World Panel
Viewpoint19 June 2019

Investing in Technology Innovation - How Much is Enough?

Information Technology

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This viewpoint was created by
Lyle Worthington, Technology Executive and Consultant & Past President of HFTP Global
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Dave Berkus
Managing Partner at Wayfare Ventures LLC

Lots of us think that there is not enough investment in innovation in the hospitality industry. I disagree - at least as it relates to the investment by chains. When you include technology refurbishment and renewal, it is the independent properties and to a lesser extent the loosely managed brands such as Best Western individual member properties that fall behind.  

Chains are in a bitter war to attract a technology-savvy generation of travelers and are spending big to do this. Independent hotels as a group, not so much. And to a degree, that division of dollar investment has driven our oft-stated view that hospitality players spend less than their contemporaries.

How much is enough? In many industries renewal alone accounts for 2 1/2% of annual budget. If you add new technologies to the mix, perhaps another 1 1/2% of budget would be a target. Chains spend to research; properties spend to implement. It is the property spending that lags, again with independent hotels taking the lead in reduced spending.

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