Two women checking in at hotel desk

Author: Jacob Buckstead / VP Hospitality Solutions / Fiserv, Inc.

Digital Transformation Promises to Reshape the Hospitality Industry

As goes the U.S. economy, so too does the hospitality industry. According to a recent industry study, this conventional wisdom is expected to result in lodging demand increasing by 1.9 percent this year, 1.2 percent in 2020, followed by a slight decline of 0.1 percent in 2021. The U.S. hotel market is then expected to bounce back in 2022 with a strong 2.5 percent increase in demand.

One of the drivers of industry growth is the ongoing digital transformation that is literally reshaping the way business is done. As consumers continue to demand a better experience in their commerce interactions, the hospitality industry is rapidly adopting new technologies to meet this expectation.

Technology Trends in the Hotel Industry

To create a more seamless guest experience, more and more hotels are automating and streamlining the travel process – from searching for a place to stay, to booking and using amenities. Innovations such as one-click or one-tap check-in, digital concierge services, smart in-room technology, and enhanced direct booking engines are transforming the hospitality industry.

As the millennial generation increasingly dominates the traveling public, these tech-savvy travelers prefer the use of apps and mobile websites for bookings, as well as reserving restaurant tables, ordering room service, and booking massages or spa treatments. Hotels are under pressure to digitize their services to meet millennials’ preferences for more personalized interactions.

Simplifying and Securing Payments in the Hotel Industry

Another important area of digital transformation in the hotel industry is in payments. Customers today are looking for a greater range of choice when it comes to transactions. In fact, according to a survey, 20 percent of customers do not complete a reservation if their payment method of choice is unavailable. Providing local payment options is now necessary, especially with the influx of international travel.

Advanced transaction solutions offer customers the widest range of payment options at point-of-sale, creating a frictionless consumer experience. By vaulting accounts securely in a mobile application (e-wallet) – whether it be Apple Pay, Google Pay, Samsung Pay, PayPal, Visa checkout, or a card on file – hotels can use tokens to authorize transactions in a secure way that doesn’t require customers to reenter card details for each purchase. This simplifies the transaction and dramatically improves the customer experience. And tokenization is designed to protect customer transaction data , helping to reduce fraud and create greater trust with patrons. In addition, the use of a dynamic currency conversion solution can enable guests to pay either in their own currency, or the hotel’s base currency, which is critical for international customers.

Hotels are also looking to “evolve” loyalty programs, moving away from complicated point-based programs that center around frequency of use and conversions with partners. Many are beginning to leverage customer data to predict preferences, and anticipate what each customer wants. Travelers are looking for more tailored amenities and offerings. Hotels can harness technology to deliver a more personalized travel experience, which can lead to greater customer loyalty.

Leveraging Data to Enhance Hotel Guest Technology

Many hotels are already integrating advance technologies, such as smart energy systems to automatically reduce the power of light bulbs during daylight hours, or to turn off the heating system when rooms are unoccupied. And on the horizon, artificial intelligence (AI) algorithms and machine learning will enable hotels to track guest preferences, allowing them to offer more curated recommendations and experience offerings. More futuristic applications of hotel guest technology involve robotics. For example, Nagasaki, Japan boasts the world’s first robot-staffed hotel. The hotel features an information robot to provide tourist information; a front desk robot capable of intelligent communication; and a cloak robot to store guests’ belongings.

Other technology advancements promise transformational change for the industry. Recognition technology, which includes everything from facial recognition to finger print or retina scanning, promises to speed-up payment processes after dining or making the check-out process completely automated. Augmented reality systems will allow guests to point their phone at a section of a hotel map, revealing information about local attractions and see customer reviews. Virtual reality systems will empower potential guests to experience their hotel room before they book a reservation. And chatbots, powered by AI, will respond to the most common guest questions and queries, freeing up staff to tackle tougher issues.

The pace of change in the hospitality industry is rapid. The good news is that hotel guest technology offers an invaluable opportunity to increase the efficiency of operations and improve the customer experience – all while growing the business.