3 minute read 17 Mar 2020
Man looking out of a hotel window

How hospitality has thrived in the digital age

In a transformative era, hoteliers are succeeding and evolving through technology — and greater efforts can lead to greater profitability.

Industry after industry has been upended by digital, from retail to entertainment, and it was not so long ago that analysts were predicting that the hospitality industry would follow suit. Customers would flock to online travel agents (OTAs) to book their hotel rooms, home-sharing companies would lead to lower demand for hotel rooms and hotel companies would lose their ability to form lasting customer relationships.

Yet upcoming EY research shows that, when you look at the data, you learn that traditional players are the ones thriving and evolving through digital, and that the status quo has not been dramatically upended.

Hoteliers are reasserting themselves over OTAs through efforts that accelerated in 2017. Since then, share prices for some of the largest hotel brands have increased at a higher rate than that of a dominant travel technology company. And by mid-2019, the year-over-year growth rate of bookings on hoteliers’ branded websites overtook the growth rate for OTA websites — putting them on a path to become the booking channel with the largest share of demand in the US. Hotel loyalty programs have steadily grown their memberships enabled by digital channels.

Those efforts included significant investment in digital channels, providing customers seamless functionality for searching for and booking rooms. The ability to track and redeem loyalty points has been enhanced. New functionality has been introduced, such as chat bots, online check-in and checkout, and folio access. Marketing campaigns have stimulated direct bookings and loyalty. Core IT capabilities have been strengthened through significant investment, and upgraded reservation, revenue management and property management systems have been introduced.

Looking ahead

To continue the momentum, hotel companies will need to build on their digital strategies for further benefits, such as:

  • Continuing to enhance digital channels through investment in brand apps and websites. Such investment will facilitate continued growth in direct bookings and acquisition and retention of loyalty members.
  • Expanding analytics and creating applications to improve property operations, providing a deeper focus on anticipating the unique needs of individual guests. Personalized experiences are increasingly important in the industry, and digital investment can enable these capabilities while revealing areas where operating expenses can be reduced.
  • Improving employee engagement and retention through an enhanced employee experience, fueled by investments in areas such as gamification. An engaged staff that takes ownership of the operation of the hotel is more likely to provide the enhanced service that guests demand.

In addition, EY research shows that, by utilizing digital tools and capabilities, hoteliers can boost profitability by as much as 40%, particularly in areas such as housekeeping, operations and the back office.

Our findings and recommendations will be explored in greater depth in our upcoming report.


Thanks to forward-thinking efforts on digital, traditional hoteliers have shown that they are more deft at handling threats from online travel agents. By building on these strategies, in areas such as operations, they can boost profitability by 40%.