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Industry Coverage

CxO Insights

Digital Transformation will Enable Growth Opportunities in the Hospitality Industry

Brian Cotton, Ph.D.

Senior Vice President and Partner

The COVID-19 pandemic delivered a gut punch to the hospitality industry. When it hit, it hit hard and rapidly, slowing or stopping hotel and restaurant chain growth plans in their tracks. Our research suggests that hotels went from occupancy rates in the high-80% range down to single digits, while at least 40% of restaurants have closed their doors or have permanently shut down. Hospitality business executives we speak with are focused on recovering business to levels that are at least half of pre-pandemic levels—but growth remains part of their longer-term plans.

The new dynamic between hotels and restaurants and their customers is shaping rebound and regrowth strategies. That dynamic is about giving people the confidence that when they stay with or dine in an establishment, they will be able to enjoy their experience without fear of contamination. People are yearning to travel and dine out, so the demand for hospitality services is building. Still, businesses will have to adapt their processes, procedures and circumstances to engender customer confidence to serve that demand.

A central business challenge is that in the COVID-sparked recession, most businesses are deferring capital spend on equipment, hiring and new technology. Any investment is directed at getting travelers and diners back in establishments. Revenue generation, competitive advantage and cost savings are critical to survival. Yet, growth in the hospitality industry is still out there, and we believe that the path back to growth is through digital transformation.

Schedule a consultation with an industry expert at no charge by contacting us at myfrost@frost.com. We are taking unprecedented action to make our team available to help you cut through the media and politics to get factual one-to-one guidance for the issues and opportunities that matter most to your business.

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