Andrew Dennis
Digital Transformation in Hospitality (+Examples, Challenges)
- Published: February 1, 2024
- Updated: March 21, 2024
Guest expectations for the hospitality sector have risen significantly over the past decade. At the same time, hotel chains and hospitality companies have also modernized their technology and outdated processes with new cloud technologies to improve operational efficiency, enable their employees, and better work with their B2B partners.
Digital transformation has been critical to meet these evolving demands. However, fundamentally improving experiences requires more than upgrading software or hardware.
Hospitality organizations must embrace innovations that travelers prefer, and 56% of hospitality leaders say there’s a growing gap between where their business is and where it needs to be to compete.
There are many different aspects of this change. Mobile check-ins, smart room controls, and automated services expedite convenience, but there’s also a risk of it all feeling disjointed if not done right.
True transformation combines tools intuitively to simplify and customize stays. Strategic implementation also powers back-end efficiencies, empowering staff to focus more on the guests.
In this article, we’ll explore the critical aspects of hospitality’s digital shift, look at key examples of new tech and systems disrupting the industry, and break down how hotel and related hospitality enterprises can overcome critical digital transformation challenges.
What Is Digital Transformation in Hospitality?
Hospitality’s digital transformation overhauls how organizations engage guests and staff, as well as changes and modernizes core operation areas of these businesses. It leverages new technologies and systems to reimagine internal processes and customer experience (CX). This changes the impressions and experiences people have on the property and improves staff efficiency – all driving business outcomes.
While there are best practices, there’s no one-size-fits-all approach. Consider AI, which enables personalized interactions through predictive preferences and smart analytics. You could apply this in unique ways to surprise and delight visitors – or could explore IoT sensors that coordinate room controls, AC, lighting, and more.
This requires a shift in your service philosophy and delivery approach. Fragmented interactions across touchpoints connect to create more memorable stays for guests. Your staff will also enjoy changes that make workflows more efficient.
Importance of Digital Transformation in Hospitality
Now you know what’s behind this change and why it matters, but how does that digital transformation impact staff and guests daily? Let’s look at the core business areas where digital change is occurring.
1. Improved customer experience
Digital transformation elevates hospitality’s customer experience through personalization and guest self-service. By digging into the details like when a guest orders coffee while working or their recent entertainment streaming patterns, you can transform stays from transactional to unforgettable through relevant customization.
Mobile check-in and smart room controls go further to ease travel friction. Guests avoid lines or calls to control lighting, temperature, and entertainment via an app. These seemingly small conveniences can improve overall stay sentiment. Thoughtful digital integrations focus on anticipating needs, not reactive problem-solving.
This is increasingly becoming a priority. In a survey of hoteliers in Asia, Europe, and North America, 70% of respondents wanted to digitize hotel information for their guests. Meanwhile, 57% of respondents wanted to digitize the check-in/check-out process.
2. Increased efficiency
There are many moving parts in any hospitality organization and trying to put the pieces together yourself can slow things down. Integrated systems share data seamlessly between departments eliminating guesswork. For example, hotel property management software centralizes bookings and housekeeping while hospitality CRMs track preferences and loyalty programs.
Workday’s research shows that 51% of hospitality leaders work with data at least somewhat siloed at their organization. Nearly the same number say siloed data hurts their ability to evaluate performance in real-time. Breaking down data silos leads to better-informed service.
These efficiencies behind the scenes pour directly into elevating the time visitors and staff spend together. You can use technology to empower people-first hospitality and offer a stay that’s on par with or even exceeds what competitors are capable of.
3. Big data and automation
Big data and automation transform hospitality decision-making and service delivery. Analyzing volumes of information reveals guest patterns and trends that guide strategy. This can drive all kinds of initiatives from personalized marketing campaigns to responsive room pricing adjustments.
However, 45% of hotels say that the fragmented nature of technology and data prevents them from achieving a singular, end-to-end view of their customers and operations. Change is necessary to maximize the value of all the data that’s now available.
Intelligent automation also handles repetitive tasks like processing guest feedback to pinpoint common pain points or assigning rooms based on known visitor preferences. Systematizing expedites processes and creates reliable, consistent service experiences.
For example, by studying guest data, hotels can offer tailored amenities and marketing messages. Predict visitor needs like preferred snack items or prepare for a busy season that requires additional staff. This data-driven approach boosts satisfaction through relevance while optimizing resources for efficiency.
Rather than relying on assumptions, you can use data to see what’s working, what isn’t, and find opportunities for improvement. Everyone on the property benefits from these systems, and with new data coming in all the time, you can quickly adapt.
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Digital Transformation Examples in the Hospitality Sector
What software and technology are driving digitalization in the hospitality industry? Here are 10 examples of modern hospitality-related technologies disrupting the sector:
1. Hotel operations software
Hotel operations software is a cornerstone for digital transformation by integrating disjointed systems into unified dashboards. These consolidated platforms streamline everything from room booking to staff scheduling, customer relationship management, billing, and more.
