Be warned, there’s a new sheriff in town: Data integration.
Without it and its like-minded cousin technology interoperability – the notion that computer systems can seamlessly connect and communicate with one another — maximizing a hotel’s profitability in the modern era is near impossible, archaic and frustrating.
Before cloud-computing became a reality, interoperability was akin to a hodgepodge of makeshift solutions relying on individually designed, usually costly interfaces. Machines spoke different languages, making it extremely difficult for many programs to efficiently integrate. It was a world filled with fragmented solutions and data silos that made it problematic for hoteliers to maximize opportunity through computing power. It was an era suggestive of what it’d be like if the United Nations had no translators; good intentions, but no coherent way for effective communication to take place.
Sadly, even with newer hotel operations platform technologies available such as more vibrant, powerful hotel property management systems (PMS) operating in the cloud, hoteliers are still lagging in other sectors. According to Handy, the hospitality industry is far behind other industries when it comes to IT spending, and that’s hurting potential profits.
A 2017 Lodging Technology Study state 53% of hotels find outdated technology architecture and the extensive efforts required to integrate with systems as the top reasons hoteliers are behind.
Fortunately, the explosion of cloud-computing is ushering in flawless technology interoperability, which sets the stage for data integration. And with it, the opportunity to better understand customer habits, desires and booking patterns in ways the hotel business is just starting to leverage.
The 2017 Smart Decision Guide to Hotel Property Management Systems notes an incredible 91% “agree” or “strongly agree” that technology platform interoperability and compatibility is a key success factor for hotel performance improvement.
Take the central reservations system (CRS). Without technological interoperability and data integration, hotels are stuck in the prehistoric days of manually adding reservations as rooms are booked. The same is true in other areas of hotel operations. Restaurant sales and spa treatments wouldn’t automatically be added to guest folios while there’d be no ability to integrate credit card charges, call accounting, sales & catering systems, energy management, back-office accounting, electronic locks, Wi-Fi Connectivity permissions, in-room movie charges, and more. And forget about getting information automatically from that mini-bar or in-room entertainment system or knowing the true value of a specific customer to a specific hotel. Plus, there’s more chance for errors created by manual entry.
“Integration is important. We had a lot of problems with our previous system because of integration issues. Reporting was incorrect. Credit card interfaces weren’t working. A lot [of] things were breaking down during peak times. We knew we needed to move to a new system quickly, and we did it in the middle of our peak season,” Said Peter Allen, Director of IT with Shilo Inn. “With the new system, our operations are much more stable. Credit card interfaces are reliable. We now have a good functional platform with the option to interface with a lot of different systems to create a full end-to-end solution. The reporting is accurate, our pricing is quick and efficient, and the system interfaces with our reservations system and our sales activities. Every part of the new system, from revenue management to group bookings to being able to accurately monitor performance, is so much simpler and easier.”
When these disparate systems have fluid communication, insights bubble to the surface allowing for smarter operational decisions and an increased ability to exceed customer expectations. But for data to be exchanged easily, it all needs to speak a common language.
“At GrandStay, we needed a property management system that would connect well with our proprietary reservation system,” said Jon Kennedy, CEO of Grandstay Hotels & Suites. “The systems needed to link without any problems. Our predecessor [solution provider] was having a difficult time doing that. So, for us, that was an important part of the equation. Not only with our general managers, but also with our other resources. You have to be able to connect [the PMS] directly to all of the different systems the hotel is using to run the business efficiently.”
Last year, HTNG’s Next Generation Distribution Messaging Workgroup was tasked with finding a new way for various computer systems and software for hotels to communicate as cloud-computing becomes the de facto hotel industry standard. The group had participation from major stakeholders such as the OpenTravel Alliance and the International Air Transport Association (IATA) to create the interoperability framework. The result was a set of industry standards for travel distribution, essential for connecting the CRS to individual hotels, for example.
Beyond setting a series of standards, the next big integration tool is the concept of open API, potentially the most significant and important change ever for the PMS. It’s a shift to an open platform model with Application Program Indices (API) allowing other products and applications to seamlessly connect without the need for individually created interfaces. But it only works for off-premise systems.
Technology integration is the primary to improving overall financial and customer success for a hotel, and the ones benefiting most are hoteliers that invested in cloud-based PMS software for hotels.
In the next chapter we’ll look at how personalization is reinventing customer relationship management and experience.
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