Robotic butlers, biometric-enabled baggage solutions, digital concierges, keyless hotel entry, virtual reality travel, fingerprint locks, cloud passports – all of this is becoming a new norm in a global tourist industry. Over the last few years, technology has become essential part of tourism development, influencing all segments of the industry.
As technology impacts the way we travel, the Middle East with its young and tech-savvy population and rising middle class, is witnessing drastic changes in its local tourism business. Numerous travel and hospitality-oriented mobile apps are providing consumers countless options – from controlling the room temperature in their hotel room, to enabling selection of a seat on their flight to their preferred destination. And that, according to the experts, is just a fraction of what technology can offer the tourism industry.
“Currently almost every industry is going through a technology-driven transformation, and the hospitality industry is no different. It is constantly evolving and adapting to current trends. In the context of hospitality, technology enables businesses to have more convenient, informed and valuable relationships with their guests that will encourage them to continue to visit our properties,” said Hamad Abdulla Al Mulla, CEO of Qatar’s hospitality major, Katara Hospitality.
“In the last decade or so, the hospitality and travel industry has seen an increased demand for ‘experiential travel’, especially among millennial travelers. Interactive self-service tools, like mobile apps and virtual reality technology, have been designed to enhance every customer experience.”
“In the last decade or so, the hospitality and travel industry has seen an increased demand for ‘experiential travel’, especially among millennial travelers. Interactive self-service tools, like mobile apps and virtual reality technology, have been designed to enhance every customer experience making it easier for potential guests to book hotel rooms, check in with their smartphones and virtually experience the hotel before arriving,” he added, while explaining the influence of technology on the hospitality industry.
Qatar’s tourism industry is poised for a significant growth, according to the Qatar Tourism Authority’s (QTA) newest data. The tourism sector’s total contribution to the economy is expected to reach $22.2 billion or 7.3% of the country’s GDP by 2026. This is significant, considering that it was $13.3bn in 2015. According to QTA, spending on leisure activities is expected to reach $12.3bn by 2026, while business travel spending is expected to rise to $4.8bn in 2026.
In terms of visitor arrivals, Qatar is the fastest growing tourism destination in the GCC region, averaging 11.5% growth over the past five years. The country currently has 22,921 hotel rooms with a further 15,956 rooms under contract, representing a 69% increase in total stock in the current pipeline. Over next few years, Qatar is planning to generate 5.2% of its GDP through tourism, create 98,000 jobs and manage an inventory of 63,000 hotel rooms.
Investment banking advisory firm, Alpen Capital, in their 2016 GCC Hospitality Industry Report predicts that the Qatari hospitality sector revenue is expected to expand at a compound annual growth rate (CAGR) 12.9% to reach $1.6bn in 2020, while the international tourist arrivals are anticipated to increase at an annual average of 7%.
With just five years remaining for Qatar to host FIFA World Cup 2022, investments in tourism are rising – QTA expects that annually, 8.6% of the total funding will be invested in tourism by 2026, as the country works to achieve its 2030 ambition to welcome 10mn visitors a year and generate $17.8 billion in tourism receipts.
“Millennials are tech-savvy, family-oriented, and travel the most compared to any other age group. They spend time on the internet, looking for feedbacks, ratings, and recommendations that guide their buying and travel decisions.”
A significant amount of money will be invested in technology, as one of the key tourism trends in Qatar and in the GCC region. Millennial travelers are the fastest growing segment of the global hospitality industry and they will account for half of all international travelers by 2025, Alpen Capital noted in its report.
More than half of the smartphone-owning millennials expect hotel brands to have a mobile-friendly website (55% of them), more than they expect a social media presence (39% of them). As an answer to their needs, 84% of hotel operators plan to create a bespoke app for each property within the next 18 months.
“Millennials are tech-savvy, family-oriented, and travel the most compared to any other age group. They spend time on the internet, looking for feedbacks, ratings, and recommendations that guide their buying and travel decisions. With multiple mobile devices at their disposal, they stay connected to social media platforms even during their travel. This has resulted in a real-time rise in reviews about a hotel which influences the booking decisions of others who are scouting the web for feedback.
“This behavior pattern has made it essential for hotel operators to not only establish but also strengthen their presence on social media platforms such as Trip Advisor. Hotel owners are making significant investments in building technology infrastructure for their properties and services to cater to this tech-savvy generation,” authors of the GCC Hospitality Industry Report said.
The report underlined that, in addition to the demand from the millennial generation, the emergence of disruptive technologies has encouraged the use of smart technology, digital solutions, and mobile apps by the hospitality industry to enrich guest experience as well as streamline administrative processes.
“Hotel mobile apps and web pages are must-haves for hotel operators, to benefit from the increasing use of online bookings. In addition to setting up the online presence, hotel operators have started to use data analytics to monitor guest preferences and accordingly modify their service delivery. Several hotels are investing significant amounts in building IT infrastructure to provide guests, especially the growing millennial travelers, a more digital-friendly environment,” says Alpen Capital’s report.
