For most of the world, with the glaring exception of China, 2022 marked the first full year of hospitality trading without any interruptions from COVID-19.
Pent-up consumer demand fuelled an extremely busy summer season and hotels were able to increase their rates significantly.
Revenue management makes a comeback
Technology suppliers were quick to highlight the important role of revenue management systems (RMS) in enabling hoteliers to maximise their rates. This was in sharp contrast to the depths of the pandemic when many hoteliers suspended their RMS subscriptions.
Mike Chuma, vice president of global marketing at IDeaS, said: “Many of the industry’s most influential voices have credited the RMS as critical to their recovery to record performance across industry KPIs, such as ADR and rate growth index.”
“Hoteliers and investors can clearly see the direct impact of a revenue management system on optimising price and its impact on net operating income and the total incremental value created for the asset.”
In September, two next-generation RMS companies - Pace Revenue and Flyr Labs - joined forces. Flyr Labs delivers RM solutions to the airline industry and specialises in Deep Learning, a subset of machine learning that simulates the workings of the human brain.
The unicorn start-up, based out of San Francisco, acquired Pace Revenue, which deploys micro-targeted hourly pricing for the hotel industry. Their combined clientele includes JetBlue Airways, Air New Zealand, Accor, and Wyndham.
Throughout the year, there was a steady stream of hotel tech M&A activity with at least 14 notable deals. Mews acquired Cenium, its fourth PMS acquisition in the space of two years, as well as buying POS innovator Bizzon.
Workforce management solutions
High demand exposed the lack of available staff in travel and hospitality, with frequent flight cancellations and some hotels implementing occupancy caps. Towards the end of the year there were signs of the crisis easing.
In a tight labour market, traditional, work-site sectors like hospitality found themselves competing against the growing number of remote-friendly companies.
Increasingly, hospitality operators turned to technology and software to help them attract and retain front-line workers. Giving employees shifts that they are happy with, on-demand or daily pay, and improving the quality of the work itself were all on the agenda.
In the US, Starbucks started allowing workers to cancel shifts at short notice - making the role more attractive to parents, for example.
From a management point of view this sounds like asking for trouble, but Simon Sykes at Quinyx, a provider of AI-powered workforce management (WFM) software, said that it is possible – with the right technology - to find people to fill shifts within an hour or so.
In June, WFM provider Unifocus announced a new partnership with IHG. Christian Urbat, head of owner Solutions at IHG, said: “Using UniFocus’ array of solutions, each of our locations can effortlessly staff according to projected demand and not just by the day but by the hour, maximizing productivity for each department area.”
On-demand pay
As the cost-of-living crisis continued, on-demand pay (also known as earned wage access) became another perk to aid retention.
In September, Atrium Hospitality, a US hotel management group that operates 83 hotels including the Wyndham, Hilton, IHG and Marriott brands, announced it was offering DailyPay's earned wage access to its 7,000 employees.
The app shows employees their earnings in real-time; if needed, they can instantly access that money by moving it to a debit or checking account. Anneliesse Cooper, SVP of HR at Atrium, said: “This kind of innovation is one of the ways we're striving to be a better employer."
Cloud migration
The transition from on-premise legacy operating systems to cloud-based hotel technology continued. On a global industry-wide scale, cloud migration is likely to take another eight to ten years to complete.
Digital guest journey technology, such as contactless check-in/check-out and pre-arrival/on-property guest messaging, became increasingly widespread as integrations with legacy systems became easier and less costly to achieve. Almost three-quarters of consumers said these services are important to them when choosing one hotel over another.
Many customer-facing tasks were automated, for instance the FAQs that come into the front desk and concierge. “Typically a third of concierge requests will be restaurant bookings and the vast majority do not require the concierge's magic touch to get that table with the view,” commented Tristan Gadsby, CEO, Alliants. “These are classic examples that should be automated, particularly with the widespread adoption of table management systems. The same applies to transportation bookings.”
Hotels with modern, easy-to-use operating systems also had the advantage when it came to staffing and retention: simple and quick onboarding processes and the automation of repetitive tasks.
Speaking at IHIF 2022, Rami Zeidan, founder and CEO of Life House, said that his business had solved its labour turnover problems by building its own software. He claimed his system was so easy to use, he could literally “pull someone off the street and teach them in a few hours.”
Tech to tackle energy costs
The rise in energy costs put hotels with IoT systems at a clear advantage. A standard IoT hotel system might manage lights, locks, thermostats, wall light switches, blinds, shades, security cameras, CO2 sensors, occupancy sensors, door sensors, and humidity sensors.
With such a system, the conference and events manager, for instance, can prepare the conference space by turning on the lights, opening the shades and setting the air conditioning, without physically visiting the room and having to manually perform these tasks.
Speaking at the HOSPACE conference in November, Thomas Greenall, CEO, Bespoke Hotels, said that gone are the days when operators would turn on the heating hours in advance of a guest’s arrival. He said a micro-metering system that analysed energy consumption at half-hour intervals had enabled the UK hotel group to cut its energy costs by 25%.
Distribution
According to the Hotrec Hotel Distribution Study of 3,900 European hotels published in June, the proportion managing rates and availability manually has decreased from 56% in 2013 to 37% today. The use of channel managers has increased from 39% to 47% but remains at a relatively modest level.
In 2013 nearly half of the hotels in the survey were not aware of the integration options available with travel meta-search engines. Today roughly 80% of respondents are aware of these distribution channels but only 41% use them. In 2013 TripAdvisor was the dominant meta-search platform. Today, Hotel Ads by Google is the market leader (73%) followed by TripAdvisor (57%) and Trivago (44%).
As consumers sought reassurance and a direct point of contact during the pandemic, direct hotel bookings rose while OTA bookings dropped a little. Time will tell if this is a trend that continues.
Four Seasons Hotels & Resorts, in partnership with Alliants, introduced a machine learning optimisation platform which increased direct bookings and revenue by 15%. Visitors to the Four Seasons website receive personalised offers that compel them to book direct.
In November, the Irish pioneer of direct hotel booking technology Avvio joined forces with US tech firm Sceptre Hospitality Resources (SHR). Avvio launched the world’s first AI powered booking engine in 2017, and SHR offers AI-enabled reservations, CRM and RMS solutions.
John Burns, president, Hospitality Technology Consulting, commented: “2022 demonstrated an increase in velocity in all areas of hotel technology – increased rapidity of new system introduction into the marketplace, greater speed of its embrace and implementation by hotel operators, and expanded swiftness and comfort with its use by our guests.”