2021 Hotel Industry Outlook

Even after a global pandemic, hoteliers remain committed to improving and implementing technology in the year ahead. Every year, HT puts together an industry outlook where we ask hoteliers, consultants and professors to tell us what the year ahead has in store for the hospitality industry. After 11 months of a global pandemic, some might think that hoteliers wouldn’t have an appetite for technology and innovation in 2021. But that couldn’t be further from the truth. In fact, the pandemic had three remarkably positive impacts on hotel technology. First it served to “bring hotel IT to the center stage [... and demonstrate its] critical role in keeping hotels operational during these difficult times,” says Daniel J. Connolly, Ph.D., College of Business and Public Administration, Drake University. Second, “digital transformations leaped years or decades ahead in some areas. Red tape disappeared, and as a result [many hotels were] able to quickly put new systems in place and implement changes that would have otherwise taken months or years,” adds Brian Kirkland, CTO, Choice Hotels International. And third, “the pandemic gave hotel companies some ‘breathing room’ to re-evaluate their technology-related priorities and adjust accordingly,” notes John Westfield, partner and practice leader, Consumer Services, ISG. With that in mind, we present to you the 2021 Hotel Industry Outlook complete with priorities, predictions and pain points. What are some of your IT priorities for 2021? DANIEL J. CONNOLLY, PH.D., COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION, DRAKE UNIVERSITY: Hotel IT priorities will focus on generating revenues and reducing costs. The industry can expect to see hoteliers take a “digital-first” approach to business problem-solving with more investment in self-service technologies and app clips (specialized, streamlined apps to address specific tasks), personalization to recognize guests via technology-mediated transactions, artificial intelligence, data analytics, and the use of social media to reach customers on reduced marketing budgets. For meetings and events, hotels will need to invest in infrastructure and capabilities in order to be able to offer and support hybrid events to address capacity constraints for social distancing and to accommodate those who are unable or unwilling to attend in-person events. FLORIAN DANIEL, CIO, DEUTSCHE HOSPITALITY: First, we will continue to enhance our self-developed state-of-the-art social Intranet and collaboration platform DH Connect in order to connect with all our associates and partners and to digitize their daily life in operations. Additionally, we are working on automating and scaling our present hospitality solution package to leverage and streamline our Hotel Opening Setup & Processes and to increase our efficiency. And, we are working on harmonizing the guest experience across all touchpoints, making our customer journey truly seamless and removing any technology breaks. MEHMET ERDEM, PH.D., CHTP, CHE, ASSOCIATE PROFESSOR OF HOTEL OPERATIONS & TECHNOLOGY, WILLIAM F. HARRAH COLLEGE OF HOSPITALITY, UNIVERSITY OF NEVADA, LAS VEGAS: Ultimately, the top priority will be supporting mission-critical functions as the market gradually returns to normal (or the new normal). The anticipated rush of leisure travelers as they finally leave solitude and seek creating new memories means that predictive analytics and labor management solutions should also be IT priorities. JOHN LAPLANTE, CIO FOR G6 HOSPITALITY: As we move into 2021, we are actively kicking off our data optimization framework to build out subject areas where we can effectively use insights from our property management system, Hotel Key, and our distributed reservations system, Above Property. We’ll be doing a deep dive into our property performance metrics using our BEST score system to continue improving our quality and guest experience. In addition, we are looking forward to the continued advancement of our newly deployed website on Amazon Web Services (AWS). G6 Hospitality continually looks for ways to manage our cloud costs, and recently we partnered with Akamai to identify bot traffic to the website. This partnership controls costs by offloading real-time bot traffic from accessing our website. JAMES TUBO, DIRECTOR OF OPERATIONS, BLUEPRINT RF: A big priority for Blueprint RF will be working with hotels to help create a touchless experience for guests. As the Covid-19 vaccine continues its rollout through 2021, guest safety will be a high priority for travelers and our Hospitality partners. And with that, a strong, reliable network will be an even more crucial part of hotel infrastructure by powering the solutions that hotels need to offer its guests. TARIQ VALANI, SVP OF IT — MIDDLE EAST, AFRICA, INDIA & TURKEY, ACCOR: For 2021 we will focus our efforts on contactless solutions as well as improving operational efficiencies both from a time and cost perspective. 2021 will also see us strengthening our ALLSAFE program which was developed to ensure that our guests are comfortable when visiting our hotels. While the ALLSAFE program covers many areas of operations and several aspects of the program are not technology driven, it is the technology platforms behind them that keep it all together. JOHN WESTFIELD, PARTNER AND PRACTICE LEADER, CONSUMER SERVICES, ISG: For our clients in the hospitality industry, we see these priorities: an increased use of automation, enhanced digital emphasis and presence, enhanced physical and digital security, data management, data engineering and data science; and agility and speed to launch. With the start of the new year, we’re advising our clients to ramp up their investments in all the areas above, to drive revenue and customer loyalty as quickly as possible. What is one IT challenge you’re working especially