Tech adoption is booming across the hospitality sector, with hoteliers keen to capitalize on the many benefits technology offers, as research commissioned by Amadeus Hospitality confirms. Joy Ghosh, Head of commercial Indian Subcontinent, Middle East, Africa and Turkey, Hospitality, Amadeus, shares some of the key findings on hotels’ tech-investment plans and demands.

In today’s travel and tourism landscape, hotels need technology more than ever to help with not only consumer-facing, but, also, behind-the-scenes tasks.

Guests expect hotels to make it easy for them to search, shop, book and pay for their stay. On property, they expect their visit to be personalized, with many wanting technology-driven services to co-exist with the human touch.

Simultaneously, hotels need to optimize operations, at a time when staff recruitment and retention remains an issue. A more efficient back-office set-up means hotel staff can focus on the guest experience.

Elsewhere, cost control is imperative; sustainability is front of mind for guests and owners; and sales and marketing are increasingly driven by digital strategies. The list goes on, but technology is on hand to help, and hoteliers have got the message.

Spending is trending

Amadeus recently commissioned research which provides data-driven insights into what hotel technology leaders from 10 markets, including those from the UAE, are thinking about technology – how much to spend, where to invest and why.

The top line finding reveals that, on average, hoteliers are planning to increase their tech spend by 16 percent in the coming year, with one in five planning to boost their tech spending by more than 20 percent.

So, what do hotels want from their increased investment? More than half (52 percent) said their most pressing objective is improving efficiency. This aim is slightly more of a driver than improving margins, improving occupancy, creating differentiation, enhancing the on-property experience and reducing costs, each of which was specified by four out of 10 participants.

Let’s take a look at what the research says about some specific use cases for technology across the hospitality spectrum.

The personal touch

The most effective way for hotels to deliver a personalized, on-property experience is through attribute-based selling, also known as menu-pricing or merchandizing. Allowing guests to select and pay an additional fee for specific products and/or services is the sweet spot for many hotels – they can increase their revenue per guest, while also giving that guest a better overall experience.

Hoteliers understand this. More than nine out of ten (92 percent) recognize the importance of providing guests with a tailored experience, while 85 percent of respondents see personalization as a sure-fire way to deliver more than 5 percent in incremental revenues.

Elsewhere, more than 40 percent also think personalization is an effective way to meet guest expectations in a global market where, generally speaking, hoteliers surveyed in the research believe that average daily rates (ADRs) are increasing.

AI gets real

Artificial intelligence (AI) has been around for a while. But over the past 18 months, generative artificial intelligence (GenAI) – AI capable of creating fresh content from existing sources – has emerged as a mission-critical technology for businesses, including hotels.

Almost every hotelier (98 percent) confirmed their belief that AI has the potential to deliver significant benefits for their business. Nearly half want it to help them identify and deliver upsell opportunities to travelers during booking, with GenAI seen as a way to build the personalized, end-to-end experiences that today’s guests demand.

GenAI and chatbots emerged as the priority tech spend over the next 12 months for more than one-third (37 percent) of the sample. Hoteliers also identified AI and machine learning as the most important technologies over the next five years, with customer predictive intelligence one of the most eagerly anticipated outcomes.

Marketing forces

GenAI is a new subject for hoteliers to explore, unlike advertising and media, which have been part of the industry for decades. Today, hoteliers have many options when it comes to marketing and media campaigns.

AI has a role to play here as well, giving marketing teams access to granular data and analytics to gauge how effective a particular campaign is, channel by channel, source market by source market.

Some 40 percent of marketing departments are using AI to identify the most effective ways to target, retain and upsell to loyal customers. At the same time, 41 percent plan to use AI-driven marketing techniques to target new customers.

However, only 36 percent of marketing teams are using business intelligence tools – solutions which provide a look at both historic performance and forward-looking insights for a holistic view, upon which data-driven actions can be undertaken and analyzed.

Distribution’s data dilemma

Like their marketing counterparts, distribution teams are reassessing strategy in response to the opportunities afforded through new technologies.

Again, hotel tech leaders see AI and machine learning as the most effective way to manage third-party channels. Hoteliers want to merchandize their properties when selling indirectly, but there are tech challenges to overcome.

Data is currently the strongest distribution headwind, with data fragmentation (33 percent), data efficiency (32 percent) and data integrity (30 percent) raised as concerns.

However, the study showed that relatively few (23 percent) of hotel distribution teams use business intelligence on a regular basis, like their marketing colleagues. Any hotelier not using business intelligence is advised to have a look at what this technology can do and how it can help across all activities, not just marketing and distribution.

Sustainability through AI

Sustainability, including environmental, social and governance (ESG) policies, touches every aspect of hotel operations and guests are watching. Hoteliers are tapping into tech, with almost nine out of 10 saying that sustainability is an important driver of technology investment decisions.

Again, AI is cited as the primary technology to help deliver sustainability objectives. More than three out of four are looking at GenAI as a way to suggest sustainable options for guests.

As an aside, some 42 percent of respondents thought that indirect distribution channels would help to enhance their sustainability credentials, perhaps by giving hotels the chance to showcase their ESG initiatives to a broader audience.

Embracing technology

Technology is, or should be, front of mind when hoteliers are considering their investment priorities. Over the years, hotel technology providers such as Amadeus and its peers have developed technology which allows hotels to optimize how their business is run, on their terms, for the type of guest they want to attract.

Overall, the report reveals that the hotel industry is very much embracing what technology has to offer. The net result of tech adoption across the hospitality sector should be happier guests, higher occupancy rates and ADRs, improved net promoter scores and enhanced brand loyalty. This, all in the context of a world where guests not only expect hotels to commit to sustainability, but also to demonstrate it.