Most solutions cover all basics from reservations to housekeeping. Niche solutions may specialize in areas like optimized channel management across booking sites. Many options are available on the market to suit the needs of any hospitality organization.
For example, one luxury hotel using Life House was transformed into a reliable, cash-flowing asset. They automated the back office, optimized revenue, and enabled hotel staff to better engage with guests. The result? The hotel more than doubled its net operating income. (NOI)
When using operations software, hotels gain comprehensive access to data and visibility that empowers strategic decision-making. Better resource planning and recognizing emerging opportunities give businesses a competitive advantage.
2. Hotel guest experience platforms
Guest experience platforms use technology to make hotel stays effortlessly personalized at every stage, from booking to post-stay. This is where mobile check-in, customized room controls, on-demand concierge access, and real-time staff communication keep visitors connected.
Real-world applications include guests requesting services or accessing local recommendations through a hotel’s mobile app. Some locations implement AI-powered suggestion engines to provide tailored dining and entertainment ideas.
This kind of service enhancement builds guest satisfaction and loyalty, all while aggregating visitor data to inform better experiences.
For example, after implementing the Duve platform, Les Bulles Des Paris provided their guests with a complete end-to-end guest experience solution, from letting them check in online before their arrival to allowing them to purchase additional services from their web-based app easily.
3. Property management systems (PMS)
Property management systems act as hubs for hospitality operations and are an essential part of digital transformation in property management. These tools can help keep track of crucial responsibilities that keep daily functions flowing smoothly PMS systems can also assign housekeeping tasks tied to occupancies and departures, and help coordinate maintenance schedules.
By centralizing these duties into a consolidated dashboard, teams can communicate more effectively. Data transparency removes friction for members of your staff. PMS platforms focus on operational tasks once the guest booking occurs, reducing the likelihood of anything falling through the cracks.
The Pousada Da Praia hotel was previously managed using spreadsheets – a method that required much manual work to manage the property’s daily processes, like housekeeping. Inventory also needed to be manually updated. This caused overbookings to become a frequent issue. Since implementing Cloudbeds, the hotel reduced overbookings and achieved a 90% occupancy rate during low season.
4. Hospitality CRMs
Enterprise CRM systems cement guest loyalty by providing highly personalized experiences. These systems aggregate visitor data to understand preferences, enabling tailored services and communications. By tracking behaviors, hotels create relevance through customized welcome messages and offers that showcase appreciation for repeat visitors.
Without CRM technology, it impossible to keep up with every interaction your staff has with guests. Using hotel CRM vertical tools like Salesforce and Pipedrive, you can see a visual history of all contact activity, making it easy to review your latest conversations and follow up with personalized emails.
The impact on retention and recommendations can have a significant impact on the bottom line. Targeted outreach reinforces connections, which can be a driver of repeat visits. CRMs strategically build guest relationships beyond temporary stays. The ability to collect feedback also guides continuous service improvements. When hotels actively listen and respond, visitors feel valued.
5. Central reservation systems for third-party OTAs
Central reservation systems (CRS) integrate hotels with online travel agencies (OTAs) for consistency. They enable properties to manage rates and inventory from a unified platform across booking sites.
This synchronization benefits guests and hotels alike. Travelers find up-to-date availability enabling easy comparison. Hotels gain broader distribution and simplified rate adjustments to drive increased reservations.
This flow of information ultimately nurtures more informed booking decisions. By centralizing data, CRS optimization makes experiences effortlessly reliable for visitors and revenue management for hosts.
For example, RateGain’s channel manager reduces the possibility of overbooking by providing real-time updates within OTAs and strategically adjusting rates to maximize revenue and occupancy. This helped Faranda Hotels achieve 20% reservation growth.
6. Optimized resource management
Optimized resource management makes the most hospitality assets from rooms to energy through precise digital tracking. For instance, predictive analytics tools anticipate busy periods for staffing allocations accordingly.
These analytics help you spot savings opportunities and automation can make changes without constant oversight. The combined impact leads to lower utility bills, reduced last-minute contractor costs, and limited downtime. Savings then get reinvested—whether upgrading furnishings more often, improving WiFi, or modernizing amenities.
No matter what you choose, efficiency improvements redirect funds toward guest experiences. That helps organizations strike the ultimate balance between profitability and exceptional service.
7. Meetings and event management technology
Having a meeting or an event at your hotel is excellent for hotel businesses to drive additional revenue and provide better seamless experiences for conference goers, but it also comes with challenges.
Meetings and events technology simplify hospitality planning and execution through digital platforms. Solutions consolidate tasks like attendee registration, room booking, schedule coordination, RFPs, and post-event feedback.
