As we approach 2024, the hospitality industry’s landscape is set to undergo significant transformations characterized by increased personalization, automation, AI, and cybersecurity, just to name a few. Moreover, these advancements will not only redefine the guest experience but also push the boundaries of what is possible in the sector.
NB: This is an article from Infor
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The good news is that the outlook remains promising, with recent Expedia data revealing that almost half of people prioritize travel more now than they did pre-pandemic, and nearly 80% plan to embark on leisure travel into 2024. In fact, the global hotel industry is expected to reach a market value of $870 billion by the end of 2023, with the luxury hotel market estimated at $115.8 billion.
But it won’t be business as usual for hotels and hospitality groups that want to stand out as demand climbs. Instead, hoteliers must adapt with modern technologies to maintain a competitive edge, address emerging concerns like staff shortages, and become revenue-generating must-visit destinations.
Industry leaders have shown that technology and innovation are crucial in helping hotels adapt to evolving guest demands amid economic and global challenges. To stay relevant and resilient in 2024 and beyond, here are five key hospitality trends and the innovations they’re supported by.
1. Stays Are Increasingly Experience-Driven
It’s no surprise that guest preferences have changed in the last few years, with nearly half of travelers valuing new experiences more than before the pandemic. As room rates steadily increase, hotels need to offer guests more value during their stay to maintain satisfaction and loyalty. And for that, they are turning to technology and AI (artificial intelligence).
The projected statistics for technology adoption in the hospitality industry by 2024 indicate a significant increase in the use of various technologies. According to industry experts, it is estimated that by 2024, nearly 80% of hotels will have implemented artificial intelligence (AI) technology in some form. With the introduction of advanced technologies such as AI-powered chatbots and virtual assistants, hotels can provide 24/7 customer support and personalized assistance to guests.
By leveraging data and AI, hotels can prompt more personalized experiences, such as adjusting room temperatures, suggesting activities and dining options, or providing amenities tailored to guests’ preferences. These personalizations are further supported by Internet of Things (IoT) devices, which can automate room features like lighting and temperature.
While many travelers still prefer traditional interactions and keys, hotels aim to enhance guest experiences by providing more contactless options. This necessitates a shift to technology infrastructure that supports keyless room entry, virtual check-ins, guest notifications, mobile tipping, and bookings.
Additionally, hotels should consider creating experiences compatible with an increasingly hybrid workforce. According to the US Travel Association, half of business travelers working remotely in 2023 extended their business trip for leisure, while one in four traveled simply to work remotely from a new location. Hotels that provide amenities such as strong, secure wifi, tech-inspired coworking lobbies, and off-hours guest experiences can appeal to this growing segment.
2. Gen Z Is Shaking Up Guest Expectations
Gen Z, which includes those born between 1996 and 2010, is expected to become the largest consumer group in the US by 2026, at 82 million. As Gen Z contributes more to the travel economy, forward-thinking hotels will need to consider this tech-native generation’s preferences and deploy compatible technologies. McKinsey & Company distinguishes Gen Z as having:
- Preferences for experiences over material possessions.
- Strong political, social, and environmental values which are openly expressed on social media. According to FirstInsight, 73% of Gen Z is willing to pay more for sustainable offerings.
- Expectations for mobile options, digital connectivity, and online brand interactions.
Hotels that aim to attract Gen Z travelers should focus on sustainability, diversity, and inclusion efforts, as well as marketing initiatives that communicate company values and accomplishments around these issues. Technologies can help hotels adopt these practices and enable measurable results. For example, AI can help procurement software compare environmentally friendly and diverse-owned hotel suppliers and monitor outcomes when investing in these businesses.
While offering mobile-friendly, personalized stays is a no-brainer for this generation, hotels should consider opportunities for eco-tourism, voluntourism, local community engagement, and off-the-beaten-track experiences — activities that appeal to many Gen Z travelers. Hotels can also use social media to observe and manage guest interactions.
3. Digital Transformation Offers Hope for Labor Shortage
Technology is transforming how hotels approach operations and address persistent hiring and retention challenges. Over 80% of hotels reported staffing shortages in Q2 2023. Thankfully, hospitality innovations have been shown to reduce weekly hours for front desk and housekeeping staff by up to 18%.
Automation technologies make a difference in hotel operations and efficiency to streamline back-office tasks such as inventory management, accounting, and payroll processing. Beyond transforming back-of-house financial duties and front-of-house guest interactions, AI and automation can also optimize the sales process. This results in cost savings and enables hotel staff to allocate their time and resources to more strategic activities. It can also attract skilled professionals who may not have considered a career in hospitality otherwise.
