With advancements in IT and surfacing of concepts like IoT, Cloud, SMAC and BYOD, the hospitality industry is in a phase of transformation. As tech spending crosses the 100 million dollar mark in the sector, customer experience is redefined by technologies like never before.
As has been the case with any and every industry, the surge in information technology-driven innovation, the hospitality industry has gone through a phase of transformation. With the advancement in IT, technologies like wireless internet, surveillance, and operation based software have become a norm with every hotel around the globe. Revolutionary concepts like IoT, Cloud and smart wearables have improved customer experience, with a surge in IT investments in hospitality around the globe.
It can be said that an improved end-user experience is at the bottom of all major technological advancements in the hospitality industry. With the proliferation of worldwide web and online booking agencies, the global travel and tourism industry has seen a surge in traffic and revenue, being able to cater to a much wider client base. Big data, analytics and SaaS have given hotel management the right approach to finally reap the full benefits off the massive customer records at disposal. Consumer based technologies like IoT, smart wearables and mobility have made the consumers more comfortable. Surveillance and security solutions have made establishments much safer places, both the guests and the business operations whereas enterprise solutions like ERP, PMS and new technologies like cloud have enables increase efficiency, and scalability in managing large workforces.
A recent Motorola Solutions study observedthat fifty-six percent of hospitality organizations had plans in place to raise mobile investments to better equip their workforces, improve operational efficiencies and ultimately enhance the customer experience. Looking back a few years ago, IT technologies were but a rarity in Hotels apart from telecom, wireless internet and basic billing software. Data that was attained from customers was never used for the betterment of customer experience. Today, with proliferation of IT and ever exceeding expectations of customers, hotels have moved towards high tech services and solutions in almost every aspect of hotel operations.
How Technology is Transforming the Sector
A number of solutions have already begun to change the way business is being done in the sector. The common feature in all these different IT solutions is that they all share the fact that they enable hospitality enterprises to have a more convenient, informed and valuable relationship with their customers.Due to these advances, customers of hotels now leverage high end technologies during their stays, which have forced the operators in the space to adopt technologies around devices such as smartphones, PCs, tablets and other devices. With digitalization, smart solutions and devices have become an integral part of their customer offerings for hotels.
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“The Indian hotel business is promising to rise as one of the key sector driving growth in the service industry.”
RuchirTalati
Marketing Manager
Matrix Comsec
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Online bookings have proliferated heavily across the hotel industry, with a number of clubs, restaurants and other establishments also beginning to adopt just capabilities as their popularity increases. Hospitality enterprises use both online travel agencies and their own customized booking systems. Software solutions like Property Management System (PMS), Electronic Point of Sale (EPoS), CRM, ERP etc. have much streamlined the operational aspect increasing efficiency as well as reducing CAPEX when managing large amounts of employee data, inventory, business transaction records, customer details etc. IoT has been the biggest catalyst in the transformations connecting technologies like smart wearables, sensors, communication, mobility, security and surveillance for a superior overall end-user experience.
“If we see the new age IT technologies, the old communication systems, billing systems, reception systems, food ordering functionality and other spaces of hotels has been replaced. New communication systems have evolved from analog to IP systems involving VOIP technology, which has further evolved to Unified Communications. New billing systems including Property management software (PMS) have simplified billing and easy report generation. Bring your own device facility allowing customers to use hotel communication system via their own device including mobiles, tablets or laptops for calling, accessing internet, messaging, food ordering or laundry and other such different features offered by hotel. Also these software get directly integrated with the communication systems and allow furthermore features including call billings, report generation, alarms and much more.”
IT in Hospitality: The Numbers
With the rapid digital upgradation of the hotel industry has witnessed an increased overall IT spending to a much higher level. RuchirTalati, Marketing Manager, Matrix Comsec said, “If you see the statistics, the growth in IT sectors in Hotels is increasing every year by 10.7% approximately from last 5 years.” This upsurge has various driving factors like the rise of social media, e-commerce, mobility and proliferation of internet. In 2016, according to eMarketer’s latest estimates of digital and travel research and booking, 51.8% of tourists & travelers booking trips & accommodations via digital means did so through a mobile device a number up by 43.8% from last year. Clearly rise of the online ecosystem of services has spurred this new phase in how travels are being planned.
