A property management system is the backbone of any hotel’s operations, which is why these tools spark such strong opinions among hotel owners. The PMS software suite is used to coordinate reservations, manage room availability, accept payments, check-in guests, and more. Property management systems are the central artery for all activities taking place at a hotel property. Finding the right system is crucial. Unfortunately, many hotel owners still haven’t found a PMS system that works for them. One survey by Fuel Travel uncovered that 55.2% of hotel managers were not satisfied with their current PMS provider. At a minimum, a PMS should give hotel owners the ability to better manage and monitor the key metrics needed to run their business (e.g. average daily rate, occupancy, and RevPAR. Switching to a cloud-based system like the latest version of Oracle OPERA gives hoteliers the ability to keep pace with the needs of an increasingly mobile traveler. A property management system is supposed to make it easy to manage your on-site workflows. Here’s what a PMS can do for your hotel team – and why you must vet your PMS vendors carefully. What Can the Right PMS Do For Your Hotel Property? Many PMS systems still in use at hotels are outdated and ill-equipped to integrate with new mobile platforms of the future. Understanding how a PMS can benefit your hotel is the first step in moving toward upgrading your platform. Improve your guest relationships and make your operations more efficient by finding the right PMS for your property. Property management software gives you new tools to surprise and delight your guests, as well as to reduce some of the friction points before and during their stay. The right PMS can reduce errors from overbookings, lead to a seamless check-in experience, and facilitate accommodating customer requests by remembering a guest’s preferences. Oracle’s PMS, for example, shows your on-site team details such as a guest’s stay history, previous communications, and past service requests. Rich guest profiles make it possible to provide high-grade service without adding a burden to your existing operations. Along with offering a great experience, your hotel captures its full potential revenue by integrating a PMS with other key hotel software such as a channel manager, revenue management system or CRM. A property management tool maintains advanced rate and room availability restrictions, as well as pricing options: best available rate, dynamic rates, daily rates, base rate, and negotiated rates. The PMS stores these data points and distributes them through an integrated channel manager to ensure your hotel grows it’s revenue efficiently. Make more money by letting your PMS adjust rates quickly across all of your channels based on market conditions. Beyond managing rates, a PMS can also automate tasks like managing room inventory and teams. Oracle’s smart PMS tool allocates room inventory to avoid overbooking and manages traffic between your front desk and housekeeping staff to make sure the rooms are clean and ready for guests. Some tools allow you to monitor market data, create automated rules and triggers adjust prices and provide insights related to pace, pickup, and occupancy. Connections with third party integrators like Hapi can automate many of your hotel’s operations by facilitating a seamless connection between systems: from managing checklists, to running reports, to scheduling your staff. Save hours spent switching between applications, manual calculations, and recovering from errors by finding the right PMS and tailoring it to your property’s needs. And, ideally, your PMS should be equipped to handle the travelers of tomorrow. Mobile is a must-have feature of any property management system. Oracle’s Cloud Service gives staff access to check-in/check-out, reservation management, room status, room maintenance, and task sheets on any smartphone or tablet. Travelers, too, expect to be able to check-in via mobile device. 60% of guests will choose a hotel that gives them a mobile check-in option over a hotel that doesn’t have that capability. Your hotel PMS must be equipped to handle mobile check-in and keep up with the needs of guests. What’s New in the PMS Market? There are a lot of new developments revolutionizing the PMS market. This year has seen innovations in the way a hotel operating system managers guests, greater access for small, independent properties, and the advent of cloud-based features. Where previous iterations of property management software treated each guest as a transaction, today’s PMS products put the guest first. Oracle, for example, offers a loyalty support feature that builds a guest profile based on their previous behaviors. Properties can use customer data to build packages and upsell relevant services based on guests’ previous length of stay, spend at restaurants and bars, and other preferences. Today’s property management systems are more accessible and affordable for small, independent properties. Our research shows that a budget PMS starts around $50 per month and scales upward based on number of rooms and implementation complexity. Lastly, the next generation of property management systems integrates cloud technology, offering a way to deliver new innovations, features, and updates continuously based on customer feedback. Today’s hotel operating software won’t become outdated at the same rate as the last generation of tools: it’s an investment that will continue to pay dividends over time. Criteria For Selecting a Property Management System A PMS must integrate with your existing booking engine, channel manager, and email marketing or CRM tool for your property to see the full benefit of using a property management tool. A PMS linked to your booking engine can keep track of guests and move them around as needed to reduce the likelihood of overbooking. When used in conjunction with your channel manager, a PMS can utilize smart pricing to grow your revenue depending on market trends. And, used with your CRM system, a PMS will track guest preferences to empower your team to provide a five-star experience. PMS vendors each offer different bells and whistles with their software, but these are a few of the key features your system should include: Intuitive interface: easy-to-use interface so your staff can pick up the system quickly Reservation modification: keep track of guests and move them around as needed Centralized dashboard: monitor key metrics and get daily reports at a glance Customizable taxes and fees: modify taxes, fees, and cancellation policies to suit your business. Government compliance: comply with local tax and regulations Guest communication: send automated pre and post-stay communications to your guests. Reporting suite: generate detailed production and financial reports Channel availability: