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Evolving in the digital era: Tech investment priorities for hotels
Wednesday, 9th October 2019
Source : Expedia Group, Inc.

Hotels have been around for and will likely exist for millennia and with such certainty it can feel as if there isn’t a lot of urgency to do things differently.

But in today’s ever changing world where technology can make a would-be hotelier out of a homeowner, you can create the best guest experience but still get overlooked by travellers and outmanoeuvred by your competition.

While delivering an exceptional guest experience is table stakes, tech automation is becoming increasingly important in the lodging industry.

Technology can offer a key competitive advantage for those lodging providers who understand how they can transform their business by making technology investment a priority. However as technology evolves, constraints such as budget priorities, lack of tech integration, and complexity of usability can create barriers to entry for many hoteliers, particularly the smaller accommodation players.

According to a new survey of more than 1,200 hoteliers by Expedia Group, chain hotels1 are nearly twice as likely as small independent properties2 to prioritize technology investments when asked what they would do with their non-operating capital if they had to pick one thing to bet it all on.

Alternatively, small independent properties are 1.5 times as likely as chain hotels to prioritize room renovations when asked to select their top priority for capital expenditures outside of keeping the lights on – indicating a gap in technology investment strategies and priorities among different hotelier segments.

Technology has the power to level the playing field for hoteliers of all sizes, however nearly half of the small independent hotels surveyed indicate that technology investment decisions are based on affordability and value. In contrast, more than half of the chain hotels prioritize technology that seamlessly integrates with their existing systems.

While cost is a concern for all hoteliers, it’s the larger chain hotels that are planning to increase their tech budgets over the next two years. Their top motivations include improving employee productivity, revenue and the guest experience.

Technology providers in the lodging industry should seek to offer low cost and basic feature solutions that focus on a frictionless user experience for smaller hotels. At Expedia Group, we are focused on the success of all our partners and have invested over $1.6 billion in technology alone last year to help travellers find their perfect accommodation and also help our partners with easy to use revenue management, marketing, distribution, and guest management tools.

Research conducted by Abhijit Pal, Head of Research, Lodging Partner Services, Expedia Group

Methodology
The study polled 1,215 global hotelier participants in July 2019 for a choice-based study to determine how hotel properties are prioritizing their technology investment spend. The study leveraged Expedia Group’s global hotelier panel in order to compare technology spending between chain hotels and small independent properties. Chain hotels are classified as properties self-selected as part of a chain affiliation or group of properties with more than 100 rooms, while small independent properties are classified as properties with no chain affiliation and 100 rooms or less.

1 Chain properties: properties self-selected as part of a chain affiliation or group of properties with more than 100 rooms.
2 Small independent properties: independent properties with no chain affiliation and 100 rooms or less.

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