Digital Technologies in the Hospitality Industry in the Context of

COVID-19

Elena Shumakova

Far Eastern Federal University, Department of Tourism and Hospitality, Vladivostok, Russia

Keywords: Hospitality, Hotel, Digital Technology, Customer, Experience, Efficiency.

Abstract: Modern society is characterized by the rapid development and spread of digital technologies, as well as radical

changes in socio-economic life under the influence of these processes. The last decade has been marked by a

steady trend in the development of digitalization in the hospitality industry. The active introduction of modern

technologies in the activities of hotels is a prerequisite for their successful operation, since the accuracy,

reliability, efficiency and high speed of information processing and transmission determines the effectiveness

of management decisions in this area. In this context, the article deals with the features and prospects of using

digital technologies in the hospitality industry. In the course of the study, particular attention was paid to the

essence of the digitalization of hotel services and the characteristics of the most common technologies that

are used by them (blockchain, intelligent robots, Internet of Things (IoT), face recognition technology). In

addition, the effects obtained from the digitalization of certain areas of hotel activity and the main reasons for

the expansion of the use of new technologies in the future were studied. Particular emphasis was placed on

the challenges and difficulties that hinder the use of digital technologies in the hospitality industry.

1 INTRODUCTION

Under modern conditions, the key factor in the

development of economy of the XXI century is data

presented in digital form. In this regard, advanced

digital solutions are given a top priority. Service and

information network technologies have taken a

special institutional position in the development of

modern enterprises and society, becoming the basis

of the digital economy (Zhenlong, 2021).

The rapid development of digitalization ensures

an increase in competitiveness in almost all sectors of

the economy, and, accordingly, has a positive effect

on the efficiency of business entities. In addition, the

introduction of advanced, breakthrough innovations

leads to profound transformations of business

processes and, as a result, changes in management

systems at all levels. Figure 1 shows the key business

processes of enterprises that are primarily subject to

digital transformation.

Figure 1: Priorities for business digitalization initiatives in

companies around the world from 2020 to 2021 (Eivind,

2020).

The service sector, namely the tourism and

hospitality industry, is no exception in this case. The

hotel business, like the global economy as a whole, is

undergoing a profound technological revolution.

Digital technologies in the field of accommodation

and reception of guests received an additional

impetus for development in connection with the

260

Shumakova, E.

Digital Technologies in the Hospitality Industry in the Context of COVID-19.

DOI: 10.5220/0011118900003439

In Proceedings of the 2nd International Scientiﬁc and Practical Conference "COVID-19: Implementation of the Sustainable Development Goals" (RTCOV 2021), pages 260-266

ISBN: 978-989-758-617-0

COVID-19 pandemic. As a result of quarantine

measures and restrictions on movement, losses to the

tourism industry amounted to more than $ 195 billion.

According to statistics, there was a 22% decrease in

travel in the first quarter of 2020, and arrivals in the

middle of the year fell to 57% in all markets. This

means the loss of 67 million international tourists and

about US $ 80 billion (Hudson, 2020). As a result, the

tourism and hospitality industry ranked third in the

world for the speed of digital transformation during

the coronavirus pandemic (see Figure 2).

Figure 2: Global impact of COVID-19 on digital

transformation speed in 2020 by industry, % (The state of

digital, 2021).

Given the transformations and challenges taking

place today, digital tools and platforms occupy a

much more important place in the operation of hotels

than literally a few years ago, because they allow you

to ensure safe communication with staff and guests,

simplify most of the functions for receiving and

placing guests and allow display the main business

processes in digital format. On the other hand,

hospitality consumers today are looking for better

solutions and unique experiences. With one-touch

check-in, digital concierge services, voice-activated

devices, chatbots, smart in-room technology,

advanced analytics, virtual assistant platforms,

improved direct booking and more, hotels are rapidly

adopting new technologies to exceed customer

expectations and digitize their journey as much as

possible.

