In an era where digitisation is integral to the hospitality value chain, the recently conducted global Digital Hotel Operations Study offers a comprehensive examination of the state of digital operations within the industry.
Representing the collective voice of 84 hotel chains with over 2 million rooms worldwide, this study delves into the nuances of the digital guest journey, shedding light on both the achievements and challenges faced by the sector.
Unveiling the Transformative Trends:
Record Online Bookings and Guest Data Utilisation:
A seismic shift reverberates through the industry as direct bookings surge by almost 50% in 2023 compared to the previous year, constituting nearly one-third of all reported bookings. This surge aligns with the revelation that approximately two-thirds of total hotel chain revenue is now generated through online channels, with direct bookings gaining ground against online travel agencies (OTAs).
The report credits this shift to factors such as quality content on brand websites, loyalty offers, and an increasingly customer-centric approach facilitated by smart and agile systems. Notably, three-quarters of participants now leverage customer relationship management (CRM) systems, marking a substantial 40% increase from the previous year.
Rise in System Integration Levels:
The report accentuates a noticeable rise in system integration levels since 2017, providing valuable insights into hotels’ evolving priorities.
Internet booking engines are now integrated with property management systems (PMS) at 91% of properties, a considerable surge from 55% in 2017. Central reservation system integration has also risen to 90% in 2023, compared to 47% in 2017, while revenue management systems are integrated at 79%, marking an increase of 32 percentage points.
Personalisation and Revenue Growth:
Personalisation, a critical aspect of the guest experience, receives a noteworthy rating of 4.6, showcasing a significant improvement from the 3.6 recorded in 2021. The industry’s heightened acumen in understanding and meeting guest expectations reflects a positive trajectory.
The study further uncovers untapped potential for revenue growth through automated ancillary sales promotions. Respondents anticipate a potential doubling of ancillary revenue from 15% to 29%.
While opportunities for upselling are frequent during the booking process (78%), pre-arrival communications (67%), and check-in procedures (65%), there is room for improvement in maximising ancillary revenue during guests’ stays, as only a quarter of hotels reported utilising app, mobile website, or digital ordering platforms for on-site pitches.
Rise of AI Applications:
Artificial Intelligence (AI) takes centre stage, marking an 86% increase in potential applications. Predictive modelling gains prominence, particularly in environmental protection and maintenance cost reduction. This shift in focus showcases the industry’s readiness to embrace AI-driven solutions for enhanced operational efficiency.
Challenges on the Horizon:
Obstacles to Achieving Higher Digitalisation Rates:
The report doesn’t shy away from addressing obstacles to achieving higher digitalisation rates. Chief among these challenges are the perceived high costs of acquiring new technology solutions, cited by 83% of respondents—a 14 percentage point increase from the 2022 survey. The inflationary impact on purchasing power and supplier wages exacerbates concerns about the overall system cost, hindering technology adoption.
Moreover, limitations in systems integration present a significant hurdle, with nearly three-quarters of respondents identifying this as the primary challenge in optimising operations. Other impediments include costs (60%), staff training (59%), limited software functionality (46%), and staff shortages (43%).
Innovation Management Gap:
The report highlights a critical gap in innovation management within the industry. Only 35% of hotel chains have a structured innovation management process in place, revealing an area where the industry needs to focus its attention. Prioritising innovation at all levels of the organisation is imperative for sustained growth and competitiveness.
As the hospitality industry navigates the digital frontier, the insights gleaned from the Digital Hotel Operations Study Report illuminate both the triumphs and trials.
While transformative trends reshape the guest experience and revenue models, challenges like cost concerns and integration limitations demand strategic solutions. The industry’s ability to bridge these gaps will define its digital success, ensuring a seamless and enriched experience for guests in the ever-evolving landscape.
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