Digital transformation is changing how hospitality and leisure businesses operate. By adopting new technologies, digital transformation can help businesses with the following:
- Streamlining operational processes and systems
- Enhancing operational efficiency
- Reduce risk
- Improving data security
- Deliver inaccurate and timely reporting
- Maximising engagement with customers and improve the overall customer experience
This article explores the key challenges faced by businesses within the sector and strategies for successfully embracing technology and modernising operations.
Meeting guest expectations with modern technology
Over the past decade, customer expectations have grown. To meet their demand, hospitality and leisure providers, such as hotel chains, have modernized traditional systems and processes with innovative cloud technology. Key digital advancements, include:
- Mobile check-ins for guests
- AI-powered chatbots for instant customer support
- Smart apps for controlling room settings, such as temperature and lighting
- Tailored services based on previous bookings and preferences of returning guests
- Custom hotel apps providing AI-driven local recommendations for guests
- VR headsets offering immersive entertainment, such as music and games
While front-end technology advancements have been significant, back-end systems for staff operations often lag behind, impacting operational efficiency.
Challenges in achieving digital transformation
A Workday survey titled “Closing the acceleration gap: Toward sustainable digital transformation,” found that only 48% of hospitality leaders felt their key performance metrics reflected the digital era in which they’re currently operating. Additionally, only 47% believed they had the right tools to measure the performance of their products and services effectively.
The data suggests that businesses are still using insufficient tools and working towards KPIs which are unclear in a business climate that is rapidly changing and affected by economic uncertainty. Just 39% of hospitality leaders are confident in meeting their organisation’s digital transformation objectives.
A strategic and gradual approach to digital transformation
The hospitality sector’s flexibility during the pandemic demonstrated that digital adoption is not the issue unlike in other industries. In fact, the hospitality and leisure industry’s adaptability and quick digital deployments during the pandemic made it an impressive case study.
The issue perhaps lies in knowledge, planning and understanding of how to make such big transformational changes. Quite often, businesses get left behind as competitors gain a competitive edge by adopting digital transformation sooner rather than later.
For digital transformation to succeed, businesses must:
- Clearly define their business goals and strategies
- Identify necessary process changes and supporting technologies
- Plan effective change management to minimise disruption to staff and guests
Effective change management and planning
When new processes and technology impact staff, suppliers, and guests, successful digital transformation requires a strategic, phased approach. Developing a technology roadmap with clear milestones keeps projects on course and measurable. Aligning budgets, staffing plans, and infrastructure changes over time enables smoother adoption whilst reducing risk, minimising disruption, keeping stakeholders informed, and ensuring greater chance of success.
Employees are more likely to embrace new tools if they see them as helpful rather than a hindrance. Clear objectives and measurable outcomes, such as reducing front desk call volumes by 20% in a year, can help track progress and justify future investments.
Benefits of digital transformation
Many hospitality businesses are now prioritising investing in staff-facing technology, such as property and restaurant management systems.
These are technologies that cater to many inter-departmental operations, such as point of sale, housekeeping, customer relationship management, tracking of sellable and non-sellable stock, and reservations.
Businesses that embrace digital solutions often experience the following benefits:
- Reduced labour costs and increased capacity for higher value tasks
- Improved cashflow forecasting via systems that integrate finances and operational reporting
- Progress towards sustainability goals by reducing waste
- Enhanced data security and compliance via automated processes
In summary
Digital transformation in the hospitality and leisure industry is an ongoing process requiring thoughtful planning and strategic investment. By improving both guest-facing and staff-facing systems, businesses within the industry can achieve greater efficiency, enhanced customer experiences, and long-term growth. Adopting the right approach to modernisation can secure lasting success in a rapidly evolving sector.
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