What is digital transformation in hospitality?
November 16, 2021
The pandemic brought a rush of technological innovation and adoption that has been lifesaving for many hospitality businesses. As the dust starts to settle on the Covid crisis, operators are now taking a step back and starting to think about how technology can support and complement their business in the long run. As ex-operators, Vita Mojo always wants to keep a finger on the pulse of the industry.
We joined forces with Hospitality Mavericks and KAM Media to conduct in-depth research into the digital transformation of hospitality to understand how we can drive innovation while maintaining the human element at the core – improving the experience for employers, staff, and customers.
Where is hospitality on the road to digital transformation?
According to a study from Harvard University, hospitality is far behind other industries when it comes to digital transformation, a feeling echoed by operators, of which 73% agree.
Industries with rich heritages often struggle with major change and traditional ideologies can hinder the success of digitalisation. Leaders in industries that were early adopters of digital transformation put the tools in the hands of their employees. Getting your staff on board will not only ramp up productivity but increase the chance of success.
What are operators’ goals for digitalisation?
Our research shows that digital transformation within hospitality is happening, albeit slowly. Despite employees being credited for successful implementation of the digital tools, most adoption has been centred on the customer to ensure they have a good experience: 85% of operators see improving customer experience as a key goal for digitalisation. But, it’s the operational technology that has the most impact on saving time and money.
What’s holding operators back from digital transformation?
The biggest obstacles facing operators today in implementing a digital strategy comes down to budget and resources. While 60% of hospitality operators have a dedicated person responsible for their digital strategy, just 20% have a set budget. This lack of investment highlights that while operators recognise the benefits of digitalisation, it’s still not considered a core part of the wider business strategy.
Hospitality operators recognise the value of data but they’re struggling to use it
Customer and business data is one of the most valuable commodities for any business. While we found that operators are gathering data using digital tools and systems, they’re not capitalising on it. In fact, only one in five operators are maximising their customer data capture. Tapping into that resource will help operators target their customers with a better understanding of what they want.
“Customer data, when integrated and analysed, provides the intelligence that marketers need to drive short-term sales and the whole business needs to power brand development and build long-term business resilience. Investing in technology and the data it generates is a sound and measurable investment with an increasingly proven ROI. We’ve seen it in other industries but hospitality has been slow to recognise that we live in the era of personalisation and data enables us to deliver that.”
Victoria Searle, Founder, DataHawks
Is hospitality ready for digital transformation?
Senior leaders are simply not ready for the level of digitalisation now required. Many said they were too busy keeping their business open and operating to think about digitalising. Having said that, the pandemic has forced operators to accept that they can no longer put it off, meaning investing time and money.
“We have a lack of know-how and knowledge of digital in general. We are too busy with running the business to learn digital skills and we’re terrified of making mistakes.”
93% of operators plan to increase digital investment over the next three years
Despite hospitality being behind other industries, there’s a strong desire among operators to drive improvement and innovation. Investing in a strong digital strategy not only improves efficiency and reduces operational costs, it also provides invaluable insight into their customers and business.
No one could have predicted where the food and drink sector would be in 2021. Although it’s not been easy for hospitality, the pandemic has seen a rush of innovation with tech adoption skyrocketing. With restrictions easing, operators are starting to think about their digital strategies proactively rather than reactively.
Starting your journey towards digital transformation
Even with great technology, effective digital transformation requires a lot more than just turning it on. If the process is going to have a real impact on your business, the decision to implement any digital solution or new technology should be strategic, not reactive.
The digital transformation of hospitality is happening and it’s time to get on board.