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?
A huge chasm exists between investment in technology at the brand or chain level and the investment (and adoption) of technology at the owner/property level. At the chain level CEOs and boards have realized that technology is at the core of creating competitive differentiation. Not to invest in technology would mean leaving the playing field open to tech-savvy startups, OTAs and AirBnB, which means eventual slow death. All the large brands have poured hundreds of millions of dollars into technologies to enable more seamless experiences and higher stickiness for their guests.
On the other hand, at the property and owner level, technology does not have the same priority. However, squeezed by increasing labor and distribution costs, I predict we will see an acceleration of automation and technology adoption. Finally, with devices starting to “talk” to each other, the Internet of Things will bring a new wave of productivity and efficiency gains for hotels.