Technology in Hospitality: 20 Trends Shaping the Industry
By Jordan Hollander
Last updated December 02, 2022
6 min read
What will the next few years of innovation look like in the hotel industry? With so much innovation and change in the hospitality space, it can be difficult to decide what new software to purchase or where to allocate budget. Although the industry changes rapidly, it’s clear that a few key trends are driving hotels forward. In this article, we’ll walk you through 17 trends that are relevant to hotels of all shapes and sizes. Some trends, like the shift toward a mobile-first and cashless experience, transcend the hotel industry. Other trends, like mixed-use spaces and vacation rental marketplaces, spotlight the blurring of lines between short-term rentals, hotels, work space, and residential properties.
1. Renewable Energy
The travel industry is a big producer of emissions, so guests and hoteliers are looking for ways to minimize their carbon footprints. Hotels are adopting a variety of sustainable practices, such as installing solar panels on-site, switching to energy-efficient lighting, tapping energy management systems or leveraging thermal heat pumps. And a few net-zero and carbon neutral hotels are going all-in on renewable energy, with these hotels producing at least as much energy as they consume.
2. Digital cashless tipping
Fewer guests are carrying cash, but service workers like valets, housekeepers, bartenders, and bell staff still expect and deserve tips. The solution? Digital tipping apps that allow guests to leave tips via credit cards or other digital payment methods. By scanning a QR code or clicking a link, guests can access the platform, and the platform handles tipping employees out.
3. Contactless Check-in
The pandemic expedited the industry’s shift toward contactless check-in, as hotels sought solutions for guests and employees who wanted to minimize face-to-face contact. But this trend is here to stay, as both guests and hoteliers can benefit from faster and more convenient check-in processes via mobile apps and digital room keys or self-service check-in kiosks that scan IDs and dispense room keys.
4. Labor Shortage (and Management Tech)
Another trend that was born of the pandemic is the industry-wide labor shortage; many hotels laid off staff in order to survive the pandemic but struggle to re-hire for those positions. As a result, many hotels must find ways to uphold the same level of guest service with fewer staff members. Departments have consolidated, labor management technology and automation has become more impactful, and hotels have added compelling perks like sign-on bonuses in an effort to attract candidates.
5. Artificial Intelligence (A.I.)
AI might sound like science fiction, but it can actually help you achieve goals like increasing guest satisfaction, boosting RevPAR, and cutting costs. Various hotel industry software now leverages artificial intelligence to provide rate recommendations, predict demand, deploy special offers on your website, schedule staff, perform concierge duties, and more.
6. Cloud Computing
For decades, hotel software was installed on-premise, on the hard drives of computers behind the front desk or in the back offices. But in recent years, the limitations of these legacy systems became more obvious, like how they cannot easily support remote work and collaboration or install updates in real-time. Thus the shift toward cloud computing: hoteliers increasingly choose software that is based in the cloud, which means employees can log in from any internet browser and the software is always the latest version.
7. Mobile Payments and Digital Wallets
Not only do fewer guests have cash in their wallets, fewer guests want to pull out their wallets at all. In all industries, consumer payment preferences have shifted toward mobile payments and digital wallets like ApplePay and GooglePay.
8. New Social Media Platforms (like Tiktok)
Social media isn’t limited to Facebook and Instagram anymore; newer platforms like Snapchat and Tiktok have swiftly surged in popularity to become some of the world’s biggest names in social media and entertainment. Hotel brands can strengthen their relationships with guests and even engage new, younger audiences by expanding their social media strategies to include these channels.
9. Next Gen Hotel Management Companies and Models
With differentiating factors like leaner teams, innovative technology, and social media savvy, the next generation of hotel management companies is giving legacy players the run for their money. Groups like Life House and OYO are reimagining the traditional hotel operating model to provide more compelling results for owners and better service for guests.
10. Mixed-Use Spaces
In the last five years, we’ve seen creative combinations of space become more common. For example, companies like Sonder and Placemakr operate de facto hotels inside traditional apartment buildings. And some hotel groups are repurposing lobby or meeting space as co-working space.
11. Vacation Rental Marketplaces
Vacation rentals are no longer a niche; they’re fully mainstream now. Sites like Airbnb and Vrbo, which, compared to giants like Expedia and Booking.com, originally catered to a relatively small segment of vacation rental fans, have skyrocketed in popularity. In fact, hotels are even experimenting with listings on these sites because the traffic is so significant and valuable.
12. Big Data and Analytics
Hotel systems generate a lot of data, from reservation data in your PMS to order data in your POS to email engagement in your CRM system. But what do you do with all this data, and how can you distill it into actionable insights? Reporting functions within your software (or standalone business intelligence tools) can provide the analytical muscle necessary to make sense of this big data. For instance, you can turn all of your email engagement data into a nice dashboard that shows which email campaigns garner the highest conversion rates.