“New technology alleviates the need for extended stops at guest services for check-ins and checkouts, which frees staff and allows the hotel to allocate more resources towards improving a guest’s overall stay”
“Incorporating the latest technology within our overall hotel product offering ensures we deliver optimum customer experience. With the help of technology, we are able to cater to the needs of our guests through data collection by personalizing our guest’s needs. Through digital self-service, we are able to create a more efficient operations system that improves the quality of customer service while subsequently increasing profits.
“New technology alleviates the need for extended stops at guest services for check-ins and checkouts, which frees staff and allows the hotel to allocate more resources towards improving a guest’s overall stay,” said the Katara Hospitality CEO while explaining the benefits of investing in the newest technologies in the hospitality industry.
The benefits of investing in technology were clearly visible in 2016, 51.8% of travelers who booked trips via digital means did so, using a mobile device, up from 43.8% in 2015. It is easy to predict that investing in the hotel mobile applications, which are going to be expected to provide an increasing number of services and options for hotel guests, is a secure investment.
Al Mulla agreed by saying, “Katara Hospitality continues to evolve by casting a close eye on current trends and consequently adapting our strategies to ultimately ensure alignment with our vision. Our approach for 2017 and beyond is to reinvest in our current portfolio and upcoming projects by incorporating the latest technology within our iconic properties for a more interactive and connected experience for our guests.”
“For a totally modern hotel stay we also plan on investing in smartphone applications that enable our guests to control their experience from the moment they check in to unlocking their rooms all through their smartphones. Finally, to offer the best communication platforms we will ensure that all our properties have an ultra-high speed Internet connection and install modern interactive TV systems,” he said.
Virtual travel potentials
“VR would be one of the key sectors with strong growth in the GCC. The majority of the revenue will come from the gaming industry, but in future, travel and hospitality segment that uses VR as a way of digitally marketing their products is poised to grow significantly”
The impact of technology on travel and hospitality cannot be underestimated, because it has unleashed untapped economic potential: for example, industry experts are predicting that virtual reality (VR) is to be “the next big thing” in tourism, especially in the Middle East, where it is predicted to become a fast-growing billion dollar industry. Even mature markets, like US tourism hub Las Vegas, are embracing VR tours to attract and enable visitors.
“Sin City” has launched a virtual reality companion app, which offers 360 video tours of attractions, hotels and more, and the developers are arguing that the users are able to explore what Las Vegas has to offer in a virtual setting and gain the excitement needed to book their own Las Vegas adventure. Egypt has recently developed mobile VR concept which allow users to travel back in time and follow explorer Howard Carter in his infamous discovery of the tomb of King Tutankhamun in the Valley of Kings tours.
“A growing number of companies in the GCC’s tourism industry are embracing VR as a key part of their marketing and some are leading the way in their respective industries on a global scale. Dubai’s Jumeirah developed a digital platform in partnership with Google that uses 360-degree video, 3D sound, playful interactions and exclusive hot spots to bring to life Jumeirah’s 23 properties around the world.”
According to the consultancy firm Deloitte, VR would be one of the key sectors with strong growth in the GCC. The majority of the revenue will come from the gaming industry, but in future, travel and hospitality segment that uses VR as a way of digitally marketing their products is poised to grow significantly.
“The Visa report estimates that the MENA region will see the number of annual outbound trips rise from 42mn in 2016 to 65mn by 2025. This may, in turn, lead to regional outbound travel spend increasing annually by 3.6%, from $77bn to $110bn by 2025, with the middle class accounting for approximately two-thirds of the growth”
According to the global payments company, Visa, the increasing digital connectivity is among three key trends (together with the rise of an emerging middle class, and an aging population), will transform the tourism industry in the MENA region in the next decade. Visa in their report “Mapping the Future of Global Travel and Tourism” estimates that more than 37mn MENA households will make $20,000 or more annually by 2026 and that more than 40% of them will take at least one international trip per year.
The report estimates that the MENA region will see the number of annual outbound trips rise from 42mn in 2016 to 65mn by 2025. This may, in turn, lead to regional outbound travel spend increasing annually by 3.6%, from $77bn to $110bn by 2025, with the middle class accounting for approximately two-thirds of the growth.
“In addition to spending more, these travelers will be fully connected digitally and consequently better informed about their destination options, modes of transportation, accommodation choices, and cost”, Visa’s report stated.
In conclusion, high-tech tourism is becoming the international standard and the Middle East is closely following the newest developments. Newest travel and hospitality technologies developments are in high demand especially in the UAE and Qatar as they are preparing for mega events – Expo 2020 and FIFA World Cup 2022, by transforming their tourism industry to the sophisticated high-tech environment.
Will the football fans staying in Doha in 2022 be greeted and served by robotic butler? Probably yes. And for sure they will open their rooms, order food, book entertainment, arrange room service via customized mobile apps. Hi-tech is here to stay and there no two views about that.
This article is from BQ Magazine’s Issue 44 – May 2017.
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