Smart Hospitality Market: Entering a New Era of Hospitality
The global hospitality sector has, for long, been undergoing a continuous transformation and this transformation is picking up even more pace as societies continue to welcome the fusion of different cultures into them. Cultures from the eastern world and the western world can be seen blending into what we, today, call as a modern society. From the way people live, to the way they eat, drink, socialize and interact with other elements of the modern ecosystem, societies are witnessing a continuous evolution on all key fronts. The pace at which this modernization of societies is taking place can be deduced from the pace at which urbanization is increasing worldwide. It is interesting to see how people’s desire to become a part of modern society is driving the urbanization engine worldwide. The figure given below shows the urbanization trend at a global level:
Global Urban Population, % of Total Population
Source: The World Bank Group
Clearly, the drift of people from rural areas towards urban areas does not seem to stop any time soon and this drift is being fuelled by people’s perception about urban localities. People believe urban areas can offer them a better standard of living by improving the access they have to basic amenities and by offering them enough opportunities to boost both their professional and personal growth. As urbanization continues, and trends continue to change, players across hospitality sector can be seen putting in efforts to evolve their offerings. Since the growth of this sector is very closely aligned to the degree of comfort and cost-effectiveness players across this sector offer to customers, any change in societies reflects in the offerings by hospitality providers. Smart hospitality is a relatively new practice which involves the incorporation of technology into various aspects of hospitality in order to provide customers a better experience. The smart hospitality market growth is majorly attributed to rapid growth of tourism sector across the globe. The figure given below shows the increase in the number of international tourist departures from countries worldwide over the years:
Global International Tourism, Number of Arrivals, in Billion
Source: The World Bank Group
This continuous increase in the number of international tourist arrivals is partially attributed to continuous efforts by many governments into strengthening their tourism sector.The government of Indonesia, for instance, is working towards making the country a more attractive tourist destination for travellers from high income countries and this focus of the government is visible through the initiatives being taken by it to meet this goal. For instance, in December, 2019, the government announced its focus on attracting tourists from European countries following a decline in the number of visitors from China on account of China’s ongoing trade war with the United States. While this is just one example, many other countries across the globe, which hold enough growth potential in their tourism sector, can be seen working rigorously towards strengthening this sector. As this continues, hospitality players are increasing the flow of investments into advanced technologies in order to offer high degree of comfort and satisfaction to their customers. Smart hospitality solutions use technologies like Internet of Things (IoT) and Artificial Intelligence (AI) to enhance their comfort and safety. Since these two parameters are very critical for the business growth of hospitality providers, many companies are adopting smart hospitality solutions across their businesses. Hilton, for instance, one of the key hotel chains in the United States, delivers smart, hyper-personalized hotel rooms to its customers.
The company spent more than US$100 million to develop and install a digital key technology that allows guests to open their rooms with their smartphones. This might seem a small functionality to some customers but adds significantly to the security, convenience and thus, to the overall customer satisfaction. Success stories like these are influencing many other players to adopt solutions like these in their hotels or other such establishments. This is fuelling the demand for smart hospitality solutions and services, thus driving the market growth. Since this market still holds immense growth potential, many smart hospitality companies are engaging in partnerships and other growth strategies to diversify their product portfolio so as to expand their market reach. In 2018, the creator of the speech-enabled device built for hotels, Roxy, partnered with leading provider of smart home solutions, Control4 to allow hotel guests to use their voice to adjust room controls including lights, thermostat, and blinds. This trend can be seen in other parts of the world as well. The growth of this business is also attributed to continuous advancements in technologies. As Internet of Things and Artificial Intelligence continue to become even more advanced, their penetration is not confined to some specific sectors. As their know-how continues to increase, these technologies are breaking the walls and penetrating into every sector across the globe. The adoption of these technologies across sectors like hospitality is also being fuelled by improving affordability of these technologies. Availability of enough skilled workforce, and presence of a large number of vendors offering everything from hardware and software to professional and managed services is making these technologies easily accessible for various customers. This is fuelling the shift towards smart hospitality, thus augmenting the market growth.
Geographically, the report, titled Smart Hospitality Market, from Knowledge Sourcing Intelligence, segments the market into North America, South America, Europe, Middle East and Africa, and Asia Pacific. To give a clearer view of the market, these regional markets have been further segmented into countries which account for a significant share in the market. North America and Europe account for a major market share while the Asia Pacific smart hospitality market is expected to show a higher growth over the next five years.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.
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