Hotels Emerging to Next Generation with Tech

Justine Wong | 23 Dec 2022

Tourism is back and hotels are ready

The holiday season this year is bringing back the traveling trend. With loosened restrictions for inbound and outbound travelers, many are incredibly excited to spend their year-end leisure time in foreign scenery. Covid-19 has changed our lives more than we thought throughout these three years, evolving many industries' practices as well. In a good way, it has pushed many businesses to operate more innovatively to increase efficiency and remain competitive under economic downturn.

The market disruptor - Airbnb

Undoubtedly, the hospitality industry is one of the most distressed markets during the pandemic. Facing the challenges of a massive reduction of inbound guests, they had to shift marketing strategies to focusing on local guests instead.

But tough times always come with lucrative opportunities if we search for them. During the hard times, it is when PropTech kicks in to bring some innovative solutions for the industry. Airbnb was one of the early PropTech solutions in the hotel industry scene, and it is a market disruption engaging various property owners and potential users in an online platform, transacting services in a more efficient way and price. Though many places have yet to recognize and restrict Airbnb operations by specific laws, such as Thailand and Singapore, the business has spread rapidly with continuously rising globalization and technological development. It is incredibly convenient for users to search for a cozy place to rest in town without spending much on hotel accommodation. However, what short-term renters are concerned about the most is still one thing, safety. The place they rented is simply a house privately owned by an individual citizen, so it is less reliable than established hotel brands with controlled regulations.

Hotels are striving for next level

According to Maslow's hierarchy of needs theory, suppose we wish to satisfy one's fundamental safety needs. While hotels may have fulfilled the safe image of staying in, under the pandemic, safety is not only limited to a place with a high-security level anymore but also ensures a hygienic level to prevent the spread of viruses. In that case, people may turn back to hotels, which is also why hotels are still relatively competitive and not easily replaced by Airbnb.

To satisfy customers' needs and wants efficiently, technologies are implemented on a far-reaching level, from back-of-the-house to the front house of the hotel. Though hotels implemented service robots as early as the early 2000s in Housekeeping, F&B, and Front Office, and have been utilized wisely to replace essential human staff work and increase efficiency to ensure guest satisfaction, human staff still needed to be more critical.

However, the pandemic has encouraged many hotels to use contactless service as the mainstream method. Hotel automation solutions are now slowly replacing human staff in concierge, amenities delivery, luggage carrying, and butler services. They perform in a controlled manner with less error, especially in this hygiene-sensitive period; robots could relieve the concern of guests interacting with human staff. And most importantly, the new generation – Gen Z, becoming our new significant market segment, are living with technology in their daily lives and even embraced all-robots hotels, such as Henn-na Hotel in Nagasaki, Japan, more than any other generation.

PropTech is more than just tech

The hospitality industry adopted PropTech way earlier before noticing they are part of it. Hotels have adopted PropTech solutions in their traditional operation practices. Besides from service robots, Property Management Systems (PMS) and databases, such as OPERA, are used to track customers' preferences during the guest cycle and also manage hotel revenue and inventory, which has been used for decades in the majority of hotel chains already. Also, online hotel reservation distribution channels such as Hotels.com have been well-known and used by the public for years.

Nowadays, hotels continuously implement all kinds of PropTech solutions, from AI real-time HVAC systems to increase energy efficiency and annual saving up to 40%, most importantly ensuring that the clean tech helps control the in-house air quality and hygiene level. New booking engines such as Cloudbeds is also a rising star as cloud-based PMS and plays an intermediate role in helping hotels expand their market reach and grow revenue.

While hotels are also fundamentally real estate properties, they also share business opportunities outside hotel operations. Some hotels have started to turn their property into a co-living space business model during the epidemic virus to cope with the occupancy drop and market change. Focusing on local markets, hotels are not only limited to staycation packages but also to grab the relatively stable demand for residential properties, targeting the growing demand from students; co-living space would be an attractive accommodation choice for youngsters

The pandemic has boosted some technological and innovative hotel business model development and opened new market opportunities. Undoubtedly, hotels will continue to emerge with new service models and improve guests' satisfaction through innovative solutions. Next time on your holiday, you may try to discover some unrealized PropTech in the hotel, and they are beyond your expectations. ■

The Author

Justine Wong?is a final year student of Hospitality and Real Estate with?The Chinese University of Hong Kong. She is interested in exploring how the latest technologies can bring about novel customer experiences in the hospitality and real estate industry. Justine is a foodie and travel enthusiast, also a multilingual who is passionate in learning new languages and cultures.?

Linkedin: justine-wong-0121

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official position of Proptech Institute, including its directors, employees and affiliates.

?PropTech Institute | https://www.proptechinstitute.org/ | [email protected]