Hospitality is in the early stages of digital transformation, which the COVID-19 pandemic has accelerated. Independent properties, historically underinvested in technology compared to larger, institutionally-owned properties, are now looking to catch up.
According to a recent study, less than 2.5% of net room revenue is spent on technology in the hospitality industry, compared to the 4.2% average spend across other industries. However, this is starting to change as the industry adapts to the challenges of the pandemic. During 2022, 81% of hoteliers reported implementing and/or planning at least one major tech project.
The hospitality tech market's low adoption rates and fragmentation have positioned it for outsized growth in the coming years. Industry shocks from COVID-19 and labor shortages have catalyzed change and innovation as hotels look for new ways to improve efficiency and reduce costs.
Some areas where hotels invest in technology include contactless check-in and check-out, virtual concierge services, and automation of back-office tasks. These technologies improve the guest experience and help hotels reduce their reliance on labor and lower costs.
As the hospitality industry continues to recover from the impacts of COVID-19, technology will likely play an increasingly important role in how hotels operate. Independent properties, in particular, must invest in technology to remain competitive in an increasingly digital world.