Despite macroeconomic uncertainty, a survey by global consulting firm BCG found that 60% of companies plan to increase their spending on digital transformation in 2023 compared to 2022.
The BCG survey of 2,700 executives across a variety of industries highlighted business model transformation and sustainability as the top two priorities for future investments, and these areas are certainly amongst our predictions for hospitality in 2023.
Business intelligence
While the roll-out of guest-facing technology continues, internal business intelligence systems will play a key role in 2023 as hoteliers seek to safeguard profitability in the face of inflation.
Speaking at the HOSPACE conference in November, Kate Nicholls, CEO, UKHospitality, predicted that hotels will deploy business intelligence tools to analyse data and consumer preferences.
“We haven’t had to work really hard on staffing or energy previously because we were in quite a benign environment,” she said. “Now you are finding that you need to drill down into the detail of the business to find out what works and you need data to make those decisions. Then you can find the technology to automate the mundane which frees up your team to deliver the valuable experience because only a person can deliver an experience and quite frankly that’s what your guests are paying for. That’s where the pent-up demand is still coming from. “
“Whether you are a Premier Inn or a luxury hotel, you need to have the data to be able to tell you what motivates those consumers, what gives them value for money and makes them come back.”
Tristan Gadsby, CEO of hotel technology consultancy Alliants, added: “For a long time we have talked about big data in the industry but we are now at a turning point where forward-thinking hotels are starting to benefit from connecting the many silos of data that exist across a hospitality company.”
“Personalisation, once a hard-to-attain goal for hotel marketing teams, is now becoming a reality as hotels leverage much richer guest profiles and preferences.”
The hotel sector is now a mainstream asset class and pension funds and institutional investors have a requirement for data and to see how their assets are being managed.
Nicholls added that the pub and quick service restaurant sectors had gone through a similar “painful” modernisation process in 2018-19 to make their business models fit for investment again. Now it was the turn of hotels, she said.
Sustainability
With regulatory pressures increasing, there will be a growing demand for businesses of all sizes to report on their emissions and implement carbon reduction programmes.
The American Hotel & Lodging Association (AHLA) launched Responsible Stay, its new ESG initiative in December 2022 with the backing of almost every major hotel brand. A key focus will be to optimise energy efficiency through operational improvements and the adoption of clean energy technologies.
Hotels will increasingly apply intelligent tech to energy-hungry areas like kitchens and spas. London hotel Claridges, for instance, uses a Quintex system in its kitchens that reduces energy costs by 30%, saving £10,000 a year. Hilton’s Birmingham Metropole Hotel is saving a similar amount after installing extractor fans that automatically react to cooking activity.
More businesses will use the services of reuse digital platforms such as Globechain and Loopcycle. UK restaurant chain Nando’s, for example, has used Globechain to redistribute 6,000 items of furniture and cooking appliances to charities.
Loopcycle is an online marketplace that aims to minimise the stigma associated with buying second-hand products by providing professional catering equipment with full digital service histories.
AI, revenue management and forecasting
Hospitality firms will use AI-powered forecasting to minimise waste and drive efficiencies. 5-Out is a fast-evolving restaurant labour and sales forecasting platform that can now predict the sales of individual menu items 31 days in advance, and create optimal purchasing and labour schedules accordingly.
Revenue management systems (RMS), which have helped drive room rates above 2019 levels, will be applied to other hotel departments.
Mike Chuma, vice president of global marketing at IDeaS, said: “Hoteliers are looking to adopt revenue management practices in other departments like meetings and events, parking, F&B, etc. In simple terms RMS not only helps get the right price for the right guest at the right time, it provides other insights for operational efficiency. Hotels of all sizes see this impact, with the largest brands getting the value from centralising functions in a very intelligent way.”
According to Accenture, AI has the potential to double annual economic growth rates, and boost labour productivity by up to 40% in developed countries by 2035.
Guest-facing technology
Almost three quarters of consumers are willing to pay a slight premium for better technology to support their stay, according to a recent study by Hotel Technology.
The roll-out of guest-facing technologies (guest apps, in-room technology, messaging and chatbots, self-service check-in, mobile key, and digital concierge services) will continue as integrations become ever less tricky to achieve.
Skift Research says that out of all the above categories, guest apps and in-room technology have been the most widely adopted by hotels while a digital concierge service is the least adopted software.
When it comes to messaging and chatbots, guests and hotel employees are now sending three times as many messages as before the pandemic. The volume of messaging is only going to continue growing as B2C chat services become mainstream.
In summary
Summarising the current evolution of hotel technology, Gadsby at Alliants commented: “Once just buzzwords, technologies like IoT, Big Data and Machine Learning, are now having a real impact on the hotel industry. There are also a number of much-hyped technologies that have not had much of an impact so far and time will tell whether they yield results.”
On Blockchain, Gadsby said: “The promise of distributed customer records and transactions is yet to hit the mainstream. ”
On the Metaverse and Extended Reality, he said: “Some practical applications are starting to emerge but we have not seen any wide adoption yet.”
And Quantum Computing means that “pricing calculations and queries in milliseconds and true real-time decision-making are possible but we are not there yet and probably won't be for a number of years.”