13. Evolving Booking Patterns and New Consumer Behavior
You’ve probably noticed that one of the biggest macro-trends is that consumers are using their mobile devices for nearly everything, and the hotel booking process is no exception. Historically, guests may have shopped on mobile but booked on desktop, but today’s guests are happy to finish their booking on mobile - as long as your website is mobile-optimized. A slew of vendors and applications have popped up to help you make your website more mobile-friendly, add mobile payment options, and even create your own hotel mobile app.
14. Mobile Key
Why make guests carry around an easy-to-lose plastic room key when their smartphones can act as room keys? Using secure Bluetooth technology, hotels can let guests unlock their guestroom doors with a mobile “key” which is less likely to get lost and never gets demagnetized. The Bluetooth-enable locks are usually quite easy to install, and they can deliver a nice boost in guest satisfaction and a positive return on investment.
15. BYOD and Streaming to Hospitality TVs
The 21st-century version of pay-per-view and cable is BYO streaming. Guests already have a favorite streaming service – all your hotel tv needs to provide is a place for them to log in and watch. Smart TVs with streaming apps are the next essential amenity in hotel rooms so that guests aren’t forced to watch Netflix on their laptops. Instead, allow guests to access their own streaming accounts on their in-room TV for an optimal viewing experience.
16. Mobile Guest Journeys
After booking their reservations on mobile, how can guests continue their experience on their smartphones? Hoteliers are exploring creative ways to keep guests engaged pre-arrival through after check-out. For example, guests could download your hotel app (or access a web-based app) to book restaurant or spa reservations and learn about your amenities. Or you could send push notifications or text messages with important pre-stay reminders or mid-stay pulse checks.
As hoteliers use more and more software applications, these systems must communicate with each other in order to deliver maximum value. APIs, or application programming interfaces, make such collaboration possible. For instance, your property management system might integrate with your restaurant’s point-of-sale system via an API.
18. Privacy & Cybersecurity
Hotels are a prime target for hackers. “Only about 25% of all U.S. businesses, including hotel operators, are fully compliant with current data security best practices. That means that three out of four are not and are potential disasters waiting to happen,” reported one cybersecurity expert.
Numerous high-profile malware attacks on the hotel industry have led to hundreds of millions of guests’ data being compromised and millions of dollars in damage. Just this February, MGM Resorts revealed they were the target of a massive data breach that compromised personal information for more than 10.6 million guests. Files leaked in the MGM attack included information on celebrities, chief executives of technology companies, reporters and government officials, according to Skift.
With this trend on the rise, hotels are being forced to get smart about security. Property owners must do their research in selecting tech tools that provide multilayer security, data protection, secure transactions, and compliance with international payment and data privacy standards. Hotels must regularly host training to their staff on the proper way to handle personal information, comply with privacy regulations such as the GDPR, and change their access credentials regularly. The many tech innovations we see penetrating the market require constant vigilance of cybersecurity best practices, regular updates to security software, and dedication to routine testing and threat assessment.
19. Distribution Wars
Hotels are getting better at capturing direct bookings. Hotel tech like direct booking platforms, metasearch ad managers, and messaging integrations help properties draw more visitors to their site and convert more direct bookings, circumventing the high OTA commissions in the process. Direct booking tools that connect a property’s PMS, parity, behavioral and demographic data across the entire booking journey has put hotels on even footing with OTAs when it comes to winning bookings.
Secondly, Google has entered the travel market in a big way. Google has expanded from traditional AdWords to include hotels everywhere via its Hotel Ads product. Google has historically been the source for much of OTAs inbound demand, and now that the platform is a direct competitor, OTAs are vulnerable unless they pay billions of dollars each year to Google to ensure they show up high in search results and get clicks from travel planners. Free traffic is “shrinking all the time”, Expedia CEO Mark Okerstrom explained to analysts.
20. WiFi 6
5G may be getting all the buzz, but for property owners, WiFi 6 is much more relevant. WiFi 6 is the term used to describe the next iteration of Wifi, a faster, more efficient connection enabled through new technologies. WiFi 6 is about 30% faster than our current WiFi. This might not sound that impressive at first glance, but considering how many devices we’re adding to our WiFi networks, the increase in speed is dramatic.
Like 5G, WiFi 6 will have obvious implications for guests who use their smartphones to book and manage their stay. But beyond the guest experience, hotels can take advantage of faster WiFi to power all those streaming, tablet, and voice-activated devices. With WiFi 6, your property can leverage in-room technology to provide better service, driving positive guest reviews and repeat business. Smart thermostats, smart speakers, and smart locks will all perform better with the adoption of WiFi 6 over the next five years.
Which trends are most impactful to your hotel? Which trends have you already noticed? By keeping these 17 trends in mind, you can set your hotel up for success in the years to come.