This consolidation provides event organizers comprehensive visibility to adapt on the fly. It also empowers guests through self-service convenience. Customization might include contactless check-ins, virtual floorplans, and digital schedules. The combined convenience and personalization lead to smooth events that drive repeat visits.
Springboard Hospitality has used Tripleseat Hotels to manage their group sales and catering business for a variety of event types – including film production group business, social and wedding groups, as well as corporate meetings. Springboard Hospitality has succeeded in streamlining its overall group business management, improved accountability, and leveraged robust data that has driven an 8% increase in group business.
8. Smart rooms
Smart rooms let guests customize lighting, temperature, entertainment, and more through digital interfaces like apps and voice commands. These automated conveniences offer personalization options that many hospitality brands need to improve.
When visitors can dial in comfort preferences instead of just accepting defaults, satisfaction can skyrocket. In 2027, ABI Research expects 6.4 million smart hotel room devices to ship worldwide. That’s double the 3.2 million smart hotel room devices shipped in 2022.
9. Virtual tours
Virtual reality (VR) and augmented reality (AR) tours provide immersive previews that build guest excitement pre-stay. Some luxury hotels implement interactive VR experiences, allowing visitors to digitally walk through the property, rooms, and amenities before booking. This helps guests make informed decisions and sets expectations while showing the unique characteristics of the hotel.
Businesses of all sizes see the value in this. Marriott hotels worldwide offer virtual tours of many properties. This project includes 360-degree videos that guests can view online to understand what to expect from the brand.
10. AI-powered personalization and chatbots
AI algorithms use guest data to enable personalized services, tailoring recommendations to match known preferences. Meanwhile, chatbots efficiently handle inquiries in real-time, providing responsive assistance. Their combination streamlines operations with automation while nurturing an engaging, personalized customer experience.
Hotel managers expect AI to significantly improve task performance across their operations within five years. With AI anticipating needs and chatbots readily providing support, the technology creates another pathway to thoughtful hospitality. Guests appreciate frictionless self-service for basic questions and hyper-personalized touches.
For example, the Upper Deck Resort found that the Tripdairy chatbot provided all
relevant information to its customers and handled simple customer service requests. This allowed them to understand their customers better. It led the company to increase direct booking by 35%.
Hospitality Digital Transformation Challenges
Change is inevitable, and so are the challenges that come with it. Take a closer look at the challenges organizations face when taking on digital transformation initiatives in hospitality.
1. Contextual end-user training and onboarding
Hotel managers and staff need to grasp how to use new tools, their functionality, and how they integrate within real-life workflows that improve their productivity and drive business outcomes.
But this is a challenging feat, as 40% of hotel managers say reskilling and redesigning work for new technology are top concerns.
With a digital adoption platform (DAP) like Whatfix, hospitality companies can enable their staff with in-app guidance for contextual onboarding and real-time training. With Whatfix, create in-app support like Tours, Task Lists, Flows for interactive walkthroughs, and more that provide moment-of-need support to hotel managers and staff, in the flow of work.
The goal is comprehension tied to roles rather than disjointed lessons. Hands-on empowerment drives technology optimization. Guest will need to adjust as well, so consider what will support the learning experience best.
Above: In-app employee guidance created with the Whatfix Digital Adoption Platform
Whatfix’s DAP empowers organizations with a no-code editor to create in-app guided flows, onboarding tasklists, pop-ups, tooltips, alerts, reminders, self-help wikis, and more to enable employees to use software better. Enable your employees to become proficient in new applications faster, create interactive process documentation, guide users through process changes, assist employees through infrequent tasks, and provide self-help performance support on your CRM, ERP, HCM, or any desktop, web, or mobile application.
2. End-user support at the moment of need
Delivering in-the-moment end-user assistance for guests and employees builds user confidence when using new systems. This could include 24/7 help desks to on-site support teams. A tiered model can also enhance efficiency by resolving common issues through guest self-service and escalating more difficult scenarios.
This matters for both guests and staff. Support speed and contextual guidance prevent employee frustration that stands in the way of innovation. It’s essential to continuously review the support you offer and adjust when necessary.
With a DAP like Whatfix, enable staff and guests with in-app support with Smart Tips and Self Help that provide additional support in moments of need. Self Help auto-crawls your FAQs, SOPs, knowledge base, help center, training resources, onboarding materials, and more, aggregating them into one searchable resource center that overlays your web and mobile applications.
3. Integrating new systems and processes
Integrating innovations with legacy systems is a complex process requiring alignment. Having deep visibility into existing workflows and pain points allows you to find the right starting point strategically.
Focus on phased implementation to target non-critical areas before expanding to higher-risk aspects. For example, start by having front desk staff input new bookings into both the old and new system simultaneously. This stage validates accuracy while building familiarity with new interfaces.
