The Impact Of Digitisation On The Hospitality Sector In 2023 & How The Sector Will Contribute To India's GDP

The Impact Of Digitisation On The Hospitality Sector In 2023 & How The Sector Will Contribute To India's GDP

Aditya Sanghi, CEO & Co-Founder, Hotelogix, 0

The hospitality industry has been a significant contributor to the Indian economy. Recently, it has encountered challenges such as increased competition, evolving customer preferences, and rising costs. The COVID-19 pandemic has exacerbated these issues, making it essential for the industry to adopt a more digital approach to survive.

In 2023, the Indian hospitality sector has significantly improved its performance by adopting digital transformation. Both independent and hotel groups are utilising technology to simplify their operations, enhance customer experience, and increase profitability. They have become more responsive to market changes and agile, ensuring their continued growth and profitability.

Here are a few areas in which digitisation have transformed the hotel industry:

Daily Operations
Managing daily operations across departments in a hotel is a challenging task that requires a lot of effort and coordination. The slightest mistakes would have a domino effect on another department, leading to errors, lack of collaboration, revenue leakage, and, most importantly, dissatisfied guests. That's why many hotels are migrating to the cloud to streamline processes.

In 2023, most hotels running on-premises PMSs adopted cloud Hotel PMSs for many reasons. With cloud PMSs, they have been able to save costs on technology investment as they no longer have to worry about setting up costly servers and hardware. Some other notable benefits they witnessed are mobility, flexibility to access hotel data on the go, comprehensive automation that eliminates errors, time saving, and seamless data flow across departments in real-time, leading to overall enhanced operational capabilities.

Hotel groups are trailblazers when adopting cloud based Hotel PMSs. Apart from being able to centrally manage group operations, including reservations, distribution, etc., it also helps them expand, allowing them to add and go live with new properties quickly. The point we have been trying to make here is that for independents and hotel groups, digital transformation has enabled them to gain better control over their businesses.
Guest Service
The hospitality industry is in the midst of a digital revolution changing how guest service is delivered. Today's guests want hotels to prioritise their requirements. They seek unique experiences, prompt service, the highest degree of comfort, etc. These expectations are continuously evolving, necessitating hotel operators to adapt and innovate with technology.

To start with, we will talk about guest services apps. We have seen their adoption increase, allowing guests to do many things with their smartphones. From finishing pre-check-in formalities to unlocking the door, raising service requests, making payments, checking out and submitting feedback, today's guests like doing everything with their smartphones.

According to data and experts, the industry contributed $40 billion to the country's GDP in 2022, which will touch $68 billion by 2027

Then, there is IoT facilitating efficient guest service in the form of smart rooms. These rooms enable guests to control amenities and order any service through the voice assistant application. Hotels have invested in Augmented Reality (AR) and Virtual Reality (VR) to provide guests with a preview of their amenities/experience even before making reservations.

Artificial Intelligence (AI) also plays a critical role in guest service. For example, these AI-powered chatbots are designed to improve guest experiences in several ways. They analyze large amounts of guest data and help hotels with targeted marketing and offering customized services.

The Impact
Thanks to the right solution and strong demand from the G20 and ICC World Cup, the Indian hospitality sector experienced significant growth. In the third quarter of 2023 vs. the same period in 2022, we observed about a 15% boost in ADR and RevPAR.

How does the industry add value to the country's GDP?
The Indian hospitality industry employs about 7% to 9% of the total employment, which will go up in line with the planned pipeline that looks robust. India's ranking has steadily risen in the World Economic Forum's travel tourism competitiveness index. Earlier in 2013, it was 65. in 2022, it was 54. The country will welcome about 15 million foreign tourists by 2024. Domestic hospitality brands and big international players - are all geared up to expand big in this subcontinent. According to data and experts, the industry contributed $40 billion to the country's GDP in 2022, which will touch $68 billion by 2027. Looking at all these trends, the industry is on track to contribute about $1 trillion to India's GDP in 2047.