How to Handle the IT Talent Gap in Travel and Hospitality in 2023

The travel and hospitality industry is a dynamic and highly competitive landscape, encompassing various segments like airlines, hotels, and online travel agencies. This vibrant sector is driven by pricing, convenience, service quality, and brand reputation. To stay ahead, businesses need to address two vital factors that have significantly impacted the industry:

1. Technological advancements: The rapid rise of technology has intensified competition within the industry, providing consumers with numerous choices and easy access to travel information.
2. COVID-19 pandemic's impact: Undoubtedly, the pandemic has not only significantly affected the travel industry financially but also changed consumers’ behavior. Trends that emerged from the pandemic, like the desire for self-service, mobile reservations, and contactless check-in/out emerged during the pandemic and are here to stay.

While many guests are eager to resume their travels, the hospitality industry must remain adaptable to meet evolving traveler expectations, optimize property operations, and explore avenues for revenue recovery. In the post-COVID-19 era, companies require flexibility and elasticity across budgeting, operations, and staffing.

Moreover, the increasing reliance on technology helps organizations collaborate more effectively and boost operational efficiencies, but it also demands specialized expertise in IT, data management, engineering, and security, skill sets that are currently in short supply.

In 2022, the tech industry witnessed a significant number of layoffs. However, due to the substantial talent gap, approximately 80% of tech workers in North America who were affected successfully secured new positions within three months, as reported by the McKinsey Global Institute. Additionally, the number of new tech job postings has far exceeded the number of workers who were laid off.

Businesses must not only manage the massive talent shortage but navigate the trend of investing ahead of revenue and adhering to lean budgeting. According to a Skift and AWS survey, 72.3% of travel executives agree that digital transformation is "very important" to their business. Still, only 37.6% believe their business is ahead of the curve.

Addressing the talent gap and investing in digital transformation is critical. If you consider your company to be among that 37.6%, here are the key areas of investment you should consider accelerating for your travel and hospitality business in 2023:

1. Artificial Intelligence Is the New Black

The industry’s rapidly changing customer journey has pushed companies to streamline and reorganize services. Consider improving customer service and travelers’ experiences by implementing AI/ML-driven booking and reservations systems, GDS, revenue management, or hospitality systems such as PMS and HMS. AI and ML allow you to gain information about your customers and their preferences automatically and make predictions, which makes them the most reasonable investment this year.

According to a McKinsey survey, right before the pandemic two-thirds of organizations were piloting the concept of business automation, compared to 57% in 2018. A separate senior-level executive’s global survey found that 67% of executives had accelerated automation and AI deployment during the pandemic. And a Forbes pool highlights that in 2023, over half of businesses already use artificial intelligence for cybersecurity and fraud management.

2. Digital Transformations Can Preserve Resilience

To preserve resilience, companies should invest in digital transformations, legacy optimizations, and cloud migration. While the going-digital concept is not new, the pandemic has accelerated the adoption of digital technologies by several years, serving as a wake-up call for the industry.

Despite ongoing economic challenges, travel is experiencing a budgetary increase as consumers forge ahead with their vacation plans. The industry has already regained 95% of its 2019 activity, and it is projected that the remaining 5% contribution to global GDP will be recovered by the end of 2023.

Although travel is back on the menu for many guests, the industry must continue adapting to meet evolving customer expectations, optimize property operations, and explore strategies for revenue recovery.

According to a Skift report, 57% of professionals in the travel industry stated that Covid-19 prompted their companies to undergo a digital transformation. This umbrella term encompasses various critical aspects, such as legacy modernization and systems consolidation. Integrating multiple systems emerges as a significant challenge for large companies, as disconnected systems can lead to data loss, hampering complex forecasting, impeding valuable insights, and complicating migrations and data analysis.

3. Scale to Reduce Uncertainty

In the post-Covid economy, team scaling can be a hefty challenge, especially for companies that experienced an outflow of professionals or a lack of dedicated in-house IT teams to implement new solutions and projects. A flexible approach to staffing, leveraging the professional assistance of IT vendors can be beneficial.

Gartner's analysis of future work trends found that, in the transition from designing for efficiency to creating a team for resilience, 55% of organizational redesigns focused on role and workflow specification to increase efficiency. This approach resulted in reduced flexibility and an inability to react to disruptions in the market. Travel companies need to increase agility, not decrease dexterity, with vendors to become more flexible and responsive.

Choosing an IT Vendor to Address the Tech Talent Shortage in the Industry

When faced with the challenge of bridging the tech talent gap in the travel industry, it is essential to carefully evaluate IT vendors based on specific criteria. By considering these factors and highlighting their competencies and resources, you can confidently select the right vendor for your needs.

Let us explore the key characteristics that should be at the forefront of your search:

1. Operational Flexibility

The ideal vendor should offer flexibility across outsourcing areas, accommodating various operational models, such as fixed price or time and material contracts. Geographical flexibility is also valuable, allowing for distributed team models that respond swiftly to market changes and align processes with your business needs. Moreover, a vendor with access to engineers and managers from different locations provides budgeting flexibility and streamlines recruitment processes in today's IT talent shortage.

2. Relevant Expertise

In a rapidly evolving industry, automation, AI/ML technologies, strong data protection, and cybersecurity measures are becoming increasingly vital in streamlining operations and delivering personalized solutions in the travel and hospitality industry. Ensure your vendor possesses relevant technical expertise in these areas, backed with a proven track record of successful projects and strong industry connections. Evaluate their portfolio to see if they have implemented AI and ML solutions that have benefited their clients.

3. Flexible Staffing

Partnering with a vendor that can rapidly scale teams in response to market challenges and changes is invaluable. Assess the vendor's talent pool and determine the level of expertise available, particularly at the seniority level required for your project. Analyze their recruitment capabilities and check if they have a sufficient talent pool in the desired technologies to ensure smooth project delivery.

4. Proven Domain Knowledge

Thoroughly review a vendor's corporate communication and industry-related content, such as case studies, white papers, blog posts, and participation in relevant events. Extensive domain expertise is reflected in partnerships and connections within the travel industry. Determine if the vendor relies on industry experts or if thought leaders are associated with the company, indicating their deep understanding of the domain.

5. Commitment to Quality

Evaluate the vendor's reputation by examining their repeat client rate and long-term business relationships. This provides insights into how satisfied their industry peers are with their services.

By carefully considering these criteria, you can confidently select an IT vendor that addresses the travel industry's tech talent shortage and meets your specific requirements.

Culture, Expertise, and Technology: How DataArt Makes Things Work

At DataArt, we believe that strong project management, combined with outstanding engineering talent, results in best-in-class services and delivery. In an increasingly competitive business landscape, efficiency and quality are paramount.

We have domain-specific experience in the travel and hospitality industry and have created technology competence centers with expert-level professionals, allowing us to implement proven solutions and customized approaches to domain-related challenges.

Our Approach

With complete coverage of cooperation models and services, from strategy consulting to product design and delivery, DataArt can address issues quickly and efficiently. Here is how we work:

We aim to help businesses decrease uncertainty, concentrate on their customers, and stay two steps ahead of the competition.

As an ideal vendor, DataArt is a technology partner that shares the same values, operates required technology, and provides high-quality resources, backed by hundreds of successful projects. The combination of these characteristics has enabled us to successfully engage with our partners and clients in the travel and hospitality industries.

If you find yourself short on resources or in need of additional domain expertise to tackle future projects, drop us a line and we will happily help you. At DataArt, we are dedicated to providing qualified experts and sound solutions that will help your business thrive. Let's collaborate to overcome the tech talent shortage and achieve your goals in the travel industry.

Originally published here.