In the context of the above, the fundamental

provisions of the organization of management in

modern hotels, as well as the implementation of

digital technologies in the field of reception and

accommodation of guests require deeper scientific

and practical research. Such studies, among other

things, are necessary to substantiate the strategy and

tactics of hotel business development in the context

of digitalization both at the national level and at the

level of individual tourist destinations.

These aspects determine the research relevance,

form its purpose and also determine the

methodological basis of cognition.

2 RESEARCH METHODOLOGY

2.1 Page Setup

The importance of studying the impact of

digitalization on the development of modern

hospitality industry has led to the attention to this

problem of foreign and domestic scientists, which

include Pasca, Maria Giovina; Renzi, Maria

Francesca; Di Pietro, Laura; Guglielmetti Mugion,

Roberta; Gubareva O.V., Simonova M.M., Oborin

M.S., Miloradov K.A.

Such authors as Mitchenkova N.I., Mustafina

A.V., Stepanova V.M., Isupov P.A., Morozova M.A.,

Singh, Anjana; Munjal, Sandeep; Richard George;

Dutta, Kirti; Sharma, Kirti; Goyal, Terjani consider

the dual role of digital technologies in the operation

of modern hotels, which, on the one hand, are

designed for effective interaction between the

provider and the consumer of travel services, and on

the other hand, allow to increase the efficiency of

processing information about guests, their

preferences, experience and impressions.

The questions of theory and practice of customer

experience management in hotels in the context of

digitalization are studied by many scientists,

including: Sipe, Lori J., Lelo de Larrea, Gabriela;

Altin, Mehmet; Koseoglu, Mehmet Ali; Okumus,

Fevzi; Lukashova A.S., Karpov D.S., Gribulina N.V.

Theoretical and methodological foundations and

practical tools for the use of digital technologies in

the hotel business, the role and place of advanced

information solutions and innovations in hotel

management and marketing are described in detail in

the works written by Voronova O.V., Kharyova V.A.,

Khnykina T.S., Atadil , Hilmi A .; Erdem, Mehmet;

Green, Alison J .; Crinson, Danny.

2.2 Unresolved Parts of the Problem

Paying tribute to the achievements of scientists in this

area, we note that a number of problematic issues of

the introduction and use of digital technologies in the

hospitality industry remain unresolved. In particular,

the problems associated with formalization of the key

areas of activity of modern hotels, which primarily

require digital transformations, need additional study.

Also, the stages of introducing advanced

innovations and breakthrough technological solutions

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261

deserve special attention. In addition, adaptive tools

for assessing their effectiveness need to be justified.

There are practically no publications that would

highlight aspects of developing criteria by which

hotel enterprises can navigate the abundance of

automated control systems and digital technologies.

2.3 The Purpose of the Article

The purpose of the article is to study the process of

formation and use of digital technological

opportunities in the hospitality industry.

3 RESULTS OF THE STUDY

First of all, it should be noted that hospitality industry,

the hotel business is more than just hotel

management. It includes resort and event

management, gastronomy, wine and spirits, travel and

tourism. According to the World Travel and Tourism

Council, today it is an industry with 319 million jobs,

which should increase by 100 million over the next

10 years (Morozov, 2020).

In many countries around the world, hotel service

is one of the largest in the service sector and is

currently undergoing an important digital

transformation that is making customer service more

personalized than ever. The digital transformation of

the hospitality industry as well as digital

transformation of hotels work pursues the goal of

integrating modern digital technologies into all

functional areas and business processes, forms of

relations, contact audiences and market segments

(Karpov, Gribulina, 2020). This radically changes the

process of staying in the hotel and expands the

architecture of service delivery, contributes to the

transformation of the value attitude of hoteliers to

their business, their own employees, partners and

guests, the purpose of which is to achieve personal,

social and economic goals in a cheaper and faster

way, with maintaining a high level of service

delivery.

Today it is difficult to imagine the modern

functioning of enterprises in the hospitality industry

without the use of digital, information technologies.

Digital and technological innovations penetrate and

are actively used in almost all activities of hotel

enterprises, both in the implementation of global

management and in the coordination of daily

processes. Figure 3 shows the key digital

technologies used in hotels today.

