Almost everyone would agree that the pace of technological advances in hospitality has accelerated since the pandemic, when many technology providers were forced to redesign their offerings in response to one of the largest catalysts for change that the world has ever seen. Revenue management tools were quickly re-worked to be forward-looking versus relying on historical trends, and now machine learning is being applied to everything from creating the ideal travel itinerary to cleaning up the coding that night auditors have been screwing up for decades.
But this technology is having an impact both on the industry best practices as well as the career paths of those who have dedicated their lives to hospitality. In many cases it seems like technology is permanently altering, but not replacing key positions as many experts have forecasted. A common trait among some of these emerging solutions is hasty development and reliance on the user community to sort out the bugs and refinements. And then there's the cost.
So, on the eve of this year's 2023 HSMAI Commercial Strategy Week and HITEC® 2023 Toronto, we asked our experts: In your opinion, is this new era of technological advancement in hospitality a blessing, a curse, or somewhere in between, and why?
Obviously a blessing. In hospitality, we are with one foot in legacy and one foot into the future. We need more exponential technology development to liberate team members from mundane, repetitive, and 0 value add tasks. We should have been further away already. We need to be more creative in hospitality to "create" the positions of tomorrow. Forget about Receptionist but replace with Ambassador or Guest relations. Forget about Revenue Manager but replace with Demand Manager or Commercial Strategist. Forget about a specific function and move to multifunctionality. Think about the gig economy instead of fixed staff. And more... Technology is an enabler
Its a double edged sword. Community driven can lead to building everything for noone. My viewpoint, and having my own technology company, is that you need to solve an issue at hand. Sort the issue and then you can gather user feedback to make it more efficient - ie less clicks to get to the result, different colors, visualisations, etc. so the UX of how the problem was solved changes. We for example focus on "making you a better you". so all we do is 100% dedicated to help grow revenue through clearer, better and faster decision making - but in a planned way, not hasty.
For me, many solutions on the market are not new, not innovative and pretty much like in the movies. Same movie, just recorded with different actors 20 years later. True innovation takes time as you are builting for the future, not the now. E.g. IVI - a virtual Revenue Analyst with a clear contextual interface that started 3 years ago and now is in its prime alongside generative AI. Innovation is about builting for when the time is right, not rehashing same old same old.
So is it a curse, a blessing? Its neither. Its evolution
Technology, such as attribute based selling (upselling) has been talked about for many years, software companies have tried and optimized it for real release for a considerable amount of time, minimizing the user "optimization" afterwards. Today's tech also allows for automated user optimization, and quick and seamless activation, so there is NO negative impact for hotel guests and staff.
Good technology does not always reduce staff, the sample of ABS for example is focused purely on a more easier booking or upsell expereince for hotel guests. Rather than implying value by selling the "Executive Corner Suite", it enables to hotel to convey direct value to the guest by offering the balcony, the corner, the high floor each as individual atttributes that the guest can buy. A small innovation that in my opinion is a blessing for the hotel industry and guests.
To prove a point, I asked ChatGPT to write an article supporting technology, see the response on the extended version of the article.
Personally, I support human aid technology as long as it enhances revenue generation, improves efficiency, guest satisfaction and provides acceptable ROI. Technology has improved how commercial teams grow revenues and market share. It began with revenue management systems; it is the backbone of most paid media software, and it will revolutionize the sales process in the next few years.
A successful commercial leader of the future will discern what technology to use and how to best use it, differently than their competitors. Evolution has always been part of our journey; the speed of change is just forcing us to accelerate the process.
As labor is becoming more difficult to find in many industries the hospitality industry will have to embrace technology to remain profitable and functional in years to come. It is neither a blessing or a curse - it simply is a fact.
At the same time, more reliance on technology does not necessarily mean that humans will be replaced completely. On the contrary, adding more technology in hotels and resorts will require management companies/ owners to find and retain tech-savy staff, who can actually maximize use of the new tools and applications and apply a "common-sense" approach in situations which are not covered by the algorithms programmed into the apps.
