How Cloud Computing Is Impacting Travel, Tourism & Hospitality Industry (2023)?

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Last Updated on March 25, 2023 by Ashish

Introduction

When guests visit our home, we prepare food and beverages, entertain them to be hospitable, and make them feel pleased during the visit. The same concept applies to tourists that visit another country for work or vacation. Travel, Tourism, and Hospitality Industry (Businesses) provide services to accommodate visitors’ needs and make their stay as pleasant as possible. Some of these businesses are hotels for comfortable accommodation, travel agents for meaningful site visits, transportation agents for easy traveling, and more. 

In this blog post, we will be exploring the hospitality and tourism industry, how this industry operated before modern technology existed, and compare it with the modern system.

Tourism Industry

Cloud Computing and Travel, Tourism & Hospitality Industry
Tourism and Hospitality Industry Clients

The tourism industry takes care of all activities related to the short-term movement of tourists to locations they don’t reside in. A tourist is a person that travels to another location that is away from their palace of residence for pleasure, social or business purposes. To be considered a tourist, a person needs to stay at that location for more than 24 hours but less than one year.

The benefits of tourism are:

  • Economic benefits – Tourists spend money on the country’s businesses such as hotels and restaurants.
  • Provides job opportunities – Locals have the opportunity to work in hotels, restaurants, the transportation sector, tourism agencies, the agricultural sector, the communication sector, and more.
  • Improved facilities –  Governments want to attract more tourists to their country. Hence, they need to invest large amounts of money to provide new roads and highways, improve existing tourist attractions, and build advanced facilities. Additionally, local people can enjoy the improvements that come with tourism.
  • Cultural exchange – Tourists and local citizens interact to share knowledge of the hosting country’s history and culture. This exchange usually occurs during conferences, exhibitions, and tourism events. 

Hospitality Industry

Cloud Computing and Travel, Tourism & Hospitality Industry
Hotel Reception: Tourism and Hospitality Industry

Hospitality is a broad industry that covers several fields that provide services that ensure customers’ comfort while traveling such as accommodation, transportation, and food and beverages. Hospitality is derived from the Latin word “hospes” which means host. The ancient Greeks referred to the word “xenia” which defines the sacred rule of hospitality.

This industry is comprised of four main areas which are food and beverages, travel and tourism, accommodation, and recreation. The goal of this industry is to provide an enjoyable experience to its customers and this is achieved through the four main areas discussed. 

Hospitality And Tourism Statistics

So far, we can see that the tourism and hospitality industry are actually intertwined. These industries naturally go hand in hand. From here on out, the topics discussed below will be in reference to both industries at the same time. Below are some key statistics regarding this industry.

  • International arrivals increased to more than 1.3 billion over a span of 10 years as compared to 900 million. 
  • Recent figures published by The World Travel and Tourism Council suggest the hospitality industry making a global contribution of 8.6 trillion USD to the global economy in 2022
  • In 2022, 330 million people are working in the hospitality and travel industry.
  • The overall growth in the travel and tourism industry is at 15.1%
  • As of 5th July 2022, the market size of the hotel and resort sector worldwide peaked at 1.52 trillion USED in 2019. The forecast size in 2022 is 1.06 trillion USD. This decrease is due to the COVID-19 pandemic.

Challenges:

We can understand the tourism and hospitality industry more by being aware of the challenges these industries face.

Travel and Tourism Industry

Cloud Computing and Travel, Tourism & Hospitality Industry
Tourist sightseeing: Tourism and Hospitality Industry

Below are some challenges in the tourism industry:

  • Inflation – Inflation is rising at an alarming rate. Businesses are forced to raise prices or reduce operations to save costs. The current sharp increase in prices is pushing travelers away from traveling to expensive locations. This can have negative effects on the global tourism industry. 
  • Currency exchange rates fluctuation – Due to constant fluctuation in currency rates, it is difficult to predict long-range tourism prices. Travelers are having a more difficult time planning and budgeting their vacations due to the fluctuation. This can demotivate tourists from traveling altogether and impact businesses negatively. 
  • Competitive market – Technology and social media are a normal part of human life now. With good marketing, small businesses can compete against giant businesses and some small businesses can overtake them entirely. 
  • Limited skilled workers – The tourism industry requires workers with tourism education and training, knowledgeable in geography, history, finance, and marketing, excellent communicators, and entrepreneurial. 

