Alejandro Soria, 2011 BBA graduate of Les Roches Marbella and CEO of Cohosting, writes about the importance of Hotel Digital Transformation as a necessary means to ensure future growth in the wake of the Covid-19 pandemic.
Many hoteliers are now confronting the necessity of digital transformation for their hotels, recognizing it is essential for the future. However, not all are prepared for this shift. Despite a surge in technological tool usage since the COVID-19 pandemic, few hotels are committing to a full-scale digital transformation.
The pandemic has prompted many hotels to adopt contactless solutions, including guest apps, online check-in, smart upselling, electronic locks, and chatbots. Moreover, concepts like artificial intelligence and big data are gaining attention, though understanding and usage remain limited.
This article aims to clarify Big Data, Artificial Intelligence (AI), Machine Learning, and Business Intelligence (BI) in hotel terms and provide practical applications for the hotel sector.
Digital Transformation in Hotels
Digital transformation in hotels involves integrating various technologies across all hotel areas to enhance efficiency and guest satisfaction while addressing present and future challenges. This transformation can also create new revenue opportunities or increase the RevPar of a hotel.
Hotel Digitization
Digitization converts traditional operational systems into digital ones, such as replacing paper posters with digital screens in public areas. Digitization is a step towards digital transformation.
Hotels vs. OTAs
The hotel sector faces a clear need for digital transformation to address challenges like increasing direct bookings and meeting market demands for personalization. However, many hotels are not fully embracing this transformation to improve retention, loyalty, and acquisition, focusing instead on digitization for guest satisfaction and security.
Essential Technologies for Hotel Transformation
- Big Data: Involves large volumes of ordered and unordered data. For instance, data collected by a hotel’s PMS or CRM. Independent hotels often need specialized software to generate Big Data.
- Artificial Intelligence: AI can think and draw conclusions like humans by analyzing Big Data to identify patterns and trends. It can predict reservation patterns based on factors like weather and nationality.
- Machine Learning: A subset of AI that not only thinks like humans but also learns autonomously by analyzing new data continuously, and identifying new patterns. This technology is crucial for making predictions, such as changes in reservation behaviors due to COVID-19.
- Business Intelligence (BI): Transforms Big Data into actionable information. BI uses AI and machine learning to translate a hotel’s Big Data into reliable and manageable insights. It allows revenue managers to make data-driven decisions rather than relying solely on historical data or intuition.
Long-term Objectives of Digital Transformation
The goal of long-term digital transformation in hotels is to make decisions based on real, reliable data, enhancing the hotel’s strategic vision. This transformation shifts decision-making from being solely based on historical data to being driven by detailed, data-driven future predictions.
Conclusion
To increase direct bookings and reduce OTA dominance, among other goals, the hotel digital transformation must help answer key questions in any scenario:
- Observe: What is happening?
- Understand: Why does it happen?
- Predict: What would happen?
- Collaborate: What should the team do?
- Decide: Which way to go.
At Cohosting, we help implement and develop AI for hotels, facilitating true digital transformation. For a comprehensive digital transformation, it is advisable to understand the various tools and solutions available and consult with a transformation specialist to standardize the implementation of these tools.