• Wan Qing

Tech Hope Among Hotel Budget Constraints


The 2021 Lodging Technology Study surveyed IT professionals who represented more than 22,000 properties worldwide. Through the survey, the far-reaching effects of the pandemic can still be felt. A large group of hoteliers had no change or suffered tightening IT budgets - hoteliers were trapped between tight budgets and equipping their properties with the proper technology that guests demanded. Despite falling budgets, a positive note to highlight is the fact that hotels were generally more open to embracing new and emerging solutions. This is a nod to acknowledge what guests want - and one of the best ways to retain guest loyalty. In the previous 2020 Lodging Technology Study, it was shown that 72% of guests are more likely to return to a property when the technology they want is available.


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A Look At 2020 vs 2021 IT Budgets


The average IT budget for hotels in 2020 was $16.73 million while for 2021, there was a slight decline till $15.9 million. In 2021, 40% of hotels decreased their budgets out of which, 26% had more than 10% of their IT budget cut. 30% of hotels saw no change and on the contrary, 30% had an increase in budget. Properties that saw an increase in budgets were mostly midscale brands and independent hotel owners.


Photo retrieved from Lodging Technology Study 2021


Despite facing countless challenges when navigating through the pandemic, decision makers in the respective IT departments responded by readying their properties to provide guests with the technologies they demand. These include many features but they are not limited to just free wifi, contactless payments, digital reservations and two-way messaging. Albeit budget constraints, hoteliers are taking a hopeful step into the future by embracing technology. One important thing to note however, is the fact the guests are unwilling to pay a premium for these features. As reported in the 2020 Customer Engagement Study, guests think that the cost of hotel rooms are high enough and they should already provide these coveted features.


Photo retrieved from Lodging Technology Study 2021


Investing In The Future


The boost in willingness to adopt technology could also be due to recognition of hotel technology as a revenue-driver. Like mentioned earlier, retaining guest loyalty is of utmost importance to hoteliers. Loyal guests spend more, to be exact, 31% more! Even as the industry looks to recover, uncertainty lies ahead. The only certain thing hoteliers are sure of is the desire to re-engage previous guests as it could prove to be the most sound strategy.


Other initiatives which are deemed important by hoteliers surveyed include improving physical safety of guests and staff, enhancing data security and reducing physical touchpoints in the properties. While these features may not necessarily drive revenue directly, the inclusion of these initiatives gives guests a peace of mind and encourages a return to the same property. An investment in the future.


Understanding Risks


While it may seem that hoteliers are generally more risk-averse now, hoteliers still see potential growth for innovative digital roadmaps in the industry. The pandemic has seen an acceleration in tech adoption among hotels, and that could just be the opening the hotel industry needs for a tech revolution.