This is what 789 hoteliers said about their technology priorities
Have you ever wondered which hotel software upgrades sit at the top of the priority list for other hotel tech buyers? After all, benchmarking is an important piece of a hotelier’s professional life. The knowledge of how other hotels (especially those in your competitive set) prioritize software upgrades is an additional data point for hotel managers. While new software should improve a hotel’s operation, it also helps hotels meet consumer expectations shaped by their experiences at other hotels. To remain competitive, hotels must consider which technologies power a guest experience that appeals to target demographics.
To get a line on hotelier priorities for upgrading technology, we surveyed 789 hotel tech buyers with a single question: Which software categories are you prioritizing for investment and upgrades in the near-term?
At the high level, revenue-related hotel software came out as a clear leader accounting for 30% of demand amongst the top 12 categories. There has been an explosion of sophisticated business intelligence software providers on the market and nascent entries from categories like rate shopping which are low cost and highly effective tools that just didn't exist 5-10 years ago. One likely reason for this is the sustained coverage in both mainstream and trade press of concepts like machine learning and artificial intelligence to inform yield management. In short, hoteliers are starting to understand the importance of an analytical toolkit and are taking it upon themselves to think of data as an asset rather than a buzzword. Thanks to comprehensive coverage of these technologies, hotels are dialed in with data-driven revenue management strategies.
Operations came in second just behind revenue for near-term investment with 19%. While not surprising, given the complexity of running a hotel, it highlights the continued appetite among hotels for operations-enhancing technology. Every hotel needs a property management system and increasingly hoteliers are fleeing closed legacy server based systems in favor of innovative and flexible cloud solutions. This is evidenced by the fact that cloud based property systems contributed the lions share of demand for operations software amongst respondents.
Ultimately what's most important is the specific products that your fellow hoteliers researching right now so now that we've reviewed the higher level placements, here's how hoteliers ranked their most pressing subcategories of hotel software. With each, we’ve added some color as to why this particular technology is hot in today's market. While our list only includes the top 12 categories of hotel software, notable mentions go to: concierge software (3.85%), guest messaging platforms (3.71%), staff task management software (3.71%), merchandising and upsell software (3.42%) and reputation management software (3.00%).
#1: Property management systems
One of the most critical pieces of hotels daily operations is the property management system. The PMS is the workhorse that keeps the hotel operating smoothly and profitably. As such, it's often one of the most deliberated decisions. 14.9% of respondents said that the PMS was the top software under evaluation for investment.
Rightly so: Gartner predicts that 85% of relationships will be managed without human interaction. Extrapolate that to hotels and it's clear that the importance of a capable PMS only grows with time. If guests expect a hotel that fulfills their requests seamlessly without humans, then the core operations system for a hotel must unite all parts of a hotel to reliably deliver on this expectation.
“We look at technology as something that enhances the humanity, not replaces it. We’re removing hardware from hotels, which is reducing cost and also reducing complexity for our colleagues in hotels so they can interact with the guests. On top of that platform, next we can bring guest experience.” -Elie Maalouf, CEO of the Americas, InterContinental Hotels
Why it’s hot: The shift to cloud-based PMS, which increases flexibility and speed, has many hotels considering an upgrade from on-premises systems. There are many vendors competing in this crowded space, which gives hotels plenty of options and peace-of-mind that the software is secure and reliable. Price is also appealing: competition among vendors and lower-cost cloud computing brings best-in-class software to all hotel categories.
Learn more: Our 2019 Hoteliers Guide to Property Management is your comprehensive resource for all things property management. We also recommend browsing through the property management category to learn more about top-rated vendors in the space.
#2: Booking engines
Offering guests a simple way to book direct is a fundamental part of pulling more bookings into a hotel’s Ecosystem. The stubborn reality has been one of underinvestment in the direct booking experience. How can hotels expect guests to book direct with an outdated website that's hard to use or poorly designed for mobile? These type of experiences have made consumers less likely to book direct and stand in stark contrast to the smooth user experience enjoyed by travelers on most third-party channels. 9% of respondents are interested in implementing new booking engines into their hotel tech stack.
Why it's hot: Direct booking continues to be a hot topic. Whether it's conferences dedicated to driving more direct bookings, casual chats between colleagues at industry events, or Hilton CEO saying that 75% of bookings come from direct channels, direct booking is a key piece to the revenue puzzle. To succeed at direct booking, hotels must have functional websites geared towards conversion. Also: as hotel marketers see rising search and social media marketing campaigns, More marketers are thinking about conversion. Poor conversion increases costs; once a potential guest clicks an ad, it’s up to the hotel's website to convert.
Learn more: Download our comprehensive Guide to Booking Engines to evaluate the ideal booking engine for your hotel.
#3: Revenue management systems
Coming in a close third, revenue management systems allow hoteliers to focus on profitability at the individual guest and room level. RMS analyzes data, such as a hotel’s booking pace and market trends, and then forecasts demand and recommends a rate for each segment and room type, for each channel. Revenue management systems are an investment priority for 8.8% of respondents.
It's not surprising that two out of the three top technologies were related to revenue. As hotels implement more technology to streamline operations, boost productivity, and increase guest satisfaction, revenue earns greater focus. Hotels also have access to more data than ever before, so leveraging this data into revenue-positive insights has gone mainstream across all categories. “We continue to invest in tools to automate as much of that process in the back of the house as much as humanly possible, therefore allowing a much higher level of productivity.” -Mike Deitemeyer, CEO Interstate Hotels & Resorts
Why it's hot: As we saw in the top-level view, revenue-related technologies continue to be important pieces of the hotel tech stack. Advances in both data capture and data analysis (also driven by plummeting cloud-computing costs), means that hotels have a stronger upside to leveraging revenue management systems. And, just like with other hotel tech categories, the proliferation of vendors has both increased awareness of revenue management among hoteliers and made these solutions more financially feasible.
