From Traditional to Digital: The Evolution of Business Models in Hospitality Through Platforms

Abstract

The hospitality business model has undergone profound changes influenced by successive waves of technological advances and platforms. This paper explores how different waves of technologies and platforms are shaping the evolution of the hospitality business model. Employing a systematic literature review, this research analyzes how platform innovation has driven significant shifts in the industry. The analysis yielded four key findings. Firstly, the incorporation of digital technologies resulted in a radical transformation of conventional business models, prompting substantial alterations in marketing strategies, distribution processes, and consumer behavior patterns. Secondly, the industry has undergone five significant technological revolutions, evolving from steam-powered transportation to the integration of artificial intelligence (AI) and the Internet of Things (IoT), thereby driving a shift towards innovation-centric business models. Thirdly, the advent of digital platforms, most notably online travel agencies (OTAs), posed a challenge to traditional hospitality models by introducing personalized experiences and disrupting established market norms. While digital platforms offer advantages such as enhanced convenience and customization, they also present challenges, including intensified competition and declining profit margins. Nonetheless, technological advancements such as AI, virtual reality (VR), and augmented reality (AR) present a potential avenue for redefining value propositions and enhancing customer experiences. Fourth, the future of the hospitality business model is poised for further disruption, influenced by the emergence of new virtual platforms and services. This could potentially result in a reshaping of the industry’s value chain and value proposition.