How Strong Technology Infrastructure Drives Success In Hospitality

Forbes

6 days ago

Mark Holzberg has more than 30 years of experience in the hospitality technology space and is CEO of Cloud5.
In today's digital-first hospitality landscape, robust IT infrastructure is not merely an operational necessity but a strategic differentiator. Modern technology solutions drive guest satisfaction, operational efficiency and financial performance in hospitality businesses. The hidden costs of outdated systems are substantial, while a strategic approach to IT management provides actionable benefits for hoteliers looking to leverage technology as a competitive advantage.
Technology is the backbone of modern hospitality. A strong, resilient IT infrastructure keeps hotels running smoothly, from guest check-ins to property management systems and reliable networks. For hospitality businesses that have a well-oiled technology stack, IT can become a powerful differentiator that impacts the bottom line:
• Enhancing customer experiences, leading to better reviews, more repeat guests and higher revenue
• Improving operational efficiencies, streamlining costs, reducing waste and mitigating risks to create a more financially stable organization
• Attracting and retaining high-quality technical talent, ensuring continued innovation and business growth
The value of good IT is hard to argue with, but too often, hospitality companies view technology upgrades as an expense rather than an investment, leading them to delay necessary improvements. It can be difficult to plan for significant capital expenditures and, for branded properties, keep pace with required standards. However, failing to maintain and modernize IT systems comes with steep hidden costs. Below are just a few examples of the types of hidden costs that can impact a hotel.
Hidden Costs Of Outdated IT
Decreased operational efficiency is one of the biggest pitfalls. When IT infrastructure is slow, unreliable or outdated, every interaction takes longer, leading to inefficiencies that ripple through the entire operation.
Staff often waste valuable time on manual processes or workaround solutions, driving up labor costs and reducing productivity. Guests may experience longer wait times during check-in or check-out, which can negatively impact satisfaction. Additionally, the organization may miss opportunities to automate routine tasks, further compounding inefficiencies.
Cybersecurity vulnerabilities are another significant risk of outdated IT. Hospitality businesses are prime targets for cybercriminals due to the vast amount of personal and financial data they store. Approximately 31% of hospitality organizations have reported experiencing a data breach, with 89% of those having experienced repeat breaches.
Older systems and end-of-life equipment often lack critical security updates, making them easy prey for hackers. These breaches can lead to hefty fines for non-compliance with regulations like GDPR and CCPA; PCI DSS compliance violations, which can result in increased processing fees or loss of ability to accept credit cards; legal action from affected guests; and severe damage to brand reputation and guest trust.
According to the 2024 IBM Cost of a Data Breach Report, the average cost per breach now reaches $4.9 million, the highest level ever.
Long-Term Financial Impact
Poor IT management in hospitality businesses extends beyond mere system failures, impacting long-term financial health in several critical ways.
Without a structured IT strategy, businesses often face unpredictable costs, including surprise expenses for emergency fixes, security breaches or last-minute software patches. This lack of planning leads to budget instability and drains resources that could otherwise be invested in growth.
Frustrations with outdated technology can lead to employee dissatisfaction, increasing burnout and turnover. Given that the hospitality industry is still grappling with staffing shortages nearly five years after the pandemic, replacing an IT employee can cost a business between 50% and 200% of their annual salary. Job satisfaction, therefore, is not just a "nice to have" but an operational imperative.
A poor digital experience can directly contribute to guest churn. Issues such as unreliable Wi-Fi, slow booking processes or credit card processing failures drive guests to competitors. In fact, "Nearly three-quarters (73%) of travelers want to use their mobile device to manage their hotel experience," underscoring the financial consequences of inadequate IT management.
A Strategic Approach To IT Management
A well-managed technology stack actively enhances operations, builds more satisfied hotel workforces, improves guest satisfaction and strengthens financial performance. To get there, hospitality businesses need a proactive IT strategy that includes the following elements.
Hotels must first understand the state of their current infrastructure to identify vulnerabilities and prioritize system updates. Initial questions should include:
• What assets are at each hotel, and what's their end-of-life status?
• When was the network last upgraded?
• How many support tickets are received per day?
• What trends can be identified from those tickets?
• Where do patches need to be applied?
Fifty-seven percent of executives say they plan to increase budgets for outsourced IT managed services. Partnering with an MSP ensures hotels have on-demand IT expertise, allowing hotel IT teams to focus on strategic initiatives. With an MSP, hotels get access to top-tier IT expertise without the cost of hiring and training, and hotel IT teams get the chance to focus on strategic initiatives that drive guest experience and revenue rather than mundane tasks.
Almost 70% of travelers don't believe hotels are investing enough in cybersecurity. Hotels need to implement advanced security measures such as:
• Endpoint protection solutions
• Zero-trust architecture implementation
• Regular penetration testing
• Security awareness training for employees
• Compliance with PCI DSS requirements
This ensures IT systems can support business growth by allowing businesses to adopt new innovations quickly and expand services without encountering significant IT roadblocks.
Emerging Technologies Worth Considering
Forward-thinking hospitality businesses should be aware of these emerging technologies:
• Upgraded Wi-Fi: High-density, secure network infrastructure
• Unified Communications: Integrated voice, messaging and collaboration
• Optimized Internet Access: High-speed solutions with analytics
• Cloud PBX: Modern telephony with lower hardware costs
• Advanced Security: Enterprise-grade firewalls and monitoring
Conclusion
Good IT is more than an operational necessity; it drives financial success and guest loyalty. A well-managed IT infrastructure ensures seamless experiences, enhances security and positions hospitality businesses for long-term growth. The costs of outdated or mismanaged IT far outweigh the investment in proactive IT management.
Hotels that prioritize IT not only safeguard their bottom line but also build resilience, enhance guest trust and gain a competitive edge in an increasingly digital world. In hospitality, IT isn't just an expense—it's a cornerstone of excellence.
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