The Smart Hotel: a contactless and digital journey towards sustainability in Malta.

BY PATRIZIA NEGRO MBA IN INTERNATIONAL HOSPITALITY MANAGEMENT IN ACADEMIC AFFILIATION WITH THE EMIRATES ACADEMY OF HOSPITALITY MANAGEMENT

Internet- and Cloud-based systems are transforming the way businesses operate. This is particularly interesting for the hospitality industry, though with limited application to date due to many variables. Advances in the smart technologies like the Internet of Things (IoT) and Artificial Intelligence (AI) through Information and Communication Technology (ICT) provide the opportunity not only to optimize hotel operations but also create personalized services and experiences. Prior research discussed extensively the numerous advantages of smart technology for hotel guests, however the barriers that stop hotel stakeholders from implementing it in hotels is a grey area that has not been sufficiently explored yet.

The study, through primary data gathered from a qualitative research methodology and secondary data obtained from the academic literature, aims at analyzing the above-mentioned poorly investigated area and identifying the gap between the literature review and the hospitality industry in Malta. Besides, the research study contextualizes the hospitality industry in today’s modern and smart era and propose a Smart Hotel business model category to rejuvenate the current hospitality industry practices and to progress towards sustainability in Malta.

In order to accomplish the goal of the study, a qualitative research method was used consisting of two surveys: one addressed to the general public working within the tourism sector and the other to professionals in the hospitality industry. Interviews were conducted with Hotel Senior Managers, IT suppliers and Malta Tourism Authority (MTA) and Ministry of

Tourism (MOT) representatives. Through the findings it was possible to answer the research questions and correlate them with the academic literature to identify the gap between academia and the stakeholders’ perspective on Smart Hotels.

It appears that all hotel stakeholders defined a smart hotel as highly dependent on automation and digitalization. Most of the respondents’ approach about smart technologies in hotels is customer-centric (in-room facilities designed to enhance and personalize the guest experience), employee-centric (improving working efficiency, whilst reducing workload and human errors), and revenue-centric (saving operational costs and increasing revenue). Conversely to academia, none of the participants mentioned that the association with the term ‘smart’ could help to enhance their hotel brand image and online reputation.

The study clarified that currently there are no indicators yet for digitalization or use of smart technologies in local hotels. Nevertheless, most of the participants believe that the introduction of a Smart Hotel would add value to the tourist experience, and, at the same time, it would elevate the hospitality industry offer and overall, Malta as a destination. It was even suggested that such a hotel business model could tap into special interest travel niche markets like the Digital Nomads phenomenon, or the Medical Tourism, the Sustainable Tourism (green) segment and the Bleisure Tourism (business and leisure). Though everybody agrees that the Smart Hotel has potential, there seems to be a collective consensus among participants that it should not fall among the existent hotel star rating (2- star, 3-star, 4-star or 5-star hotels) category but it could be an additional label or a sub- category (i.e., 3-star hotel with technology). In addition, the research findings reveal that cost, return on investment (ROI), time and resistance of owners and stakeholders are the key barriers. On the contrary interoperability and connectivity, security and privacy risks, and employee turnover were not mentioned by the participants as threat motivators.

Instead, the smart technologies integration is perceived by both employees and stakeholders as a strength, as repetitive tasks can be automated, and people can focus more on guests.

With regards to the proposal of increasing smart technology to existent hotels and the hypothesis of introducing a Smart Hotel category to pursue sustainability goals, the study reveals that this is an aspect often overlooked by most, and that any smart practice adoption is mainly due to marketing interests rather than to actual pro-environment concerns. Nevertheless, several points were proposed as to why Malta should become a Smart and Sustainable Island and hotels in Malta should engage into environmentally conscious initiatives. Firstly, the smart service intervention can not only streamline operations, increase revenue and personalize the guest experience, but can contribute significantly to the reduction of the environmental impact in services, products, supplies, and even contribute to persuading guests to behave sustainably by educating them to the eco-technologies and the “green practices”.

Secondly, the Smart Hotel business model adds value to the accommodation offer by elevating the quality of the experience in hotels and transitioning from a hotel room to a smarter and more sustainable accommodation that deploys technology to pursue a sustainable competitive advantage. Thirdly, it would increase the guest expectations with regards to digitalization, automation, speed and, by providing immersive experiences through AI Technology (wall maps and AR videos), to match the trends and the changes in travel and living brought by the pandemic.

The study helped to derive several conclusions, one of which being that the society has become dependent on technology and sensitive to environmental practices at the point that these are not only influencing the buyer’s behaviour, but even the employees’, who are increasingly demanding welfare in the workplace. Therefore, the study’s observations, while recognizing the challenges for Malta to become a Smart and Sustainable Country, also indicate the potential of the Smart Hotel business model in the hospitality and tourism industry, as a source of experience co-creation and promoter of environmental sustainability. The research places emphasis on the necessity of adopting a transformative and reinventive approach as well as a holistic and futuristic vision which is clear and shared equally by tourism and hospitality stakeholders.

Keywords: Smart Hotel, Smart Technology, Sustainability, IoT, A.I., Malta.

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BY DAVID PACE