Hotels Plan Record-High Technology Spending in 2016

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Largely in an effort to keep up with customer expectations, hotels are planning to add—and make better use of—a wide range of technologies. According to Hospitality Technology’s annual Lodging Technology Study, 54% of hotels plan to invest in more technology in 2016 than they did in prior years. This level of investment is projected to represent an average hotel technology budget that exceed 6% of revenue.

Supporting this investment in technology is the recent growth in the hotel sector. The study reported that occupancy for 2015 reached levels not seen since 1981. Likewise, the sector has a strong economic outlook for 2016.

Here are a few findings from the Lodging Technology Study.

Top Objectives for Technology in 2016

Survey participants were asked to evaluate a list of objectives and select any or all that are top priorities for them in 2016. Not surprisingly, almost every one of the areas relies on, or involves, Wi-Fi:

  • 62% – Payment and data security
  • 56% – Guest-room technology upgrades
  • 45% – Adding bandwidth
  • 43% – Leveraging mobile solutions for customer-facing applications
  • 32% – Developing a digital strategy
  • 31% – Migrating solutions to the cloud
  • 29% – Leveraging mobile solutions for employee-facing applications

The fact that adding bandwidth comes in a 56% is no surprise. That’s because much of the planned installation and upgrades to customer-facing technology and technology in guest rooms require an increase in bandwidth for most facilities.

Customer Facing Technology Rollouts

Rapidly escalating guest expectations is a huge challenge for the lodging industry. In fact, Survey respondents reported that 43% of them are focused squarely on meeting those expectations. Analysts predict that these expectations will continue to be a pain point moving forward.

Surprisingly, meeting guest expectations is a bigger problem than concerns that IT budgets are too small. Only 38% of respondents are focused on this issue. Perhaps part of the reason why fewer hoteliers are concerned about budget issues is because of the fact that nearly 50% of them say that measuring ROI is the number one challenge, coming in at 46%.

The survey also asked participants to rank the technology that they currently use, will be upgrading within the next 18 months, or don’t use but will be adding in the next 18 months. Here are the results:

  • 45% -Tablets at the front desk
  • 63% – Interactive digital signage
  • 54% – Location-based technology
  • 84% – Mobile app for customer use
  • 98% – Bandwidth in public spaces

True to the technology objectives for 2016, all of these technologies rely on an expanded, reliable, and secure Wi-Fi network.

Technology in the Guest Rooms

Keeping pace with increasing guest expectations, hoteliers are planning substantial increases in technology in the guest rooms. This makes sense if only because it is the place where guests spend most of their time.

Again, the survey asked participants to rank the technology that they currently use, will be upgrading within the next 18 months, or don’t use but will be adding in the next 18 months. Here are the results:

  • 89% – In-room bandwidth
  • 99% – Wireless Internet access
  • 49% – Mobile key
  • 57% – Room control devices
  • 56% – VoIP phone system
  • 20% – iPad/Tablet provided in guest-room

These survey results suggest that hotels are moving away from providing iPads or other tablets as an in-room amenity. Rather than provide the technology, the pattern is to enable it. That could mean tying in tablets to other existing amenities such as hotel-specific apps, location-based technology, and wireless Internet access.

The Underlying Importance of Wi-Fi

It’s interesting to note that a huge percentage of current and planned technologies rely partly or solely on a Wi-Fi infrastructure. Only 45% of hoteliers rank adding Wi-Fi bandwidth as a top objective for 2016. It remains to be seen whether they actually have enough bandwidth to support their technology expansion, or whether they will change their minds about the need for additional bandwidth.

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Mr. Fellah, is a Senior Analyst and founder of Maravedis with 20-year experience in the wireless industry. He authored various landmark reports on Wi-Fi, LTE, 4G and technology trends in various industries including retail, restaurant and hospitality. He is regularly asked to speak at leading wireless and marketing events and to contribute to various influential portals and magazines such as RCR Wireless, 4G 360, Rethink Wireless, The Mobile Network, Telecom Reseller to name a few. He is a Certified Wireless Network Administrator (CWNA) and Certified Wireless Technology Specialist (CWTS).

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