Investing in Innovation: Hoteliers’ Tech-Forward Approach to Enhancing the Guest Experience

Jennifer Axness

Originally published on Hospitality Net

By: Francisco Pérez-Lozao Rüter, President, Hospitality, Amadeus

Guests’ needs are evolving, and in 2024 they center around a desire for more personalized experiences, an interest in sustainable practices, and an expectation for a higher level of service that caters to their individual preferences. Although the industry faces many challenges from skilled labor shortages to technological fragmentation and escalating operations expenses, hoteliers must continuously innovate to meet travelers’ evolving needs by offering a wider range of amenities and experiences, faster service, and more personalized offerings based on each guest’s unique preferences.

For hoteliers, the ability to use technology to analyze consumer behavior, create effective marketing strategies and provide the most exceptional consumer experiences is critical. Recently, Amadeus conducted the Travel Technology Investment Trends 2024 study of global senior hospitality leaders to identify industry challenges and explore how hospitality leaders are planning for technology investment in 2024 to tackle these issues.

Technology-driven investment trends in hospitality

As 2024 progresses, the hospitality industry is adapting to guests’ growing expectations for personalized, sustainable, and high-quality service by prioritizing technology investments as a strategic response to these evolving needs. A remarkable 94% of IT decision-makers within the hospitality industry are planning for some sort of investment in technology over the following year. Hoteliers plan on a 16% increase in technology investment, with one out of five survey respondents planning to allocate over 20% more over the next 12 months than what they’d budgeted for 2023.

AI, data analytics and personalization: Key drivers 

Hoteliers are seeking to invest in technology that will not only drive revenue but will also allow them to offer products and personalized services to help set them apart from their competitive sets. Some of these key areas of investment include the following.

  • Digital media. All hoteliers, according to the survey, are devoting at least a portion of their budget to strategic digital media campaigns, with 34% spending $50-$100,000 per year on digital ads to attract guests, and over one-fifth (21%) exceeding $100,000. The primary objectives for these digital campaigns are to target new guest segments (41%), improve engagement (40%) and determine where guests are searching and booking (39%).
  • Artificial Intelligence (AI). Almost all hoteliers acknowledge the transformative potential of AI for their businesses, which could enable them to identify and offer upsell opportunities to guests (49%), offer more personalized experiences (46%), and use data to enhance organizational efficiency (44%). Over a third of respondents (37%) named Generative AI – the use of chatbots, for instance – the technology that was of most interest to them in 2024.
  • Distribution capabilities. Seeing AI as an effective tool to help diversify offers for travelers through better management of distribution channels, hoteliers are eager to expand guest services to include experiential stays (33%), car rental services (31%), and travel insurance (29%), catering to a broader range of traveler needs.
  • Data analytics. As the use of Business Intelligence continues to grow in 2024, hoteliers are seeking a competitive edge by using analytics to turn data into real, actionable insights. 29% of hoteliers expect that data analytics will be one of the most influential technologies for their operations over the next five years.

Challenges and opportunities: Navigating the 2024 hospitality landscape with technology

The hospitality industry continues to steer its course through a variety of challenges in 2024, with improving operational efficiencies during high-occupancy periods (43%), data fragmentation (33%), data efficiency (32%) and data integrity (30%) topping their lists. Staff shortages also continue to be a challenge, leading to heightened interest in automating processes to better serve guests’ needs – allowing staff to focus more on complex tasks rather than routine ones.

Many areas of opportunity also exist for hoteliers in 2024 including AI to help pinpoint and present upsell opportunities to travelers throughout the booking journey (49%) and its ability to help develop personalized experiences for guests (46%). With a commitment to minimizing the environmental impact of travel, hoteliers also look to technology solutions to reduce over-tourism through intelligent search optimization (91%), help improve transparent data reporting (87%), and provide insights as to the environmental consequences of different travel choices.

Hospitality: Leading technology investment 

Survey results show us that hoteliers are leading the hospitality industry in terms of technology investment in 2024; 16% are planning to increase tech spending over the next year, surpassing the industry average by 2% and exceeding corporate travel managers’ investment plans by three percentage points.

Hoteliers’ commitment to leveraging technology to overcome current challenges and enhance traveler experiences is clear, with travelers enjoying smoother, more efficient booking processes, quicker service times, and more highly personalized travel experiences because of it.

Hospitality is transforming, and it is encouraging to see that the industry is prioritizing technology to boost revenue, improve efficiency, and create the personalized experiences that today’s guests anticipate. It’s important to keep in mind, however, that in order to achieve superior customer service levels and enhance the travel experience, tech advancements should always be complemented by the personal touches that are so central to hospitality.

To find out more about the hospitality industry’s technology investment plans for 2024 and what drives those decisions, download our report: Travel Technology Investment Trends 2024.