Smart Hospitality Market: Redefining Luxury

Smart technology has transformed the home environment in recent years with internet-connected devices allowing to manage lighting, heating, home entertainment and even security requirements at the touch of a mobile phone button. Hotels are also keen to replicate the level of comfort and convenience these connected devices offer at home.

smart hospitality market

The global smart hospitality market is driven by rising penetration of internet and rapid inclination toward Internet of Things (IoT) among people as well as enterprises. As the digitalization is expanding at a significant rate, the global hospitality segment is also adopting connected solutions and services to offer smart solutions to their clients. Growing use of cloud computing solutions is also supporting hotel chains to opt for smart hospitality solutions and services with the augmenting demand for real-time optimized guest experience management. The figure below shows the global smart hospitality market size for the year 2019 and 2025:

Global Smart Hospitality Market Size, in US$ Billion, 2020 and 2025smart hospitality market

Source: Knowledge Sourcing Intelligence Analysis

According to the Knowledge Sourcing Intelligence analysis, the global smart hospitality market is projected to witness a CAGR of 13.14% between 2020 and 2025. Booming travel and tourism industry is the major factor behind the growing adoption of smart hospitality solutions. The figure below depicts the number of international tourist arrivals for the period 2011-2018:

Number of International Tourist Arrivals, in Billion, 2011 to 2018

smart hospitality market

Source: The World Bank Group

According to the World Bank Group data, the number of international tourist arrival globally has surged from 1.013 billion in 201 to 1.442 billion in 2018. Rising disposable incomes and cheaper and affordable airline fares are encouraging people to travel more often.  

IoT has changed the hospitality industry in several ways, including innovations in hotel booking systems, hospitality operations, and improvements to the guest experience. Some of the best global hotel chains are now competing rigorously in terms of incorporating smart technologies that can help provide best-in-class customer services while boosting their revenues. There has been a constant increase in the number of contractors in the past recent years who are teaming up with different tech firms to build smarter hotels with low cost and less time while providing their guests better hospitality services.

Many luxury hotels are installing a virtual concierge service via an in-room voice assistant, just like Alexa that people use at homes. With the help of this voice concierge service, hotel guests can make dinner reservations, requesting more pillows via a phone app or in-room device, and many more. Hotels are also increasingly allowing their guests to check-in via their smartphone, thus enabling them to bypass the reception queue and head straight to their room. Furthermore, lighting, air-conditioning, and heating can be adjusted via the phone app or in-room device upon their arrival in the hotel room. Not only this, some hotels are leading the way to offer advanced smart hospitality solutions to stay ahead in this highly competitive market. The Aloft Cupertino in California, for instance, features a robot butler to deliver room service orders.

As consumers are demanding more and better hassle-free services during their stay at hotels, global hotel chains are increasingly investing heavily in smart hospitality solutions to fulfill customers’ satisfaction and further attracts people to stay in their hotels. Moreover, smart hospitality solutions also help hotels to save operational costs and generate more revenue while enhancing their hospitality services to customers.   

Smart Hotels Saving the Environment

Growing concerns regarding environmental sustainability among consumers is becoming extremely acute which is making smart hospitality solutions even more attractive. Moreover, rising focus on corporate social responsibility (CSR) among hotel companies is also ramping up the adoption of smart hospitality solutions. Smart hotel rooms can help in reducing the energy consumption via the use of sensors that can detect if the room is vacant or occupied, and adjust lighting and heating levels accordingly. Hyper-connected hotel rooms are offering smart services such as air conditioning and lighting to turn themselves on when they 'know' a guest has entered the hotel building. This allows energy saving while creating a welcoming environment ready for the guest's arrival in the room. For instance, The Aria in Las Vegas offers customized climate controls and curtain settings which start working once the guest enters the room. At the Torch Doha in Qatar, hotel bedrooms have 12 different light setting choices.

COVID-19 Disruption

The worldwide outbreak of COVID-19 has brought the global economy to a standstill. But the global travel and tourism industry has been the worst affected of all the major economic sectors. According to the latest data from the World Tourism Organization (UNWTO), the COVID-19 pandemic has caused a 22 per cent decline in international tourist arrivals during the first quarter of 2020. And this crisis is projected to lead an annual decline of between 60 per cent and 80 per cent when compared with 2019 figures.

This pandemic situation continues to evolve and the outlook still remains uncertain even after the five months of continuous efforts to curb the spread of this virus by way of nationwide lockdowns and mandatory social distancing measures. Travel restrictions and containment measures are expected to be in place for an extended period of time, and are likely to be lifted gradually. Also, demand-side recovery will also take a significant amount of time due to lack of consumer confidence and travel behaviour. Since the tourism sector contributes significantly to total GDP for many economies, the impact of this pandemic on this industry will hit many economies really hard for a long duration.  


Anjali Joshi is a senior market research analyst at Knowledge Sourcing Intelligence. She oversees a team of analysts and is known for the quality of market intelligence she delivers to the clients which range from start-ups and Non-profit Organizations to Fortune 500 companies. Anjali’s keen understanding of international business and market dynamics, coupled with her years of experience working in this industry, allows her to analyse current and future trends across both global and clients’ target markets and help them in making informed decisions.