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Digital Transformation in The Hospitality Industry

Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.

Media by Unsplash - @Subham Dhage
Media by Unsplash - @Subham Dhage

The hospitality industry, which includes hotels, restaurants, and other accommodation providers somehow or rather needs to transform significantly into a digital era using automation and artificial intelligence to reduce the traditional work processes thus minimizing potential human errors besides decreasing the intensive labor cost which has been reported as the highest variable cost over the decades.

In recent years, technological advancements have had a profound impact on the hospitality industry, and businesses that fail to adapt risk being left behind. Digital transformation is the hospitality industry involves leveraging technology to improve the guest experience, optimize operations, and drive revenue growth.

One of the most significant areas of digital transformation in the hospitality industry is the adoption of automation and artificial intelligence (AI) chatbots as mentioned earlier. Such technology has evolved, enhanced and adapted well across many industries in other regions around the globe, whereby potential customers can now not only be able to book their accommodation, F&B and all other activities online but at the same time have a seamless and smooth encounter from the start to the end of their booking experience.

Online payment can be collected upon booking while booking confirmation can be automatically sent to the guest via email or mobile. In addition, an automated reminder can also be sent to the guest 3 to 5 days before the actual travel or booking date as a reminder with a proposal for upselling such as room upgrade, airport hotel transfer, meal inclusion, etc.

All of this can be done with simple automation, integration, and connection using technology along with any property management systems (PMS) and point of sales (POS). One of the advantages to such an automation process is that potential human errors can be eliminated completely along with traditional human work processes whereby these bookings or inquiries can be integrated to any PMS as well as POS these days with cloud services technology that brings down huge cost of maintaining and servicing an onsite server.

In addition, automation and AI chatbots will also reduce the intensive labor cost since the industry is currently facing a massive labor shortage. With automation and AI chatbots, businesses will eventually reduce many of their hidden labor costs such as having to pay taxes, staff insurance, employee provident funds, cost of uniforms and meals, cost of medical fees as well as medical certificates whenever employees are ill and the most obvious one is the maximum 8 hours working hours as outlined by the local labor department.

On the other hand, with automation and AI Chatbots, it operates 24/7 and neither takes any medical certification for any illness nor has to provide meals, uniforms, other employment benefits such as annual leave, paid leave, overtime, bonus pay out, etc. Moreover, automation and AI chatbots are digitalize robotics, they do not work with dejections.

Multiple upselling (rooms, F&B and activities) can be programmed into these automation and AI chatbots to promote upselling over a million times even being rejected as compared to human personalize upselling. Its proven that after 10 times a human is being rejected by a customer over the counter or phone, we humans accepted the dejections and will eventually stopped any upselling on the 11th customer or call no matter how great the incentivize program is in return. Still not convinced why the hospitality industry should revamp and go on a massive digital transformation? There are a million benefits to it, read on………

Another area of digital transformation in the hospitality industry is the use of data analytics to personalize the guest experience. Gone are the days that data are only obtained from PMS or POS or even channel managers of today. In today’s competitive hospitality landscape, the organization that has the most in-depth comprehensive data to understand customers’ behaviour, characteristics and preferences will lead the market. With the help of data analytics tools, businesses can gather and analyse guest data, including preferences and behaviours, to create customised offers and experiences that meet the needs of individual guests or market segment.

Digital transformation also enables business to optimize operations and streamline processes. For example, the use of automated check-in and out process, self-service kiosks and digital door lock systems which are some affordable these days. Additionally, the use of digital tools such as inventory management systems, automated housekeeping schedules and predictive room maintenance plan can efficiently help optimize hospitality operations and at the same time manage and reduce variable cost more effectively.

Imagine that all of these can be connected and integrated to PMS which makes the process flow efficient, effective and information are stored intact according to Personal Data Protection Act 2010. Overall, digital transformation in the hospitality industry is about using technology to create a more personalized, efficient and enjoyable guest experience. Guest of today do not want to be bothered by small talks or conversations by any hotel employee at the lobby (unlike back in the 70s) and would prefer such communication to be digitalized.

This is the reality and fact of today’s expectation of services in the hospitality business. It’s a hospitality revolutionization in digital transfiguration. If you enjoyed this post, leave a comment below and please share it with a friend who you think might find it helpful too. Thanks for reading!


About Writer

Vincent NG
Vincent NG

Vincent NG - A Masters of Business Administration in Marketing from University of Southern Queensland, Australia, I have my share of rocky adventures in the hospitality, tourism and travel industry. Started my hospitality career in Food & Beverage in his early days and went into Sales & Marketing due to my never ending curiosity and appetite for knowledge as a new comer in the industry.


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Rated 5 out of 5 stars.

Excellent article with insights on the challenges ahead. All of us must agree that advancement in technology is a boon to any services sector. It's already so much of our daily lives.

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