Figure 3: Key technological opportunities of digitalization

for the hotel business.

Such technologies as face recognition, artificial

intelligence, chatbots and data analytics are modern

innovations that are changing the hospitality industry.

In the near term, machine learning will be used to

incorporate a myriad of external factors into the

pricing recommendation process, while

personalization in the course of booking will be taken

to a new level, for example, by using artificial

intelligence to analyze the profiles of people on social

networks.

According to experts, the size of the smart

(digital) hospitality market is expected to more than

double by 2025 compared to 2019 (see Fig. 4).

Figure 4: The size of the global smart hospitality market in

2019-2025, billion dollars (Nuenen, 2021).

The widespread use of digital innovations, as well

as data processing and transmission technologies

allows creating a modern and convenient product for

hospitality enterprises, aimed not only at increasing

profits, but also at maintaining competitive positions

in the market and winning guest loyalty. The effect of

the introduction of digital technologies was not long

in coming.

Statistics from Toast, one of the world's leading

manufacturers of innovative software for the

hospitality industry, show that:

 95% of restaurant owners noted an increase in

the efficiency of their business after

introducing software technologies into their

current operations;

0 5 10 15 20

6,07 12,73

2019

2025

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 73% of visitors believe that the use of modern

technology in the hotel gives them more

pleasure in their stay and use of services

(Adeyinka-Ojo, 2020);

 26% of consumers believe that the availability

of modern technology, the ability to place an

electronic order and choose modern payment

options affect the choice of a hospitality

establishment (Abdullah, 2019).

In addition, as previously noted, many hoteliers

have expanded their use of digital tools during the

coronavirus pandemic to best comply with the new

safety and hygiene practices. Due to the fact that the

tourism and hospitality industry was constantly

forced to adapt to changing quarantine restrictions,

this led to a reduction in the points of contact between

hotel employees, service personnel and customers,

which helped to quickly adapt processes and

standards for cleaning premises (Khamitova, 2019).

A survey of hotel owners around the world about

what technologies can be introduced in the coming

year showed that the majority of respondents plan to

simplify and digitize the processes associated with a

guest. 23% of respondents said they will focus on

implementing contactless check-in and / or digital key

solutions next year, while 19% plan to implement

digital guest messaging tools. All this is necessary in

order to reduce direct contact with the guest and

communicate securely with each other using digital

means. Another 10% of respondents also plan to

implement tools to automate the daily operation of

hotels (Gretzel, 2018).

The main reasons why hoteliers are using digital

technology in 2021 are presented in Table 1.

Table 1: The main reasons for using digital technologies in

the hotel business in 2021 (% of respondents) (Gannon,

2020).

Improvin

g guest

service

Profit

growth

Ensuri

ng the

future

of the

hotel

Gaining a

competitiv

advantage

Increas

e in

basic

income

Saving

financial

resource

Time

savin

24 18 16 15 11 6 5

A special emphasis should be placed on the fact

that rapid changes in the hospitality industry require

hotels to intensify their digital transformation in order

to preserve their value and bring added value to the

business. This can be achieved through partnerships

with tech businesses that can identify and clearly

identify the relevant issues that need to be addressed

first with innovative technology. This strategy is

beneficial for all participants: hotels receive added

value and optimize business processes, and startups

accumulate industry experience they need for further

development.

4 DISCUSSION OF RESULTS

Among the advanced digital technologies applied in

the hotel industry, which are the most popular today,

the following can be distinguished: blockchain,

intelligent robots, Internet of Things (IoT) and face

recognition technology.

Let's consider the features of their use in more

detail.

Blockchain technology. This technology has the

potential to revolutionize the way information and

data is stored and used, increasing transparency and

security while improving transactions. One of the

most important aspects of blockchain technology is

that data is decentralized, and information is shared

on a peer-to-peer network. Each block contains

information about transactions and timestamp.

Blocks are also permanent and cannot be changed

without obtaining permission from all network

participants and without changing all subsequent

blocks (Novichkov, Savchenko, 2021).

In terms of benefits, blockchain technology can

offer the hospitality industry stability and security.

