The Digitalization of Hospitality Services and 4 Key Challenges to Overcome

In an age of digitalization, many of the medium to large sized Hospitality Service Providers (HSP) have begun to adopt the new technologies, with a major point of emphasis on introducing cognitive abilities between hardware and software components.

These new technologies empower HSPs to create a level of service and personalization that has simply been unachievable in the past.

According to a Deloitte report conducted in 2017 CIOs in Travel, Media and Hospitality have increased their IT budgets by 57% compared the previous year and it is safe to assume that number has only grown in 2018.

Many of the Hospitality Service Providers (HSP) have begun to enhance their services and engagements with the customers through iOT, machine learning, and other cognitive solutions.This enables them to collect more data, personalize the customer experience, and streamline back office operations.

However, there are several key challenges to overcome for the implementation to be success.

1. Interoperability

For those unfamiliar with the term;

Interoperability refers to the ability of computer systems or software to exchange and make use of information.

At the moment, the hospitality industry lacks standardization. Many Hospitality Service Providers (HSP) have or are in the process of developing proprietary solutions based on their metrics, processes, and methodologies to accommodate the technological service demands of the modern day guest.

Unfortunately, this has led to a diverse spectrum of implementations which are essentially all solving the same problem(s) by providing a similar service. While this doesn’t pose a problem within the scope of a single property, it is prohibiting the distribution of relevant data within the guest profiles across intra and inter-organization systems.

The inability to share data across the organization or to other strategic partners can lead to a loss in potential revenue for the HSP as they are not able to provide consistent personalized services to their guests.

Interoperability issues will also impact the guest’s experience, as they create hassles and inconveniences that take away from the seamless user experience desired by all guests.

Non-standardize systems at different locations will introduce unwanted learning curves for guests during their stay, while such systems may also have issues interfacing and using data from personal devices brought by the guests.

2. Security and Privacy

Within the past six months the world as a whole has witnessed the impact of personal data ending up in the hands of unwanted custodians. Much like the other applications that provide a personal experience (ie: Facebook, Instagram, Wealth Management) the hotels need to collect and track guest preferences, behaviors and locations to provide the best environment and experience.

The challenge for the Hospitality Service Providers is to ensure that guest’s data is used and stored properly to protect guests from physical, economic or societal threats. While guest facing systems and point-of-sale terminals are the most susceptible to security attacks, the HSP must concern themselves will all possible levels of entry.

For that reason, security primitives need to be supplemented in the hotel network for added security in the interfaces with personal guest devices, and in-room or on-property iOT devices.

A secure hotel network prevents hackers from gaining access to guest data by attacking personal devices connected to the network, as well as prevents hackers from reprogramming devices or sensors on the network for inconvenient or malicious purposes.

Adding security protocols within each guest interaction and active connection on the hotel network requires significant computing resources. A decentralized computing platform is necessary to meet these extensive requirements.

3. Responsiveness

Responsiveness resulting in instant gratification or customer satisfaction is the driver for HSP when it comes to the customer’s experience. In an era where everything is within our fingertips, guests expect the same level of service applied during their stay and HSPs are being challenged to increase the promptness for guest requests and services.

A survey conduct as apart of an Oracle Hospitality report displays the growing demands of the hotel guest by showcasing the top initiatives the survey participants feel hotels need to focus their efforts towards.

· Capability to select specific room locations (45%)

· Means to share information about in-destination activities (41%)

· Automation of the check-in/checkout process (39%)

· Way to make service requests (36%)

This seamless level of service can only be achieved by digitalizing the interactions between the guest and hospitality staff through the connectivity of both hardware and software.

By directing guest interactions to guest facing systems and implementing automatic controls through iOT sensors/devices, the hospitality service providers can eliminate the cumbersome processes of interacting and intervention when dealing with guests while providing instant responses to the guests, increasing their customer satisfaction.

Responsiveness is not only critical when it comes to the guests, but also for maintenance and other upkeep activities that are currently managed by the Hospitality back of house system.

A no or slow response time to repair needs — decreases revenue per room. For example, a room cannot be rented if something as simple as the TV is not working.

With the introduction iOT and other hardware solutions any anomalies or drops in service are instantly detected and reported to the proper staff member to be address immediately or in priority of need.

To be able to execute at this level, HSPs must make a significant investment into the sensors, people, and backend management systems to handle all the requests while providing the data to the proper stakeholders.

4. Data Management

With the introduction of more systems, sensors and personal devices the volume of data for the Hospitality Service Providers will increase exponentially. Not only is the overall volume of data increasing, but the variety of sources in which it is being captured are also increasing.

For HSPs to successfully create a personalized experience for each guest, they must have the ability of not only aggregating, but analyzing and parsing the data per guest to maintain up-to-date records of their preferences and behaviors.

In order to provide personalized service to guest, the back of house (BOH) management systems must analyze the guest preference profile along with data about the state of the surrounding environment detected from the iOT devices/sensors.

This places a significant computational burden on the BOH systems that can only be managed through the use of specialize technological infrastructures.

Conclusion

It is clear that there are some significant challenges to overcome when introducing cognitive abilities to both hardware and software for a Hospitality Service Provide. However, the benefits well outweigh any of the obstacles that may emerge during the initial implementations.

By providing HSPs with this enriched level of personal data they will be able to digitize their services, lower overhead, streamline operations, and most importantly serve each guest as a unique individual resulting in the highest level of customer satisfaction.