4. Tracking end-user behavior and identifying digital friction
Monitoring system usage and end-user interactions is key for technology optimization as changes roll out – as well as continuous optimization and identifying digital friction. Sophisticated product analytics software captures, tracks, and analyzes usage, maps workflow patterns, builds user cohorts, and uncover user friction points.
Compare end-user adoption trends across user segments to provide better experiences and optimize flows. In-app surveys supply qualitative data from staff on ease of use and feature wish lists. You want to find any snags, questions, or hurdles preventing employees or guests from using your new systems.
With a DAP like Whatfix, hotel and hospitality companies can track end-user behavior, gather feedback, and identify areas of improvement with Whatfix’s end-user behavioral analytics.
Then, use this data to optimize your product experiences and identify priority areas of improvement. Enable your technology end-users with contextual in-app guidance, information, and support to utilize technology fully and overcome friction areas. Use its end-user analytics to continue to improve, creating a data-driven, end-user first flywheel for creating more friendly, optimal technology experiences for hotel guests and staff alike.
5. Transformation resourcing and investments in technology
Leading a successful digital transformation in hospitality requires gradually aligning finances, staffing plans, and infrastructure upgrades, not overnight change. Having a technology roadmap linked directly to hospitality goals and metrics keeps projects on track through milestones.
For example, if a front desk chatbot integration is expected to reduce call volume by 15% over 6 months, keep an eye on your progress as the months go by.
When people see digital tools as assisting them rather than inhibiting them, adoption can flow more organically. It’s also easier to justify future investments when you have specific goals in mind and a plan for how to achieve them.
6. Compliance and security challenges
As technology progresses, associated compliance and security challenges intensify. This makes paying attention to evolving data protection laws even more important. You also need robust cybersecurity protocols shielding systems and visitors.
With customer data, payment information, and operations relying increasingly on connected systems, cybersecurity demands vigilance from hospitality leaders. A breach leaking sensitive visitor or staff information can cause immediate downtime, plus longer-term distrust jeopardizing bookings.
Being proactive will help you combat threats before they disrupt operations or compromise trust in your hospitality brand. Dedicate resources specifically to stay on top of risks old and new, whether technology, human error, or external breaches.
Hospitality Technology & Software Clicks With Whatfix
Accelerate your hospitality digital transformation by enabling your employees and customers with contextual in-app guidance and real-time support with Whatfix’s digital adoption platform (DAP).
Whatfix enables hospitality enterprises with its no-code Visual Editor to create in-app, moment-of-need support and contextual guidance. This reduces time-to-proficiency and achieves new levels of productivity and proficiency through better software adoption. It also provides customers with self-service, personalized, and guided user experiences.
Whatfix empowers a data-driven approach by analyzing tech experiences with end-user behavioral analytics and event tracking. This identifies areas of friction in your digital processes and tech experiences, allowing you to create optimal, contextual user journeys across various end-user segments. Use Whatfix’s Visual Editor to overcome these friction areas with additional in-app guidance, nudges, queues, and support.
How does it work? Whatfix empowers real estate organizations to:
- Create in-app Flows and Task Lists that guide hotel employees and guests step-by-step through digital processes and applications.
- Enable end-users with Self Help, providing a searchable help wiki that connects to all your help and support documentation, FAQs, help desk articles, and more – that overlays on your digital UI.
- Notify end-users of application process updates, compliance changes, company announcements, and more with Pop-Ups and Beacons.
- Provide contextual Smart Tips that give hotel managers, staff, and guests timely information that nudges them to take the correct in-app action.
- Use Field Validation to ensure data is entered in full, in the correct format.
- Collect end-user feedback from hotel guests and hospitality staff such as NPS, guest experience surveys, training and onboarding feedback, and bug identification with In-App Surveys.
- Analyze end-user behavior with User Actions and Enterprise Insights by tracking custom in-app events to optimize user journeys, segment users into cohorts, identify areas of friction, and more.
With Whatfix, you can understand how your hospitality technology is being used and underadopted by staff and guests. This makes it easier to adjust software training and adoption strategies—all to provide a seamless experience for guests and your staff that enables them with the right context and support to utilize new technologies and systems fully.
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What Is Whatfix?
Whatfix is a digital adoption platform that provides organizations with a no-code editor to create in-app guidance on any application that looks 100% native. With Whatfix, create interactive walkthroughs, product tours, task lists, smart tips, field validation, self-help wikis, hotspots, and more. Understand how users are engaging with your applications with advanced product analytics.
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Software Clicks With Whatfix
Whatfix's digital adoption platform empowers your employees, customers, and end-users with in-app guidance, reinforcement learning, and contextual self-help support to find maximum value from software.
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What Is a Digital Adoption Platform?
DAPs enable technology users with contextual in-app guidance and real-time support to guide them through business processes and to learn in the flow of work.