Despite 59% citing economic uncertainty, 59% of hospitality/travel businesses say the current economic climate will cause them to increase investment in IT over the next 12 months, a move that can help reduce costs, improve scalability, inform decisions, manage risks and build resilience.
Further, 65% of travel/hospitality businesses cited pervasive artificial intelligence as having the highest positive impact on the business/market environment, according to a survey of 1,420 IT professionals across industries sponsored by Rackspace Technology with Dell/VMware in October 2023.
2024 will be the year AI makes good on its promise to deliver ROI. This evolution will bring increased regulation to provide the guardrails guiding AI along with the talent acquisition needed to manage AI. The buzz has also generated the ethical use of AI, especially when it comes to plagiarism, data and privacy.
“These results highlight an evolution in artificial intelligence, signaling a decisive shift from the theoretical exploration of generative AI. The proliferation of pilot programs we saw in 2023 will result in active implementation in 2024,” said Jeff DeVerter, Chief Technology Evangelist, Rackspace Technology.
Not only did 45% of hospitality/travel businesses name AI as the most important technology but they listed enhanced products (52%), improved security (48%) and new product creation (49%) as among the benefits they’ve already realized from AI with improved security (54%) as the top expected benefit it will bring near future. AI initiatives gaining the most traction are computer vision (50%), custom engagement (50%) and predictive maintenance (50%).
There is an expansion in AI use cases as companies explore higher-end functions such as computer vision while more traditional AI use cases like sales and marketing analytics seem to be less of an initiative priority.
Cloud Technology, Hybrid Cloud and Private Cloud Grow
Challenging as it can be for organizations to install cloud infrastructure, the cloud has become critical, in part, due to the growth of new generative AI services and the ability to set up large parallel computations with speed.
“In the cloud arena, the increased focus on edge and private cloud indicate that organizations are simultaneously migrating more of their critical workloads while adopting a more sophisticated approach to their overall cloud infrastructure,” DeVerter noted.
Hybrid cloud solutions prevail and will grow, despite inherent data and regulatory compliance challenges. In addition, the complexities of cloud migration, limited resources and security concerns will favor a shift toward the expansion of private cloud. Most travel/hospitality businesses use a hybrid or multi-cloud system which utilizes a combination of public cloud, private cloud computing, storage and services in different environments.
Edge computing, private cloud and public cloud will all increase as a percentage of workloads in the coming 12 months, while data centers, colocation facilities and on mainframes decline. Hospitality/travel businesses credited public cloud with increased process efficiency (57%), reduced IT spending (48%) and faster testing for new products (46%). They credit private cloud with enhancing a personalized customer journey (55%), creating new revenue streams (50%), increase company growth (52%) and improving the ease of use for customers (44%).
The survey identified three benefits to adopting a hybrid model throughout their organizations: Improved security (51%), data control (50%) and reduced costs (46%).
Over half (45%) of respondents said data integration is the biggest challenge in adopting a hybrid cloud model. Other issues were less challenging like compliance with data sovereignty/privacy (45%), ensuring consistent security compliance (30%) and skills shortage (31%).
Challenges to AI Implementation, Among Them Labor Issues
The biggest challenges to implementing AI into the businesses are measuring business value (41%) and lack of support infrastructure technology (40%).
Market demand and changing technology escalate the need for skilled professionals, outpacing the expertise of talent available.
Navigating the talent landscape presents one of the most complex challenges for the IT sector as we head into 2024. With most companies struggling to recruit for roles that didn't exist a few years ago, the race to onboard individuals skilled in emerging technologies like AI and 5G is intense. The scarcity of seasoned professionals in nascent tech fields is prompting organizations to rethink their talent acquisition strategies. As tech increases, the demand for talent increases as well, increasing costs.
Most (70%) hospitality/travel businesses are struggling to recruit and hire the kind of talent needed to handle increased cloud and AI technology. The key roles they’re struggling to fill are 5G specialists (53%), data analysts (46%), data scientists (41%) and cybersecurity experts (36%). As the need for technology increases, labor costs are increasing 51% to cover salaries, wages, bonuses, benefits, training and recruitment costs. The main reasons for the increase are advancements in technology (52%), high demand/low supply of qualified employees (46%), remote work (45%) and cloud adoption (40%).
Survey Methodology
Commissioned by Rackspace Technology and Dell/VMware, the survey was conducted by Coleman Parkers Research October and November 2023, based on the responses of 1,420 IT decision-makers across manufacturing, digital native/technology, financial services, travel/hospitality, retail, government/public sector, and healthcare sectors in the Americas, Europe, Asia and the Middle East.
Coleman Parkes is a full-service B2B market research agency specializing in IT/technology studies, targeting senior decision makers in SMB to large and enterprises across multiple sectors globally.