The hospitality sector is constantly evolving to meet increasingly demanding customer expectations. In 2024, travelers want fast service, expanded amenities and immersive, memorable experiences.
In practice, this means that hotels must personalize their offerings to meet the guest’s individual wants and needs, while preserving brand identity and keeping operating costs low. Additionally, the industry is currently facing a range of challenges, from a shortage of skilled labor to technological fragmentation and rising operating costs, making customer satisfaction even worse. more difficult.
Digital transformation is shaping the future of the hospitality sector, enabling the change of business processes so that both branded and independent hotels can attract the modern guest. From analyzing consumer behavior, to creating effective digital marketing campaigns, to providing compelling retail offers and seamless service, technology is essential every step of the way. This is why Amadeus led the Travel Technology Investment Trends 2024 study, to find out how hospitality executives plan to invest, what new technologies excite them most, and what impact it will have on the industry as a whole.
What are the general investment trends?
2024 is a year of investment, with the vast majority of hoteliers planning to focus on technology. Ninety-four percent of hospitality IT decision-makers plan to invest in their business this year. Not only are there clear signs of massive investment, but the increase in funding for technology is substantial.
On average, hoteliers expect a 16% increase in their technology investments over the next 12 months, with 65% of the industry planning to increase their investments by more than 10%. This increase is significant, demonstrating that investment is an important part of many hospitality executives’ current business strategy. Digital transformation, which requires attention and resources, is clearly at the top of the agenda.
What new technologies are hoteliers investing in?
It is positive to see that hoteliers are increasing their investments, but what technologies are they investing in?
- Digital Media: Our study found that the average spend per property is $74,337, with their campaigns primarily focused on new customer segments. Campaign analytics can also help businesses identify where customers are currently searching and booking, which can help them make strategic decisions.
- AI: Virtually all hoteliers (98%) recognize that artificial intelligence has the potential to bring significant benefits to their business. Generative artificial intelligence (generative AI), such as chatbots, was considered the most important technology next year by 37% of respondents. Hoteliers hope technology will help them identify and sell opportunities to travelers at all stages of the booking process and create personalized experiences for guests.
- Distribution Capabilities: Hoteliers seek to increase bookings and brand awareness by effectively utilizing different sales channels. Not only will technology allow them to run these channels faster and easier, but it will also help them reach new audiences in new markets.
- Data Analytics: Developments in data analytics and reporting are important for centralizing key information, removing fragmentation, and identifying challenges to business performance. AI has the potential to serve a function here by effectively managing an organization’s data.
What motivates this investment?
The reasons for the increase in investments are multiple. Regarding challenges, some hoteliers (43%) said they feel the need to improve operational efficiency and speed of service during peak periods. Data management was also cited as a major challenge, with hoteliers identifying data fragmentation (33%), data efficiency (32%) and data integrity (30%) as issues. Additionally, the hospitality sector is facing staff shortages and increasing operating costs. This may encourage them to invest in new technologies such as automation, which can help staff do their jobs more efficiently and spend their time on more complex tasks.
Many opportunities are also created by the potential of new technologies. For example, hoteliers are turning to energy-efficient technology platforms to reduce their environmental impact. They are confident that the new software will provide insight into the environmental and social impact of travel and provide visibility into key sustainability indicators so consumers can make informed choices. Additionally, new AI capabilities provide hoteliers with the ability to create personalized offers that will help improve the guest experience and increase revenue.
Why is this good for the industry – and for consumers?
Investment figures in the hospitality sector compare favorably to those in other areas of the industry. For example, corporate travel managers plan to invest 13% more in technology than in 2023, while corporate travel agencies, online travel agencies, and leisure travel agencies plan similar changes. This is significantly less than the 16% increase planned by hoteliers. The figure for the entire travel sector is 14%, showing that the hotel industry is ahead when it comes to investment. It’s clear that the hospitality industry is not content with the status quo. Leaders are ambitious, ready to scale their businesses, improve their operations and their customers’ experiences – and they are willing to invest significant sums to do it.
For travelers, this will translate over time into faster, smoother service throughout their journey. AI-generated personalized offers will improve guest experiences, as they will be able to experience more complete and connected trips, with easy access to exciting offers such as car rental, additional excursions or specific room attributes . Other new features will enable faster service time and a smoother booking process. These changes increase opportunities for improved customer satisfaction and more memorable travel experiences.
Overall, it’s great to see that technology is a priority for the hospitality industry. The primary goals for brands and hospitality properties are to increase revenue, increase efficiency and create the end-to-end personalized experiences that modern guests expect. Hospitality providers can see enormous potential for a more engaging guest experience as well as significant growth if they effectively prioritize their technology investment strategies now. Yet we must not forget that these technological innovations must be combined with the human connections that are at the heart of hospitality to unlock high levels of service and improve travel.