One of the main challenges with hotel tech is that many new programs are being developed by engineers without input from the actual user. Whatever is "beautiful", "cool" or "elegant" may not always meet the needs of the user - be it hotel staff or guests. Involving advisors with hands-on hotel experience in several areas early in the design/ concept phase of a new development will be key to adaptation, allowing use to the fullest extent and maximum ROI.
Let's strive for a "Hotel-tech company by hoteliers for hoteliers"!
The challenge we might be facing is the sheer amount of solutions coming up at the same time, which can be puzzling for most hoteliers, especially the independent ones that don't have a dedicated IT department, and need to decide by themselves on which solution should they sign in, and which one they must discard.
To add salt to injury, most solutions are very niche or specific, performing just one task, and might have a challenging connection with others that are needed to fully function.
And since the customer journey is becoming longer (I would say circular), more technology is needed to make sure the customers is engaged throughout, to make sure they enjoy their experience to the fullest...and the Hotel maximizes revenue.
Therefore, in my opinion every advancement in technology is positive. It's more a matter of the hotelier having good honest advice regarding the right solution to choose for his or her establishment.
It's not about going for the most expensive/the cheapest. It's about choosing the right one for your needs (based on size, type of accommodation, location, segmentation, etc...). And for that, having the advice of a trusted friend, peer or consultant can be key.
There is no doubt that hospitality is transitioning from low-tech and high-touch to hi-tech and hi-touch, and becoming a service industry powered by technology. How do we achieve that? to begin with, the industry needs to start investing more than the current 2% of room revenue.
In "normal" years, the hospitality industry spends less than 2% of net room revenue on IT, telecom and IT personnel payroll/benefits. This is it! Compare this to Expedia"s annual spend of 10%-12% of net revenue.
Today's travel consumers are more digitally and tech-savvy than ever. Many of their service expectations are around self-service, around do-it-yourself, from online planning and booking, to contactless check-in, mobile keys, voice assistants and message communication with hotel staff i.e. these are all technology solutions and applications.
The technology underspend has clearly increased hoteliers' dependency on the OTAs. It's no wonder that over the last 3 years the OTAs have increased their market share 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 pandemic has not changed the industry's overemphasis on immediate problem-solving, often at the expense of long-term strategic thinking. Due to the impact of the pandemic on the labor force, there is now a shortage of skilled workers. This has increased the focus on technology as a possible solution. Furthermore, the issue isn't merely about adopting technology but the intricate process of mastering it. This is particularly challenging when technology must be used by a broad spectrum of hotel employees, who may lack the in-depth knowledge required to leverage these tools effectively.The time is ripe for hoteliers to adopt a strategic approach to modernizing their outdated tech stack to better align with the demands of a post-pandemic world. This involves more than just embracing new technologies; it requires thoughtful integration of these technologies to resonate with larger business goals and drive sustainable growth. Moreover, the pandemic has prompted a shift in focus from merely maximizing revenue to ensuring profitability across all revenue sources. It has underscored the importance of maximizing revenue not just from rooms but from all possible avenues, including food and beverage, event spaces, and ancillary services. Technology plays a pivotal role in achieving this holistic profitability.
Evaluating new technology solutions has always required a healthy balance of creativity and discipline, and the current environment is no different. Although, in fairness, the speed of innovation and complexity of the available solutions today is adding some challenge for sure! Success in implementing advances in technology has always started with clearly defining the business problem you are trying to solve, and then evaluating the possible methods to solve it. Too often, especially with the rapid pace of tech innovations these days, tech ends up being solutions looking for problems, and it's really easy to get distracted by a "shiny object" piece of tech. When you see something new and cool, rather than jumping in with both feet, have the discipline to think carefully through the uses cases within your oranization, and pick one or two that will demonstrate the value of the investment. Test, learn and when you are satisfied it will work, then go all in! Now that some of this tech is being released in a less mature state, this evaluation discipline is even more important.
It's impossible to halt progress. Technology is here to stay and will continue to advance. Hoteliers need to be strategic in their adoption of technology.
These are a few tips:
Sticking to outdated tech solutions while disregarding newer and superior ones is not a good approach. Similarly, it is unwise to pursue every new and promising technology.
Tech solutions must interface with your current tech stack and be future-proof for interfaces with new solutions. API rules the world.
Good training materials that are constantly updated are a must. No use in technology that can not be utilized to its full potential.
