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Hospitality digitalisation trends in China

Hospitality digitalisation trends in China

Key Takeaways
  • The hospitality industry in China has long placed a considerable emphasis on integrating digital innovations to not only enhance the guests’ experience, but also to make the sector more sustainable.
  • This trend has significantly accelerated in recent times, as many businesses were driven to find innovative digital solutions to overcome a wide range of challenges related to the COVID-19 pandemic.
  • Independently of the pandemic however, many companies within the hospitality sector have long recognised the potential of digital solutions to improve customer experience and reduce their environmental footprint.

Encouraged by the considerable government support to promote digital technologies, the presence of several of the world’s largest tech companies, as well as the widespread profusion of digital infrastructure and transactional technologies, the hospitality industry in China has long placed a considerable emphasis on integrating digital innovations to enhance the guests’ experience and make the sector more sustainable. This, for example, can be seen in Alilbaba’s futuristic “FlyZoo” hotel, which was inaugurated in 2016, and features a wide range of AI-powered services that aim to create a convenient, seamless experience for guests. 

The subsequent outbreak of the COVID-19 pandemic in turn further accelerated this trend.  Many  businesses were driven to find innovative digital solutions to overcome the challenges associated with the ever-evolving status of a wide variety of non-pharmaceutical countermeasures, as well the pronounced shift among consumers towards remote or contact-limited services. In addition, it is worth noting that although most regions in China have transitioned to a post-pandemic phase, the young generation still fancies the convenience provided by technology. This underlines the need for brands to pay attention to customer experiences on technology to achieve high satisfaction and loyalty.

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Providing Immersive Experiences
Immersive experiences in particular are increasingly gaining in popularity, as they enable individuals to easily get together and entertain themselves without ever having to leave the comfort of their homes. To make this a reality, Swiss startup LocalBini for example is developing an immersive experience with the help of a VR headset and a dedicated protocol, which not only enables live streams in 3D and 360°, but also full voice interaction among all participants. This innovative technology can therefore be used in streaming platforms that wish to enhance their portfolio with 3D and 360° travel experiences, retirement homes that wish to offer live-streamed excursions, or luxury brands that want to present their flagship products to customers on different continents – all of which is highly relevant for the Chinese market.

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Expanding contactless services
In addition to providing immersive travel experiences, companies are also working to expand their portfolio of personalised, interactive, and entertaining contactless services. As noted by a recent Lausanne Hospitality School (EHL) blog post, “the fewer processes that must be handled directly by employees, the easier it is for brands to create positive, safe experiences for their customers.” In this context, ETH Zurich spin-off, Animatico, for example, combines stylised characters with artificial intelligence and voice control to create a seamless way of interacting with digital devices, such as kiosks and mobile-based platforms. To achieve this, the spinoff developed an avatar animation and interaction platform that can create interactive avatars, which can provide top-notch customer support for large public environments in an intuitive and entertaining way.

This technology evidently also possesses excellent potential in the Chinese market. Although robotics is already employed in the hospitality market, many companies are still seeking more advanced and interactive devices to further expand their digital customer service offers. For example, Animatico’s core product could also be used to analyse the facial expressions of customers, as well as to conduct sentiment analysis, thereby providing hospitality providers with invaluable information on how to improve their products, services and experiences.

Promoting sustainable hospitality
Finally, as China continues to pursue its ambitious goal to achieve carbon neutrality by 2060, the hospitality industry has also taken numerous steps to contribute to these efforts. These, for example, included a request by the Shanghai municipal government in 2019 for hotels to stop offering disposable amenities, unless customers specifically ask for them, as well as the issuance of a set of garbage sorting and recycling regulations.

In addition to disposables, food waste also constitutes a considerable challenge for China’s hospitality industry, thereby prompting a rising number of companies to develop innovative new solutions to address this problem. One example is ENWISE – a Shanghai-based company that offers a dry anaerobic digestion system called “OSCAR”, which transforms organic waste into affordable clean energy and fertiliser. To achieve this, OSCAR is equipped with an automatic Internet of things (IoT) monitoring platform that is able to autonomously realise 7/24 supervision and remote control of key performance indicators (KPIs). Moreover, thanks to its compact, modular design, it can also be customised to fit the unique needs of each client.

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Conclusion and outlook
In summary, although China’s hospitality industry has already benefited from the integration of digital innovations, it appears to be inevitable that this trend will only continue to accelerate in the future as technologies mature and give rise to exciting new applications. Contactless services in particular will constitute a considerable point of investment, along with technologies and models that aim to decrease the ecological footprint of the service industry.

References:

EHL Insights. Post COVID-19: What’s next for digital transformation? [online]. [n.d.]. https://hospitalityinsights.ehl.edu/what-next-digital-transformation (accessed on 27.10.2021).

McKinsey & Company. How COVID-19 has pushed companies over the technology tipping point—and transformed business forever [online]. 05.10.2020. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever (accessed on 27.10.2021).

Ministry of Foreign Affairs of the People’s Republic of China. Statement by H.E. Xi Jinping President of the People’s Republic of China At the General Debate of the 75th Session of The United Nations General Assembly [online]. 22.09.2020. https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1817098.shtml (accessed on 27.10.2021).

RAISER, Martin and PIATKOWSKI Marcin. China 4.0: Sharing the dividends of digitalization [online]. 10.11.2020. https://www.brookings.edu/blog/future-development/2020/11/10/china-4-0-sharing-the-dividends-of-digitalization/ (accessed on 27.10.2021).

STAFF, Alizila. Introducing Alibaba’s FlyZoo Future Hotel [online]. 11.03.2019. https://www.alizila.com/introducing-alibabas-flyzoo-future-hotel/ (accessed on 27.10.2021).