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2023 Belongs to Technologically evolved Hotels

Debiprasad Sarangi
Debiprasad Sarangi

2023 belongs to technologically evolved hotels

The hotel industry is known for its adaptability. Whether quickly understanding the power of new technology solutions or changing guest behaviours, hotels have promptly responded to every change to stay relevant in a competitive market. Given the recent shifts in market dynamics, hotels are going through a massive evolution, and technology has undoubtedly empowered them to deal with them. Technology has helped them emerge ‘almost victorious’ out of the Covid grip in 2021 – 2022. The current upward march will continue in 2023, and hotels will see a significant recovery in demand and room revenue in the coming year. Considering the kind of value technology has added, it is right to state this – technology will continue to drive the industry’s growth in the next year. Let us put it this way – 2023 belongs to technologically evolved hotels.

Let’s see how.

Cloud migration

This is the first and foremost step towards leveraging the full potential of technology. On-premises solutions are dead for many reasons. Hotels need to get on to the cloud as soon as possible to improve operational capabilities, deal with solution integration issues, and save IT overhead costs.

We expect a significant percentage of hotel groups to adopt cloud-based multi-property management systems to gain centralised control over their operations, guest history, reports, reservations etc. Moreover, going cloud will help them with their corporate expansion strategy by allowing them to add new properties and go live quickly. Similarly, more independent properties will invest in cloud solutions to sell more rooms at the best rate, increase occupancy and revenues, and serve guests.

Mobile adoption

This will be another area where we will witness a massive surge. Gaining mobility with Mobile Hotel PMS App enables hotels to execute tasks while keeping an eye on key metrics on the go. It increases their productivity and saves time. Now, hotels will see many benefits with the guest-facing aspect of going mobile. They can offer a range of contactless services by allowing guests to use their smartphones to check-in, unlock the door, control in-room amenities, raise service requests, make payments, and check-out. To summarise, mobile adoption will drive their performance and help them win guest loyalty.

Revenue management and online distribution

Going by current data, about 20% to 25% of hotels use Revenue Management Systems (RMS). Due to its high costs, complex interfaces, and lack of knowledgeable resources to work on it, RMS solutions were out of reach for the broader range of hotels. But with the cloud and AI-led evolution, it is now feasibly accessible to hotels of all sizes. A smart RMS automatically and optimally changes room rates based on many parameters, including a hotel’s current and future occupancy, local demand and competition rates. This leads to making a safe and educated assumption that the adoption of RMS will increase in 2023.

Regarding online distribution, hotels will have to look at two critical aspects – indirect booking via OTAs and metasearch engines and direct bookings via their brand websites. Now with more and more travellers booking their reservations online, it becomes imperative for hotels to focus on efficient distribution capabilities. This means more and more hotels will invest in a channel manager and its integration with a Hotel PMS. This will help them maintain rate and inventory parity across all the channels and increase their online visibility to attract more guests. Plus, they will spend on a booking engine to drive more direct reservations.

Marketing automation

Marketing is critical for hotels to drive brand awareness and create the required brand credibility. This is essential to attract more guests to sell more rooms. Generally speaking, hotels allocate around 15% of their annual budget to marketing. However, we are about to see a lot of activities here. An increasing number of hotels will invest in Hotel PMS and CRM integration. It will help them run targeted email campaigns, reach out to potential existing guests with tailored messages, and promote unique services offerings.

Automating all these activities will help them save time while running repeat campaigns. Most importantly, it will enable hotels to understand how guests interact with them through information like email URL clicks, website page visits, purchase history, and what they talk about their brands on social media platforms.

Guest service

The ultimate aim of having technology or digitisation is to serve guests better. A cloud Hotel PMS will play a vital role in this aspect. For example, a hotel group can access the centralised guest history to understand their past purchases and preferences. They can look at both property- group-level guest data to offer them customised services. Similarly, independent properties, too, can level up their customer service game with system-generated reports on their guests.

If the recently coined popular perception that every company will become a tech company soon is accurate, then for hotels, 2023 will be the stepping stone towards this. They must identify the issue they want to address and adopt the right technology solution. The crux is that they are in a unique position today, where only technology can drive their growth. That’s why 2023 belongs to technologically evolved hotels.

This blog was originally published in Explore Tech.