Complex Made Simple

Hotels’ digital transformation gaining momentum, but rushing into it is unwise

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It’s no secret that the hotel experience is undergoing a digital makeover. One can no longer expect to wait in line for check-in, check out, or any service in between

Over half of hospitality IT leaders had started to implement trials in areas such as artificial intelligence Organizations must follow data to the edge of the network to process it more efficiently Hotels should break out their digital transformation into small, achievable efforts

It’s no secret that the hotel experience is undergoing a digital makeover. No longer can one expect to wait in line for check-in, check out, or any service in between.

Those who fail to digitize will book their way out. Those who rush into it may create irreparable damage to their operations.

Hotels’ digital transformation accelerating  

Hospitality has seen a significant change in the adoption of technology and digital services, yet huge swathes of the industry were forced to remain dormant, leaving many digital advancements relatively untested or stagnating.

The whole sector must quickly accelerate its digital transformation to fuel long-term recovery, or risk customer abandonment and falling further behind.

According to research by Aruba, as of last year, the hospitality sector was in a healthy place in its adoption of advanced technologies and moving computing to the Edge.

Over half of hospitality IT leaders had started to implement trials or applications in areas such as artificial intelligence (AI) (55%), Internet of Things (IoT) (70%), and machine learning (57%). However, that compares to figures of up to 75% for AI in the financial services industry, or 77% for IoT in retail, distribution, and transport.

But it was also already struggling significantly with the data these new technologies produce.

A quarter (25%) of IT leaders in hospitality said there was too much data for their systems to handle. With data levels increasing exponentially over the past year, thanks to the Covid-induced rise of smart technologies, IoT sensors, and connected devices the depth of data sprawl will only be greater.

A new eBook by Aruba, ’Serving Hospitality at the Edge’, lays out three key areas of focus for organizations in the sector.

Step 1: Process data efficiency

Organizations must follow data to the edge of the network to process it more efficiently, capturing it in real-time at its source versus transferring it back to a centralized hub. Aruba’s research showed that 54% of hospitality IT leaders were already using or trialling Edge technologies pre-pandemic, and a further 16% were already computing at the Edge.

These pioneers are successfully delivering new outcomes, such as utilizing facial recognition technology (49%), experimenting with live, real-time, multi-language translation (45%), and creating enhanced augmented and virtual reality experiences (43%) as a result.

Step 2: Analyze data intelligently

There is a growing role for AI to not only help enhance customer service, provide personalized guest experiences, and support brand management, but also to aid IT teams with network troubleshooting and issues resolution to avoid any costly downtime or damage the user experience.  

Step 3: Store data securely

There’s a growing need to police increasing levels of app and device connectivity, and this is causing a headache for the hospitality business, with 67% of decision-makers believing that connecting IoT devices at the Edge would make their business more vulnerable.

Aruba believes a Zero Trust approach to security is part of the answer here, but network v

isibility and device identification also become key.

Morten Illum, VP EMEA of Aruba, concludes: “Consumer behaviors, expectations, and demands have shifted exponentially, and hospitality organizations must demonstrate that they can respond quickly to these new requirements to tempt them back through their doors.”

The research report can be read here.

Maximizing the guest experience

Many hoteliers were worried that digitizing or putting the check-in and check-out process into a mobile website would damage the guest experience.

The warm, human welcome of a stay could be lost and guests might perceive the service was reducing.

Integration will be the theme that dominates this increased digitization to ensure it really delivers. In the case of payments, there is now a real focus on how to better streamline payments to make them seamless and easier to process both for the guest and the hotelier.

Certainly, payment before arrival benefits both the guest who can then enjoy a much easier checkout experience and the hotelier as cash flow support. The domino effect of this increased efficiency can then be felt throughout all operations.

Lastly, an erroneous key stroke around a payment balance through a lack of automation is the fastest way to erode trust in your digital experiences, so getting it right all the time and not relying on conversations at the reception will be a priority. 

Short-term data analysis. Hoteliers need to have a clear view of the current bookings, markets, and rates and this is multidimensional across food and beverage, bedrooms, events, and other operations.

If any one area is suffering, they can react quickly with packages to attract locals rather than those further afield, or make decisions without delay.

Hoteliers must synchronize and have touchpoints across all operations.

 The right approach to digitization    

Hotels should break out their digital transformation into small, achievable efforts directly connected to a business outcome. At the brand level, hotel chains should not build tech in-house but rather partner with best-in-class tech vendors. Hotels must focus on one area of improvement at a time, rather than trying everything at once. 

Digital transformation strategy for hotels

The mission for hotel owners in approaching digital transformation is to pick the goal with the highest impact. Digital transformation can help to: 

  • Increase digital revenue and website traffic
  • Reduce operational costs
  • Improve product and service quality
  • Improve customer outcomes

Pick one of these goals, and peg your technology acquisition to a specific outcome and it will likely drive the operational and personnel changes necessary to be successful.

One obstacle toward gaining digital revenue is a high volume of overbookings which occurs when the total number of rooms reserved by guests is more than the number of rooms available.

Hotels often overbook to mitigate losses from no-shows, cancellations, or early check-outs, however, overbookings also indicate poorly run operations.

In this scenario, one potential digital transformation initiative could include the adoption of a new property management system that includes an intelligent accommodation management tool. This tool avoids overbookings of specific room types and ensures that rooms are cleaned and maintained in a timely manner.

A property management system (PMS) can also play a significant role in a hotel’s digital transformation by improving customer outcomes.

In this scenario, a hotel can use a PMS to allow staff to check-in guests via any smartphone or tablet. The mobile platform can also allow for reservation management, room status, task sheet management, room maintenance, and real-time updates on rooms and maintenance requests.  

A PMS can provide many solutions for reaching your business goals, but having the right leaders in place is also critical.  

Hotels must have the right digital-savvy leaders to steer the way, empower teams to work in new ways and build the skills and capabilities of entry-level workers.