24/7 high-quality support is vital. Waiting for the ticket to be resolved for a week is unacceptable. Time is money.
Think about your guests first when looking for new technology. Does it improve their experience?
Is it a profitable investment?
Hospitality tech advisors
Navigating the complex hospitality technology landscape is a challenge. I see a rise in new consultants who can assist hoteliers with selecting, maintaining, and updating their technology stacks. These consultants will have experience in hotel operations, marketing, revenue management, and using various tech solutions.
Just as self-serve checkouts have allowed supermarket teams to dedicate their time to other more strategic, high-value jobs, technological advancement is a blessing any time that it's unlocking goodness for the hospitality industry as opposed to taking jobs away. It's a misconception that the latest innovations will have the greatest impacts, simply by virtue of them being the newest technologies to hit the shelf. However, when assessing technology, hoteliers should always bring everything back to their customer-driven goals. Do they have a positive impact on your bottom line, reduce costs and create efficiencies without compromising on the integrity of your hotel brand? Do they automate onerous tasks that consume valuable time? Do they simplify manual, complex jobs that detract from the guest experience? In assessing technologies this way, alongside other critical criteria such as security and stability, hoteliers will be able to differentiate between the technologies that are shiny and the technologies that actually add value.
In my opinion, the current era of technological advancement in the hospitality industry brings both positive and negative implications, depending on the corporate culture and the level of understanding of digitalization within each company.
On the positive side, technology has revolutionized revenue management by introducing advanced tools based on machine learning, Robotic Process Automation (RPA), and Artificial Intelligence (AI). These innovative solutions have enabled companies to be more proactive and make well-informed decisions, leading to increased efficiency and profitability.
However, there are also challenges associated with the rapid evolution of technology in the hospitality industry. Some companies have misunderstood the concept of digitalization, resulting in the hasty adoption of numerous programs and technologies that overwhelm teams and hinder their ability to work effectively. Instead of implementing solutions strategically, there is often a lack of understanding regarding the purpose and proper integration of these technologies into the overall digitalization strategy.
In conclusion, the impact of technological advancement in the hospitality industry can be both positive and negative, depending on how it is approached.
While the COVID-19 pandemic brought the travel industry to a standstill, it opened gateway to rapid innovations which are reshaping the way hotels serve the evolved guests.
There is no doubt that innovation is at the heart of revival of the hospitality sector. However, innovation without a clear purpose can lead to challenges within the industry.
Meaningful innovation seamlessly integrates technology with personalized service, ensuring it enhances rather than replaces human interaction. By aligning technology investments with business objectives, hotels can reap substantial rewards while mitigating costs. Empowering staff with technology through comprehensive training helps them embrace technology to deliver exceptional service.
Meaningful innovation in hospitality follows core principles such as a guest-centric approach, streamlined operations, scalability, adaptability, and data-driven decision making.
- Understanding guest desires enables hotels to create genuine connections.
- Technology optimizes operational processes, reduces costs, and improves productivity.
- Scalable and adaptable technology solutions ensure agility and competitiveness.
- Data-driven strategies driven by revenue management software, predictive analytics, and CRM systems optimize pricing, personalize marketing, and identify improvement areas.
Adopting meaningful technology can create unforgettable moments, streamline operations, and drive data-driven decisions. It's about finding the balance between technology and human touch, where technology enhances the magic of hospitality.
The hospitality industry is experiencing a technological revolution that brings meaningful innovation benefiting all stakeholders. In the past, the industry faced a lack of data insights, but in recent years, there has been an influx of information.
To navigate this abundance of data, the industry is challenged with the next crucial step: highlighting actionable insights that prompt users towards impactful decision-making. Technology providers are moving in this direction as well surfacing the true insights, empowering hoteliers to determine their extent of implementation. The goal of technology isn't to push humans aside, but to serve as a partner in better and faster decision-making. Hoteliers and technology providers are working together, fostering a collaborative relationship.
Meaningful innovation in the hospitality industry lies in striking a balance between leveraging abundant data and maintaining a focus on actionable insights. By combining human expertise and machine power, the industry can tap into technology's full potential - and ultimately drive truly unprecedented outcomes.
