It seems barely a week goes by without the opening of another grand new hotel somewhere in the UAE.
According to one recent report, more than 200 new hospitality and leisure-recreation projects are currently under construction across the country, with more than 80 of them slated to open during 2018.
It should come as little surprise then to learn that the hospitality industry is among the world’s largest and fastest-growing industries. But what many of us forget is that it encompasses much more than just hotels.
Indeed, the sector is also home to restaurants, private clubs, food and beverage eateries, travel service providers, traditional aggregators, global distribution systems, event managers, and a whole raft of other tourism-related businesses.
While it’s possible to group all these under the umbrella of hospitality, there are also many differences between them, with ownership and investment structures varying greatly by geography and segment.
But one thing they have in common is that they are all inherently service businesses, with the service provider — whether that be the brand owner or a franchisee operating under brand guidelines — forming an integral and inseparable part of the product offering.
For this reason, the satisfaction that guests and customers receive is directly impacted by the quality of the service delivery. Fundamentally, therefore, hospitality is the relationship process between a guest and a host.
And that relationship has the potential to be greatly enhanced by the numerous emerging technologies that are revolutionising the industry.
There can be no doubt that technology is becoming the key enabler in hospitality, with third platform technologies such as cloud, social, mobile, and big data analytics combining with innovation accelerators like robotics, artificial intelligence, and augmented reality to transform the industry.
The hospitality sector has been undergoing globalisation for some time already, through omni-directional cross-border investment and brand penetration, together with the internationalisation of travel destinations.
And while slowdowns in some regions are putting downward pressure on future growth prospects, aggregate global demand continues to grow.
Travellers now have much greater visibility of their choices across multifaceted dimensions of value such as price, performance, availability, and guest satisfaction.
The hospitality industry is undergoing unprecedented digital disruption, and the emergence of game-changing technologies is irrevocably altering the very way that business is conducted in the sector.
Customer engagement has become one of the key drivers in the hospitality industry, and as a result of the social media explosion, a new breed of confident, empowered, and savvy travellers is emerging.
Technology is also changing the customer experience and providing a way to engage customers at every level of the brand experience — from initial purchase through to the actual consumption of services, and even beyond.
Mobile technology is proving crucial to this transformation, facilitating consumer-to-brand interaction and providing endless opportunities for customisation, communication, promotion, and loyalty.
New technologies are also enabling customers to satisfy their need to purchase a particular service almost as soon as they become aware that this need exists.
Indeed, technology enables customers to instantly transact right when the demand occurs. This fundamental change to the hospitality business model obviously simplifies customers’ lives, but it also renders the traditional travel agency largely obsolete.
In this new environment, transactions can be executed everywhere (at home, on the go, at work, in leisure) and at any time, with each step of the cycle — ‘need’, ‘purchase’, ‘consumption’ — becoming more and more naturally integrated into the daily mental and physical routine of customers.
At the same time, the hospitality industry is also being disrupted by the emergence of the sharing economy, with the most obvious protagonist in this field being Airbnb.
Simply put, the sharing economy is a socioeconomic ecosystem that allows individuals or enterprises to grant temporary access to their under-utilised physical assets or human resources.
Consumers with available assets, such as an unused car or an empty spare room, can generate revenue by offering them to their peers through nontraditional channels, meaning that customers can be both service providers and consumers at the same time.
The sharing economy creates a peer-to-peer system with technology as the medium, and its presence is certain to shake up the industry as it becomes even more mainstream.
It will inevitably grow and may even coexist with traditional hospitality players, with each targeting different segments, catering to different needs, and, ultimately, thriving together.
One thing for certain is that it is no longer business as usual. The hospitality industry looks a lot different today than it did two years ago, and technology will ensure that it looks just as different again two years from now.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
