What is Phygital Tech And How Is It Transforming the Hospitality Industry?

If I asked you about your last experience with phygital technology, would you have any idea what I’m talking about? Perhaps not – and yet, phygital technology is exceedingly commonplace in our world, even without an official buzzword. Phygital technology is the term coined to describe the marriage of two very different but equally important experiences: physical and digital. By blending the online and offline worlds within one experience or offering, brands across industries unlock new opportunities for customer engagement while creating a more seamless user experience.

In fact, phygital experiences aren’t just on the horizon; they are already readily adopted by businesses and consumers across all industries. Think about the last time you walked into a McDonalds or a similar fast-food chain – did they have digital kiosks available for self-service in combination with employees at the register? Have you ever utilized the Starbucks mobile app, which allows you to order ahead or scan to purchase and collect rewards once you order at the counter? Have you recently shopped at a grocery retailer that allowed you to scan a QR code to validate your parking rather than paying at the traditional machine? The last time you were at a restaurant, were you instructed by your server to scan the QR code on the table to access the menu?

In so many ways, phygital technology has already transformed how we interact with retailers and service providers, and, unsurprisingly, it has begun its takeover of another industry: hospitality.

The Rise of Phygital Technology

If there was any hesitation regarding phygital technology, the COVID-19 pandemic pushed it aside. Google’s own research “shows the pandemic has made people more flexible about whether they buy online or offline,” with 73% of people in their study saying they are channel-agnostic, compared with 65% pre-pandemic. Moreover, a recent Harvard Business Review article noted, "while e-commerce will continue to be an essential element of retail strategy, the future success of retailers will ultimately depend on creating a cohesive customer experience, both online and in stores.” Finally, Euromonitor research indicates that 78% of all purchases will still be made in-store by 2024; however, 63% of shopping occasions begin online

Now, more than ever, consumers across industries seem to be craving a cross-channel experience, and hotel guests are no exception. A study found that sports fans were happy to spend an additional $20 on food and drinks if they could spend half as long in line. In hotels, we can expect guests to be more likely to order a drink at the lobby bar or splurge on an upgrade if front desk lines were reduced or eliminated by phygital technology, such as self-check-in. The introduction of phygital technology is not a threat to the traditional, in-person service exchange; but instead stands to improve upon it and bridge the gap between high-touch service and convenient, frictionless service.

How is Phygital Tech Transforming Hospitality?

For the most part, hospitality has always been centered around human interaction. If “make yourself at home” has traditionally been the mantra of hotels to guests, the smiling faces and friendly, high-touch service provided by staff have always defined great guest service. Guests want to feel acknowledged, welcomed, and cared for when they step foot into a hotel that will represent their home away from home for the duration of their stay. This, even despite the continued evolution of our industry and the world in which it exists, has not changed; however, how that service is delivered, has changed.

Hotels will always offer human-centered service, but that service can be enhanced by implementing phygital technology that helps mitigate (or eliminate) operational road bumps. With the implementation of phygital tools such as mobile check-in and room upgrades, self-service kiosks, mobile room keys, mobile concierge services, in-room AI-powered assistants, and more, hotels are in a better position to provide exceptional service. Rather than leaving their staff to champion guest interactions and basic operational tasks, hotels can rely on phygital tech to offload much of the operational pressure formerly placed on staff so that they can focus more closely on the guest experience.

From the guests’ perspective, digital and in-person offerings allow guests to "choose their own adventure” and select the service delivery channel that best suits them. For some guests, this will be the speed and convenience offered by self-service tools, while other guests may prefer interacting directly with a staff member. Not only that, but digital offerings provide hotels with the opportunity (and, more importantly, the data) to personalize interactions with guests and ensure each touch-point is better catered to them and their preferences/needs. Phygital tech uses customer data to create information profiles for each guest, which can inform a more relevant guest experience (including more personalized upsell offers or rewards).

The Future is Phygital

Simply put, phygital experiences make it easier for hotels to give guests what they really want: enhanced autonomy and great guest service paired with convenience and enhanced personalization. In fact, phygital technology isn’t just an opportunity to improve service – it’s an opportunity to drive additional revenue, and it’s an opportunity that is far too often missed due to legacy processes and systems.

The guest experience is not limited to their decision to book, or the moment they receive their room keys – now, more than ever before, hotels must consider all aspects of the guest journey. Anything a guest sees touches, hears, or tastes. At the same time, on-property will impact their experience, so how can hotels utilize technology in tandem with traditional pillars of hospitality to make each guest experience more engaging, satisfying, convenient, and seamless?

If brand giants such as Starbucks and Amazon have taught our industry anything, it should be this: automation is a powerful tool, and convenience and personalization are powerful catalysts to customer satisfaction. So, hoteliers, now is the time to ask yourself – how much could the automation provided by phygital technology benefit your guests’ experience? More importantly, what are you waiting for?

About Stayflexi

Trusted by over 1300+ leading independent hotels, luxury resorts, multi-property groups worldwide, Stayflexi is the industry's first fully automated all-in-one hotel management and automation platform.

Reshaping a legacy hospitality technology landscape, the modern, cloud-based solution provides integrated PMS, Guest Upsells, Channel Manager, Booking Engine, and Revenue Management tools under single sign-on. Packed with powerful features to streamline and automate operations while increasing staff productivity and guest satisfaction, Stayflexi can help hotels maximize profitability. Self-service options like self check-in/check-out, touchless POS, auto room allocations, and auto inventory management can reduce operational costs by 50%, while the upsell engine can increase bookings by 30% while enhancing the guest experience.

The company was founded by computer science majors from Carnegie Mellon and Cornell to address their own problems as hosts as well as travelers and currently serves over 23,000 rooms in 100 cities across 13 countries.

Steve Carran
Sales Director
+1 844 234 2363
Stayflexi