Hotels to Increase Tech Spending in 2015

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With rising guest expectations as the key driver, hotels are increasing tech spending in 2015 with a focus on mobile engagement. That’s according to the results published in Hospitality Technology’s 2015 Lodging Technology Study.

The increasing investment in technology is evidence that hotels on every tier—economy, midscale, upscale, and luxury—have recognized the importance of providing guest-centric solutions that leverage the growing use of mobile devices. They know that mobile devices have become an important part of their guests’ lives. To give their guests a better experience during their stay, hotels are expanding opportunities for mobile engagement.

Meeting Guest Expectations is an Ongoing Challenge

In an effort to measure industry trends, the 2015 Lodging Technology Study asked respondents to identify one challenge that has the greatest impact on the success of their IT projects. For the third year in a row, escalating guest expectations took the top spot.

Unsurprisingly, 29% of respondents believe that guests expect greater technology advances than hotels can reasonably keep pace with. This concern edged out worries about technology ROI (21%), the sufficiency of IT budgets (16%), company resistance to technology upgrades (15%), and lack of IT talent to make necessary improvements (11%).

To meet the challenge of escalating guest expectations, hotels have set clear priorities. Guestroom technology will command the bulk of technology budgets with 16.87% in 2015 compared to 15.27% in 2014. Adding networking, bandwidth, and connectivity takes the second largest chunk of the technology budget with 14.59% in 2015, dropping from 15.25% in 2014.

While its sure that hotels will go about spending their increased technology budget in different ways, it is clear that will focus heavily on engaging their guests through their mobile devices.

Top Priority: Customer-Facing Mobile Solutions

In 2015, 39.5% of respondents to the 2015 Lodging Technology Study reported that adding customer-facing mobile solutions will be their top priority. As expected, their focus will be on increasing mobile functionality and engagement.

Several of the larger chains have already announced current and future plans to leverage Wi-Fi technology, with wireless guestroom access being one of the top features. By early 2015, Starwood will allow customers to unlock doors using their mobile devices. This mobile room key will be available in all of its 150 Aloft Element and W Hotels. Hilton plans to offer mobile-enabled check-in, room selection, and mobile room key access across all of its 11 brands globally by 2016.

The study also revealed two emerging technologies—those that are not currently heavily used by hotels but 20% or more of respondents have plans to roll out in 2016. The first enhancement is adding tablets to the front desk to help guests access hotel services and amenities.

The second enhancement is deploying location-based technology such as beacons to support proximity marketing through mobile apps. This technology will enable hotels to create one-on-one relationships with guest based on their real-time activities and personal interests.

Second Priority: Adding In-Room Bandwidth Wireless Internet Access

Adding bandwidth came in a close second to the priority of customer-facing mobile solutions with 37.8% of the vote. Even though hotels will be spending slightly less on increasing bandwidth in 2015 as they did in 2014, it remains a significant priority. That’s because hotels need more bandwidth to support the growing demand on Wi-Fi that mobile initiatives bring.

In 2015, hotels will aggressively add in-room bandwidth for greater wireless access as well as additional bandwidth throughout their facilities. Facility-wide bandwidth increases are necessary because hotels are also adding employee-facing mobile applications and preparing for changes in their payment technology systems to become EMV-ready.

With their planned investments in bandwidth, hotels are shoring up their foundation to support a greater focus on mobile engagement.

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