Every hospitality establishment – be it a hotel group or an independent property – knows the benefits of technology-powered digitisation. They all know that it significantly improves operations, saves costs, refines guest experience, and increases revenues. Having said this, let’s look at the degree to which hotels have embraced technology. The finding is quite equivocal. While some studies say the tech adoption rate looks okay, some say it lags slightly compared to other industries. But they all approve of this – hotels are not doing enough to allocate decent budgets toward technology.
How does the IT budget look today?
One of the lingering impacts of the loss incurred during the pandemic is – the diminishing IT budget. Hospitality Technology’s 2022 Lodging Technology Study shows that on a global level, hotels spent less than 3% of their revenues on IT in 2021. Regarding hotels in India, we see a much lesser budget allocation – around 0.75% of their revenues. So, one thing is obvious – even though, on the surface, it might look like the post-Covid growth rate has fuelled the industry’s need for rapid digitisation, much more is still to be done.
How to go about it?
Before answering this, we will look at how today’s guests view a hotel that leverages various technology solutions to make their stay memorable. Contactless self-services, voice-controlled in-room amenities, personalised offerings based on past purchasing history – guests like them all. Yes, as per our understanding, over 90% of guests would appreciate all these during their stay. And this is where digitisation makes all the difference for hotels.
First and foremost, hotels should look at IT as an integral part of their business strategy. They must make the necessary budgetary changes to allocate upwards of 3%-4% of their revenues to a host of hospitality technology solutions. Everything needs careful evaluation, whether upgrading the existing tech stack for process automation or implementing something new like a guest-facing solution.
Choosing the right solution
Hotels should consider technology as an integral part of their business strategy and choose solutions accordingly. Today, most hospitality companies buy technology as a retrospective thought or to solve a particular problem. But, in our opinion, it should involve a very tactical approach.
Hotel Property Management System (Hotel PMS)
It needs the maximum attention and careful deliberation. Legacy or on-premises systems are no longer relevant for today’s rapidly evolving business dynamics. It is high time that hotels of all sizes and offerings, independent and groups, embraced cloud-based property management systems. Cloud PMS has changed the paradigm and is no longer viewed as a system for internal operations only. Instead, it is considered vital to power growth and drive efficiency across departments. With its ability to collaborate with multiple systems, including CRMs, Channel Managers, Revenue Management Tools, Financial systems etc., cloud PMS has become the holy grail of data capture for hotels.
However, a hotel group must invest in a multi-property management system to gain centralised control over group-wide operations, guest data, reports, reservations, inventories, etc. Empowering their corporate functions with the right tools and information helps them to drive growth and efficiency for the entire group/brand.
Channel Manager and Web Booking Engine
Small or big, standalone or group – hotels of all types depend on OTAs to sell more rooms. It requires investing in a cloud-based channel manager that seamlessly integrates with a Hotel PMS. This integration is instrumental in automatically updating rates and inventories on all the OTAs in real time. While this automation saves time and reduces errors, it also helps hotels avoid overbooking and double bookings that could result in loss of business and dissatisfied guests.
Talking about online room sales, a hotel’s website, too, has the potential to generate bookings. And for this, hotels should invest in an intelligent web booking engine to get incremental direct bookings via their proprietary websites. And yes, leveraging social media in today’s world to drive direct booking is very beneficial, which can be achieved by having a good booking engine on the hotel’s FB page.
Revenue Management System
Tweaking room rates or increasing the length of stay based on guesswork is not the right way in today’s highly competitive environment. Simply speaking, hotels can’t go wrong when it comes to pricing their rooms and amenities. That’s why a sizeable portion of the IT budget should go to a smart AI-powered revenue management system. Hotels can leverage this solution to gain insights into competitor pricing, local market demand based on seasonality, special events and many more to come up with the right room rate at the right time for the right guest. It can also recommend daily, and weekly rates and even dynamically change room rates based on occupancy and a guest’s length of day. For hotels, it is not just spending money on a revenue management system. It is all about increasing ADR and RevPAR.
The list of IT solutions doesn’t end here. It can include online reputation management solution, CRM, materials management, Point of Sale, contactless services, and others. Choosing the right solution via a trusted technology partner can help hotels gain competence and expand offerings and portfolios. The crux here is – an increased IT budget leads to enhanced productivity, improved guest satisfaction and robust financial health.
Resource: https://hospitalitytech.com/2022-lodging-technology-study
