These days in the hospitality world, it’s not only about “keeping up with the Joneses,” but keeping up with the Jonses’ tech stack. There may be some who contend that technology has a limited place in hospitality, that ours is a people business and, therefore, must be high-contact at all times, and that technology may interfere with the level of personal interaction required for excellent customer service. However, it’s not quite that simple. To assume digital transformation removes personalization or de-humanizes service misses the full picture. So, what exactly is digital transformation and how can hoteliers use it to enhance, rather than hinder, the guest experience?
Defining the Buzzwords
Whenever a business shifts its processes to a digital-first environment, that’s digital transformation. These processes, according to a 2021 report by Skift and AWS, could be “practices, toolsets, analytics, or simply ways of working.” Renowned tech analyst Benedict Evans describes digital transformation as a “generational shift in the technology inside big companies,” as they start moving from one framework to another.
Companies evolved from using mainframes in the 60s and 70s to more recently client-server architecture in the 80s and 90s to the present day, as businesses move to the cloud and SaaS products. One thing that hasn’t changed is that businesses need to solve current business problems, leading them to find new solutions that end up changing how the business operates (take just-in-time supply chains, for example), reinforcing the cycle of innovation. As Evans notes, “The ‘old’ systems are good at the old things.” Thus, modern challenges need modern solutions.
Moving everything to today’s technological paradigm of choice – the cloud -, however, has been a slow process. As one can imagine, it takes time and budget considerations to invest in new software, training, and equipment. Then suddenly, the world is struck by the COVID-19 pandemic, and it becomes an almost overnight imperative for hospitality companies to accelerate or get on board the digital transformation to survive the tough realities brought on by the pandemic.
A Digital Transformation Framework for Hospitality
As with any business decision, knowing your own operations and your customers is key to good investment decisions. The pandemic changed the customer journey, shifting their pain points and wants. Increasingly, hotels and restaurants have had to implement contactless solutions, rethink processes to comply with regulations and new hygiene expectations, and even change the means and channels where they reach customers.
Hotel Consultant, Are Morch contends that, above all, digital transformation for hospitality needs to focus on differentiation and cost-effectiveness, as outlined in his 7-step approach to the process. As a brief summary, he recommends creating a framework where current processes are looked into and understood, while also anticipating future needs before choosing a platform to support the transformation. According to Morch, technology should help employees perform their jobs better and, for that, it is necessary to get their buy-in, as well as to improve the guest experience and encourage them to book directly. Constant training is needed to keep employees up to date on the latest features and to ensure they make the best out of the technology, while also focusing on compliance and data security practices that must be maintained at all costs. Finally, he states that the process of transformation is a slow one and flexibility is needed to adapt to changes as they come. For him, looking at what competitors are doing can be a way to learn from their mistakes and save yourself some time and money, but also to ensure differentiation amongst offerings.
The goal for digital transformation in hospitality is to be ever-present where our guests are, whilst making the most of it for our internal efficiencies as well. The level of automation in which processes are taken over by technology is entirely up to each operator or chain, in the case of corporate-mandated changes, and goes hand-in-hand with the identity and offerings of each in order to elevate quality and productivity.
Digital Transformation isn’t a completely new process, in fact, it is merely the normal evolution of businesses taking the next technological step in search of better efficiencies and more effective solutions to customer problems and needs. As it is not a fad or just about having the latest shiny object, it will get to a point where companies reluctant to upgrade will be left behind and struggle to keep and gain market share. Customer service, as well as staff workload, will become affected, making it difficult to stay competitive. Additionally, it can also mean fewer avenues for product diversification and leave the business vulnerable to unpredictable events, just as we have seen happen during the COVID-19 pandemic.