On the use of smart technologies, a research conducted by TCS & Mi6 Marketing, the spending on devices and solutions under the IoT umbrella in the Travel, Transportation & Hospitality segment had a marked dip from 2015’s numbers on $128.9million to $108.9million in 2016. Significantly, it has been recorded that the global hospitality industry has been on the bear path due to economic difficulties being faced worldwide currently. This receding income base, coupled with budget constraints reinforces the fact that CIOs & ITDMs looking for hospitality technology will be faced with the challenge of “doing more with less” when it comes to IT development in the future. Although, all signs point toward extended economic difficulties for the vertical, hospitality IT executives can still achieve their goals by investing in the right IT projects that enhance the bottom line and improve customer value.
The Indian Market & Challenges
The hospitality industry in India is one of the top ten verticals in terms of revenue share. Due to the variety of terrains, cultures, heritage, adventure and entertainment opportunities in India, the country has had flourishing tourism from the West as well as Far East. With digitization and implementation of new technologies, Matrix’s Ruchir believes this trend will continue in full momentum, “The Indian hotel business is promising to rise as one of the key sector driving growth in the service industry. Further advancement in IT technologies leads to innovative changes in Hospitality sector which can be experienced when someone stays at any hotel.” Explaining the approach of Indian Hoteliers to IT implementations, he adds, “In India, there are still many hotels which had been using older communication systems and such hotels have been forced to shift to newer technologies now due to customer’s requirements and increasing IT trends. Due to IT technologies, there are many opportunities for hoteliers to gather in the market including getting more customers and also earn more from the new ways from the existing customers.Change is only constant in the world and it is daily proved by the ever-evolving technology. IoT is evolving which is more advanced than Unified Communications. In India, even now UC is considered a very new technology, but soon IoT is going to replace many UC applications.
An increasingly competitive market due to improved efficiency with IT has forced players in the sector to chalk out new strategies around capturing more market share through the use of technologies. Strategies include actively monitoring rates and crafting revenue management strategies that include alternative accommodations, creating last-minute mobile promotions, local demographic based marketing to generate word-of-mouth awareness and most of all benefitting from concepts like SMAC, BYOD, IoT, and e-commerce.
For a long time, hospitality technology has been old, complex and expensive. But, in recent times, we have seen the rise of SaaS products which are more intuitive and cheaper than their predecessors. Property management systems and channel managers are now readily available to small properties like independent hotels and hostels that enable Indian owners to compete on a more level playing field with the larger enterprises.
Opportunities Going Forward
In 2016 and onwards, it is expected that the adoption of hospitality SaaS products will continue to grow. SaaS providers nowoffer an array of suites and products that work in tandem to increase efficiency and customer experience for the hospitality players. Many SaaS products currentlyon the market do not provide a total solution for current needs of the sector, but software providers will surely be enhancing their current products portfolio and addingnew more competent ones to their future lineup.
Reliance on cloud computing will grow in all aspects. Gone are the days where your hotel’s information was stored on servers in your back room taking up valuable space. Cloud computing offers greater security and reliability and in turn solves the aspect of security maintenance of establishments. Related to SaaS and cloud computing, utility computing will become the norm in 2016.
Thus advancements of the IT industry have brought in a lot of challenges as well as opportunities for Hospitality sector. If addressed with a proper approach, these can be used to add to customer value and revenue. Thus it is essential that hospitality establishments, big or small, keep up with the advancements in networking, communications, IoT, business solutions, security among others. IT Decision Makers need to be connected and also have their workforce connected. They should train their employees before implementing new infrastructure or other technologies. The market spending of IT in India has just come to the fore, and the opportunities for the sector are larger than can be perceived on horizon.
Solutions influencing the Hospitality Space
- PMS (Property Management Systems)
- CRS (Central Reservations Systems)
- GDS (Global Distribution Systems)
- POS (Point of Sales)
- Sales & Catering
- Yield Management
- Guest History Data Management
- Telecommunications Systems
- CAS (Call Accounting Systems)
- In-Room Systems
- Locking Systems
- HR (Payroll, Time & Attendance, Labor Scheduling)
- Accounting Systems
Technology Trends in Hospitality
- Online Travel Agencies (OTAs)
- Mobile & Cross-Platform Marketing
- Big Data Analytics
- IoT & Smart Devices
- Cloud Computing – SaaS
- Mobility – BYOD
- Security & Surveillance
- Marketing automation
- Business Solutions – ePOS& CRM
By: Chitresh Sehgal – csehgal@accentinfomedia.com
