Hospitality Management and Digital Transformation

Balancing Efficiency, Agility and Guest Experience in the Era of Disruption

Richard Busulwa

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000296754
• Edition: 1
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

Hospitality managers are at a critical inflection point. Digital technology advancements are ramping up guest expectations and introducing nontraditional competitors that are beginning to disrupt the whole industry. The hospitality managers whose organizations are to thrive need to get their organizations into a position where they can effectively leverage digital technologies to simultaneously deliver breakthroughs in efficiency, agility, and guest experience.

Hospitality Management and Digital Transformation is a much-needed guidebook to digital disruption and transformation for current and prospective hospitality and leisure managers. The book:

• Explains digital technology advancements, how they cause disruption, and the implications of this disruption for hospitality and leisure organizations.

• Explains the digital business and digital transformation imperative for hospitality and leisure organizations.

• Discusses the different digital capabilities required to effectively compete as a digital business.

• Discusses the new and/or enhanced roles hospitality and leisure managers need to play in effecting the different digital capabilities, as well as the competencies required to play these roles.

• Discusses how hospitality and leisure managers can keep up with digital technology advancements.

• Unpacks more than 36 key digital technology advancements, discussing what they are, how they work, and how they can be implemented across the hospitality and leisure industry.

This book will be useful for advanced undergraduate and postgraduate students studying strategic management, IT, information systems, or digital business–related courses as part of degrees in hospitality and leisure management; as well as practitioners studying for professional qualifications.

Part I
Digital technology advancements, digital disruption, and digital business transformation

1
Introduction and need for this book

Introduction

Information systems researchers have established that growing advancements in digital technologies (e.g. cloud computing, the internet of things [IoT], artificial intelligence [AI], and blockchain) are resulting in disruptions to industries, organizations, and professions.¹ Often referred to as digital disruption,^2,3 these disruptions manifest themselves in a variety of ways, including as changes to the way value is created, changes to the competitive landscape, changes to customer expectations, and changes to the basis of competition.⁴ Incumbent organizations can turn a blind eye to digital disruption, deny its existence, or accept it but change too slowly; in such cases, they often end up sowing the seeds of their destruction (consider the fate of businesses like Blockbuster and Kodak, or industries such as the taxi industry). Alternatively, incumbent organizations in an industry can leverage and exploit digital technologies to adapt to disruption and to recreate themselves as digital businesses that leverage digital technologies for breakthroughs in efficiency, customer value, adaptability, and agility.^5,6,7,8 This process of organizations adapting to digital disruption and recreating themselves as digital businesses is most specifically referred to as digital business transformation,⁹ although the more slippery term digital transformation is commonly used.¹⁰ Notwithstanding that digital transformation is a slippery term, we use both terms interchangeably in this book, since digital transformation is a more commonly used term in most literature. We strictly mean digital business transformation each time we use either term.

Hospitality and leisure organizations have not been immune to digital disruption. Industry participants have faced nontraditional industry entrants such as Airbnb and online travel agencies (OTAs).¹¹ They have also faced increased pressure from traditional competitors leveraging digital technologies for a competitive edge.¹² Thus digital technology advancements and the resultant disruption risk they create require hospitality and leisure firms to reexamine their businesses from end to end and to redesign them so as to leverage digital technologies for breakthroughs in efficiency, differentiated customer value, adaptability, and agility.¹³ But doing so requires hospitality and leisure managers at all levels (i.e. board, executive, middle management, and frontline managers across all functions) to effectively participate in digital business transformation. In turn, this requires that hospitality and leisure managers understand different digital technologies and their implications for hospitality operations and strategy, make sense of related critical digital technology issues (e.g. privacy and digital ethics, cybersecurity, scalability and interoperability, sourcing, digital ecosystems, digital innovation, digital business models)^{14, 15} and lead the hospitality and leisure workforce in transforming their organizations into and competing as a digital business.

Need for this book

The computing field (comprising the disciplines of information systems, information technology, computer science, computer engineering, and software engineering) is renowned for its specialized terminology, jargon, acronyms, and abbreviations. These can often make it challenging, even for professionals within the field, to clearly understand critical issues. Unfortunately, the growing proliferation in digital technologies and related terminology only compounds this challenge; consider the specialized and slippery terminology related to blockchain, cloud computing, and artificial intelligence technologies. Despite this challenge, within many of the hospitality and leisure management curriculums we reviewed, courses related to management information systems or information technology tended to focus on traditional information systems and IT concepts (e.g. traditional hardware, software, networks, operating systems, enterprise resource planning systems, decision support systems). In doing so, we contend that they miss opportunities to help hospitality and leisure managers make sense of the slippery terminology related to digital business and digital transformation, to help them understand the different digital technologies and their implications for digital business transformation and digital business, to provide them with a framework for understanding the digital capabilities required by organizations and the resultant managerial roles and competencies required, and to provide them with a framework for learning how to keep up with accelerating digital technology advancements. Seizing these missed opportunities is critical to hospitality and leisure managers having the required knowledge and skills to effectively participate in digital transformation and digital business, and thus to maximizing their managerial effectiveness and their organizations’ long-term survival.

