Cost reduction in light of digital transformation and its impact on competitive advantage an applied research study

Abstract

This research aims to demonstrate the role of digital transformation in reducing costs and its impact on enhancing the competitive advantage of the hotel sector, in light of the rising operational costs and the weak utilization of modern digital technologies faced by this sector. The rapid technological development has forced hotels to adopt digital transformation tools, which contribute to improving financial and operational performance, supporting the administrative decision-making process, and increasing operational efficiency, all of which positively reflect on achieving competitive advantage. The Mansour Melia Medina Hotel was chosen for the applied study to measure the impact of digital transformation on cost reduction. To achieve the research objectives, the deductive approach was relied upon thru the review and analysis of relevant theoretical literature, alongside the use of the descriptive-analytical method. This involved collecting primary data thru interviews with hotel management and staff to evaluate the existing cost system. The research concluded that the implementation of resource planning systems supported by digital transformation led to a significant reduction in the overall service costs. Costs decreased markedly, allowing management to make more flexible and competitive pricing decisions, thereby enhancing the hotel's competitive advantage.