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The State of Digital Transformation in Hospitality
Apr 29, 2021 • 3 Minute Read
The US hospitality industry is still recovering after four million hospitality jobs were lost in 2020 due to COVID-19. With wide-spread vaccines in sight leisure travel is starting to pick up again, but travel volumes may take a long time to return to normal and 19% to 36% of all business travel could never return due to the rise of remote work.
The industry needs to work harder to attract a public that is largely still wary of travel. Many companies are leveraging technology in new ways to reach a wider customer base and amplify the power of their workers—investments that could be part of larger digital transformation efforts.
What Does Digitally Transformed Hospitality Look Like?
The hospitality industry is undertaking three basic strategies as far as digital transformation is concerned. These strategies focus on three technologies—artificial intelligence, automation, and augmented reality. Using these technologies, companies hope to enhance the customer experience without overly taxing their scarce manpower.
1. Artificial Intelligence Reduces Manpower Requirements
Chatbots may be table stakes in the world of artificial intelligence, but they service a critical role in the hospitality industry. This technology allows guests to answer questions and make restaurant and hotel reservations without engaging support staff with low-level tasks. Chatbots can handle up to 80% of customer queries. This means that staff only need to intervene when a customer’s issue requires special attention—and it also means they can spend more time on complicated customer questions, which decreases time to resolution and increases customer satisfaction.
Energy consumption isn’t necessarily a customer-facing issue, but dealing with energy consumption issues can keep companies in the black. The LightStay program at Hilton Hotels allows facilities to predict and optimize the cost of housing their guests, while also shaving down energy usage. AI programs that can automatically turn off lights and HVAC when a guest leaves can dramatically shave down energy costs. This can also be a net selling point, as consumers tend to prefer environmentally friendly brands.
Lastly, personalization is a great way to attract new customers and delight repeat customers—and AI is a great way to add personalization. Research from McKinsey shows that 80% of consumers want personalized offers from brands, but personalizing relevant offers at a large scale can be difficult to do. AI helps with this, predicting which customers will respond best to upselling and cross-selling opportunities.
2. Automation Achieves Personalization at Scale
Automation in the food services industry ranges from front-of-the-house ordering kiosks, to kitchen devices that aid in food preparation, to automated restaurants like Spyce which have fully robotic cooking staffs that produce highly customized and tasty meals quickly.
Hotels are utilizing automation in a variety of ways, one being room cleaning. Through automated cleaning, robots equipped with ultraviolet lights that automatically enter hotel rooms (when they sense no one is present) and broadcast germ-killing radiation.
Lastly, hotels must lay in supplies of everything from frozen food to cleaning fluid. If they run low on these supplies, they must quickly order more at high prices or else risk the ire of their guests. Automation can prevent this. With sensors that monitor the supply of food, toiletries, and cleaning supplies, automated planning programs can reorder stockpiles before they reach minimum levels, ensuring the best prices while maintaining continuity of service.
3. Augmented Reality Enhances the Guest Experience
Theme parks and other immersive guest experiences are looking to Augmented Reality (AR) to bridge the physical and virtual world. Experiential applications of AR have been during the London Olympics in 2012, when Holiday Inn developed an AR application that allowed visitors to take virtual selfies with various Olympic athletes. Disney has taken this application even further in recent years, allowing the children of resort visitors to play virtually with characters from its various franchises.
Some augmented reality applications are still very practical. The ability to take a virtual tour of your hotel room and its environs is a useful and pragmatic augmented reality application that has to potential to sell guests on the hotel in a way that a regular website can’t approach.
Lastly, augmented reality can help function as a concierge. In one example, the UK’s Hub Hotel placed maps in each guest room. They then created an AR application where users could hover their phones over the map and then plan their day around local tourist attractions.