper-optimisation of the use of available resources. Correspondingly, the attitude "to possess" has evolved into "to be", which perfectly fits values shared by the younger generations - generations that are now part of the labour market, crave challenges and personal development, and for which the occupation itself does not constitute a value.

All the above sets the foundation for another silent revolution - automation. In contemporary, modern, and educated world, waste of priceless human resources is a deadly sin. Uncreative occupations (but not exclusively) which could be replaced by technology, await a radical change. Words of Edward Rensi (former CEO at McDonald's) fit perfectly in this framework. In 2016, he said, "It's cheaper to buy a $35,000 robotic arm than it is to hire an inefficient employee who's inefficient, making $15 an hour bagging French fries". According to the report by McKinsey, by 2030, the automation process will affect up to 375 million workers, including the undoubtedly increasingly hard-to-find hotel staff.

Investments in automation and technologies substituting workers are inevitable - the process is already under way. However, these changes should be perceived as an opportunity to concentrate both our own and our employees' efforts on areas which cannot be replaced by technology. Certain areas, once digitalised, will gain value and become particularly precious from the client's perspective. Do not forget that the technology is only a means of access to a valuable service. In 2018, Netflix is going to invest $8 billion in its own productions, because they perfectly understand that their clients appreciate the quality of the service in the first place. Hoteliers should have plenty to say on this topic. Today is the right time to act and prepare hotels for the digital transformation of the market, not only from the technological standpoint.

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Waldemar Antonowicz

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    About Profitroom:

    Profitroom has been active in the hospitality industry for over 10 years now, serving more than 1500 hotels in various parts of the world. Profitroom specializes in providing solutions maximizing hotels' profits.
    They provide, among others, one ofthe most popular reservation systems in Europe - Upper Booking Engine, design award winning hotel websites and offer marketing services to hotels.
    In recent years, the company has gained trust of the most respected independent hotel brands and won awards for both their products and designs. More details on http://www.profitroom.com/about-us

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