Investing in Technology Innovation - How Much is Enough?
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?
Co-Founder at TRAVHOTECH
Technology represents one of the significant opportunities for competitive advantage in our industry. Market dependent, the physical aspects of a hospitality product are fairly static. The space where the opportunity lies to make the difference is in the 'software' as we often refer to it.
Software, being people, but also the technology that goes with them.
It is true that the same software is available to the entire industry. Where is the advantage? The timeline of adoption. Even if all company's in a market were forced to use the same technology tools, the differentiator is at what point the investment is made vs. when the competitors make their investment. Time to enjoy capability before the pack catches up is the true advantage. If an organization continues to stay ahead of the pack, then they continue to enjoy capabilities the rest of the market does not have. It's through time and capability that we empower the other software - people, with tools that make a difference to a business in general.
The early bird catches the worm.
I don't believe it's about R&D from a technology perspective as far as Hotel companies are concerned. Hoteliers need to concentrate on their core business in a congested marketplace. However, hoteliers do need to keep a close view on the adoption of tools that can provide the leap forward.
I also firmly believe that annual investment is not about set figures and arbitrary percentages. More so that constant improvement is imperative. Well constructed initiatives that an organization wants to achieve in the business are the key. The importance of these goals determine right-sized technology investment and when funds will be made available.
Apple, as an example, is a technology company. Their business motivations differ from that of a hospitality company. Many of the technology vendors providing tools to the Hospitality industry invest more than 5% per annum in moving their products forward.