For example, hotel employees must transfer customer

details to airlines and carriers and insurance agents.

Blockchain technology will protect personal data

from theft, distortion and illegal use.

There are four key opportunities for applying

blockchain technology in the hotel industry.

1. Baggage tracking. Blockchain technology can

be very valuable for tracking baggage of tourists,

especially when dealing with international travel. The

use of a decentralized database greatly simplifies the

exchange of information between companies that

accompany guests' travel.

2. Identity services. Identity services are

extremely important to the hospitality industry,

especially during a quarantine period, and blockchain

has the potential to become the industry standard for

storing this information. The technology used in this

way can dramatically reduce check-in or queue times,

since a fingerprint or retina can replace documents,

which means less time for hotel staff and customers

to contact.

3. Safe, traceable payments. It is obvious that

payment transactions are one of the most important

areas of use of blockchain technology in the hotel

industry. The functionality of this technology can

make bank payments simpler and more secure, allow

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you to pay with virtual assets, for example, bitcoins,

as well as increase the level of security of transactions

that are carried out with the involvement of mobile

payment providers.

4. Customer loyalty schemes. Many hotels are

launching customer loyalty schemes to encourage

them to return in the future. Blockchain can also help

with these programs, simplifying the process, making

it easier for customers to get information about their

loyalty points, and for hotels to quickly distribute

promotions and bonuses. This tool can also help fight

fraud in this area.

Intelligent robots. Robotics is rapidly gaining

popularity among both hoteliers and their customers,

driven in part by changing guest habits, as well as by

the COVID-19 pandemic. Increasingly, customers

are looking for self-service methods and this makes

the automation that robots provide attractive to hotels,

travel agents and other businesses.

In addition, hotel teams nowadays often have to

face the challenges of providing high quality service

when the number of employees is reduced, but the

requirements and demands of customers are

increasing. As you know, team communication is

very difficult during a pandemic. A number of

employees are forced to work from home; some are

transferred to reduced or limited working hours. All

this necessitates restructuring and adapting processes

in the hotel. Robotics in this case is the most

acceptable solution.

With intelligent robots, hoteliers can overcome

most of the challenges by automating and simplifying

day-to-day workflows. Digitizing traditional hotel

operations is now a priority. The tools and platforms

to empower hotel teams to improve their performance

are more important than ever.

27% of surveyed respondents in Europe said they

plan to automate day-to-day processes to compensate

for resource constraints and reduce the burden on

small teams. One in six hoteliers says that they plan

to implement new workflow management tools in

2022. Another 11% emphasize that they would like to

migrate their current systems to the cloud

infrastructure in the near future. This would allow

hotel employees to access relevant information

regardless of location, while communication within

the team and the implementation of certain processes

would be much easier and faster. (Lam, 2019). The

move to the cloud technologies is also an opportunity

to start taking advantage of artificial intelligence and

machine learning in an ever-growing amount of

customer data.

Internet of Things (IoT) technology. This term is

commonly used to refer to everyday physical devices,

appliances, and other things that are equipped with an

Internet connection, making them capable of

transmitting and receiving data.

An example of the use of the Internet of Things in

hotels is a smart mirror, which, by synchronizing

directly with hotel TV and other applications, allows

guests to keep abreast of daily news or even watch

their favorite TV series simply by clicking on the

glass, and all this can happen while cleaning teeth or

preparation for going out.

In addition to entertainment for guests, smart

mirrors bring significant benefits to the hotels

themselves. Acting as the hotel's concierge, the

mirror displays information about services, weather,

or local attractions that the guest should visit. In

addition, being able to navigate and view a virtually

holographic platform on a hotel mirror is undoubtedly

an experience that a guest will tell friends about,

thereby advertising the hotel's services.

With advanced room presence sensors, a hotel can

maximize energy efficiency by detecting activity in

rooms and automatically adjusting energy levels

based on the presence or absence of a guest. In

addition, this innovation allows guests to customize

their stay using the same presence detection

technology. Thanks to Bluetooth, guests can

independently adjust the level of lighting, shade, and

even locks and minibars in the rooms.