Hospitality Industry

Cloud Computing and Travel, Tourism & Hospitality Industry
Woman in a restaurant: Tourism and Hospitality Industry

Below are some challenges in the hospitality industry:

  • Climate change – Climate change makes it difficult for businesses to predict the time and magnitude of climate change events. Low predictability inhibits the industry from effectively reacting and adapting to sudden disasters. 
  • Competition against tech giants – Tech giants such as Google and Facebook have an abundance of data that can provide insight into customer wants and needs. Normal companies that fail to identify their niche and their target customers are at risk of losing customers to these tech giants.
  • Skilled worker shortage – According to the International Labor Organization, the accommodations and restaurant industry sector is creating jobs at the fastest rate as compared to other sectors. The number of skilled hospitality workers is not produced at the same rate as the demand for these workers. Hence, there are not enough skilled workers to fill the job market.
  • Poor marketing – Traditional marketing methods are a thing of the past and are not effective in this technological age. Businesses that are hesitant to utilize social media for marketing will fall behind. 
  • Rising cost – Inflation affects the prices of all goods and it has risen steeply over the last few years. Businesses in the hospitality industry are also affected by these rising costs.
  • More guest expectations – Nowadays, guests expect many amenities to be available for their perusal. For example, accommodations are expected to be equipped with WiFi, quality television, a clean and comfortable environment, and easy check-in and check-out. 

Tourism Management

The people in charge of handling the tourism industry must be well coordinated as this industry requires excellent coordination and cooperation between travel agents and tourists. 

Tourism management is the management of a number of activities such as planning the tour, making transportation arrangements, recommending or providing accommodation, managing communication between agents and tourists as well as executing marketing to attract more tourists. 

Activities

Cloud Computing and Travel, Tourism & Hospitality Industry
A travel agent: Tourism and Hospitality Industry

Some activities in managing tourism are:

  • Understanding factors that influence the tourism industry – Examples of these factors are destination climate, the country’s economic condition, the cultural importance of the destination, and the effects of technology. 
  • Knowing the tourism demand of a particular destination – Tourism businesses must know the demand for tourism to make smarter business decisions and maximize profit. 
  • Understand the different tourist types – Tourism businesses must market the right tour package to the right type of tourist to ensure customer satisfaction, maintain good business reviews and maximize profit. 
  • Gauge consumer behavior – Businesses can find out consumer behavior by studying the driving factors that influence their traveling decisions. Knowing consumer behavior and motivations allow businesses to suggest tourism recommendations and to improve the businesses’ own tourism plans.
  • Discuss and arrange transport, accommodation, tours, and their costs
  • Arrange bookings and documentation for travel
  • Perform clerical and office tasks
  • Manage budgets and expenditures

Hospitality Management

Hospitality management is used to oversee daily administrative, commercial and operational business tasks. These businesses are hotels, restaurants, catering, souvenir stores, amusement parks, and many more. The final goal in hospitality management is to ensure maximum customer satisfaction and make them feel welcome.

Activities

Cloud Computing and Travel, Tourism & Hospitality Industry
Airplane departing at the airport : Tourism and Hospitality Industry

Some activities in managing hospitality are:

  • Monitor accounts and manage budgets – Cash inflows and outflows must be accurately recorded and safely stored for future audits. Failure to manage budgets can lead to budget shortages or even bankruptcy. 
  • Organize and coordinate operations efficiently – The hospitality industry covers a wide array of organizations such as hotels, restaurants, tourist destinations, and more. Communication between the different organizations must be well organized and coordinated to avoid confusion, clashes, or delays which can affect customer satisfaction. 
  • Gauge customer satisfaction level and handle complaints – This step is needed to continually improve business operations and provide maximum customer satisfaction.
  • Ensure proper and consistent record keeping 
  • Prepare reports to senior management

Technology Evolution In The Hospitality And Tourism Industry

Nowadays, we are all accustomed to the simple and quick method of booking flights, hotels, and restaurants online. However, the hospitality and tourism industry did not operate this way prior to technological advancement and the Internet. Let’s see how the hospitality and tourism industry evolved as technology became more mainstream. 

