Digitalization – Truth and/or Trend?

Patricia PetrinjakTourism Marketing
8 min read

What is digitization anyway?

Digitalization is a process that uses technology and data as a lever for further development. This process involves transforming internal business processes and operations, increased networking and interconnection of different systems.

Digitalization is not a process that is ingrained in only one aspect of our everyday lives. it completely transforms all social and economic aspects of life.

What exactly does digitalization have to do with hospitality and the travel industry?

Everything.

Since establishing the first reservation system for the Westin hotel in 1947, technology has become a central part of the hotel business. The pace of change continues to accelerate with the advancement of artificial intelligence (AI), thus expanding the possibilities of automated personalization.

But that does not mean that hospitality is using all the digitalization benefits – on the contrary. The majority of hoteliers have yet to use the potential of digitization fully. At the end of each year, hoteliers look back to find out what worked and what didn’t before the new season.

Understandably, 2021 was terrifying. All future successes will rely on new technologies that will be the trigger for innovation and growth.

Namely, the adoption of technology is completely changing hospitality and travel. With the age of digital transformation, hoteliers and vacation rentals are increasingly feeling the need to move business away from on-premise legacy infrastructure in favor of integrated and agile cloud-based systems.

According to an IBM report, 2 out of 3 organizations have started using cloud-based systems for pandemic-caused business activities, with 97% now using cloud technology. These scalable and flexible solutions empower long-term innovation and accelerate business growth.

New Era of Automation: Cloud-based and API-first

Digital transformation is the only trend in hospitality going on for years. However, it has been in focus only recently – blessed with a pandemic, unfortunately.

Most hoteliers and vacation rentals still do not use adequate modern technological solutions for quality management.

Managing guest base and reservations; providing an exceptional experience through all phases of the guest journey using a custom tech-stack is widely unused.

Digital transformation indirectly points out that for the most prominent hoteliers and small vacation rentals, operational processes are still defined by heavily outdated technology.

While in fact, the processes should be defined by the guest profile.

Traditional and on-premise property management systems in hotels, apartments, hostels, or campsites are unavailable to the changes and expectations that await hospitality and all those involved. The on-premise property management system has several shortcomings. Some of these are the unavailability of additional integrations. Each new adjustment – if even available, involves additional costs and equipment that usually lead to the interruption of part or all activities and are often charged extra.

Suppose you are not constantly physically present in your hotel, apartment, camp, or hostel. In that case, management is almost impossible because traditional on-premise systems are physically installed on every computer. Although access is possible from different locations, this usually requires additional technical settings.

Technology must serve you – the user, not the other way around.

Mysterious Cloud-Native Platforms

Cloud-based platforms and solutions are a modern approach to building and creating software applications that allow flexibility, scalability, and resilience.

Simplified, cloud-based software developers build applications accessible to almost everyone instead of traditional, legacy, and exclusively on-premise technologies.

Applications are created as a kind of Tetris microservices. More relaxed applications allow users, hoteliers, and vacation rentals to select services that meet their unique requirements.

Photo by Killian Cartignies on Unsplash

Simply put, no more – you can only use this and that channel manager. Or, no more – we don’t support merging with that accounting system you need.

In short, you reserve the right to control your own needs and desires.

Cloud-based solutions are very flexible and easy to update, efficiently communicate, and share data with other applications – with the highest data security standards. According to some data, by 2025, cloud-based platforms will serve as the basis for more than 95% of new digital initiatives – an increase of less than 40% in 2021.

The question arises – how can hoteliers adapt if the technology they rely on cannot?

Fortunately, the answer is simple.

The modular modern applications approach allows hoteliers and vacation rentals to customize and separate the functional parts of the application, allowing them to adapt to their needs quickly. Finally, hoteliers can choose a uniquely designed tech stack that can be easily, and as needed, repurposed to form new services and solutions, as building lego blocks. Add what you need, and remove the excess.

Digital Transformation Of Hospitality and Hotel Tech

When it comes to automation driven by artificial intelligence in business, there is a certain tension – for a reason. Regardless of automation and personalization, guests always want relevant communication and authentic service.

Digital transformation is not without challenges, such as:

Data collection: As many as 83% of hotels have trouble collecting accurate and precise data due to the outdated tech stack.

System integration: Limited data from third-party sources, limited property management systems that work best for themselves – but not for you. The data remains incomplete, and the same actions must continuously be repeated – often manually.

Multichannel communication: It is increasingly challenging to manage guests communicating through multiple channels.

Therefore, it is not surprising that 40% of hotels do not apply personalized automation due to a lack of knowledge.

Photo by Jonathan Chng on Unsplash

Yet, even with the challenges, the benefits of digitization are manifold:

Improved guest experience: From more relevant marketing offers to a more personalized stay experience, artificial intelligence-driven technologies can enhance any interaction with guests.

Increased profitability: Adjusting ideal offers to guests positively affects the conversion rate. Better matching the price with the guest segment makes each reservation more cost-effective.

Reduced operating costs: Automation saves money in various ways. Self-service tools reduce front desk work; implementing text messaging enables guests to communicate more effectively with staff,

Extended stay: Staff is more productive – and happier – when they don’t have to do tedious tasks like manual data entry. Automated tools simplify the performance of such repetitive tasks by allowing staff to dedicate themselves to guests.

Technology is the key to success in hospitality.

We are aware of the burning problem of the hotel industry – quality staff.

Technology and digitalization of hospitality are the only way to return the focus to guests and offerings instead of process management. But the imperative to invest and use digitization is also accelerating.

With workforce shortage and changed guest expectations, digitalization has the potential to set your hotel and apartments in a much more competitive position, increasing productivity and operational efficiency.

There are frequent discussions about man’s role in hospitality and travel.

But if your property management system doesn’t recognize a guest who returned because you have a new person at the front desk? 👀

Man is undoubtedly the key to success in hospitality. But not in the way we are used to.

The man, the manager who controls technological opportunities, and adapts digitalization to his guests, is the key to success in hospitality.

Out-of-the-box thinking about simplifying, speeding up, optimizing, and automating processes with technology will directly affect the guest.

Truth and/or Trend?

No. Digitalization is a necessity.

Because for the travel industry and hospitality, digitalization, applications, mobile solutions, and automation opens up unlimited possibilities. Features such as flawless property management upgrades, up-to-date systems, long-term scalability, precision and functionality, and increased productivity – for an era of exceptional and quality customer service.

Best of all?

The price you will pay for digitizing your business according to your own needs is far less than your resistance price.

While no one can predict the future, technology and digitalization will inevitably continue to be a catalyst for change in hotels and hospitality.

Rentlio – digitalizing hospitality since 2014.

We dare to say that since its founding, Rentlio has challenged the status quo that has dominated Croatian hospitality for a very long time. Rentlio is present in over 40 countries around the world. Through Rentlio, more than seven thousand accommodation units are managed.

We sincerely believe in the vision of advanced cloud technology that optimizes operational processes. At the same time, its openness to 3rd party integrations allows its users to use tech stacks tailored to specific needs.

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Although she would love to read all day, Patricia enjoys writing for Rentlio. Constantly trying to adapt to the Dalmatian way of life, you can find her walking her two dogs and/or reading on most evenings 📚