Top three paths travel and hospitality companies take to start their digital transformation on AWS

Welcome to 2023! It’s no secret that 2022 was a great year for travel and hospitality companies, with many reporting record quarterly and fiscal year earnings. This financial strength can be attributed to their ability to deliver exceptional customer experiences while optimizing their operational efficiency.

However, in 2022, travel and hospitality companies also faced challenges such as the spread of the Omicron virus in January, pent-up demand, and staffing challenges. To address these challenges and accelerate their recovery, they turned to digital transformation with Amazon Web Services (AWS). In fact, a recent survey by AWS and industry analyst Skift found that 72 percent of travel and hospitality industry executives consider digital transformation “very important” to their business, and 65 percent reported that their budget for digital transformation increased by more than 6 percent compared to 2019.

For those just starting their digital transformation journey with AWS, the question remains: “Where do I start?” To help answer this question, we’ve compiled a list of the top paths travel and hospitality companies can take to begin their digital transformation.

1. Migrations for legacy systems and applications

In 2022, more than 30 percent of travel and hospitality companies started their digital transformation by migrating legacy systems and applications to AWS. They wished to bring stability to their legacy systems while reducing the overhead and operating costs to maintain them, all while training and upskilling their resources to use modern technology to empower innovation.

According to the AWS Cloud Economics Center, postmigration, travel and hospitality companies reduce application-specific infrastructure costs by an average of 20 percent per year and increase the development staff’s ability to focus on strategic work by 29 percent. They also achieve a 54 percent reduction in annual unplanned outages and a 45 percent reduction in security-related incidents per month.

Common candidates for migration projects included database migration, data center migration, enterprise resource planning applications (for example, SAP), and website and mobile applications.

With the depth and breadth of travel and hospitality companies we are fortunate to support, and as the thousands of migrations that we facilitate each year, we observe patterns in how travel and hospitality companies migrate their systems and applications to AWS through different paths. For more details, please visit Airport Cloud Migration Journeys and stay tuned for upcoming ebooks for Restaurants and Accommodation & Lodging.

For travel and hospitality companies that would like to gain confidence from obtaining support from those experiences in migrations, we offer AWS Professional Services—a global team of experts that can help businesses realize their desired outcomes when using the AWS Cloud—including Migration Readiness Assessment and Migration Evaluator, as well as AWS Partners specialized in the industry to help them get started.

One customer who chose this path is Accelya, a leading global provider of technology solutions to the travel industry. The company used AWS solutions and programs to migrate its applications within a few months, with the chief operating officer, Jeffrey Matthew, stating, “It wasn’t so much about what we built; it’s how quickly we did it. Within two days, we had a proof of concept running in our production environment. It could absolutely run our workloads.”

2. Modernization for systems and solutions

In 2022, travel and hospitality companies also explored cloud-native services from AWS. They demonstrated interest in managed service offerings to improve security postures and save IT operation costs. Topics for modernization projects by spending included:

1. Serverless compute: AWS offers technologies for running code, managing data, and integrating applications, all without managing servers. These technologies eliminate infrastructure management tasks, like capacity provisioning and patching, so travel and hospitality companies can focus on writing code that serves their customers. An example of serverless compute service:
   • AWS Lambda, a serverless, event-driven compute service that lets you run code for virtually any type of application or backend service without provisioning or managing servers
2. Database and analytics (DB&A) services: With fully managed resource provisioning, maintenance, and backups, travel and hospitality companies no longer have to worry about operational database management and can focus on their business, instead of managing databases. Examples of DB&A services include:
   • Amazon Aurora, which provides built-in security, continuous backups, and serverless compute
   • Amazon Relational Database Service (Amazon RDS), a collection of managed services that makes it simple to set up, operate, and scale databases in the cloud
   • Amazon Redshift, which uses SQL to analyze structured and semistructured data across data warehouses, operational databases, and data lakes
3. Containers: Containers are the smallest compute unit in a cloud-native application. They are software components that pack the microservice code and other required files in cloud-native systems. By containerizing the microservices, cloud-native applications run independently of the underlying operating system and hardware, allowing travel and hospitality companies to use fewer computing resources than conventional application deployment. Container services include:
   • Amazon Elastic Kubernetes Service (Amazon EKS), a managed Kubernetes service to run Kubernetes in the AWS cloud and on-premises data centers
   • Amazon Elastic Container Service (Amazon ECS), a fully managed container orchestration service that makes it easy to deploy, manage, and scale containerized applications
   • AWS Fargate, a serverless, pay-as-you-go compute engine that lets users focus on building applications without managing servers

