Hospitality tech in Southeast Asia has suffered in the past few years. However, it has overcome multiple challenges, like an economic downturn, and shown resilience and agility to begin thriving again post-COVID-19. The Travel and Tourism sector is now on track to experience significant growth, reaching USD 31.53 billion in 2024 and USD 38.22 billion by 2028.
According to the Hotel Operators’ Sentiment Survey 2023 by Singapore-based property and investment management firm JLL (Jones Lang LaSalle), occupancy levels rose as key markets reopened. Average daily rates (ADRs) in places like Bali and Phuket exceeded pre-pandemic levels by over 20%. Moreover, 73% of the hotels in the Asia Pacific (APAC) expected ADR to rise as well.
Some of the challenges the sector has faced include the COVID-19 pandemic, global tensions and conflicts, and regional disasters caused by climate change issues. The pandemic brought movement restrictions and travel bans, severely affecting tourist destinations in the Association of Southeast Asian Nations (ASEAN). Other problems included a lack of adequate vaccination among travellers, leading to refusal of entry to countries at the airport.
We previously highlighted economic storms like inadequate startup funding, high interest rates raising travel and product prices, inflationary effects on the economy pushing hospitality charges higher, and rising energy costs hindering touring logistics. Furthermore, workers expect more benefits after the COVID-19 pandemic, forcing management teams to raise hotel and rental pricing.
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Additionally, climate change and carbon emission reduction costs are high, preventing the hospitality industry from charging low room prices. Adopting technology in restaurants, hotels, and food & beverages (F&B) joints is costly, making it challenging for people to integrate with innovative tech. Finally, China’s prolonged lockdowns limited the number of people travelling, thereby preventing ASEAN from attracting customers.
These issues led to lost jobs, revenue, funding, and capital for investment.
How hospitality tech has demonstrated resilience
ASEAN businesses in the hospitality tech sphere have shown resilience in various challenges. Nevertheless, they have trusted government initiatives and policies to bring more success and funding through stimulus packages and training opportunities. There are also incentives tied to the tourism industry to boost travelling and accommodation.
Secondly, the region’s digital transformation has meant that hospitality tech stakeholders can digitalise their innovative service offerings and diversify their revenue streams. They were able to restructure their tour packages—for example, by providing group travel discounts—and use promotions to attract more travellers.
During the global pandemic, they focused on domestic tourism to counter the movement restrictions. They also restructured and streamlined operations to remove inefficiencies and resource wastage. By analysing problems in the sector, they could redirect their efforts toward sustainability and guarding the environment.
Some hospitality establishments were forced to lay off employees during the COVID years, but reopening key markets made it possible to begin rehiring to cope with the vacation seasons. It also gave companies time to upskill their staff to use technology to simplify their work lives and become more productive.
Future outlook for Southeast Asia’s hospitality tech sector
Despite the issues brought on by the global economic crisis, technology is helping the sector recover well. Smart tourism is rising, delivering travel analytics, ride-sharing applications, and IoT devices such as those for adjusting room temperature, which can reduce hotel costs. Smartphones enable seamless transactions, personalise tourism searches, and provide app-controlled door access.
Additionally, hospitality business owners can use online management software to record customer data in secure platforms. The cost of cybersecurity will continue rising as people become more conscious about the safety of their data and financial information.
Hospitality businesses can remain competitive through innovation, obtaining funding, seeking regional market opportunities, upskilling staff, and forming partnerships to provide additional services. There are opportunities to attract travellers from untapped markets and use marketing tactics to enhance the sector.
Adopting innovative technology, such as artificial intelligence (AI), will boost the hospitality sector by offering solutions like self-service, tour package purchases and bookings via apps, and security and record-keeping via blockchain. Even so, digitising will still require staff upskilling to enhance service delivery.
Choosing suitable suppliers can help save money, assist in choosing high-quality products and services, and work with people focused on climate change solutions in every sector. Tech can help companies target clean energy and renewable packaging products to use environmentally friendly goods.
Furthermore, sustainability concerns can be addressed by removing paper receipts and documents and opting for online information. Keycards can also be replaced with digital key entries to protect the environment.
Lastly, while it is essential to champion domestic tourism, most revenues come from outside, especially when hosting conferences and events. Thus, ASEAN leaders should open their doors and encourage foreign nationals to visit and enjoy the sites to counteract the impact of the economic downturn. Strategic partnerships and the use of hospitality tech in Southeast Asia will enhance tourism businesses by boosting their regional market reach.