Technology is changing – particularly in the hospitality sector.
Guests demand greater online interaction and more tailored offers.
Shareholders want greater cost savings to drive profitability following
the sluggish performance of the hotel sector in the last two years.
Hotel groups need to relentlessly search for new revenue opportunities,
and need to act quickly to secure them. In this era of change, hoteliers
face a crucial question: what to demand of IT providers?
With IT becoming an essential component of effective corporate
strategy, it is important to get fundamentals right. Through discussions
with industry analysts, commentators and hotel groups, analysing
surveys, and considering recent research, five key themes have emerged
on what global hoteliers should demand from IT providers:
The ability to cope with global expansion and business consolidation
as the market demands – even when these shifts happen rapidly
Over the past decade, the technological demands of hotels have grown
significantly. Such demands occur on two levels: the growing extent of
information surrounding each guest; and the need for operational
agility. Relating to the first, hoteliers have increasingly focused on
developing specific customer relationship management programs to foster
cradle-to-grave brand loyalty, requiring capturing and storing
information on guest activities and preferences. Simultaneously, guests
themselves have increasingly demanded more sophisticated technological
facilities, mostly before and during their stay. Relating to the second,
unpredictable markets and shifting economies require hotels to adjust
accordingly. IT providers must be able to meet these adjustments in an
agile, responsive manner. For instance, advertising sites and search
engines are increasingly able to propose leads to hoteliers in real
time, requiring hoteliers to accept or reject these leads in real time
too. This requires not so much a large amount of data as it does the
ability to process quickly the qualifications of a lead against an
extensive amount of data – which in turn requires IT providers suited to
the task. Such operational agility is particularly important for
growing hotel chains.
A vision towards the future and a focus on innovation
While Hoteliers focus on their own business, they may not have the
possibility to focus so much on technology. Hoteliers may struggle to
transform and develop IT technologies themselves. Indeed, in the past,
hoteliers tended to be almost reluctant to invest in IT, arriving late
to technological change. Yet now the consumer is pressing for
technological development, and the e-commerce/mobile trend in the market
is becoming an increasing reality.
Given this, hoteliers must look for IT
providers that both integrate new technology, and that possess a
future-oriented vision to determine what technological actions should be
taken. Integrating new technology refers to the ability of IT providers
to work with new applications, keeping up with and driving change.
Studies have shown that hoteliers should expect the next decade to
demand enhanced websites, upgraded Central Reservation Systems and
internet booking engines, new means of promotion, and an increased
interaction with technology. Customisable website booking options is
thought to be the number one emerging technology trend. Artificial
Intelligence-based technologies used to forecast food and beverage
demand more accurately will become more common. Mobile technology is
increasingly being used by consumers to interact with hotels, leading to
pressure for specialised websites and interfaces.
Can the IT provider handle these approaching demands? Indeed, can
they not just meet these changes, but actually drive change forward,
operating as a proactive rather than reactive force for the hoteliers?
Understanding such trends and future developments require constant
immersion in the IT world, combined with a serious focus on the
omnipresent question of ‘what is next’. Hoteliers deserve IT providers
that can both respond to, and lead, innovation.
Present a track record of success
IT providers should have demonstrated in the past that they have the
delivery capabilities and know-how to take on major industry challenges.
They need to be able to handle global, complex implementations and
on-going support for clients. How many dedicated client-facing and
research and development staff do they have? How many years of
experience do they possess managing portfolios? What is their track
record in dealing with heavy transaction processing? The absence of such
a background could be dangerous for hoteliers. For instance, the web
often has a high ‘look to book’ ratio. If IT providers have been unable
to handle heavy transaction processing in the past, this suggests they
will continue to do so in the future – meaning this ‘look to book’ ratio
will struggle against bad technology, and the hotelier would lose
business. Again, hoteliers require IT providers that are future-proof –
and in this case with the background to prove it.
Possess robust, stable and secure systems
A hotelier needs to be able to rely on their IT provider. They must
be able to trust that the IT provider’s system is at once stable, secure
and robust. A recent study indicated that more than 55% of credit card
fraud comes from the hospitality industry. Unpatched systems, storing
prohibited data, using low-strength passwords, and operating via
unsecured web applications have all been cited as leading to credit card
fraud. Security is crucial to protecting the reputation of the hotel
brand. What can the IT provider offer to ensure guests are protected?
Likewise, what happens when complications arise that challenge the
stability of an IT provider, such as a natural disaster or a power
outing? Infrastructure, system strength and security must be at the top
of any priority list, providing not simply stability but high level
stability within a heavy transactional environment.
Thus IT providers should offer innovative,
forward-looking solutions. Data monitoring and data surveillance are
obvious steps. Increasingly important to security is the use of
hybrid-cloud technology. The managed nature of certain cloud structures
helps ensure that important data is stored within a secure, stable
location outside the hotels. Should a natural disaster or power outage
occur, stressing the infrastructure of the hotel or the IT provider,
cloud computing helps ensure data is housed within a stable cloud
environment. IT providers should also offer systems secure not only in
the present, but in the future, considering projected security
developments like ambient intelligence, knowledge mining, biometrics and
predictive analytics.
Offer development that is conscious of expenditure
For
hoteliers, budgets inevitably factor into cohesive business plans. IT
providers should be conscious of this, operating in such a way that a
hotelier’s investment is maximised. A recent study determined that not
having the budget to make necessary improvements was the biggest
challenge for IT departments, even as such developments and improvements
were considered to be crucial. Likewise, projects supporting both
cost-savings and revenue generating were ranked first (97%) as the main
driver for technology initiatives. Thus hoteliers should ask: what is
the IT provider doing to accommodate financial realities? How are they
addressing expenditures without hindering development? For instance,
some IT providers invest their own extensive funds into a centralised
system, enabling hoteliers to access the benefits of these systems
without having to likewise expend such capital upfront. Hoteliers should
consider the capex versus the opex commitments required to modernise
their systems.
Inevitably, this is only the start. There will be
other things hoteliers should demand from IT providers – such as sector
experience and an ability to quickly meet needs, to name only two. But
the five demands listed above are crucial as hoteliers consider their IT
needs. They allow hoteliers to work with IT providers towards
future-proof, secure, client-focused, business-aware development. They
encourage advancement with stability and affordability with innovation.
In short, they are demands worth making.
