Future of the Hotel Industry: 5 Hotel Digitalization Trends for 2021

We will highlight the main points Moritz von Petersdorf-Campen focused on with regards to hotel digitalization, and take a look at what this means for the future of the hotel industry.

At this year’s ITB Berlin Now travel industry conference, Moritz von Petersdorf-Campen presented the 5 hotel technology trends to look out for in 2021. Here's Moritz's run down of what to look out for in 2021 and beyond.

Trend 1: Hotel revenue management will change dramatically

The way hotel revenue managers forecast demand has been thrown into disarray since the beginning of the pandemic. As nothing like this has ever happened before, it’s almost impossible for them to judge the hotel’s demand in the next 3, 6, or 12 months. Before the pandemic, when things were generally more stable, forecasting was a relatively easy job, but the global pandemic has dramatically changed the future of the hotel industry.

There is now a demand for more accurate and realistic ways of forecasting guest behavior in unexpected events. Hotel revenue managers used to make educated guesses about future demand, relying on legacy data of seasonal demand, competitor price changes, and the calendar of local events. The pandemic has shown there’s a need for a more sophisticated approach to forecasting in the hospitality industry.

Solutions that aggregate multiple key data points that determine hotel demand from a number of hotels are now becoming more useful for hotel companies and this trend is set to continue in the future. Hotel companies can cross-reference different data points, see data sets from different regions, hotel types, or seasons, and therefore forecast much more accurately than they could before the pandemic. These solutions will ultimately reduce revenue loss and enable hotels to function much more efficiently—a welcome change after the great losses the industry has seen during the pandemic.

As Moritz says, “I think this is changing now dramatically because there are new software solutions out there that aggregate this data across multiple hotels. So, take HQ revenue from Berlin, for instance. They’re doing exactly that. They’re taking data from different hotels in one city, putting it together on a daily basis so you get an overview of the overall demand for a given market.”

Trend 2: Hotel room phone systems will move to cloud-based solutions

Moritz explained the second trend by talking about his own experience with customers: “Let me tell you a story about a hotel here in Berlin that I got to visit roughly two years ago. He recently invested in a large refurbishment and while doing this, he also invested in a new PBX, a new hotel telephone server plus software. That cost him roughly €25,000 and he paid another €15,000 for the phones and then, obviously, the recurrent fees that come with that. And he was happy with that investment. He was asking himself, “well, do I still need a phone?” But he’s got a four-star hotel, services like room service, etc., to sell, he wanted the guests to be able to talk to reception. And he still thought it’s a good idea, the hotel classification required it and so, he made the investment.”

At a time when the future of the hotel industry is going through massive changes, it’s important to see how legacy standards in the hotel industry can be upgraded and have their costs scaled down. Telephone systems can cost hotels a lot of money, but they are a necessity for both the star rating and for a well-functioning hotel that relies on internal calls. However, with affordable international roaming costs now the norm, guests are making external calls from their room less than ever before, so hotels miss out on this opportunity to make a return on their investment. The result is that legacy hotel telephone systems have little to no ROI value in the modern hotel industry.

Moritz’s answer is cloud-based telephone systems, much like SuitePad’s very own SuitePad Phone. By migrating telephone services to a cloud-based system, hotel businesses can cut down significantly on the costs of installing, maintaining, and upgrading old-fashioned hotel telephone systems.

“There are many cloud-hosted systems out there these days that hotels can easily use to connect their network to this cloud-hosted system so that their back-office phones and the phones in the guest rooms are able to connect to this directly. And the amount of money that hotels have to pay for this system is a fraction of what you need to pay for a PBX that you would purchase and then have to purchase the phones on top of that and run it like this. So, I believe that the cost advantages of cloud-hosted telephone solutions are just going to be too big to be ignored by the hospitality industry going forward.”

Trend 3: Modern digital room keys will end the need for hotel apps

One of the saving graces for hotel apps is their digital room key functionality. This is one of the main incentives that hotel guests have for downloading hotel apps—they’re required to do so in order to get into their rooms! But as more and more digital room key solutions come to the market, there will be more simple and convenient ways for people to house their digital room keys on their mobile devices. For example, with Google or Apple wallet functionalities. As manufacturers look for ways to make accessing digital room keys more convenient, it’s likely that the big guns in tech will take the opportunity to provide this capability.

Without the need to download a hotel app to use the room key functionality, download rates will continue to decrease. As a result, hotel businesses will struggle to reach their guests through hotel apps simply because fewer guests are downloading them because there will be more convenient options out there.

