Digital Transformation in Hospitality Sector: Enhancing Guest Engagement & Experience

By Mr Rahul Verma

We live in a digitised world that is very different from the past. Indian industries are at an advent of a great digital transformation which has not only disrupted the functioning of almost every sector providing hyper focused and personalised services but also equipped industries with tools that are beneficial, especially for the hospitality industry which is at the forefront of these changes. According to a report, the Indian online travel market, estimated at ₹1,519 billion in the fiscal year 2023, is projected to reach ₹2,491 billion by fiscal year 2026.

The Digital Transformation of the Traditional Hospitality Sector

Earlier, hospitality meant excellent service, deluxe rooms and fine dining. However, with the introduction & advancement of technology in the sector have led to defining “outstanding guest experience” in multi-faceted aspects. This means it includes customised services, convenience and tech-enabled exchanges. The hospitality industry, in its quest to cater the guests, utilises software solutions to ensure improved guest engagement and provide a more fulfilling experience. 65% of hoteliers are expected to invest more in Cloud based technology for ease of management, flexibility, and expandability. About half of all the online reservations involved mobile bookings highlighting the popular nature of guests accessing their accommodation and other services through mobile devices.

Digital transformation in hospitality is not just about deploying technology but utilising it tactically in order to improve every step of guest journey. Technology is entrenched into each stage; from booking channels and check-ins, to in-room experiences and post-stay interactions aimed at making it an unforgettable personalised experience for the guests.

The role of technology in enhancing guest experiences

Digital solutions enable hotels to personalise the guests stay and experience by processing the data and churning the trends in preferences. Assistance of this nature caters in identifying behaviours and trends which are often utilised to hyper-personalise the services such as:

• Preferred rooms
• Diet specifications
• Special amenities
• And additional services

Hotels can now offer seamless booking and check-in processes from the moment guests decide to book. They can use mobile apps or online platforms to make reservations quickly and easily. Digital check-in processes can also speed up arrival experiences and reduce wait times.

The IoT has also revolutionised the in-room experience like smart room technology controlling the temperature and lighting, entertainment systems, and more. This level of control increases comfort and satisfaction. The use of CRM (Customer Relationship Management) in the hospitality industry led to 27% improvement in customer retention showing how guest loyalty and personalised services are important. Revenue management systems increased revenue by about 5-10% on an average for properties that use optimised pricing strategies and demand forecasting. More than 80% of travellers feel that online reviews are critical in deciding places to stay, highlighting the relevance of the guest experience management platforms.

Hotels also use more immersive technological tools like Augmented Reality and Virtual Reality (VR) to provide guests with an immersive experience even before they arrive. VR tours offer them a sneak peek into rooms and facilities, allowing visitors to make more informed choices. AR-enabled experiences guide the visitors end-to-end allowing them to explore and engage more deeply with the property. In addition to this, chatbots and AI-powered assistants are becoming essential for answering guests’ questions quickly and efficiently. AI-driven chatbots and assistants can provide instant answers, recommend services, and even help with room service needs, enhancing their overall experience and reducing operational burden.

Possible Threats Posed by Technology in Hospitality

Despite the huge benefits of digitalization in the hospitality industry, it still poses some challenges. Privacy concerns, data security as well as striking a balance between technology and human interaction are major stumbling blocks that require careful manoeuvring. However, these challenges present opportunities for innovation. Blockchain to ensure secure data storage, strong cybersecurity measures, and finding out how to balance tech-driven and human-centric services are some of the areas where hotels can come up with innovative solutions leading the way.

Multiple changes are expected to engage the guests better in the future. Guest experiences will be defined by trends such as artificial intelligence integration, internet of things, and other developments in data analytics. Furthermore, there has been increasing popularity of contactless technologies particularly after COVID-19 pandemic. These technologies which include voice activated controls and mobile room keys as well as contactless payments will continue evolving to meet demand for safer and more convenient exchanges.

Services to enhance the guest experience are made possible with in-house technology, a trend which a lot of properties are seen undertaking. This allows a high level of data security as the personal information is stored in the property database. A dual benefit to the guests includes availing of various offers which are flashed on the application including the loyalty points which can be further availed for the discounts provided.

Studies indicate that in the next ten years, more than 70% of hotels will use Internet of Things to better their services for their guests. It is also estimated that about 40-50% of hotels and restaurants would adopt mobile POS systems to simplify transactions and improve on customer experience. The hospitality industry is expected to record yearly growth of 10-15% in digital transformation investments, thus highlighting the movement towards further technological integration. With one innovative tech solution at a time, the hospitality sector stands at the threshold of endless possibilities in the era of digital evolution.

(The author is Mr Rahul Verma – Director of Sales and Operations (KAARA Hotels and Resorts), and the views expressed in this article are his own)