Businesses in the hospitality industry have had to adapt more than most in recent years. From Covid-enforced restaurant and venue closures to unstable supply chains and soaring inflation, hospitality businesses have faced severe pressure to improve operations and tap into new revenue opportunities, largely driven by changing consumer behaviours, and the focus of this article, technology.
Technology specifically has been a notable instigator of change in this sector and many others too. This is highlighted by lower attrition rates, thanks to frontline workforce tech and ChatGPT-enabled loyalty programmes. Innovative new solutions and software have emerged over the last few years that have caused disruption, undoubtedly, but many hospitality firms are looking at tech as a cause for good.
In many ways, technology can stand to augment and support companies navigating turbulent economic times and achieving long-sought-after operational excellence.
As we head into 2024, several key technology trends look set to have a major influence on the sector. This short guide explores some of the most significant and eye-catching developments and why hospitality firms should pay close attention, harnessing them to address current and future challenges on the horizon.
Enhancing Operational Efficiency Through Automation and AI
Artificial intelligence (AI), machine learning (ML), and automation are buzzwords that have dominated conversations in 2023. With good reason, too, as these look set to transcend operations.
For hospitality firms facing rising costs, recruitment challenges, and increasing pressure to deliver flawless customer experiences, AI and automation can help them work smarter and more efficiently.
Here are just some of the examples of smart AI integration in hospitality:
- AI-powered chatbots and booking processes to handle routine guest or customer enquiries, reservations, and transactions
- Inventory and supply chain optimisation through predictive analytics and automated orders based on projections and estimated foot traffic
- AI-powered revenue management to accurately forecast demand and optimise pricing
- Intuitive room controls like automated temperature, lighting, and airflow
When applied methodically under the supervision of hospitality staff, these technologies can allow companies to focus on value-adding activities and dedicate more resources to creating a more personalised, memorable customer experience.
Cyber Security Will Grow In Importance
As digitisation accelerates, the cyber threat landscape grows increasingly bigger, and that extends to include operational and reputational risks to hospitality businesses.
Hospitality companies have to comply with payment standards like PCI DSS and data protection legislation like GDPR, among others, not to mention manage the compliant and ethical use of various incumbent systems. Given the likelihood of a cyber attack nowadays, hospitality firms have to manage their attack surface on many fronts.
Going into 2024, this trend looks set to continue and, unfortunately, get worse. Therefore, businesses will need to address gaps and vulnerabilities in their systems upfront, which includes applying multi-factor authentication (MFA), segmenting networks, investing in penetration testing to uncover flaws, adding regular patches and updates, training and upskilling staff on cyber best practices and more.
Luckily, however, this proactive approach to adding multiple layers to a cyber defence strategy will pay dividends, and can also accelerate other digital transformation initiatives. For instance, hospitality firms can offer seamless, secure, and automated booking and ordering systems, from customer reservations to stock orders from suppliers. Backed up by an encrypted infrastructure, these processes will become far less susceptible to cybercrime and take far less time to complete manually.
By tackling cyber risks proactively rather than reactively, hospitality firms can become more digitised while safeguarding data and assets with complete confidence.
Leveraging Data and Analytics for Deeper Customer Insights
Customer preferences and expectations are continuing to evolve and be influenced by external factors like sustainability, transparency, and competitive pricing. At the heart of all of these factors, however, is the most powerful asset to hospitality brands trying to maintain that competitive edge, and that’s data.
Data and analytics are more useful than ever for understanding all facets of your audience, from their expectations and pain points to average spending behaviours. Granular data can be put to effective use and spearhead how firms can leverage technology for maximum effectiveness.
Firms will be able to use data-driven trends to influence the following processes and improvements, to name but a few:
- Conversational, AI-powered dialogue and seamless interfaces to engage guests via their preferred communication channels, such as social media platforms, websites, or apps
- Integration of CRM platforms, analytics software, and reservation systems to create unified customer profiles and understand how conversions could be improved
- Customer journey mapping based on digital touchpoint analytics
- Segmentation and predictive modelling to tailor offerings to micro-segments in your audience
- Sentiment analysis on social media mentions and reviews
Together, these examples can give hospitality businesses rich, real-time insights into their audiences and their behaviours. From this, they can refine concepts and practices to deliver more relevant, memorable experiences for their customers.
Immersive Technologies Taking Guest Experiences To The Next Level
It’s wise to assume that innovative technologies like virtual and augmented reality (VR/AR), as well as AI, will transform hospitality in exciting ways.
Immersive VR content, for example, can offer prospective guests a deeper insight into hotels, villas, or apartments before a booking is made. AR can spearhead the curation of interactive guides and video content to help hospitality firms reinforce key messaging and ideas to their audience. AI will, among many other things, drive innovation in facial or fingerprint recognition for personalised and more automated experiences in all sorts of venues and establishments.
Hospitality firms will be one of many that will be smart to integrate technology like this strategically, for the benefit of their customers. User experience must be at the heart of this smart innovation to avoid gimmicks or complexity that could detract from the experience.
An Exciting, Challenging Journey Ahead
For all of its quirks and advantages, technology cannot wholly substitute for human hospitality. However, when applied creatively, it can alleviate many of the pressures on staff, improve efficiency, and lead to long-term cost savings. Ultimately, these benefits serve a common goal: enabling a more personalised and frictionless guest experience.
For hospitality businesses ready to take that digital step forward, the next few weeks and months will be crucial. Exciting innovations are imminent but they will require careful navigation and the need for firms to put security and user experience first when deploying new tech.
That said, the rewards promise operational and reputational success. Developing a clear strategy, aligning your culture, and taking proactive, incremental steps will be pivotal towards overcoming those initial barriers to digitisation.