Before Technology Existed

Cloud Computing and Travel, Tourism & Hospitality Industry
Paper records

Below are some traditional ways the hospitality and tourism industry operated before technology became commonplace:

  • To make a reservation, people needed to call or physically visit the business and make the reservation.
  • Hotels were not transparent. Hotels were sold to wholesalers. Wholesalers were sold to tour operators who then sold to travel agents and then finally to guests. 
  • Hotels, restaurants, and attraction sites kept paper logbooks to record customer details, revenue, budgets, complaints, and other documentation
  • Payments were made face-to-face at the business premise.
  • Customer reviews were not available for other customers to read as complaints were filed directly to the business. Usually, the complaints are dropped in a designated box at the premise.

After Technology & Internet

Cloud Computing and Travel, Tourism & Hospitality Industry
Booking flight online

As technology became widely available, the tourism and hospitality industry also adapted to the technological evolution. The way the industry operated started to change which lead us to where we are today.

Below are some trends and changes in the industry due to technological advancement.

  • In 1996, Expedia launched a website for the hotel, airline, and car rental bookings. Later that year, Travelocity launched its own website to help the “DIY traveler”. https://www.stayntouch.com/blog/technology-in-the-hospitality-industry-evolution/
  • In 2004, Kayak.com introduced the world with meta-search for travel purchases. It allowed travelers to find pricing results across several websites in one search.
  • According to a Google Travel study, 74% of travelers plan their trips on the Internet. 
  • According to TripAdvisor, 45% of users use their smartphones to plan and organize vacations. 
  • Tourists can make a hotel or restaurant reservation in just a few minutes over the Internet across a variety of reservation websites and compare prices.
  • Tourists can buy tickets to amusement parks or famous attractions online before the actual vacation date. Additionally, businesses appeal to more customers by providing early-access tickets at discounted prices.
  • Tourists can cancel a reservation or request refunds online easily. This makes it easier for tourists to make changes to their plans.
  • Customers can arrange transportation, accommodation, and other tourism-related activities online at their own place and time without needing to physically be present at the desired premises.
  • Reviews and complaints are now transparent as they can be posted online. Other people can get an idea of a specific place and make better decisions. 
  • Payments are made online and only take a few minutes to process. Customers do not need to be physically present to make payments.
  • Businesses keep records such as revenue, complaints, reservations, and availability on computers or online. More recently, more businesses have transferred to using Cloud services for storing and managing records.

How has COVID-19 Affected Tourism & Hospitality Industry?

Cloud Computing and Travel, Tourism & Hospitality Industry
COVID-19 Vaccine

COVID-19 forced the world to come to pause for a period of time. In the first few months since the pandemic spread worldwide, rules were applied forcing people to stay indoors and limit human contact. Since every person was staying at home, nobody was traveling. Hence, the tourism and hospitality industry which deals with matters involving human traveling was also affected.

Below are some key side effects of COVID-19 on the tourism and hospitality industry

  • Tourism worldwide is expected to recover to 2019 levels only after 2023.
  • The October World Economic Outlook projected the global economy to contract by 4.4% in 2020.
  • In Barbados and Seychelles, the arrivals in August 2020 were down by almost 90 percent compared to previous years. 
  • New normals started to get imposed. Many countries approved programs that allow tourists from “lower-risk” countries to enter but with strict quarantine requirements.
  • Export revenues from tourism were predicted to fall by $910 billion to $1.2 trillion in 2020.
  • In 2020, it was predicted that 100 million direct tourism jobs would be at risk
  • A sudden fall in tourism means funding for biodiversity conservation had to be cut off. This leads rise to poaching and illegal hunting.
  • Traditional festivals and cultural heritage practices that were unique and attracted tourists, as well as sacred to ethnic groups, were forced to be halted. 
  • Indigenous handicrafts were halted which affected indigenous people’s revenue
  • By 2020, 90% of contours had closed World Heritage Sites. 13% of them may never reopen.
  • Imposition of travel restrictions to control virus spread. 
  • Travel restriction has disrupted the airline industry. During the height of the pandemic, airlines faced difficult times regarding revenue and increasing debt. 
  • Reduced hotel occupancy rates caused many hotels, even 5-star hotels, to close. There are records of resorts that were once popular now looking very run down and even abandoned.
  • Mass layoff and reduction in wages in tourism and hospitality businesses.

