Is the Hotel Industry Ready for a Major Technological Disruption in 2021?

Srinivasa Challa (CS)
5 min readAug 13, 2021

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Digital Transformation in Hospitality

Despite being a multibillion-dollar industry, the hospitality business has only witnessed incremental innovation in the past decade. It is fraught with legacy systems that operate in silos, incur a high operational cost and invite ongoing performance issues due to data fragmentation. Even the big brands in the market have only a partial cloud presence. As per my experience, negligible investments have been made in centralized software solutions that can automate daily operations. But I’ve observed that this changed following the outbreak of the global pandemic. The hotel industry is now experiencing a major wave of digital disruption.

Widespread use of cloud-based platforms is inevitable

Having interacted with hotel owners first-hand, I’ve learned that guests are becoming more demanding by the day. They expect contactless and customized services. When deciding on a hotel to stay at, most customers browse hundreds of hotels in their preferred price range. While established hotel chains and boutique establishments are focused on personalizing the customer experience, the absence of guest history data poses major challenges in their path.

Most hotels are still dependent on their insufficient, legacy booking systems that prevent data sharing in the cloud. This means that the entire hotel industry is struggling with data fragmentation. Without cloud-based platforms that unify customer data, it is unlikely that hoteliers would be able to track guest profiles and preferences.

Big Data is the buzzword: The introduction of cloud-based platforms means easy access to guest data in the system. Leveraged discreetly, it will allow hotels to draw up client profiles, complete with insights. Marketing teams can use this data to put together smart campaigns to upsell, cross-sell, manage their brand image, and power their online presence to generate a steady stream of revenue even amidst the COVID crisis.

Investment in SaaS is rising steadily: Recent market investments in the hospitality industry have been very promising. Other than cloud-based operations, there is significant interest among venture capitalists in investing in hotel software. As a natural response to this market demand, opportunities in SaaS are booming. Both investors and hotels are eager to capitalize on this growing trend.

Several hotel owners are coming up with a comprehensive yet low-cost, cloud-based software suite that will serve as a one-stop solution. From property management to hotel bookings, these SaaS solutions can deliver a personalized experience at scale. The idea is to focus on more value-intensive guest services while leaving the software to run daily operations.

White labeling and APIs are becoming standard: Related to SaaS is the trend of white labeling and the use of APIs (application programming interface). The practice of white labeling allows SaaS companies to customize the look and feel of the product. The end product seems as if it has been built by the respective company and is an important part of the personalized experience.

So, ideally, a large conglomerate can source its internal systems and software platforms from multiple vendors, as required. An effective and responsive API would ensure that all of these separately sourced systems interface and exchange necessary data in real-time. APIs are the key to all systems working together, leveraging each platform’s efficiencies and capabilities.

Smart hotel rooms are fast becoming the norm: Voice-enabled home assistants have changed the level of luxury people are used to at their own homes. Added to this are streaming television and on-demand service providers. Similarly, multiple food delivery options are a major feature in the everyday life of customers. All of this means hotels have tough competition — not just against one another, but also as far as the basic comforts that are expected by guests in today’s touch-free world.

To ensure customer satisfaction, high-end hotel properties are now investing in voice activation of lights or drawing of curtains; tablets within the room to run room functions, book meals & experiences, and browse the internet; and in-room TV streaming, to name a few. Hotels without an in-house kitchen are opening up options for their guests to order food from nearby restaurants and local eateries.

The focus on cybersecurity and data privacy is escalating: Along with operating on outdated legacy systems, most hotels are also guilty of not prioritizing data privacy and cybersecurity protocols. In my experience, this is what makes them a prime target for security breaches, resulting in a huge loss of revenue and reputation. With the rise of investments in SaaS solutions, hotels are also getting informed about security. Demand for multi-layered security systems that ensure secured client transactions, protection of sensitive data, and compliance with global practices of data security and monetary transactions are growing. However, this needs dedicated efforts for training in-house personnel to comply with data security regulations and limit compromises in confidential data.

The Use of 3D/AR/VR in the hotel booking experience is rising: The top-tier hotels are investing in 3D/Augmented Reality/Virtual Reality to enhance their clients’ booking experience. Most guests browse through hotel reviews and traveler photos before finalizing their booking. A 360-degree view of the room supplemented by AR/VR/3D will only serve to provide the level of detail about the property that clients are looking for. Future technology trends will also focus on allowing guests to explore the surrounding locality and attractions, enabling them to make informed decisions.

AI-powered communications to manage bookings and more: AI-based chatbots are becoming increasingly intuitive and responsive. They ensure prompt responses and zero waiting time for simple queries. This increases customer engagement and boosts direct bookings for the hotel. Miscellaneous tools to increase traffic to the main site and reduce bookings via OTA are also being offered by software SaaS solutions firms.

Implications of Wi-Fi 6 spell business benefits: The next generation of Wi-Fi is more secure, fast and efficient. Wi-Fi 6 on hotel properties will allow guests to browse and transact with greater safety and ease. Harnessing the benefits of Wi-Fi 6, hotels can boost their ratings and client satisfaction index.

To Sum It Up

The hotel industry has faced challenging times recently due to the pandemic. With the changes in customer priority and business strategy, I envision the hospitality industry as more agile in its response to stay relevant and successful. The virtual ways of working and focus on emerging technologies are now a necessity. The hotel business needs to accommodate this trend and rethink its service model around technology to get the most of reviving market. What according to you could be different avenues of growth for the hospitality industry? Let me know your thoughts in the comments.

About Author:

As the CTO of Rishabh Software, Srinivasa Challa (a.k.a CS) defines and drives the technology solution roadmap for global customers. CS is responsible for the seamless execution of the company’s technology strategy, development & cross-functional delivery. With 25+ years of experience, he is instrumental in creating CoEs across domains like Healthcare & Fintech. CS is a constant learner who loves to stay updated on technology, healthcare, digital transformation and customer experience design & more.

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Srinivasa Challa (CS)
Srinivasa Challa (CS)

Written by Srinivasa Challa (CS)

An ardent technologist and CTO at Rishabh Software

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