For example, Taco Bell built a serverless data integration platform to handle the complex task of creating unique menus for each of its over 7,000 restaurants. This menu middleware uses Amazon Aurora combined with AWS Amplify, a complete solution that lets front-end web and mobile developers easily build, ship, and host full-stack applications on AWS; Amazon DynamoDB, a fully managed, serverless, key-value NoSQL database; AWS Lambda; Amazon API Gateway, a fully managed service that makes it easy for developers to create, publish, maintain, monitor, and secure APIs; and AWS Step Functions, a visual workflow service that helps developers use AWS services, to create a scalable, cost-effective data pipeline.

If you would like to see more cloud-native architecture for the travel and hospitality industry, please visit the reference architecture.

3. Single view of travelers/guests

In an industry that generates a large volume of data on customer preferences and transaction records, travel and hospitality companies want to understand their guests better and get the most value out of this data. However, in the 2022 Skift Digital Transformation Report, only 18 percent of travel and hospitality industry executives indicated their data collection and analytics capabilities as “excellent” today. A few mentioned siloed and fragmented data and poor data quality as major roadblocks.

To remove these roadblocks, some travel and hospitality companies start their AWS journey by building a unified view of customers, known as Customer 360°. They developed their data platform solution and connect it to critical industry systems, such as property management systems (PMS), point of sale (POS), customer relationship management (CRM), and customer contact center solutions to get actionable guest insights from data on customers.

Barceló Hotel Group, one of the largest hotel chains in Spain, used Tealium, an AWS Partner, to create its data platform and became the master of its data, facilitating better data quality, management, and usage.

AWS Training and Certification

As more travel and hospitality companies are investing in digital transformation to accelerate business growth, they’re quickly finding that they lack the necessary cloud-skilled talent to help reach their cloud goals. This lack of talent is a major obstacle, especially as the industry is trying to bounce back from the impact of the COVID-19 pandemic. The pandemic led to widespread layoffs and furloughs, which caused many skilled workers to leave the industry and work in other fields, making it harder for companies to find the talent that they need to migrate to and effectively use the cloud.

To address these challenges, many customers in 2022 turned to AWS Training and Certification, where businesses can learn from AWS experts, advance their skills and knowledge, and build in the AWS Cloud. For instance, TUI Musement, a leading tours and activities business that combines a scalable digital platform, used AWS Skills Guild, a comprehensive skills enablement program that builds cloud fluency across an organization, to launch its training under the brand TUI Cloud Academy. Using this program, TUI Musement trained 715 resources in six months. AWS Training and Certification provides a comprehensive training program that helps employees gain the necessary cloud skills to support their organization’s digital transformation efforts. By taking advantage of AWS Training and Certification programs, TUI Musement and other customers positioned themselves better to achieve their digital transformation goals.

Kick-start your digital transformation with AWS

The travel and hospitality industry has chosen AWS to run its mission-critical workloads and innovate for the future. AWS offers a range of capabilities and solutions specifically designed for the travel and hospitality industry and has a wealth of industry experience that can help your organization accelerate its digital transformation.

To learn more about how AWS and its Partner solutions can help you start the digital transformation, visit the AWS Travel and Hospitality website to learn more about industry solutions, find case studies, and connect with the dedicated Travel and Hospitality team.