The conversation around the evolution of hospitality technology is often focused on the technologies and solutions themselves – whether it’s stock and trade offerings such as improved video and Wi-Fi or more nuanced discussions around advancements in artificial intelligence and cybersecurity.
However, in any customer-centric industry in which technology evolves, underlying consumer dynamics drive the need for an enhanced experience. We’ve identified three hospitality trends fueling the demand for technology innovation to be infused throughout the guest experience.
Rising Occupancy and Falling Ages
In 2024, U.S. hotel occupancy was 63.6 percent, representing a slight improvement from 2023 but still below the pre-pandemic level of 2019, which was closer to 66 percent. At the same time, the average daily rate rose to $160.16 - a sharp increase of nearly 22 percent from 2019.
Dig underneath the economics, however, and you’ll find a shifting demographic. In 2024, it was expected that 60 percent of hotel bookings would be made by millennials and Gen Z, two groups with a penchant for adventurous, often exotic travel journeys. On top of that is technology, such as mobile and contactless services, which are table stakes in the Gen Z hospitality experience.
With these demographics’ spending power only expanding in the coming years, technology as a criterion for quality of stay will only increase.
Labor Shortages Continue
A May 2024 survey by the American Hotel & Lodging Association (AHLA) found that 76 percent of hoteliers reported staffing shortages, with housekeeping identified as the most pressing need by 50 percent of respondents. Overall, 79 percent reported difficulties filling open positions. The issue remains at a standstill. Bureau of Labor Statistics (BLS) data showed that in October 2024, the hiring rate in the accommodation and food services industry matched the separation rate at 4.9 percent, resulting in stagnant growth.
This means that technologies designed to enhance the guest experience and cater to evolving customer desires (e.g., contactless transactions) will simultaneously contribute to closing the labor gap while gleaning insightful customer data. Ideally, this will contribute to improving the experience even further without exposing properties to damaging data breaches.
Contactless is Beyond the Tipping Point
Malcolm Gladwell’s iconic debut book “The Tipping Point: How Little Things Can Make a Big Difference” defined his signature concept as “the moment of critical mass, the threshold, the boiling point.” This would be apt to describe how the shift toward contactless guest experiences has gone from nice-to-have to must-have.
In their annual Hospitality Outlook report, insurance consulting firm Hub said that nearly 60 percent of global hospitality executives “expect a fully contactless experience to become standard for all basic hotel transactions.” Even more to the point, the same report declared that only NINE PERCENT of travelers want direct human contact when they have service needs, which is likely driven in part by the technology-reared demographics touched on above.
Such a dramatic shift means that any property not leaning into this runs the risk of being years behind in providing a modern guest experience, which ladders back to our original premise. Keeping up with technology shifts is challenging enough. Keeping up with consumer sentiment is often the bigger task.
Stay Ahead of the Hospitality Curve with Allbridge
As consumer dynamics continue to drive the need for innovative guest experiences, ensure your property remains competitive. Leverage our cutting-edge solutions to enhance contactless services, streamline operations, and meet the evolving demands of modern travelers. Discover how Allbridge can help you bridge the gap between technology and exceptional guest experiences today.
