Hotel technology insiders have been discussing a giant migration to the cloud for nearly a decade now.
Early on, IT teams would frequently debate the challenges and opportunities, masking their fear of the unknown. Then technology leaders began discovering many additional benefits to operating in the cloud. Smaller, more aggressive tech startups became the early adopters and, as they gained traction, disrupted laggards in the space.
Those who dragged their feet are now left kicking themselves. Today, brands, owners and operators understand that an open, cloud-based supplier community better serves hotels and the overall industry.
At the 2017 Revenue Strategy Summit in Washington, D.C., a panel of hoteliers and suppliers collectively called for industry partners to open up their programming interfaces. To do this more easily, legacy systems must move their data, applications and operations above property, where systems can talk with one another and share data in a fast and secure ecosystem.Panelists @RevStrategy: A more connected #tech ecosystem better serves #hotels Click To Tweet
“It really comes down to the hotels to demand connectivity and integration and openness,” said Al Genin, chief analytics officer and senior VP of revenue management for Great Wolf Resorts. “We need to really understand: Are they truly open, and are they willing to work with other groups that might cross the line a bit?”
“So long as you have a cloud application that’s as open as possible with bi-directional APIs, ultimately that makes each system smarter,” added Sundeep Chanana, an Internet and software investment banker with Horatio Partners. “You don’t have disparate systems and fractioned data, and you have things like real-time optimized pricing.”
Chanana said more suppliers opening up their systems would go a long ways. “They have a bunch of reasons to keep those closed-wall systems, but we need to lobby them to open up their APIs,” he said.
Traditional benefits of the cloud are obvious: Less on-site hardware means less server maintenance, and web-based software allows users to log in and access the system and data from anywhere. But there’s an increasing number of vocal hoteliers who, like Genin and Chanana, are calling for open APIs and cloud architecture for new reasons.
For one, cloud computing allows owners and management companies to build nimble tech stacks. Should one part of the integrated system become obsolete or bought out by another company, hoteliers can pull the old software and plug replacement software right back into the network.
Also, cloud-based software is continually updated with new features and functionality, as opposed to hosted software that often requires users to purchase the latest versions.
The less friction there is to exchange data, the faster and easier it will be to integrate systems and increase the potential for innovation.
Enabling True Personalization
A widespread industry adoption of cloud computing would allow for much more advanced guest personalization.
Will Darrah, VP of reservation solutions for TravelClick, said it would certainly improve the guest journey and help hotels personalize many parts of the guest experience. For example, he said, TravelClick is beginning to introduce video into the booking experience.
“From the booking engine to the acquisition and retention phase to clickstream data, think of a world where you can go after that customer in a form in which they want to buy,” he said.
But it’s perhaps more important, Darrah said, for hotels today to transition the data from acquisition efforts to retention efforts by continuing a personalized experience once the guest has arrived on property.
“We want to be able to make this data actionable,” he said. “Once we get that guest to the property it will be imperative to maximize their preferences.”
Genin agreed, saying Great Wolf is evolving its approach to guest loyalty by using personalization data. He said guests today expect hotels to actually be using the data they’ve already provided.
“The expectation of the customer is that if you have data around my preferences or experiences, you should be able to recognize and act on it,” he said.
“Personalization is going to look completely different in six months,” Darrah concluded.
Brands Causing the Bottleneck
Much of the blame for a lagging cloud movement lands squarely with the big hotel brands, panelists agreed.
On-property legacy system solutions, like the proprietary tech stacks built by brands, “absolutely hinder our ability to achieve optimal RevPAR performance,” Chanana said.
Brands “spent hundreds of millions of dollars on their tech stack and it’s hard to throw that away,” Darrah added. “But these vendors are your biggest allies.”
Darrah said many smaller ownership and management groups are getting smarter and putting together their own tech stacks, connecting separate systems that are quickly taken off the shelf and inserted into the equation.
Many on the panel agreed that traditional property management systems were built to check guests in and out but now have become a central repository for connecting various systems and storing data. While it’s painful to remove a PMS, there are better, more advanced systems capable of providing a single source of truth, Darrah said.
In the end, technology suppliers will continue to push the industry forward. While companies understandably want to protect their revenue, building closed systems and not sharing data will no longer fly.
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