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01/31/2022

Hospitality Needs a New Tech Backbone to Meet 2022 Demand

Hotel CTOs are no longer responsible for just the foundational tech landscape. The role increasingly overlaps with marketing and development executives as the need for deploying a tech-centric customer experience grows.
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The hospitality sector is facing pent-up demand from a public eager to travel after two years of pandemic restrictions. Technology will play a major part in acquiring customers, as well as engaging and retaining them, while creating brand loyalty. With leisure travel expected to rise more than usual this year, hotels need a technology backbone that will ensure they are ready to capitalize.

Technology has a key role to play in customer engagement in each phase of a traveler’s journey—from planning and booking, to pre-trip, traveling and post-trip. A CTO in a hospitality firm is no longer just responsible for the foundational technology landscape; the role increasingly overlaps with marketing and development executives, given the renewed importance of deploying a tech-centric customer experience.

Know Your Customer

For each phase of travel, customer centricity and engagement are at the heart of brand success. Harnessing a data ecosystem that mines both structured and unstructured data to create a 360-degree view of the customer is the foundation of a successful interaction.

“Data is the new oil” has been accepted wisdom for many years, but as with oil, the value of data is in the refining. Data ecosystems (whether data lakes, databases, etc.) that leverage analytics to generate  meaningful insights about the customer will continue to be a key focal point of CTOs. These insights will drive planning, booking, in-room and post-travel experiences. Integration of disparate data systems, de-duplication, maintaining data sanctity and—above all—data security will continue to be key areas of investment. Ultimately the quality of the insights will be directly impacted by the quality of data.

Time and Speed to Market

The need for speed—getting products and experiences out to the market faster than the competition—will continue to drive the market in 2022 and beyond. This has several implications for the foundational technology projects CTOs oversee:

  • Mainframe offloads will have an added benefit of technical debt reduction;
  • Accelerated cloud strategies, prompted by the pandemic, will give organizations elasticity and availability for various programs, enabling better customer engagement;
  • Systems integration—addressing the need for backend systems to talk to each other and front-end systems to provide a seamless and timely experience—will lead to an expansion of API factories and Centers of Excellence;
  • “Do Agile” will continue to evolve to “Be Agile” in an ongoing shift left in development, with DevOps and DevSecOps taking center stage;
  • Operating models will evolve from a project-based approach toward a product-based approach.

Improved Customer Experience

Technology for 2022 and beyond will leverage advanced analytics and data for hyper-personalization, as a backbone for delivering optimal engagement through personalized, online or mobile-led experiences. The goal is to deliver a seamless experience that leads the customer from planning through booking and traveling and into an ongoing relationship, post-travel.

The in-room experience will see an expansion in chatbots and sensor technology to manage personalized entertainment, temperature, room service and other amenities. Contactless and self-service engagement will be critical from a health and safety perspective, which will continue to be a key aspect in the post-pandemic world. Trip planning and inspiration will use technology such as AR/VR to provide near-real-life experiences before actual travel to enable informed decisions and increase the level of engagement from the trip conception stage. Loyalty programs may see a change as the world moves from “business” to “leisure/bleisure” travel, leading to meaningful continuous engagement.

The real differentiation will be when hotels are able to proactively engage customers in the planning stage with recommendations driven through customer 360 data.

Operations

Technology will continue to play an important role in process automation while bringing efficiencies to back-end processes like finance, accounting, HR, payroll, supply chain management or customer service. Process automation has seen significant adoption across the hospitality industry and will continue to grow as organizations realize ROI from such initiatives. The industry also will see growth in the number of use cases that apply digital twin technology for virtual concierge, locational accuracy and operational efficiency in reducing waste. Sustainability will gain momentum due to compliance requirements and customer awareness within the hospitality space. CTOs will use 5G to help accelerate some green initiatives, helping lower the carbon footprint.

We will also see an increase in the chatter around metaverse, as many hospitality firms will start looking at incorporating the concept into the pre-trip experience as well as operational improvements.

While these trends preview ways the tech landscape needs to adapt to the new-gen traveler, another key area of focus for CTOs will be hiring tech talent. In the era of the “great resignation” and global talent shortages, organizations need to create workforce retention and engagement strategies. Any firm that is leading technology-based transformation will stay ahead of its competition if it can effectively hire and retain skilled employees.

 

ABOUT THE AUTHOR

Pratibha Salwan is based in Atlanta and leads the Travel, Transportation, Hospitality and Logistics (TTHL) sector for ISG. With more than 28 years of experience working across the globe, she has spent the past 20 years in the U.S. incubating, growing and expanding her work with digital technologies across the TTHL vertical. She has worked with clients in the Airline, Travel, Transportation, Hospitality, Logistics and Retail industries, and has been responsible for leading the digital charge for multiple organizations, providing domain-led technology solutions.