2024 crystal ball

Three Hotel Technology Challenges Operators Will Face in 2024

This year, hoteliers will be focused on integration hurdles, data security risks and striking a balance between personalization and privacy.

In recent years, the hospitality industry has undergone a significant transformation, recognizing the potential of technology to redefine and elevate the guest experience. This technological wave serves as a powerful catalyst for achieving hyper-personalization and, consequently, heightened guest satisfaction.

While it's true that hospitality has historically been slower to embrace digitization than other sectors, a notable shift is occurring as the industry recognizes the potential benefits of leveraging technology. 

However, this journey towards technological integration is not without its challenges. The sector is now grappling with the task of bringing diverse technologies online and ensuring their compatibility with existing systems. From CRM platforms and keyless room entry systems to mobile app-operated HVAC controls, hospitality managers find themselves navigating a diverse landscape of technologies that require seamless management and integration.

Yet, the challenges posed by hospitality tech are not merely obstacles; rather, they serve as a catalyst for driving further innovation within the sector in the coming year.

Integration and Compatibility

As the hospitality industry adopts more diverse technology, integration becomes increasingly challenging. These Integration issues often stem from the use of disparate systems for various functions, such as reservations, point-of-sale, property management, and customer relationship management (CRM). These systems may not communicate effectively with each other, leading to inefficiencies and a fragmented guest experience. Often, different systems save the data in varied formats, making it difficult for programs to exchange data and remain interoperable.

Moreover, hotels are often operating on legacy systems that are incompatible with new technologies and software. Even among modern systems, not all software systems work seamlessly together. Compatibility issues between systems can arise due to differences in technology standards, data formats, or communication protocols.

For instance, if the point-of-sale system in a hotel restaurant doesn’t integrate with the room billing system, it may not seamlessly add charges incurred at the restaurant to the guest's overall bill at checkout. This lack of communication between systems can result in difficulty tracking payments. It can also lead to duplicate receipts or guests skipping out on their tab.

Hospitality providers should thus look to middleware, which acts as a bridge between different software applications and facilitates communication and data exchange. Middleware, as the name implies, can serve as an integration layer, connecting existing systems and enabling them to work together. What’s more, middleware can handle the transformation of data between different formats and standards. This is crucial when integrating systems that may use different data structures or protocols. Middleware ensures that data from one system can be accurately interpreted and utilized by another.

Safeguarding Data

Due to the sensitive nature of the information that they store and the multiple access points, hospitality providers are already prime targets for cyberattacks. Around one third of all hospitality providers have reported a data breach in their organization’s history. As the industry moves towards increased integration, this puts an even bigger target on hotels, casinos, event venues, and the like. 

While integration is crucial in hospitality, it also poses risks: if one system or device is compromised, they all may be. A potential breach in a mobile app controlling HVAC utilities could mean an attacker has access to a hotel’s internal reservation system or guest payment information. Moreover, as hospitality providers implement more IoT devices, such as smart thermostats and smart door locks, there are additional security risks because all devices are connected to the internet and central network. Even room keys and locks can now become access points for a data breach.

So, what’s the solution? Hospitality providers should secure IoT devices by segmenting IoT networks from critical systems, which involves dividing a computer network into smaller, isolated subnetworks. These segments are typically created based on factors such as device type, function, or security requirements. By segmenting a network, organizations can control the flow of traffic between different parts of the network, limiting the potential for unauthorized access or lateral movement in the event of a security incident.

Personalization vs. privacy

While guests increasingly expect personalized experiences, there is an unfortunately fine line between personalized experiences and privacy violations. While AI and other intelligent systems can collect guest data to understand guest behavior and make personalized recommendations, hospitality providers don’t want to alienate their customer base by making things too specific. It can be tempting to run full speed ahead with AI and data analytics, but remember to maintain regulatory compliance and obtain informed consent. 

While it’s evident that guests are expecting higher levels of personalization – for instance, for properties to save their room preferences from previous stays – it’s also imperative to consider the risk versus the reward of data collection. Consider the difference: recording a guest’s pay per view movie history to make viewing recommendations later versus tracking a guest’s access card around the hotel to understand their leisure activities. Would one, both, or neither of these be acceptable? It depends. 

To establish ground rules, providers should establish transparent data policies and obtain explicit consent from guests. Moreover, they should collect only the necessary data for providing personalized services. Avoid data collection that goes beyond the scope of guest expectations or service requirements. This reduces the risk associated with handling excessive personal information, an issue that will grow even more contentious in the coming year as the fight over data privacy intensifies. 

While the year 2024 poses its challenges, it marks a pivotal moment for the hospitality industry. Innovators in the sector have the opportunity to discover and implement effective technology systems, fostering a more technologically sophisticated and interconnected hospitality landscape.

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