29.7 C
Tuesday, May 28, 2024
HomeProcurementSmart Technologies For Hotel Procurement

Smart Technologies For Hotel Procurement

One of the most significant technological trends within the hotel industry is the rise of smart hotel technology. This technology benefits both hotel owners and guests, improving financial results, as well as the guest experience itself. Procurement occupies a place of importance in the hotel. It supplies the hotel efficiently and produces value through the optimal quality of goods and services as a function of customer service and sustainability at the lowest possible cost. All these measures have resulted in cost savings, environmental benefits, improve technology, and an increase in revenue whereby procurement is directly involved.

Smart Procurement Using Cloud Technology

Cloud-based technology enables hoteliers the key to run smarter, more profitable businesses that are in tune with modern-day travelers and more productive. The maturing of cloud computing and increased adoption of Platform-as-a-Service (PaaS) will impact the procurement system in many ways.

Over the years, technology evolved as a series of modules, even as enterprises discovered processes that could be mapped into software as sourcing, contracts, purchase, payments, catalogs, and so on. Today’s procurement is aggressively integrating all these disparate modules to offer a “source-to-settle” solution. One of the biggest strengths of a cloud-based system is that it can be easily connected to others software applications, even if these applications do not share the same provider.

Through quick data retrieval and seamless collaboration, cloud procurement software accelerates decision-making and reduces the overall turnaround time of the procure-to-pay cycle. Cloud and mobile enable access from any location, users can work from anywhere. Key priorities for the hotel to rebound from the COVID-19 crisis and achieve digital resiliency will be building a technology ecosystem that allows rapid innovation, drive profit, and improve efficiency.

Smart Procurement Using Internet of Things

AI-driven automation can automatically reduce room heating, ventilation, and air-conditioning (HVAC) consumption when the system detected the room is not in use. Data can be seen and collected by using the Internet of Things (IoT) network connected with sensors on live room environmental changes such as occupancy, temperature, humidity, HVAC energy consumption, and air-conditioning performance status. AI software automatically adjusts the HVAC settings to reduce energy use when the room is empty and restores the temperature when the room is utilized again. Such automation minimizes energy wastage and saves energy costs.

Inventory management automation can be implemented using remote scanners and sensors. Smart equipment alerts the tracking system when the product inventory is low, triggering reminders to restock or re-order without a staff needing to perform the regular audit. Using a range of tools ranging from planning and sourcing to contract negotiations, order delivery, payment, and supplier management, IoT helps procurement improve collaboration, analytics, and engagement.

Smart Procurement Using Robotic Process Automation (RPA)

Hotels need to create Purchase Requisitions routinely to fulfill ongoing purchase requirements of goods and related services. Turning transactional processes over robotic process automation is common today. Robots are not replacing humans, but software can automate repetitive, transactional tasks, such as paying vendor invoices or replenishing inventory levels based on triggers like the amount of product shipped. For the procurement function, RPA plays a crucial role in automating transactional Procure-to-Pay workflow and executing bidding transactions by leveraging systemic controls and well-defined business rules, thereby offering significant cost, improved data accuracy, and efficiency benefits. Instead of managing purchase orders, the procurement staff can concentrate on high-impact decisions when repetitive tasks are automated. The Covid-19 pandemic also highlighted the need to manage risk in the supply chain and, in turn, the need for technology and visibility.

Smart Procurement Using AI Technology

Artificial Intelligence (AI) chatbots have started to help businesses articulate their needs with procurement instead of completing lengthy requests on enterprise resource planning (ERP) systems. AI is creating intelligent machines that think, behave and learn like humans. AI can learn on its own and change, adapt, and grow based on new data. Data is critical for procurement teams because they are unable to track the spending on goods and services and manage supplier/vendor relationships without it. The growing number of data allows procurement teams to manage cost savings and supplier/vendor performance risk.

Contract Management is the process of managing contracts from different parties (suppliers/vendors, partners, and customers), covering the terms and conditions and deadlines, and supporting the processes that utilize the contract data, ensuring vendor relationships are efficient and profitable. Natural Language Processing (NLP) allows businesses to automatically scan and understand long and wordy legal documents for cost savings opportunities. The machine learning algorithm can also automate contract management via solutions to make the auditing process faster and more efficient.

In Hotels, AI is being integrated into systems used for revenue management, CRM, guests feedback management, messaging, and daily operations automation. AI is a disruptive technology that automates tasks and improves the way a hotel front office works. Implementing AI must be part of a transformation process that will establish a new balance between staff and virtual agents to use the best skills. Chatbots can provide instant answers to hotel-related-queries. This technology can reduce operational costs by ensuring staff does not waste valuable time on mundane conversations, especially repetitive guests’ requests.

AI can further help a hotel brand to understand guests’ preferences regarding what appeals or turns off a high-end user. These analyses on guests’ experiences can then be used to improved guest service quality. A study like this may spare significant time by eliminating the need for manual surveys. Due to the increase in guests’ receptiveness about contagious viruses, hotels worldwide might have to consider investing in safety and sanitation. AI-driven video analytics solutions can add visible value in this scenario by identifying infected guests and tracing their effective contact within the premises.

AI can provide insights into demand forecasts, competitor rates, and cost sensitivities while consolidating other factors such as seasonality, special occasions, duration of stay, type of room, and day-of-the-week differences to maximize room occupancy at dynamic pricing. Such study allows the hotel to understand better how to generate more profits and revenue.

The full content is only visible to SIPMM members

Already a member? Please Login to continue reading.


Atakan Kantarci. (2021). “AI Procurement: Why it matters & applications/use cases”. Retrieved from https://research.aimultiple.com/ai-procurement/, accessed 11/04/2021.

Hotel Tech Report. (2020). “What is the Internet of Things? IoT Devices and the Hotel Industry”. Retrieved from https://hoteltechreport.com/news/internet-of-things-iot, accessed 06/04/2021.

Kalyar Thiri Maung, ADPSM.(2020). “AI Technologies for Digital Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/ai-technologies-digital-procurement/, accessed 11/04/2021.

Philip Charles Loges, ADPSM.(2019). “Crucial Digital Technologies for Effective Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/crucial-digital-technologies-effective-procurement/, accessed 11/04/2021.

Revfine.com (2019). “Blockchain Technology Within the Hospitality”. Retrieved from https://www.revfine.com/blockchain-technology-hospitality-industry/, accessed 29/03/2021.

Saikrishnan Ranganathan. (2020). “Saving Costs and Boosting Productivity Post-COVID with SensorFlow’s AI-Driven Solution”. Retrieved from https://www.hospitalitynet.org/opinion/4100733.html, accessed 05/04/2021.

Suhale Kapoor. (2020). “Hospitality Brands and COVID-19: How Can AI and ML Render First-aid?” Retrieved from https://hospitality.economictimes.indiatimes.com/blog/hospitality-brands-and-covid-19-how-can-ai-and-ml-render-first-aid/4283, accessed 05/04/2021.

Tan Liew Yian, ADPSM.(2021). “Artificial Intelligence (AI) Technologies”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/artificial-intelligence-ai-procurement-hotel-industry/, accessed 29/03/2021.

Kam Pooi Foon
Kam Pooi Foon
Kam Pooi Foon has extensive years of experience in the specialised field of procurement, and specifically in the hotel industry. She holds the professional qualification in tourism management and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Pooi Foon completed the Advanced Diploma in Procurement and Supply Management (ADPSM) on April 2021 at SIPMM Institute.

Most Read