In addition to the employees they lead, a substantial proportion of respondents indicate that they currently outsource or intend to outsource in 2020 application development, property IT support and corporate information security functions. Information security remains the top enterprise priority, followed by digital transformation, employee engagement and big data initiatives. Cloud migrations are the next priority, but they rank lower than in last year’s survey. This implies that respondents have successfully completed a significant number of cloud migrations.

Hotel investment priorities are led by payment processing initiatives, typically EMV and tokenization efforts. Following these are upgrades to major hotel systems, including PMS, POS and wireless Internet access for guests. Telecom remains a relatively low priority for both the enterprise and the property, with a surprising drop in intent to launch an above-property shared services call center compared to last year's survey.

Budgeting Processes and Spending Plans

In this year’s CIO survey, we asked respondents to describe how their organizations approach budgeting for IT expenditures. By far the most common method (57 percent of hotel companies in the sample) is to develop a single budget for all IT encompassing the enterprise, both corporate and all properties. On the other hand, 24 percent of respondents develop separate corporate IT budgets and individual budgets for the properties. And 20 percent of respondents create a corporate IT budget and a separate budget that covers all hotels.

In last year’s survey we asked the same question about 2019 budgeting and have found a strong shift toward the enterprise budgeting model in one year.

Half the survey respondents indicated that their 2020 budget plans called for spending more on IT in 2020 than in 2019. Just under a third are budgeted for “about the same” level of spending. The remaining 20 percent expect to spend less, suggesting that some major deployments were completed in 2019.

2020 Investment Priorities

For 2020, we asked respondents to rank investment priorities separately for the enterprise and hotel level.

Enterprise Investment Priorities

For the enterprise priorities, it’s no surprise that information security remains the top priority, as it was in last year’s survey. Also consistent with 2019, digital transformation holds down second place.  

In the 2019 survey, cloud migration and big data were essentially tied with digital transformation for second. This year, we have some meaningful separation between second and third, with big data and employee engagement tied for third, suggesting that numerous organizations successfully executed cloud migrations in 2019. Procurement investments and ERP continue to own the bottom rung of priorities. This ranking doesn’t mean hotel companies don’t consider these areas important. Rather, it implies that the solutions in place are serving the enterprise well and don’t need replacement or major investment for most organizations.

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Hotel Investment Priorities

The list of candidates for hotel investment priorities is a bit longer than for the enterprise, so we asked respondents to rank only their top five investment areas.

Payment processing slightly edges out new or upgraded PMS for first place, as it did last year. This suggests many organizations are still working through full EMV compliance. EMV device certification for F&B POS applications and card not present transactions remains a challenge for many hotel companies and our vendor partners. The fact that PMS remains a close second in priority reinforces the primacy of this crucial tool to effective hotel operations. POS, Wi-Fi and guest engagement applications are all tied for third. This also is similar to last year, except for guest engagement displacing PCI compliance in the top five. PCI has dropped several spots to tie with other areas such as mobile key, housekeeping and panic button, cloud migration and network infrastructure behind in-room entertainment upgrades and staff mobility. PBX, guest service delivery and digital signage round out the bottom of the priority list.

Conclusion

This report presents the findings of a survey of leading CIOs representing more than 18,000 hotels and 2 million rooms. The study examined staffing, budgeting, outsourcing and broad investment priorities at the enterprise and hotel levels, then drilled down to focus on telecom, guest engagement, cloud migration and payment technologies.

In total, the findings show that the industry remains committed to using technology to drive the business, increase revenue, decrease costs and enhance the guest experience.

©2020 Hospitality Upgrade

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