AI, Personalization & Data Analytics: A Deep Dive into Hospitality Investment Trends

Alison Guillot

Originally published on PhocusWire


The hospitality industry is constantly evolving to meet guest expectations, which are becoming more and more demanding. In 2024, travelers want speedy service, expanded amenities and immersive, memorable experiences. In practice, this means that hotels must personalize their offerings to match the individual wants and needs of the customer, while maintaining brand identity and keeping operating costs low. Additionally, the industry is currently facing a range of challenges, from a skilled labor shortage to technology fragmentation and rising costs of operation, making satisfying customers an even more formidable task.

Digital transformation is driving the future of the hospitality industry, allowing for the modification of business processes so that branded and independent hotels alike can appeal to the modern guest. From analyzing consumer behavior and creating effective digital marketing campaigns, to providing appealing retail offerings and seamless service, technology is key along every step of the way. That’s why Amadeus conducted the Travel Technology Investment Trends 2024 study, to find out how hospitality leaders are planning to invest, which new technologies they are most excited about, and how this will impact the industry as a whole.

What are the overall investment trends?

2024 is a year for investment with the vast majority of hoteliers planning to splash out on technology. 94% of IT decision makers in the hospitality industry are planning to put funding into their business this year. Not only are there clear signs of broad investment, but the increase in funding for technology is substantial. On average, hoteliers are planning a 16% increase in technology investment in the next 12 months, with 65% of the industry planning to expand investment by more than 10%. This increase is significant, showing that investment is an important part of many hospitality leaders’ current business strategy. Digital transformation, which requires attention and resources, is clearly at the top of the agenda.

Which new technologies are hoteliers investing in?

It’s positive to note that hoteliers are expanding investment, but which technologies are they investing in?

  • Digital Media: Our study revealed the average spend per property is $74,337, with the greatest focus of their campaigns being to target new segments of guests. Analyzing campaigns can also help companies identify where guests are currently searching and booking, which can help businesses make strategic decisions.
  • AI: Virtually all hoteliers (98%) recognize that AI has the potential to bring significant benefits to their businesses. Generative Artificial Intelligence (Generative AI), such as chatbots, was considered the most important technology in the next year by 37% of respondents. Hoteliers are hoping that the technology will help them identify and upsell opportunities to travelers at all stages of the booking process and create personalized experiences for guests.
  • Distribution Capabilities: Hoteliers are looking to increase bookings and brand awareness by making efficient use of different selling channels. Not only will technology allow them to manage 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 to centralize key insights, remove fragmentation, and identify challenges with business performance. AI has potential to perform a function here by effectively managing an organization’s data.

What’s driving this investment?

There are multiple reasons for the rise in investment. Regarding challenges, some hoteliers (43%) said they feel the need to improve operational efficiencies and service speed during busy periods. Data management was also named as a key challenge, with hoteliers feeling that data fragmentation (33%), data efficiency (32%) and data integrity (30%) are problems.  Additionally, the hospitality sector is facing staff shortages and a rising cost of operations. This may be driving them to invest in new technology such as automation which can help staff do their job more efficiently so they can spend their time on more complex tasks.

There are also many opportunities created by the potential of new technology. For example, hoteliers are looking towards energy efficient tech platforms in order to drive down environmental impact. They trust new software will give insight into the environmental and social impact of travel, and provide visibility on key sustainability indicators so consumers can make informed choices. Additionally, new AI capabilities are providing an opportunity for hoteliers to construct personalized offers which will help enhance the guest experience and increase revenue.

Why is this good for the sector – and consumers?

The investment figures for the hospitality sector compare favorably with other areas of the industry. For example, corporate travel managers plan to invest 13% more in technology than they did in 2023, while business travel agencies, online travel agencies and leisure travel agencies plan similar changes. This is notably less than the increase of 16% planned by hoteliers. The figure for the entire travel industry is 14%, showing that hospitality is ahead of the curve when it comes to investment. It’s apparent that the hospitality industry is not content with the status quo. Leaders are ambitious, ready to evolve their businesses, improve operations and their customer’s experience – and they are willing to put in significant investment to make this happen.

For travelers, this will translate over time into quicker and smoother service throughout their trip. AI generated personalized offers will elevate guest experiences, as they will be able to have more comprehensive and connected trips, with easy access to compelling offerings such as car hire, added excursions or specific room attributes. Other new capabilities will allow for quicker service time and a smoother booking process. These changes increase the opportunity for improved guest satisfaction and more memorable travel experiences.

Overall, it’s great to see that technology is a priority for the hospitality industry. The main goals across hotel brands and properties are to enhance revenue, drive efficiency and create the personalized, end-to-end experiences that modern guests expect. Hospitality providers can see huge potential for a more engaging customer experience as well as significant growth if they effectively prioritize their technology investment strategies now. Yet we must not forget that these technological innovations should be paired with the human connections that are at the core of hospitality to unlock elevated service levels and make travel better.


To understand the full scope of which hospitality technology investments are taking off in 2024, and why, download our report: Travel Technology Investment Trends 2024