Here’s what Moritz had to say in his presentation at the ITB conference: “there are fewer reasons to download a hotel app. There are already, in many cases, not many good reasons to download hotel apps and the download rates are already low. But that will lead to even more challenging download rates for hotel apps. And hence, I believe, that if you’re not one of the largest companies in our industry, will probably not be the best investments”

Trend 4: Quality in-room entertainment will be more important than ever before

Seamlessness is one of the major technology trends of our age. Being able to listen to the same Spotify playlist or podcast by just picking up where you left off on a different device has become the norm. We’re casting to the TV, consuming media at our own pace, and constantly being suggested different TV shows. The digitalization of multimedia is a far cry from days when TV was just a few channels, and if you missed a show, you missed it forever!

But, many hotels have failed to keep up with the multimedia digital revolution. Cable TV might be a standard, but for many guests, that’s so 1995! Modern guests want to pick up where they left off with their favorite show on Netflix on the hotel room TV, or continue their favorite podcast through the hotel’s in-room speaker system. More and more hotels are making this realization and adding devices such as Bluetooth speakers to hotel rooms, but more can be done to create a seamless experience for guests. Over the next five years, hoteliers will greatly improve the seamlessness of their multimedia offering, giving guests more of what they want when they’re relaxing in their hotel rooms.

Moritz has a vision for the future of in-room entertainment in the hotel industry: “I have an Alexa at home, I can stream my content to my TV. These things are happening at home, but usually, they are not happening in the hotel room. So, there’s a gap between the guest living room and the hotel room. But also, with the pandemic, I believe that hotel rooms are becoming somewhat of a safe haven for guests. Instead of going to the movies, which is not possible at the moment, or going to a fancy restaurant, which is hardly possible these days, guests will spend more time in their hotel rooms, watching the movies that they want to watch or ordering in-room dining. Guests will spend more time in the room and hence, I believe hotels will need to provide a higher standard of entertainment within the hotel room in the future.”

Trend 5: Guest safety is key and will lead to a quicker rebound of the industry!

The pandemic has shaped the hotel industry in a way that will last for years for both hoteliers and guests. It’s shown just how vulnerable humanity is and just how easily bacteria and viruses can spread—even once COVID-19 is gone. For these reasons, hotels will need to ensure more provisions are in place to offer guests the level of protection and safety they’ve come to expect.

Recent data from Deloitte Digital indicates that 84% of hotel guests would like control of their room cleaning, 80% would like to have remote check-in and -out, 70% want hand sanitizer at all hotel entrances, and 81% think hotels should send follow-ups on health concerns that occurred during their visit.

Digitalization can help in a number of ways with ensuring guests feel safer during their stay. For example, programs that can track guest data can discern what caused a guest to become ill or to whom they may have spread an illness. As busy places with people coming and going, hotels have always been hotspots for disease transmission, so using digital technology to stop these issues before an outbreak occurs is vital.

Similarly, digital technology can give people more control over the level of safety they experience at a hotel. For example, guests could choose whether they want room cleaning services, and what level of cleaning they want. Some guests may want to forgo room cleaning for the duration of their stay to reduce the number of people they come into contact with while others may see additional cleaning as a positive attribute. Solutions such as SuitePad’s Green Option enable hoteliers to offer their guests a higher level of control over their room cleaning schedule, allowing them to make these valuable decisions for themselves.

On the subject of guest safety, Moritz said: “In the past, there were fingerprints on the guest directories, these days it’s more about viruses on the remote control or the guest directories. So, that can be taken away and replaced with a centralized digital device such as an in-room tablet. Additionally, with regards to having the choice of whether you want to have your room cleaned or not, the green option comes to mind. And you can use that through our system or also through other ways, where you can basically ask the guest, “Hey, would you like us to skip your daily housekeeping and only have your room cleaned every second day? Or not cleaned at all while the guest is there?” That’s not only good for the environment, that’s not only good because of the pandemic, but it’s also good for the hoteliers pocket because you have a very decent chance to save money in such a scenario. I believe as there are so many trends, sustainability, the trend of perceived guest safety, plus the need to save costs these days, that these types of features will actually last throughout the pandemic and is important for hoteliers going forward.”

The outlook for hotel digitalization

The pandemic has changed the hotel industry in many ways. While some may have thought it would set the hotel industry back, it’s actually highlighted just how necessary digitalization is for a successful and sustainable hotel business. In this blog post, we’ve highlighted how the future of the hotel industry will be shaped by digitalization, and how you, as a hotelier, will benefit from getting ahead of the curve when it comes to hotel digitalization.

If you’re looking for a digital solution to meet all your hotel needs that also evolve with changing guest expectations, look no further than SuitePad.

_{- Published on May 07, 2021}