How technology is disrupting CX in the hospitality industry
The hospitality industry is a vast and diverse sector encompassing businesses and services accommodating, feeding and entertaining guests. It is a customer-oriented industry that focuses on providing exceptional experiences in a variety of settings, including hotels, spas, resorts, restaurants, cafes and bars.
According to Market Data Forecast, the hospitality market was valued at USD 4107.60 billion in 2022 and is projected to reach USD 9950 billion in 2028 with a Compound Annual Growth Rate (CAGR) 0f 16.13%. The hotel and tourism industry typically accounts for about 10% of worldwide GDP. However, in 2020, when COVID-19 hit, the hotel industry made up just 5.5% of global GDP.
Hospitality brands aim to provide excellent service to guests, which requires a focus on quality, safety and cleanliness and a deep understanding of customer preferences and needs. To be successful, businesses must effectively manage operations, understand customer behavior and maintain a positive reputation in the marketplace and on social media.
Digital transformation in the hospitality industry
The guests have become more demanding in the hospitality industry as it has been undergoing a digital revolution for decades, leading to a more global and competitive environment. Hotels have adopted digital check-in and check-out processes, online reservations and guest self-service portals. They are also using mobile apps to provide a seamless and hassle-free experience for guests, from booking to check-out. The resulting access to better data and analytics provides valuable insights into guest preferences and behaviors.
How technology is revolutionizing the hospitality experience
As with most other industries, technology has transformed hospitality and customer engagement. CX evolved from the (hopefully) personal to the powerfully personalized, with technology automating many tasks and adding a stronger element of customization by incorporating data in ways that had only been dreamed of in the past.
Customers expect the digital hospitality experience to be as intuitive and seamless as the other transactions conducted on their phones or other devices. The challenge for hospitality providers is to match those expectations by deploying applications that meet or exceed them in an efficient and cost-effective manner.
Digital engagement - Hotels use digital platforms such as email, social media, text messaging and video chatting to communicate with customers. The more businesses engage with their customers online, the more the customers become invested in the brand and its offerings.
Automation - Many hotels have switched to automated kiosks instead of hiring additional employees to register or check out guests. According to a survey by Kiosk Marketplace, nearly 92% of hoteliers surveyed said guests have increased acceptance of technology and expect contactless options.
Personalization – With the help of data and analytics, brands can gain a better understanding of their customers' requirements, future-proofing their experiences. Customers' reservations, reviews left after their stay or their eating preferences can provide brands with the insights that they need to make accommodations more distinctive and memorable for customers, enticing them to plan a return visit.
Top 6 digital transformation trends in the hospitality industry
Digital transformation supports CX excellence in the hospitality industry by making it easier for guests to manage visits and tailor their experiences according to their specific wants and needs. In addition to increased efficiency and lower labor costs associated with the introduction of self-service tools, digital solutions improve the quality of the customer’s stay and strengthen brand loyalty. And by leveraging the power of social media, hospitality providers can offer promotions and conduct customer service and reputation management in a positive and proactive manner.
The top six digital transformation trends in the hospitality industry are:
Mobile integration
Customers can place and manage reservations on their devices. Hotel check-ins and check-outs can also be managed online at the convenience of the customer, making it an effortless and stress-free experience. According to a study by Criton, 74% of respondents stated that they would prefer to use a hotel app to make their booking if their favorite hotel had one.
Artificial intelligence and chatbots
The adoption of AI and chatbots has been a boon for the hospitality industry. Today, hotels can provide booking information to their customers on their phones or other devices. Some hotels also have facilities such as voice-activated chatbots to open curtains, set a wake-up alarm or order breakfast without the need for human interaction.
IoT integration
As more and more devices are integrated into IoT, (Internet of Things) it has become even easier for the hospitality industry to access and use data to improve the customer experience. With information about each customer’s likes and preferences, hotels can make recommendations for future stays, target promotions or other perks to strengthen loyalty — and save customers’ time and effort. This also increases the opportunity for upselling and creates a better CX. According to the 2019 Internet of Things survey from PwC, 73% of hospitality executives report that they have active IoT projects which is far ahead of the average (48 percent) for all others in the survey.
Social media
Social media plays a vital role in boosting customer experience in the hospitality industry. It has become a popular platform for customers to share their experiences and opinions and for hotels and restaurants to connect with their guests. Through social media, hospitality businesses can provide personalized service, respond to feedback and offer promotions and discounts to their followers. Social media platforms also allow businesses to showcase their amenities, services and unique features to potential customers. By using social media, hospitality businesses can create a positive image, build brand loyalty and attract new customers. Overall, social media has become an essential tool for enhancing customer experience in the hospitality industry. In a survey by Hospitality Net, 48.75% of hoteliers ranked social media as the second most important sales and marketing priority in 2021.
Virtual reality
Through VR, customers can view a 360-degree view of a room, the entire hotel or other parts of the property from the comfort of their home or office. This helps them make informed decisions while finalizing travel plans.
Next-gen data and analytics
Next-generation data and analytics have revolutionized the hospitality industry, providing businesses with a complete customer view by analyzing large volumes of data to gauge their needs, behavior and preferences. This information can help businesses personalize their services and experiences, tailoring their offerings to meet their guests' specific needs. Additionally, it also helps businesses optimize their operations, predict demand and manage their inventory more effectively, leading to improved service, better allocation of resources and higher customer satisfaction. Next-gen data and analytics play a crucial role in boosting customer experience in the hospitality industry, providing businesses with the tools they need to deliver exceptional service and create long-term customer loyalty.
The COVID-19 pandemic only served to speed the digital transition and as we enter a new era of travel and hospitality, the advantages of technological innovation will give brands a competitive edge in this booming industry.
To learn more about leveraging technology in the hospitality industry to transform customer experience, contact us.