Cloud Computing In Tourism & Hospitality Industry

The hospitality industry’s ultimate goal is to provide the most satisfactory customer experience. Nowadays, customers have higher expectations such as quick check-in, smooth reservation, quick cancellation, and secure refunds. Customers are more drawn to systems that are user-friendly, and intuitive. 

Cloud computing services are the forefront technology that transformed the hospitality and tourism industry. It enables speedy and efficient services, it can provide many insights to businesses as well as customers, and saves operational costs for businesses. 

Below are examples of services provided by some of the major cloud computing vendors in the cloud computing market. 

Google Cloud

Cloud Computing and Travel, Tourism & Hospitality Industry
Access the cloud using an intelligent device
  • Cloud SQL
    • Fully managed relational database service for MySQL, PostgreSQL, and SQL server
    • Rich extension collections, configuration flags, and developer ecosystems
    • Ensure business continuity with reliable services backed by a 24/7 SRE team
    • Automate time-consuming tasks
    • Secure, scalable, and user-friendly
  • Dataflow
    • Fully managed data processing service
    • Automated management of processing resources
    • Reduce total cost of ownership
    • Solve scaling and cost challenges
    • Transform data into insights. This is important for businesses to gauge customer satisfaction and predict trends.
  • Cloud Bigtable
    • Fully managed, low latency, and scalable NoSQL database service,
    • For large analytical and operational workloads,
    • Ideal for use cases such as real-time analytics,
    • Seamless scaling to match storage needs,
    • It can be used to enhance customer experience.
  • Cloud Spanner
    • Fully managed relational database with unlimited scale
    • High availability with zero scheduled downtime and online schema changes
    • Automating cumbersome tasks such as manual database sharing
    • Rich application and tool support
    • Analyze usage patterns in the Spanner database

AWS

Cloud Computing and Travel, Tourism & Hospitality Industry
Cloud Storage
  • Amazon Personalize
    • Elevate the customer experience with ML-powered personalized recommendations
    • Automate creating and maintaining personalized recommendations
    • Target customers more accurately by segmenting users based on preferences.
    • Maximize data’s value by unlocking hidden information in product descriptions, reviews, or other unstructured text.
    • Increase revenue and customer loyalty by catering to individual customer want and needs.
  • AWS Lake Formation
    • Quickly import data from all your data sources then manage them in a centralized data catalog
    • Secure and govern your data lake at scale
    • Centrally manage access to datasets
    • Enable self-service analytics across the organization
  • Amazon Pinpoint
    • Connect with customers through target multichannel communications
    • Deliver SMS or emails to help customers easily access accounts through secure one-time passwords
    • Send real-time notifications to customer segments about updates

Microsoft Azure

Cloud Computing and Travel, Tourism & Hospitality Industry
Cloud Connected 
  • Azure Database for MySQL
    • A relational database service in Microsoft cloud based on MySQL.
    • Data protection using automatic backups
    • Enterprise-grade security and compliance
    • Monitoring and automation to simplify management and monitoring for large-scale deployments
  • Azure Cosmos DB
    • A fully managed NoSQL for modern app development
    • Millisecond response times and automatic and instant scalability
    • Replaces database administration with automatic management, update, and patching. 
    • Handles capacity management with cost-effective and automatic scaling options
    • Simplified application development
  • Power BI
    • A collection of software services, apps, and connectors that work together to convert your data into coherent, visual, and interactive insight.
    • It can be used to view reports, create reports, publish reports, and dashboards
    • It can use the Power BI phone app to monitor the progress