Face recognition technology. Face recognition

technology in the hospitality industry can be

especially useful as hotels have to deal with a huge

number of travelers, so this technological innovation

can help speed up workflows (Alrawadieh, 2021).

Let's designate four promising vectors for the use

of face recognition technology in the hotel industry.

1. Personalization. For example, hotels can offer

guests the opportunity to provide a photo during the

booking process in order to avoid the need to check

documents upon check-in, and the service staff uses

the received data to identify guests who were

previously at the hotel.

2. Security. Face recognition allows you to verify

the identity of a guest and provide him with access to

a hotel room, gym or other specialized facility,

without the need to present identification documents.

In addition, using this technology, it is possible to

identify problem guests or visitors.

3. Data analysis. This technology can potentially

be used to identify and verify clients by gender, age

and ethnicity. In addition, data mining allows you to

determine the mood of guests and find out how they

react to different services.

In general, the digital revolution opens up broad

prospects for hoteliers and allows them to customize

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and transform their business in accordance with the

needs of customers, current market trends, and also

makes it possible to respond in a timely and most

effective manner to global challenges such as the

coronavirus pandemic. But, at the same time, digital

technologies require industry participants to properly

adapt to them, which is associated with a number of

problems of both endogenous and exogenous nature.

Thus, the factors hindering the development of

digital technologies in the hospitality industry

include:

 financial and economic (it is quite difficult for

medium and small businesses in the hospitality

sector to invest heavily in the digitalization of

activities, and government benefits and

programs to support and stimulate them are not

always provided);

 regulatory (lack of clear regulatory and legal

legislation governing the interaction of subjects

in the transition to the digital space, including,

this concerns the protection of personal data,

control of the reliability of accounts and the

information provided);

 general instability (differences in the financial

and political capabilities of the regions to

integrate hotels into the international digital

space);

 lack of investment in high-tech industries (the

impact of sanctions, limited access to

technology transfer and import of ready-made

solutions);

 low standard of living of the country's

population (lack of the ability to purchase

modern, most functional gadgets and to use

paid content and Internet roaming services

while traveling);

 digital illiteracy of the population (most of the

population does not know about the

possibilities of digital technologies or is very

superficially aware of them).

5 FINDINGS (CONCLUSION)

At a time of tough financial constraints, tougher

competition in the market, which is associated with

permanently emerging economic crises and shocks,

global challenges facing humanity in the new century

(coronavirus pandemic, environmental degradation,

political instability), the key moment for hotels is to

make a decision on how to change their investments

and how to spend money to start prospering again.

In this context, the successful functioning of

enterprises operating in the hospitality industry is

virtually impossible without the use of modern digital

technologies. The specificity of the formation and

sale of a hotel product requires such high-

performance information systems that, in the shortest

possible time, would provide information about the

availability of rooms, the possibilities of

accommodation for tourists, provide for quick

reservation and booking of rooms, issue tickets,

invoices, and make it possible to receive settlement

and reference information.

Digitalization provides many benefits for

hoteliers, we are talking about numerous multiplier

effects, when all production chains are included in a

single information space. World experience clearly

shows that the introduction of breakthrough

innovations and high-tech solutions in the hotel

industry is economically feasible and efficient, since

they contribute to generating additional income and

reducing costs, improving the service process,

ensuring competitive advantages in the market,

increasing the efficiency of individual departments

and the hotel as a whole.

Thus, it seems that the digitalization of business

processes in the field of hospitality services in the

modern conditions of digitalization of the global

economy is the only strategic direction for the

sustainable development of hotels. However, to

obtain the effect, it is necessary to gradually enter the

field of high technologies according to the following

stages:

 recognition of the need for digitalization;

 drawing up a digital business model by

integrating individual initiatives and solutions;

 creation of new customer value;

 transition to an integrated digitalization of all

processes and services.

Prospects for further scientific research consist in

the development of methodological tools for

assessing the effectiveness of hotel business

management in the context of digitalization of the

hotel and restaurant industry.

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