This is a guest blog post from our partner Apicbase, a company that is specialized in backoffice management softwear of hosptality industry.
Digital transformation in hospitality is no longer a buzzword for high-level brainstorming meetings. Maintaining and improving the guest AND employee experience with tech has become necessary.
First, the good news, the technology that supports digital transformation is available and ready. The market already offers mature mobile integration, AI, chatbots, virtual reality, and SaaS services for almost every aspect of the operation.
What’s remarkable about this stage of the digital transformation process is that the focus is no longer limited to front-of-house operations. Hotel kitchens, and foodservice in general, also embrace automation for the back-of-house at full speed.
What does this mean? If you had to summarise the previous digitisation efforts, you could say that they revolved around revenue optimisation. Commercial kitchens, meanwhile, remained a pen and paper-driven operation—however, rising inflation and labour scarcity force F&B managers to adopt digitalisation.
The move to digitalisation was necessary, but management and staff are quickly seeing the benefits.
For example, it used to be almost impossible to gain meaningful insights into F&B-related costs. Thanks to modern software, food cost control has become easy and effective. In addition, work on the floor is less stressful, as admin-heavy tasks such as purchasing, stock control and food cost calculations are automated.
Food and beverage is the second most important source of a hotel’s revenue and a crucial factor in the guest experience. So it is only natural that digitalisation is at the top of the agenda for people at C-level today.
With a data-driven approach, F&B directors and chefs can improve the bottom line by developing more efficient menus, aligning the supply chain with needs, reducing food waste and actively monitoring error-prone kitchen processes. This is how culinary consultancy It’s Enjoyable works also. They design operational strategies and guest experiences based on data-based scenarios.
Now, for the bad news: the road to digital transformation is paved with lofty targets and disappointing results. In fact, according to research by McKinsey, “the average digital transformation stands a 45% chance of delivering less profit than expected.”
In this post, we analyse the areas to focus on to increase your chances of success.
1.Transformation’ is the keyword
The word ‘transformation’ shouldn’t be taken lightly. Knowing this will help you set more realistic targets and timeframes, save time and money and avoid disappointments.
Although ‘digitalisation’ and ‘digital transformation’ are often used interchangeably, they mean two different things. While the first consists of a simple tech upgrade, the latter will have a more profound impact, requiring new processes, new talents, a different mentality, and probably a different organisational structure.
2.It’s not just about tech
The first step towards digital transformation is to know your customers. Modern hotel guests want convenience and personalisation, but that might differ depending on who you want to attract.
Once you know what type of experience your guests want, focus on the technology that helps you provide it to them. The consultants of It’s Enjoyable add extra value to this part of the transformation. They carry out market research, charting the feasibility of the project and analysing which technology should be involved.
3.Big data is more work than you think
As you digitise guest interactions and processes, you will generate a significant amount of new data, opening the door to insights you probably never considered before. Moreover, it allows for data-driven decision-making, which is, after all, an important goal digitalisation.
However, for data to be helpful, it must be clean, uniform, and shareable. Getting there requires more work than you might expect.
Typically, raw data comes from various sources, is then stored by a different system, analysed by yet another one, and finally shared with all stakeholders. The process involves multiple platforms, which must be able to communicate with one another.
This might make digital transformation especially challenging for hotel chains since they often thrun a mixture of legacy software (POS), point solutions (accountancy) and spreadsheets to manage food and beverage inventory, procurement, and menu costing.
The goal of digital transformation in the hospitality industry is to develop a technology ecosystem where all platforms can work together by sharing relevant data and avoiding silos. To get there, a F&B tech strategy is critical.
4.You need new processes
Digital transformation will significantly impact your company’s internal processes and how departments communicate with one another.
In their journey, hotel guests move horizontally through different stages. That’s often at odds with the typical vertical structure of organisations.
To provide a seamless guest experience, technology alone won’t be enough. You will need new and improved processes and constant communication between different departments. In other words, a new approach to internal operations.
A great example of how new technology and processes go together is citizenM, a Dutch hotel chain. Like most hotels, citizenM aims to create a great guest experience. Unlike most hotels, though, they walked the talk by turning operations around completely, rethinking what a hotel is and how to run it.
5.Digitise food and beverage (F&B) to bring in more revenue
Digital transformation in the hospitality industry should involve the rooms division (payment and booking systems, PMS, etc.) AND the F&B business unit.
As we said earlier, F&B is already the second most crucial revenue stream for many hotels. Digitisation can make it grow even more by reducing costs and creating a superior dining experience that attracts more diners.
However, the caveat is that the technology upgrade will have to work at two levels: within the F&B division itself and by integrating data and processes with the room division.
With digital transformation, the hotel industry has the opportunity to rethink its mission and the concept of the guest experience.
For a more detailed guide on approaching digital transformation in hotel groups, check out the Apicbase comprehensive guide on digital transformation in hospitality.
Carl Jacobs is CEO of Apicbase, a modular F&B management platform to improve back-of-house efficiency and cut food costs in hotel chains and multi-unit restaurant operations.