Pavel Orlov, Forbes Technology Council, said "Companies often think the most important part of digital transformation is the decision to invest heavily in acquiring software, solutions, and emerging technologies. In fact, the most important aspect is the adoption of this technology."
Technology, for technology's sake, is equal to not having it, or worst, it creates a distraction.
- Evaluation of the right technology for your organization and culture is a key step missed in many cases. This decision should be in alignment with the organization's vision and goals and support the right strategy.
- Once the technology has been selected, a detailed plan should be prepared, including the organization's readiness for the transformation. People and processes need to be considered carefully to ensure the technology adds maximum value. An evaluation of which tasks will become irrelevant, as well as new ways of working, is essential.
- People's roles, responsibilities, and mindsets need to evolve –not necessarily change – but evolve as appropriate, and new processes and procedures will be created to ensure adoption and integration of the new technology takes place.
Meaningful innovation is achieved only when we also change our habits and mindset to take full advantage of what has been developed.
Clearly, the technology evolution in hospitality is a good thing. In addition to the obvious benefits to the daily operation and increased return on investment for owners, it has been the driver behind a consistent wave that an entire genre of hoteliers, including me, have taken advantage of to enjoy successful careers in the commercial discipline, a career path that pretty much didn’t exist 30 years ago.
Channel managers are a perfect example. Made things better for everyone. Eliminating the need for someone to manually adjust pricing in every distribution channel made more complex pricing strategies and more distribution channels possible, increasing returns for the owner. Revenue Managers were able to reallocate the time saved to more analysis and less sitting at a keyboard, doing a repetitive but extremely detailed tasks. Winner.
Rate shoppers, revenue management systems, and even PMS’ are other examples of the innovations that none of us could see living without, even though hotels somehow managed to operate before they existed.
But not every one of the industry’s tech solutions is so clearly a benefit to all the stakeholders.
As an above-property leader, I personally couldn’t live without our sales automation systems. The ability to understand group pace across our portfolio without having relying on anyone else is invaluable. Plus, they communicate with our inventory management systems, give us standardized BEOs, contracts, etc.
Huge benefits, but not without a cost. For the daily user these systems have long learning curves, often including lengthy online training and difficult certification exams. But when you consider the traditional personality profile for a sales manager, a high-tech acumen isn’t really at the top of the list. The inability or unwillingness to embrace the sales system has been at the core in almost every instance where we have had a sales manager fail, which seems to prove the point.
The new wave of BI tools and dashboards are another example. The answer is always yes in the C-suite, when a salesperson is asked if some customized KPI can be added to the dashboard application they are considering purchasing. And what executive team doesn’t want the perfect KPI dashboard to manage the business, right? But when the implementation rolls around, someone deep in the operation is given a new template that they are supposed to fill in manually, or worse yet, a new task of reading numbers on one screen and typing them on another. Good for some, but not for all.
I think it comes down to the definition of disruption. For a technologist, disruption is always good. Period. But not many of us get out of bed in the morning thinking, “Oh boy, I really hope things get shaken up at work today.”
Taking 360-degree approach to disruption is the key. While it would be impossible to always take two steps forward without occasionally taking one step back, understanding the implications of new technology beyond the desired outcomes of the decision makers is key to making it work, and apparently not quite as obvious as it sounds.
I am not sure I agree with the premise. I don't believe the pace of technological advancements in the hospitality industry has accelerated since the pandemic. What has accelerated, IMHO, is the ACCEPTANCE of technology within our industry, which was previously (and wrongly) perceived as solely relying on personal touch, with any technological advancements being considered heretical. When I introduced the term "post-human hospitality" a decade ago, I intended to highlight a point in time, a "travel" singularity, where artificial and biological hospitality workers could collaborate harmoniously rather than compete. It took a pandemic to diminish the heretical nature of this idea, but here we are. As usual, I don't perceive this as an innovation at all. If anything, it's a form of Darwinian evolution. Just as we find it peculiar when we encounter "Hello Girls" (a colloquial term for American female switchboard operators) and wonder how humans could have performed such repetitive and mundane tasks, we will soon be questioning ourselves: Were we really asking humans to handle credit card charges and input data into property management systems?