Why 2023 Will Be the Year of Alternative Revenue, Not the Metaverse

Hospitality Technology recently sat down with Mykola Sheludko, Vice President, Product Management at Sabre, to discuss how the hospitality technology industry evolved last year and to get his take on what 2023 might bring. When reflecting on 2022, Sheludko pointed out that hoteliers – especially at the beginning of the year – were very interested in how they could drive revenue via alternative revenue streams. This shift in thinking meant that hoteliers were more open to selling anything, not just rooms.

“Hoteliers became very intrigued by retailing solutions and the industry seems to be transitioning into a total revenue state of mind that is only going to solidify more over time,” Sheludko said.

[Want to hear from hoteliers that have already begun to make this transition? Check out our HT-NEXT session recap on alternative revenue streams for some ideas on what your properties could be doing to generate more income.]

Specifically, he believes 2023 will be “the year of change,” when hoteliers really shift their attitude towards retailing. As more tools become available, hoteliers are not only more willing to use them but, in many cases, have already begun using them. This, in turn, is leading to some great success stories.

At the beginning of 2022, hoteliers were also looking to save money by cutting costs and increasing efficiency by streamlining operations. Any technology that helped hoteliers optimize planning, maintenance, task management on property and the like became incredibly important and highly sought after.

“This remained a top priority in 2022 and will continue to be one in 2023 as hoteliers are still faced with a labor crisis and consequential operational challenges,” he explained. “Streamlining operations helps hoteliers run their properties with fewer on-property staff members which is crucial when so many properties remain understaffed.”

Sheludko explained that Sabre’s Nuvola solution combines task management and guest engagement software, offering hoteliers the missing link for providing a great guest experience. Nuvola will also be able to help address the on-property fulfillment challenges that can occur when hoteliers sell an expanded variety of ancillaries.

As 2022 progressed, hoteliers became even more interested in how best to use customer data. In particular, hoteliers are looking for a holistic solution that allows data to support the guest journey from beginning to end.

“There isn’t a holistic solution out there just yet,” Sheludko said. “There are many companies who currently cover a specific step within the guest journey but not the journey as a whole. It isn’t for lack of interest from hoteliers. At conferences and industry events, everyone is talking about better use of available data and trying to figure out this problem.”

“This is why we are launching our Performance Studio later this year. This innovative product activates data assets, to enable hoteliers to drive decision making by providing a unified view of customer’s SynXis data and offering a variety of advanced analytic capabilities.”

For Sheludko, retailing and data go hand-in-hand. He predicts that as hoteliers learn how to manage data, they’ll be able to tap into and better understand what guests are consuming on property and elsewhere, what experiences and services they’re purchasing, and hoteliers will then be able to leverage that to generate even more intelligent insights and drive more revenue.

As for what the future holds, Sheludko isn’t convinced that 2023 will be the year hoteliers “go all in” on the metaverse.

“Neither the hospitality industry nor guests are ready for the metaverse,” he notes. “Both the industry and guests still need to mature in terms of their thinking and understanding of this concept as well as how we attach value to this innovation. In fact, I feel that this may be one of those areas where hoteliers will actually need to educate consumers why the metaverse is important and a valuable area to spend their money. So, likely this trend will take a few years to really mature.”

However, he is much more optimistic when it comes to the importance of digital twin technology in 2023. Digital twins – which are often 3D virtual models of specific buildings and processes – have already been used within a variety of industries, including hospitality, to model and then improve operations.  Sheludko is particularly excited about their potential use by guests during the booking process.

“Younger generations are very visually oriented,” he explains. “Imagine a booking process that allows them to see a specific room in 3D, see exactly where it is located on the property, see its exact view from the window, etc. Now layer in the ability to show them exactly how close they are to the pool, golf course, spa. And add to that a third layer: showing them how close they are to a popular restaurant, entertainment venue, tourist attraction, shopping hub, etc. That’s very exciting!”

And finally, Sheludko feels 2023 might bring some breakthroughs in the use of AI specifically when it comes to recommendation algorithms.

“Many startup companies are already exploring this technology actively,” he notes. “You provide them with data and they return recommendations on where you might like to eat, shop, or visit. But what will be the next level? Obviously, the more you know about the guest, the better a recommendation you can give. But the breakthrough might be finding a way to really garner consumer trust, or it might be something completely different. I’m curious to see what happens.”

Interested in hearing even more of Sheludko's insights? He recently participated on a panel at HT-NEXT where he discusses this topic and others in more detail. Check out this video to hear more!