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6 Ways Hospitality Can Benefit From Digital Transformation

Digital transformation has disrupted every industry, as businesses across the board seek to adopt strategies to improve their work processes.

In 2019 alone, we’ve seen managed services for DX rapidly increase its market share. Managed services, IT in particular, have seen enormous growth, from a $24 billion industry in 2009 to a $193 billion industry today.

Most of these services of course concern growing agitation from organizations—especially SMBs—to gain an advantage over their competition by incorporating solutions that take advantage of modern technology.

The hospitality industry is no stranger to digitization, and in fact has often taken a leading role in utilizing it to provide a better experience for customers.

The vast majority of people will be familiar with how digital initiatives have transformed the hospitality industry—AirBnb upending the hotel trade is a good example. Then there’s in-room tablets, phones, and even robots.

Today we’re going to be taking a look at how companies in hospitality can take advantage of digital solutions to improve their business and bring in more customers.

1. Big Data and Analytics

Data is a vital tool for modern organizations, and pursuing a digital approach opens doors for using data to be better your business processes.

Big data has been used to inform decision making for a number of years now. In fact, an estimated 53% of companies leverage big data to shape their future plans.

Like any industry, those in hospitality are more frequently using data from their customers to better understand how to serve them.

An obvious example of how this can help is revenue management. Big data can assist owners by carrying out predictive analysis for future demand, anticipating when the busiest times are and preparing accordingly.

For example, wouldn’t it be great to be able to know exactly when to up your rates or lower them because you can see into the future? That’s exactly what big data can do—give you unparalleled insight into customer behaviors and allow you to plan accordingly to maximize profits.

That’s just one example of how big data can be useful for hospitality. You can also use it for targeted marketing based on customer profiling or an improved customer experience through a responsive feedback system, to name a couple more examples.

2. Multiple Channels

Most businesses will by now be familiar with the concept of having a presence across several different platforms.

This is no different in hospitality. Put simply, customers expect to be able to interact with companies wherever and whenever they can.

Multichannel strategies are typically wide-ranging, utilizing digital communication like social media platforms and apps.

Businesses that adopt omni-channel strategies achieve 91% greater year-over-year customer retention rates compared to business that don’t

Hospitality relies strongly on a positive relationship between the customer and the business, particularly for younger generations. If communication is poor, your chances of retaining customers drops significantly.

An estimated 41% of consumers stop using a company’s product or service altogether if they’re unable have issues solved quickly through their communication channel of choice.

Companies with extremely strong omnichannel; customer engagement retain on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement.

What this means in effect is that businesses in hospitality cannot afford to not be present across every digital channel, but those who are will be rewarded.

3. Personalized Experience

Personalization can be something of a buzzword within digital transformation.

Hospitality, however, is one industry where this is not just important, but essential. It’s an entire industry that is built around tailoring a great experience for guests as individuals.

Previously, personal experiences would be something that was ordinarily undertaken by more exclusive and high-end establishments.

60% of consumers want offers targeted to where they are and what they’re doing and they’re willing to share personal information for rewards

Now, with a wealth of technology at hand, providing more personal experiences is a whole lot easier for even the smallest establishments.

A prime example of this is using data to gain a better understanding of what your guests want.

If a guest visits your site and takes an interest in a service you offer, like a spa, you can utilize that information to craft personalized notifications for that specific service.

4. Internet of Things

IoT technology has revolutionized how organizations conduct their work processes and completely shifted the meaning of working offices for many businesses.

IoT has also had a profound effect on how customer can interact with companies. In hospitality, where engagement with the guest is one of the most important concerns, we have seen radical changes over the years.

Of 1600 actual enterprise projects in progress last year, the most sought-after were Smart City (23%), Connected Industry (17%), and Connected Building (12%)

As most people with a smart device in their house will know, you can control a lot of things through IoT tech. The same concept can be applied to hospitality.

For example, guests staying at a hotel can be offered the ability to control the room temperature and the TV through their phone. This is a trend we’ve seen grow in 2019.

For business owners and employees, IoT tech additionally offers advanced monitoring.

By unifying all smart devices under one network, it’s easy to keep track of what’s working and what’s not, making maintenance significantly easier.

If an appliance is performing unusually, it’ll be detected and can be dealt with quickly—much better than a problem going unnoticed and having to pay for a costly replacement when it fails.

5. Augmented Reality

This is a relatively new but significant addition to the hospitality landscape.

What may have once been considered a fairly frivolous endeavor for businesses is now a hugely important technology being adopted by organizations in the industry.

As ever, much of the interest in technology like this is driven by the demands of millennials, who expect excellent digital experiences as a given.

Augmented reality can be used to show potential customers exactly what the environment will look like. This is useful, not just for hotels, but any location—wedding venues, for example, are a great example of places that benefit enormously from giving guests an augmented view of the location on their website.

6. Digital Concierge

The days of heavy-set welcome packages sitting on the front desk in hospitality are disappearing quickly.

A digital concierge, or e-concierge, is a concept that has taken the industry by storm. What it means in essence is being able to cater to customers through digital means.

In short: providing your guests with all the information they need on their device of choice.

Hotel guests see mobile as the future of the guest experience as they predict three main travel innovations by 2030: mobile virtual hotel concierge, mobile payments, and personalized mobile travel guides

Whether it’s checking in or answering a query through the chatbot, a digital concierge aims to use digitalization to streamline processes and make them easier for customers—particularly questions they might have.

An estimated 64% of consumers want businesses to be available and contactable via instant messaging communications, and if current trends continue that number is only going to go up.

Utilizing a digital concierge helps meet this demand and cater to the needs of guests.

Are you considering implementing digital solutions into your hospitality business? Are you dissatisfied with how you connect with your customers digitally?

Impact can help, we provide our clients with digital solutions and strategies that are customized to achieve their goals. If you’re interested in finding out what a managed service provider can do for your business, reach out to us and ask one of our experts!