World Panel
Viewpoint19 June 2019

Investing in Technology Innovation - How Much is Enough?

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In the first viewpoint of this panel, several experts weighed in that the Hospitality Industry does not properly invest in technology innovation. Apple spent about $15 billion in research last year alone… or 5.5% of its annual gross revenue. We ask ourselves these questions: Is this level of investment purely in R&D also necessary in our industry, and is it possible to get that kind of money? What's your take?

This viewpoint was created by
Lyle Worthington, Technology Executive and Consultant & Past President of HFTP Global
HITEC Minneapolis
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This Viewpoint is part of the HITEC Minneapolis panel
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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