Oracle

Cloud Computing and Travel, Tourism & Hospitality Industry
Administration on the cloud
  • Oracle OPERA 5 Property Management Solutions
    • Helps hoteliers to orchestrate business such as reservations, loyalty, sales, and catering. Helps to elevate guest service and increase profitability
    • Property management system – to deliver personalized guest experience, maximize revenues and occupancy, and enhance operations. 
    • Room reservation software – provides a central database for room inventory, simplifying management for all reservation types.
    • OPERA Analyzer reports – provides a comprehensive view of your OEPRA 5 on-premise deployment to enhance performance management
  • Oracle Service
    • A customer service tool that helps organizations to predict customer needs and deliver a positive service experience
    • B2C service – A customer service solution that leverages AI and ML to help service teams rapidly complete repetitive tasks so that they can focus more on delivering expert customer experiences. 
    • B2B service – Improve visibility and collaboration between sales and customer service teams.
    • Field service – Improve field service management with a set of AI-powered tools for routine, scheduling, and managing field service technicians to deliver on-time customer services. 

IBM Cloud

Cloud Computing and Travel, Tourism & Hospitality Industry
Programmer writing code
  • IBM Watson Advertising Conversations
    • An award-winning AI-powered advertising solution 
    • Brands can use this for intelligent and personalized one-on-one conversations with consumers
    • Deliver more engaging and memorable ad experiences 
    • Can understand user’s intent and provide answers and recommendations.
  • IBM Watson Advertising Predictive Audiences
    • Helps brands find and reach new audiences.
    • Helps you avoid overtaxing analytics and data teams through the automation of complex modeling tasks
  • IBM Watsons Advertising Accelerator
    • Use AI predictions to deliver personalized digital ads
    • Makes sense of real-time customer engagements 
    • Assemble user-specific ad variations in real-time

Case Studies

Now, let’s see how tourism and hospitality-related companies and organizations adopt cloud-based solutions to improve business performance. 

Google Cloud – Sabre using Google Cloud Bigtable and Cloud Spanner

Cloud Computing and Travel, Tourism & Hospitality Industry
Information saved on the cloud

Sabre is a software and technology company that uses highly scalable databases and AI to power travel industry companies around the world. It serves over 1 billion travelers every year and processes more than 12 billion shopping requests.

The companies that partner with Sabre are airlines, travel websites, travel agencies, and hotels. This company has always used technology in its operations to optimize retailing, distribution, and satisfactory experience in the travel industry. Sabre wants to rearchitect their infrastructure to become fully cloud native. Due to this goal, Sabre has established a 10-year partnership with Google. 

Sabre wanted a cloud service that is reliable, has high performance, excellent development time, and functionality. Cloud Spanner and Bigtable are two of Google Cloud’s managed databases. They are highly effective services that could support many of Sabre’s travel applications. 

Sabre typically processes thousands of reservation updates per second. Spanner was able to process over 1 billion requests per second at peak and provides five 9s SLA to support their applications. Spanner helped maintain compliance, business continuity, redundancy and reliability, built-in data protection, and multi-layered security. Spanner’s client libraries provide a built-in mechanism to handle returning in the event of transaction conflicts.

Other than that, Sabre’s shopping engine generates millions of itineraries per second on behalf of travelers through mobile apps, third-party travel websites, and airline call centers. Google Cloud’s Bigtable makes an excellent choice for Sabre’s shopping business. The NoSQL database service can handle high-throughput, low-latency applications with more than 10 exabytes of data under management. Bigtable has a single-digit millisecond response time which enables Sabre to serve large volumes of shopping results cost-effectively while providing low response times to customers. 

AWS – Air Canada improves the customer experience using AWS

Cloud Computing and Travel, Tourism & Hospitality Industry
Digital data shared over the cloud

Air Canada is Canada’s largest airline. It provides scheduled passenger service directly to 51 airports in Canada, 51 in the US, and 86 internationally.

Air Canada shared how the company improved its Aeroplan loyalty platform on AWS to be serverless and event-driven, and help the company achieve full product control. Air Canada unveiled a new passenger service system plus a loyalty program called Aeroplan. The aim was to help customers manage their travel and take full advantage of the Aeroplan program all from one application. 

