Booming Smart Hospitality Market
Smart Hospitality refers to the usage of technology to enhance the stay experience of visitors/guests/ customers. A smart hotel is one that employs internet-connected devices, also known as the Internet of Things (IoT), to communicate. These devices are interconnected and enable control from a single point at any time. A customer staying at a smart hotel, for instance, can operate their room using their smart devices. This includes remotely open or closes the doors, windows, controlling their room temperature, and lightning of the room. Further, such operations are more sustainable from the perspective of energy saving. For example, central devices can be programmed to automatically adjust the light bulbs or heating devices according to room lighting or room temperature.
Another contributing factor to the growth of the market is the growing use of cloud computing. Construction houses and tech firms are teaming up to construct a smart building, particularly smart hotels. This reduces the cost by a significant amount and is less time-consuming. And with the rise in real-time optimum guest experience, the smart hospitality market is boosting the travel and tourism business.
Booming Travel and Tourism Industry
The prime driver of the smart hospitality market is the booming travel and tourism industry and the emergency of demand for smart technology. With rising technological advancements and penetration of the Internet globally, it has been observed that adaption of technology in the hospitality market increases customer satisfaction and stay experience, therefore increasing the hotel business. And with the increasing trend of travel, the market size is expected to expand in the next couple of years. As per a report by the World Bank, 530.15 million more people traveled in the year 2018, as compared to the year 2009. The key reason behind this surge is a rise in disposable income, growing mental health awareness, availability of the internet in all parts of the world, and impactful social media influence on people. Furthermore, growing competitiveness in the market encourages the industry to employ advanced technology to attract more customers. Global hotel chains are continuously adapting to smart solutions for getting a competitive edge. The market players are strategizing and collaborating so as not to fall behind. InterContinental Shenzhen, for instance, signed agreements with Huawei Group and Telecom industry to construct World’s first 5G smart hotel. Another example is established by Viggo Smart Hotel. The company aims to deliver cloud-based smart hotel TV solutions for better digital entertainment of visitors. Shangri-La Group and Tencent working on a project to develop smart hotel solutions in Shangri-La.
Benefits of Smart Hospitality in the Hotel Industry
Constraints to Smart Hospitality Faced by Small Firms
Despite its benefits, the smart hospitality market growth faces some major hindrances. First, the market requires a high initial investment to set up the infrastructure for a smart building. This initial investment is huge and cannot be afforded by small and medium-scale firms. Also, once set up, this technology demands recurring maintenance, which binds the owner with recurring costs. Moreover, the industry lacks technically skilled professionals, who can maintain and manage the systems. And hiring these technical professionals also costs more than what a small hospitality firm can pay.
Geographically, the Asia Pacific and Central Asia market is expected to out-preform in the smart hospitality market. The region has affordable and accessible traveling destinations for tourists all over the world. Along with favorable government rules and regulations to encourage the travel and tourism industry, international Hotels Chains are investing in countries such as India, China, Maldives, and Bali, particularly in smart hospitality solutions. Cheap availability with a moderate skill-set workforce is abundant in this region, which further attracts international companies to invest in the countries. Recently, Thailand-based Minor Hotels contracted with Chinese country Garden Group, to enhance tourism in China and globally. Also, the South Korean International Corporation agency has funded Thua Thein-Hue Provision in Vietnam to construct a smart cultural and tourism city in Hue. The governments as well are supporting the travel and tourism industry through infrastructure enhancement and global promotion. Ministry of Tourism, Government of India, for instance, spent Rs 1986.04 crores in 2018-19 to develop and promote tourist places along with fueling the tourism industry.
North America and the European region also have a noteworthy market share and is expected to grow at a significant rate. Their state-of-art infrastructure and robust technological advancement facilitate efficient consumption of energy, reduction in the operational cost, and availability of modern amenities.
The coronavirus pandemic has a severe impact on both, the travel and tourism industry and the smart hospitality market. Owing to nation-wide lockdowns and travel restrictions in most of the areas, the travel and tourism industry faced a shutdown. The smart hospitality market as well was negatively impacted. The shutdown of Hotels, Restaurants, and Resorts, led to a loss in revenue making the installation and maintenance of smart hospitality solutions expensive. As per UNWTO, the Asia Pacific region alone lost 300 million overseas customers due to the pandemic. As per the UN, Revenue loss in 2020 due to a pandemic is worth $1,3 trillion.
However, the pandemic does bring a great opportunity for the smart hospitality market to develop safe and sound infrastructure using smart solutions. These solutions help in the prevention of the spread of the virus with its touchless technology. Further, regular temperature checkup and automatic sanitation may encourage a consumer to choose a smart hotel more than ordinary hotel post-pandemic.
Leave a ReplyWant to join the discussion?
Feel free to contribute!