Learn more: Our Ultimate Guide to Revenue Management Software goes deep into the complex world of technology-driven revenue optimization.
#4: Channel managers
The unbundling of hotel software has allowed hoteliers to customize their tech stacks to select vendors for specific functionality. With this approach, a hotel can choose smaller startups that move more rapidly than some of the traditional bundled vendors. Hotels can also save money by paying only for the required functionality. Standalone channel managers have emerged to help hoteliers manage distribution from a single tool, regardless of which other software is in use. Channel managers are under consideration by 7.4% of respondents.
Why it's hot: Channel proliferation continues unabated. For hotels, this leads to an inherent conflict: How to get inventory on the shelves on whichever channel potential guests prefer? There are simply not enough hours in the day to update inventory across many channels via each channel’s dashboard. It's also nearly impossible to stay current with the best channels for your hotel. A channel manager wrangles this complexity and streamlines inventory management across channels. Even for the smallest of properties, a channel manager makes a big impact -- and thus it’s something hoteliers are considering for their operations.
Learn more: As you research channel managers for your hotel, refer to our Ultimate Guide to Channel Managers.
#5: Central Reservations Systems (CRS)
The CRS weaves revenue management, pricing, and distribution strategy into a single tool for managing a hotel’s revenue. The hotel CRS is the revenue engine that sits alongside the PMS at the core of a hotel’s operation. This is the system that centrally manages guest reservations, as well as distributes rates, availability, and room inventory In real-time to direct and third-party channels.
Hotel revenue managers and marketing/e-commerce managers use the CRS to create various promotions and offers through rate plans for different channels and to adjust pricing quickly to be updated across all channels. As hotels become more adept at matching inventory and pricing on a channel-to-channel basis, the CRS takes on outsized importance as the center of a hotel’s revenue management strategy. 6.1% of respondents said that investing in a CRS is a near-term priority.
Why it's hot: Hotels want tighter integrations between a hotel’s PMS and CRS, which follows the cross-category trend of cloud-native solutions enabling flexibility and speed. The ultimate outcome is to completely eliminate any data latency or synchronization issues that cause discrepancies in rates reservations and availabilities. And, with more systems from major players allowing guests to select a specific room while booking, there's a desire to remain competitive by implementing central reservation solutions that actually improve the guest experience before, during, and after the stay.
Learn more: For a deep dive into all things CRS, download our Complete Guide to Selecting the Best Central Reservations Software for your hotel.
Rounding out the rest
Rounding out the top 10 is mobile key/keyless entry (6%), direct booking tools (5.1%), guest room tablets (4.6%), business intelligence (4.4%), and housekeeping management software (4.3%).
Some notable surprises:
Only 4% of respondents prioritize voice-activated technology. Voice tech is one of those technologies that gets a lot of coverage but has yet to prove itself as an essential component of the guest room experience.
Keyless entry nearly tied Central Reservation Systems. It appears that, at least with this cohort, progress made at brands like Marriott (21% of rooms installed) and Hilton (75% of rooms) has not triggered a rush to replicate. Or perhaps it's that the majority of hotels that prioritized keyless entry have already completed the investment.
Interested in upgrading your hotel software? Here are some helpful resources
1. Property Management Systems - See Top Rated Property Management Systems | Download the Official Property Management System Buyers Guide
3. Revenue Management Systems - See Top Rated Revenue Management Systems | Download the Official Revenue Management Software Buyers Guide
4. Channel Managers - See Top Rated Channel Managers | Download the Official Channel Management Software Buyers Guide
5. Central Reservations Systems - See Top Rated Central Reservations Systems | Download the Official Central Reservations System Buyers Guide
7. Direct Booking Tools - See Top Rated Direct Booking Tools | Download the Official Direct Booking Platform Buyers Guide
8. Guest Room Tablets - See Top Rated Guest Room Tablet Vendors | Download the Official Guest Room Tablet Buyers Guide
9. Business Intelligence - See Top Rated Business Intelligence Software | Download the Official Business Intelligence Software Buyers Guide
10. Housekeeping Management Software - See Top Rated Housekeeping Software Vendors | Download the Official Housekeeping Software Buyers Guide
11. Voice Activated Tech - See Top Rated Voice Technologies | Download the Official Voice Activated Tech Buyers Guide
12. Rate Shoppers and Market Intelligence - See Top Rated Rate Shop Tools | Download the Official Market Intelligence Software Buyers Guide
Here are 16 must read books recommended by top hotel general...
Being a hotel GM takes finesse and creativity. You have to be both analytical enough to manage your hotel&rsq...Hotel Tech Report Mar 18 - Operations Software
The definitive guide to ITB Berlin 2019: 5 key trends that e...
Last week Hotel Tech Report attended ITB to discover the most cutting edge innovations in travel and hotels. &nbs...Hotel Tech Report Mar 13 - Operations Software
Learn how Kevin Brown went from Guest Services Manager to Pr...
Working as a front desk agent at a hotel is insanely hard work. Hotel guests have extremely high expectations...Hotel Tech Report Feb 16 - Operations Software