Air Canada also needed to adopt methods that can support future app features such as expanding the loyalty program, allowing tailored inflight experiences, improving the day-of travel airport experience, and offering self-serve updates.

Air Canada wanted to add capabilities to its app with performance and scalability in mind. So, they turned to AWS serverless stack including AWS Lambda, Amazon DynamoDB, Amazon Cognito, and AWS AppSync among others. 

The team uses AWS AppSync since it simplifies application development which was provided with a single endpoint, microservices, and APIs. As a result of these changes, the airline has improved its website conversion rate by over 60 percent and reduced transaction handling time by 32 percent. 

Microsoft Azure – Tourism Australia using Azure Cloud solutions

Cloud Computing and Travel, Tourism & Hospitality Industry
Sydney, Australia

Tourism Australia is empowered with a data and analytics platform developed on Azure by agile Analytics. It saved the agency 80 hours a month and provides important insights to maximize impact.

Tourism Australia needed a good idea of accurate and up-to-date data about where the tourists are coming from when they will arrive, what are their objectives to visit Australia and where are they going.

The organization’s teams are regularly fielding these sorts of questions which takes up many hours and valuable resources since the staff needs to extract the right data from the right sources and store them in the right place. There are more than 10 different data sources, many with differing formats. They need to be sorted and scoured manually in order to respond to a request. 

To overcome this tedious task, an intelligent data and analytics platform was built and deployed, which freed the team and allow them to work on more important matters. 

To solve the issue, Microsoft Gold Partner Agile Analytics built the Azure-based platform. It provided Tourism Australia staff with fingertip access to data. Agile Analytics was commissioned to assist with centralizing a range of data sources to help better align and drive decision-making. The team’s efficiency has increased by drawing insights across any datasets in one dashboard which previously would take hours to put together. 

Built on Microsoft Azure, the platform used Azure Synapes Analytics, Azure Data Factory, and Azure SQL with insights about bookings, flights, and searches delivered through Power BI reports. 

Tourism Australia is not stopping here. It plans to extend its analytics capabilities by importing additional data resources, and external information to build a comprehensive understanding of how to support tourism in Australia. 

Oracle – Outrigger Hospitality Group moves to OPERA Cloud to gain agility

Cloud Computing and Travel, Tourism & Hospitality Industry
Data transfer over the cloud

Wagoner who is the president and CEO of Outrigger Hospitality Group decided to transition his entire portfolio to OPERA Cloud property management system to stay ahead in the rapidly changing industry. 

Wagoner said that the pandemic underscored the hoteliers’ need for agility which means using cloud PMS technology. This is needed to rapidly produce high-demand products and services, accelerate decision-making, seize more opportunities and improve service speed. 

OPERA Cloud’s integration capabilities influenced Outrigger’s decision to upgrade. A part of OPERA Cloud Suite allows partners and vendors to connect to OPERA Cloud. This gives them unimpeded, self-service access to data for faster product development. OPERA Cloud is said to be a completely open system and provides a gold mine of APIs. With Opera Cloud, they now have a modular platform for hotel operations, distribution, sales, and event management and going to be announcing a loyalty solution. 

Conclusion

Cloud Computing and Travel, Tourism & Hospitality Industry
Vacation planning

The number of organizations and companies that are adopting cloud solutions into their business is increasing and this trend is not going to stop any time soon. Customers now expect a high level of customer service, fast response, quick booking and check-in, secure online payment, user-friendly applications for quick information searches, and more. With the advancement in smartphones and the Internet, companies are bombarded with trillions of data from customers. These data can be used to gauge insight into consumer mannerisms, consumer likes and dislikes, consumer expectations, and more.

These insights can then be used by businesses to make smarter business decisions that can maximize profit and reduce operational costs. Cloud solutions have been proven to be highly effective in improving and profiting businesses in the tourism and hospitality industry outlined by multiple case studies. So, to keep up with the rapidly changing market and survive, tourism and hospitality businesses must not be afraid of cloud technology but embrace it. 

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