An added benefit of digital transformation is better hiring and retention rates. Hotels may be more likely to attract skilled young professionals with tech-enabled work environments that offer more flexibility, less stress, and significant growth opportunities. If you’re procuring digital tools, the key is to strike a balance between automation and human touch. Hoteliers should have a strategy for upskilling workers who lack tech skills and procure user-friendly technologies.
4. Uncertainty Is Demanding Cost-Saving Initiatives
Hotels need to balance a healthy demand for travel with an uncertain economic outlook. For many, this will involve cost-saving initiatives supported by cloud technologies and automation. A Telkonet survey found that for 80% of hotels, the primary motivation for acquiring new technology is to reap energy savings.
What’s more, task automation technology will have a significant impact on the hospitality industry by revolutionizing various aspects of hotel operations, from maintenance to revenue management. Automated sensors can predict when equipment, like HVAC systems or kitchen appliances, is about to fail. This allows for proactive maintenance, saving money in the long run. Systems can automatically reorder supplies when they fall below a certain threshold, ensuring bulk purchase discounts and preventing last-minute, costly purchases.
Automated energy management systems can help hotels reduce energy consumption to optimize hotel spending further. When integrated with IoT, this approach can automate cost-saving adjustments — like lowering temperature settings in unoccupied rooms. In fact, by 2024, the global market for smart hotel technology is projected to reach $24.46 billion.
Cloud computing is another technology projected to have a high adoption rate in the hospitality industry by 2024, with the global market for cloud-based property management systems (PMS) expected to reach $3.43 billion. Cloud-based property management systems (PMS) can centralize hotel operations, allowing real-time access to guest information, reservations, and inventory. This can improve operational efficiency, lower costs, and enable hotels to provide a more seamless and personalized guest experience.
5. Sophisticated Data Security Is the New Normal
Over half of hospitality IT leaders say cybersecurity is one of their c-suite’s top concerns, ahead of staff retention, supply chain management, and even inflation. The average global cost of a data breach has increased by 15% over the last three years to $4.45 million. In September 2023, the hospitality giant MGM Resorts International was hit by a cyberattack that cost the company $100 million in its third quarter alone. These incidents are not just a hit to your bottom line — they have a lasting impact on customer trust and loyalty.
Hotels house an abundance of guest information that is valuable for informing personalized guest interactions. But possessing this data also makes you a prime target for cybercriminals, who can sell customer data or leverage it for ransom, identity theft, and phishing campaigns. Technologies like IoT, point-of-sale systems, and wifi can make you more vulnerable without sufficient security systems.
The good news is that organizations that use reputable cloud-based systems, AI, and blockchain extensively in their IT security systems can not only avoid breaches but also minimize their costs by an average of $1.76 million.
Cloud-based systems also offer enhanced data security and backup, ensuring that critical information is protected and easily recoverable in case of any disruptions or disasters. Technologies like blockchain also support more secure customer transactions, while biometrics can improve physical security during check-in and room access. Empowered with AI, hotels can unpack data from incidents to better understand vulnerabilities and strengthen security measures proactively.
Your Hotel Needs to be Future-Ready
Last year, we shared the Technology in Hospitality Trends and Priorities for 2023. This coming year, we want to help hospitality industry leaders in hotels and resorts, restaurants, and managed food services bridge the gap between market uncertainty and emerging guest desires for convenience and personalization.
If your hotel is budgeting for technology, replacing a limited, overcomplicated, or legacy property management system is an excellent place to start. By utilizing a comprehensive PMS, hoteliers can automate processes, reduce manual errors, and improve staff productivity, ultimately leading to better guest satisfaction and increased revenue.
Developed by hotel people for hotel people, Infor Hospitality understands the importance of integration and collaboration in the hospitality industry. Hoteliers often rely on multiple systems and platforms to manage their operations, such as PMS, revenue management systems, and customer relationship management tools. Infor Hospitality offers solutions that seamlessly integrate with existing systems, allowing hoteliers a unified view of their operations and data.
This integration enables hoteliers to make informed decisions, optimize revenue management, and provide a consistent guest experience across different touchpoints.
This transformative journey presents unparalleled opportunities for those prepared to adopt and leverage these next-generation technologies. Embracing these trends will not only keep your business future-ready but also position it as a leader in the ever-evolving hospitality landscape.
