As with many sectors, a tidal wave of technology is sweeping the hospitality world. Artificial intelligence (AI), the Internet of Things (IoT), and next-generation connectivity solutions such as 5G are reshaping guest experiences and operational frameworks. Operators must adapt quickly to survive and thrive. From personalized travel recommendations powered by AI to smart hotel rooms and seamless digital experiences enabled by cloud computing, the landscape is evolving rapidly.
As the industry embraces digital transformation, it must also grapple with cybersecurity risks, data integration hurdles, and the imperative to balance automation with human interaction. What are the key trends operators need to be aware of, and who are the trailblazers beating a path to the future?
The Rise of AI
Artificial intelligence is fast becoming a mainstay in the travel and tourism industry. The speed with which the technology is creating new avenues for personalization, efficiency, and targeted marketing continues to astound. The global AI market, including software, hardware, and services, is projected to reach $1.04 trillion by 2030, growing at a compound annual growth rate (CAGR) of 39.1%.
A standout example of effective AI deployment in travel and tourism is the luxury Turtle Bay Resort in Hawaii. Using Salesforce’s Einstein 1 generative AI platform, it consolidates guest data to create personalized marketing campaigns and enhance concierge performance. According to a recent GlobalData case study, results from the platform’s rollout included a 20% increase in booking conversions, a 15% rise in repeat bookings, and a 50% improvement in concierge efficiency.
Online travel agencies (OTAs) are also investing heavily in AI to enhance customer service, reduce response times, and offer unique, tailored experiences. The influence of AI is evident throughout the hospitality marketing funnel—from acquisition to post-stay engagement. However, there are important caveats. While budget providers benefit from automation to improve efficiency, luxury brands must strike a balance between digital innovation and maintaining a high-touch, human-centric experience. Moreover, the security implications of flawed implementation can be significant.
The Cybersecurity Imperative
As hospitality businesses digitize their operations, vast amounts of data are exposed to potential online criminality. Cybersecurity has thus become a critical priority. According to GlobalData, travel and leisure businesses are expected to spend $4.3 billion on cybersecurity by 2027, growing at a CAGR of 13.2%.
Major hospitality chains have suffered high-profile cyberattacks in recent years, resulting in financial losses and reputational damage. Major breaches at Marriott in 2014, 2020 and 2022, for instance, affected hundreds of millions of customers and resulted in substantial financial penalties from regulators.
Key challenges in cybersecurity include minimizing risks from data fragmentation (which complicates problem resolution), breaches caused by human error, and staying compliant with constantly evolving data protection laws. To mitigate these risks, continued investment in encryption, AI-driven threat detection, and multi-factor authentication will be crucial for travel providers seeking to protect customer data.
The Internet of Things: Connectivity and Automation
IoT is poised to be a hospitality game-changer, connecting devices, systems, and infrastructure more seamlessly than ever. The global IoT market in travel and tourism is expected to reach $29.35 billion by 2028, according to GlobalData.
Airports already leverage IoT for baggage tracking, real-time flight information, and security wait-time updates. Smart hotels are implementing IoT-enabled room controls, allowing guests to adjust lighting, temperature, and entertainment systems via mobile apps or voice assistants. Staymyway, a Spanish IoT firm, has developed a digital key platform that eliminates the need for physical keycards—improving both convenience and security.
However, IoT adoption presents challenges. Security vulnerabilities remain a significant concern, as poorly protected IoT devices can become entry points for cyberattacks. Compatibility between legacy systems and newer IoT devices also creates integration issues. Effective data management and analytics will be key to unlocking the full potential of IoT in hospitality.
Connectivity via the Cloud and 5G
The deployment of 5G networks promises to transform travel experiences. With 6.73 billion 5G mobile subscriptions expected globally by 2029, ultra-fast data transfer and low-latency communication will enable innovations like augmented reality (AR) travel guides and real-time language translation.
Companies such as TravelX are leading the charge, building platforms that enhance real-time personalization and immersive travel experiences. Airports and hospitality providers are using 5G to optimize traffic flow, manage congestion, and improve security through biometric authentication.
Cloud computing will reinforce this connectivity. The global cloud computing market in travel and tourism is projected to reach $23.93 billion by 2028, driven by rising demand for centralized data management and scalable IT solutions. Still, cloud adoption brings concerns around data security and regulatory compliance. Cyber threats such as ransomware and data breaches are growing issues, particularly given the sensitivity of personal and financial data handled by travel providers. Regulatory frameworks like the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) further complicate compliance.
Ultimately, hospitality firms face a tricky balancing act: embracing cutting-edge technology while staying compliant with evolving regulations—and maintaining a personalized, human touch. Those that strike the right balance will thrive; those that lag risk falling behind in a sector increasingly defined by data-driven, hyper-personalized experiences.
Discover further insights
To learn more, download our new report—Emerging Trends in North American Hospitality: 2025 and Beyond—published in association with Sterling Technology—the provider of premium virtual data room solutions for secure sharing of content and collaboration for the M&A, corporate development, real estate, capital markets, private capital, banking and legal communities engaged in travel, tourism and hospitality dealmaking.