hard to solve in 2021 and why? DANIEL: In 2021 we are laying the foundation for successful growth by creating a platform that combines our IT know-how with the immense knowledge of our shareholder Huazhu. Our goal is to bundle our systems, our know-how and our experiences from two worlds, two cultures and two continents. This will provide us a unique selling point compared to competitors and will make all our IT products highly scalable as well as reduce on-property infrastructure dependency. BRIAN KIRKLAND, CTO, CHOICE HOTELS INTERNATIONAL: In 2021, Choice Hotels, and specifically our IT function, is focused on improving our franchisee value delivery, reducing the total cost of ownership for our owners while still delivering on what guests want. Recently, we launched a new Revenue Management System (RMS) platform leveraging advanced pricing and inventory management algorithms using a mobile-first, intuitive and user-friendly interface to help encourage quick and easy adoption by our franchisees. The new platform accurately forecasts future demand by leveraging machine learning capabilities on our data and is one of the most advanced pricing decision engines in the industry. LAPLANTE: We are very proud of the work we’ve done to move our legacy rate management, central reservation, distribution, website and property management systems to cloud-enabled platforms. In 2021, we are focusing on creating our data-driven culture and increasing data literacy to better leverage the insights we receive from these systems. We are working on identifying new and trustable data that drives the business forward helping G6 Hospitality make better data driven decisions as the travel landscape continues to change rapidly. TUBO: One of the major challenges in 2021 that Blueprint RF has identified will be leveraging the customer network. As hotels add separate technologies to improve the guest experience, the overall framework will require stronger monitoring and management to keep properties alert to any challenges that could affect guest satisfaction. The network management will be critical not only for 2021 but well beyond as digital strategies grow and technology evolves. How has the pandemic changed your view of artificial intelligence (AI) DANIEL: We see AI as highly relevant in the future in terms of AI-based pricing and forecasting. Using the many insights that transactional data can provide by leveraging AI and machine learning offers opportunities like looking for patterns in pricing, volume as well as mixing analysis to gain more revenue. Unproductive customer discounts and segments can also be identified and eliminated using AI. The value of AI in forecasting has been particularly evident during the pandemic, as it presents itself as highly adaptable to new or extremely volatile situations that are not based on traditional models. In addition, AI makes it possible to consider multiple potential futures and their respective impact by using different scenarios. KIRKLAND: AI and machine learning (ML) are technology capabilities that are becoming essential pillars in a good technology strategy. Business analytics and data models that are based on KPIs and trends from the past may not apply anymore. Too much has changed, the trends are all different, and even the effects of changes on those KPIs are different. If you are not using ML and models that learn and adjust to the changing reality, your decision making and outcomes will not be what you expect based on pre-COVID truths. By leveraging the advanced AI and ML capabilities possible in the cloud, Choice has been able to react quickly during the pandemic. TUBO: Artificial Intelligence will be critical to a successful digital strategy in a hotel’s future. From a touchless guest experience to communications in the room, it’s become obvious hotels are moving quickly toward a seamless digital experience in the hotel room, restaurant, bar and meeting spaces. The technology will meet a modern guest’s expectations and drive loyalty to brands that succeed with a complete digital experience from beginning to end. In 2020, hotels leaned heavily into guest-facing technologies. Will 2021 see an emphasis on back-of-house (BOH) technologies? CONNOLLY: Given the rise in labor costs and challenges associated with keeping employees safe and healthy to work, we expect to see more investment in back-of-the-house and employee-facing technologies. Multi-property companies will want to explore ways to consolidate back-of-the-house functions (such as procurement, accounting, and preventative maintenance) along with sales and catering functions across properties to reduce staff and support remote work. DANIEL: Deutsche Hospitality will continue to focus on BOH tech. In 2020, it was mainly about digitizing existing business processes. Our focus in 2021 will not primarily be to introduce new BOH technology but to enhance the tech backbone, to reduce the complexity of the current solutions, and to provide an integrated seamless environment for our associates. TUBO: COVID-19 has fast-forwarded digital strategies for hotels, and they will want to quickly push to implement guest-facing technologies. However after talking with several brands and hotel management companies, the financial challenges from 2020 will force a complete overhaul of budgets and a more focused approach to digital spending in 2021 and progress to increased budgeting for digital needs in 2022 and beyond. VALANI: I believe that 2021 will definitely see a focus on BOH tech. BOH efficiency will be a big part of the focus, and one approach to enabling this would be the implementation of Robotic Process Automation (RPA). Some areas that stand to greatly benefit from RPA would be finance, reservations and guest services (using RPA chatbots). For more insights from Blueprint RF, please visit blueprinrf.com

Related Topics