Workday Global Study: Hospitality Leaders Share How to Thrive in an Era of Change

Hospitality’s technology landscape has exploded in recent years, with shifting consumer habits and pandemic-driven impacts fueling a surge in new business models, digital revenue streams, novel applications and tech tools. A few examples: third-party mobile delivery services and ghost kitchens, short-term vacation rentals, and mobile hotel check-in. 

But even as industry leaders move at a fast and furious pace to keep up with exponential change, Workday research reveals a disconcerting divide between many organizations’ digital growth goals and their ability to reach them. And what’s worse: The divide is widening. 

“Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” Workday’s global survey of 1,150 senior executives, found that 56% of hospitality leaders say there’s a growing gap between where their business is and where it needs to be to compete. 

Less than half (48%) feel their organization’s key performance indicators (KPIs) reflect the digital era in which they’re currently operating. And roughly the same amount (47%) say they have the tools to measure the performance of new digital products and service lines. 

Insufficient tools and fuzzy KPIs in a business climate marked by rapid change and widespread uncertainty? It’s no wonder only 1 in 3 hospitality leaders (39%) are confident in their organization’s ability to meet its digital transformation goals. 

Unlike other industries, tech aversion isn’t the issue. In fact, hospitality’s swift pivots and nimble digital deployments during the pandemic made it a case study on adaptability. But, as the Workday survey shows, many hotel and restaurant executives are having a harder time taming their data deluge and making sure technology will continue supporting companywide value creation. 

Fragmentation Impedes Future-Ready Hospitality

Data may be the lifeblood of modern operations, but it’s only as useful as it is accessible. While hospitality leaders have been swift to embrace emerging tools and best-of-breed applications, there’s no question that the resulting data silos threaten long-term performance and sustainable growth. 

A new loyalty app may be meticulously tracking consumer interactions, but if it’s not connected to the data that finance or procurement teams are using to plan, then its full value is unlikely to be realized. A robust portfolio of employee-facing tools can be a win in the talent wars—but if all that data is spread across multiple sources with different data definitions, how easy is it to turn the data into decision-ready insights?

Workday’s research shows 51% of hospitality leaders are working with data that’s at least somewhat siloed at their organization. Nearly the same number (49%) say siloed data hurts their ability to evaluate performance in real time. 

Without a digital backbone to unify the financial, people, and operational data that spans the front and back offices, hospitality leaders are left with a painful choice: make decisions using incomplete information and limited visibility or spend serious resources manually aggregating data from multiple sources before analyzing it.

Slow or sloppy insights are a risk in any industry, but in hospitality it can feel like only minutes separate those lapping the competition from those lagging behind. And Workday’s research suggests hospitality leaders understand the status quo but can’t keep pace with the accelerated rate of change in their industry. 

When asked about their confidence in their team’s ability to continually meet the needs of the business:

• 44% had low confidence in their team’s ability to make data-informed decisions in real time.
• 50% reported low confidence in their team’s ability to model multiple scenarios.
• 39% held low confidence in their team’s ability to provide relevant insights to the broader organization.  

Yesterday’s Tools Are No Match for Today’s Challenges

The need for greater agility is well established. And yet, many hospitality leaders say they struggle with technology that doesn’t allow their organizations to adapt as quickly and nimbly as they should. Only 30% of respondents say they are digitally well equipped to continue business operations in times of crisis, according to the study. 

Hospitality leaders know what they lack, but they also know what they need. Technology that unifies financial, people, and operational data—and breaks down data silos—were the two investments hospitality leaders reported prioritizing most to meet the future needs of the business.

Workforce woes, long a red-hot pain point for the industry, are motivating modernization investments for many. Restaurants and hotels are no stranger to labor struggles. But turnover, burnout, and skills shortages have reached peak levels. Nearly 6 in 10 hospitality leaders say a dearth of workforce skills prevents them from achieving their business strategy goals—more than any other industry in Workday’s research. 

Automation and self-service tools can accomplish some of the most time-intensive (and tedious) tasks that finance and human resources teams face, easing the strain of stretched-thin teams and freeing up talent to spend more time on strategic and high-level tasks. 

And, indeed, nearly 1 in 4 hospitality leaders (23%) said technology to augment team capacity is most important to ensuring workforce skills are fit for future business needs. The top spot, ranked highest by 31% of hospitality execs, went to technology to integrate financial, people, and operational data. 

Harmonized, real-time data is already reshaping how hospitality leaders address workforce planning and talent management. An example: schedule-optimization tools that afford maximum flexibility for frontline workers while enabling managers to easily keep labor costs in lockstep with shifting business needs. 

It’s worth noting that 23% of hospitality executives ranked scalable learning and development (L&D) at the top of the talent list when it comes to accelerating transformation across the wider business. That means hospitality trails only professional services as an industry laser focused on L&D.

Shifting From Reactive to Resilient 

Rather than white-knuckle their way through the next challenge, hospitality leaders are looking to shore up their resiliency by modernizing their tech infrastructure and shaking free of the legacy systems that hamstring adaptability.

Take, for instance, Drury Hotels, which owns and operates 150-plus hotels in more than two dozen states. Just months before the pandemic hit, Drury Hotels moved from a 20-year-old legacy enterprise resource planning (ERP) system to Workday—and the timing couldn’t have been more fortuitous.  

“We lost 80% of our revenue in one month, and cash flow forecasting became absolutely critical,” Amy Smith, CFO at Drury Hotels, said at a recent Workday Rising event. 

Rather than wrangle disparate data sets in a brittle legacy system or manually update a static spreadsheet, the team was able to access and analyze a single source of companywide, real-time data with Workday. 

Using Workday Adaptive Planning, the team set up forecast assumptions and formula-based variables around those assumptions. They could swiftly model multiple robust scenarios, analyze the downstream impacts of any plan, then settle on an optimal path forward. Making adjustments, as they tracked actuals against forecasts, could happen in a matter of minutes, rather than days or weeks. 

“That really has transformed both how our team interacts with the budget and forecast process and also our ability to forecast with a level of precision that’s so much better,” said Smith, noting the company’s shift from an annual budget cycle to biweekly forecasts.

Hospitality executives eager to gain traction with their digital transformation efforts would be wise to borrow a page from Drury Hotel’s playbook and, likewise, focus on modernizing their enterprise systems. Because in an industry facing relentless change, clinging to outdated systems risks being left behind.

To learn more about how Workday helps hospitality organizations drive digital transformation, visit our website.