The hotel budgeting season for 2023 has begun in earnest and a very important question is whether hoteliers will budget adequately for technology in their 2023 budgets.

Traditionally, the hospitality industry has been suffering from systemic underinvestment in technology. Normally, hoteliers spend on technology 2.5% of net room revenue. As per STR, IT spending in U.S. hospitality during the pandemic shrank significantly compared to 2019, dropping to as low as 50% in 2020 and rebounding slightly to 70% in 2021 of the pre-pandemic level. Even worse is the drop in payroll (wages and benefits) to hotel IT personnel throughout the pandemic, ending the year at 46% of the 2019 level.

Technology spending in Europe and APAC during the last two years is estimated to be even worse.

This troubling decline in hospitality technology and IT personnel spending is in sharp contrast to the accelerated adoption of digital technology in the general economy. The pandemic accelerated digital transformation by 10 years (McKinsey & Company) and today's travel consumers have become more digitally and tech-savvy than ever. Many of today's travelers' service expectations are around self-service, around do-it-yourself, from online planning and booking, to preferences for contactless check-in, mobile keys, voice assistants and communication with hotel staff via messaging i.e. these are all technology solutions and applications.

The technology underspend has clearly increased hoteliers' dependency on the OTAs: unlike hoteliers, the OTAs spent billions on technology during the pandemic. It's no wonder that over the last 6 years the OTAs have increased their market share by nearly 50% at the expense of the hotel direct channel. By investing heavily in technology applications to engage the traveler at all possible touchpoints of the digital customer journey, the OTAs have monopolized the guest relationships and left hoteliers to do…the housekeeping and dirty laundry.

The question is, will hoteliers learn from their mistakes in the past, and finally start investing adequately in technology in 2023?

Stanislav  Ivanov
Stanislav Ivanov
Founder and Editor-in-chief of ROBONOMICS: The Journal of the Automated Economy
Ian Millar
Ian Millar
Manager of Institute of Business Creativity & Senior Lecturer at EHL Hospitality Business School
Simone Puorto
Simone Puorto
Founder | CEO | Futurist
Mark Fancourt
Mark Fancourt
Co-Founder at TRAVHOTECH
Max Starkov
Max Starkov
Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
Nicole Dehler
Nicole Dehler
Vice President of Product Management at StayNTouch
Uli Pillau
Uli Pillau
Founder and CEO of apaleo
Michael Toedt
Michael Toedt
Managing Director at dailypoint Gmbh
Juanjo  Rodriguez
Juanjo Rodriguez
Founder, The Hotels Network
Tristan Gadsby
Tristan Gadsby
Co-Founder and CEO of Alliants