Filling these gaps, then, is the need for and the focus of this book. That is, the book focuses on the implications of digital technology advancements, digital transformation, and digital business for the hospitality and leisure industry and for the practice of hospitality and leisure management. It unpacks the concepts of digitalization, digital business, digital business capabilities, and digital transformation. It explains how these concepts can be shaped by the use of different digital technologies to optimize hospitality and leisure organization strategy and operations. As a part of this, the book unpacks more than 36 key digital technology advancements (e.g. IoT, blockchain, smart infrastructure, artificial intelligence, augmented reality) and explains their implications for digital transformation strategy and digital business strategy. The book then explains the role that hospitality managers can play in leveraging digital technology advancements to enable their organizations to simultaneously pursue efficiency, guest experience, adaptability, and agility so as to gain a competitive edge today and also to guard against disruption tomorrow. To conclude, a framework is provided that hospitality managers can use to keep up with digital technologies and to develop the technology skills they need to effectively lead in the digital era.

A range of industry-specific case studies and exercises is also provided to enable current and future managers to practically engage with the concepts. In using this book, we expect readers to understand the relationship between traditional information systems/information technology concepts, digital business/digital transformation concepts, the more than 36 key digital technology advancements we unpack, and any future digital technologies that may emerge. We expect them to understand the digital capabilities required by their organizations and the managerial roles to play in order to effect and optimize these capabilities. We expect them to understand which new technology related managerial competencies to develop and how to develop them. And we expect them to be able to test and reinforce their different understandings through a range of industry application examples, curated online search activities, and discussion question exercises. Used fully, the book will position hospitality and leisure managers to effectively lead in the digital era and or to effectively support senior managers at their organizations to lead digital transformation efforts.

Research for this book

The research for this book consisted of five stages. In stage 1 we undertook a review of the relevant and seminal information systems research on digital technology advancements, digital disruption, digital transformation, and digital business. The purpose of this stage was to understand the implications of these concepts for organization strategy and operations in general and for hospitality and leisure organizations and hospitality managers in particular. In stage 2 we reviewed key hospitality and leisure industry practitioner literature on digital technologies, digital transformation, digital business, and digital strategy. The aim of this stage was to understand how hospitality and leisure organizations were undertaking digital transformation, what digital strategies and digital business models they were pursuing, what digital capabilities they were building, and how they were safeguarding themselves against disruption risks. In stage 3 we sought out industry case studies of organizations successfully leveraging digital technologies, digital transformation strategies, and digital business strategies. The aim of this stage was to provide practical examples of digital technologies, concepts, and strategies in practice within the hospitality and leisure industry. In stage 4 we reviewed relevant and seminal hospitality and leisure management research on required digital technology capabilities of organizations and associated competencies required of hospitality and leisure managers. Noticing potential competency gaps, we extended this literature review to incorporate the broader information systems research on required digital transformation and digital business organization capabilities and corresponding management competencies. Still noticing potential capability and gaps, we further extended the literature review to include entrepreneurship, innovation, change management, and general management literature focusing on accelerated change and transformation. We reasoned that these literatures may have additional digital transformation–related competencies, given they typically study change in rapidly changing or high-velocity environments.¹⁶ Finally, in stage 5 we reviewed the curriculums of hospitality and leisure management degrees and programs around the world. The purpose of this review was to explore the extent to which these programs and courses covered digital transformation and digital business–related organization capabilities and managerial competencies. See Table 1.1 for a summary of the types of literatures reviewed at each stage of the research process.

Table 1.1 Key literatures reviewed at each research stage for this book and the focus of each literature review

Research Stage	Research Activity
Stage 1	Review of the information systems academic research for discussions of: The relationship between traditional information systems concepts and contemporary digital business concepts The link between digital technology advancements and digital disruption The need for digital transformation and digital business The capabilities required for digital transformation and digital business The managerial competencies required for digital transformation and digital business
Stage 2	Review of the hospitality and leisure industry practitioner literature discussing: The relationship between traditional information systems concepts and contemporary digital business concepts The link between digital technology advancements and digital disruption The need for digital transformation and digital business The capabili...