sync availability to multiple channels in real-time How to Compare & Dilligence Cloud PMS Vendors Every hotel owner has a unique set of needs at their property a PMS can solve. When vetting a platform vendor, here are some of the questions to keep in mind. How quickly can I train new staff with this system? The hospitality industry has notoriously high employee turnover. Every time a team member leaves, their replacement must be retrained. Training costs place a huge burden on your operational budget – even more so if your PMS is difficult to understand. Make sure the PMS vendor provides the regular training support you will likely need. Which channels and/or channel managers do you connect to? Premium PMS systems will sync your availability to multiple channels in real-time and provide booking engine functionality. Other vendors will also offer an all-in-one solution that reduces the overhead of managing and learning multiple systems. What kind of support is offered, and when can I contact them? A property management system is supposed to make your job easier. But, when a PMS fails and you can’t take bookings, the system quickly becomes more trouble than it’s worth. Every minute your system is down, you’re losing revenue and your team members get demoralized. Make sure the vendor’s customer support team is available to troubleshoot 24/7/365. Ask how long will it take for the vendor to respond to your support calls. What training materials does the vendor have available? What’s their NPS rating from current clients? How does your platform help me comply with the regulations in my region? Make sure the property management system can be customized to support your local language, taxes, and government regulations. Can your platform scale with your business? How open is your system to support 3rd party software integrations? Without the right integrations, like housekeeping and room assignments, a hotel is impossible to manage. When you miss out on the right integration to upsell, you miss out on revenue. Don’t pay through the nose to integrate with other software – especially with so many open APIs available. Not sure which PMS is right for your hotel? Use our Property Management Software Finder to get FREE custom recommendations.
Hotel Property Management Systems Software Articles
There's nothing quite like the topic of the best property management systems to trigger a lively discussion among hoteliers. Everyone has horror stories and preferred products. These types of insights are helpful for hoteliers evaluating new technology partners. They act as a barometer of sorts, shaping initial impressions and guiding the vendor vetting process. In this expert review of Oracle Hospitality and the OPERA Property Management System, we've combined Hotel Tech Report’s expertise with insights culled from interviews with actual users. The objective is to provide a comprehensive resource for hoteliers immersed in the process of vendor evaluation. What OPERA by Oracle Hospitality does: The nuts and bolts Oracle OPERA is a cloud-based property management system that integrates several functionalities into a single platform. In addition to the core property management functionality, such as room assignments, check-in/check-out, and rate management, OPERA includes integrated channel and rate management with group travel functionality to handle more complex requests. Who OPERA is for: The ideal customers and uses An integrated platform solution isn't for everybody. While OPERA can be used for a single property, it’s built with multi-property in mind. Very small properties likely won’t realize the full benefits of the platform and may be overwhelmed by unused functionality. The ideal customer segment is a hotel group with many larger properties that offer full service. Since OPERA is an integrated platform, hotels with more complex operations stand to benefit the most. For example, a hotel that uses Oracle POS (point of sale) and kitchen management can integrate full F&B operational functionality into the OPERA property management system. Such deep integration improves outcomes on the customer service front and gives hotel management stronger reports to monitor KPIs and profitability. 5 essential OPERA features Personalized guest profiles: OPERA has comprehensive guest profiling capability, which allows your staff to keep track of guest preferences. These rich guest profiles can be quickly accessed to better personalize stays. Staff can see useful details, such as stay history, past communications, and previous service requests, to inform their approach to each guest. For hotel groups, these rich guest profiles can be shared seamlessly across multiple properties. You can think of this feature functionality as a lightweight operational hotel CRM without the full marketing capabilities. One way to personalize profiles is to create relationships between them. For example, ensuring the corporate traveler is linked to the parent company. These relationship types can then be used to share rates among different groups or to send out personalized marketing campaigns targeted to specific relationship clusters. Advanced rate management: Orient your entire staff around up-selling and cross-selling with OPERA’s integrated rate management tool. OPERA has advanced rate and room availability restrictions, as well as enhanced rate-management capability offering a vast number of room pricing options, including best available rate, dynamic rates, daily rates, base rate, and negotiated rates. These rates can then be distributed via OPERA’s integrated channel manager. Rate management also extends to group travel, simplifying group bookings with advanced group management tools that help hotels deliver personalized proposals and accurate on-stay experiences. Intelligent accommodation management: Effective room management is the hallmark of a well-run hotel. Proper allocation of room inventory avoids overbookings of specific room types and ensures that rooms are cleaned and maintained in a timely manner. OPERA’s intelligent accommodation management automatically assigns least-occupied room first. By striving for balanced usage, maintenance costs are more predictable. Mobile: Mobile has become a must-have feature of any modern Property management system. OPERA now offers a completely mobile version of its flagship software, called OPERA Mobile Cloud Service. Staff can access the following information via any smartphone or tablet device: Check-in/check-out, reservation management, room status, task sheet, room maintenance, as well as Track It and Post It mobile that can provide real-time status updates on rooms and maintenance requests. With the staff freed up from desktops, they can circulate more effectively and help guests in new ways. A more mobile staff can reduce check-in and check-out times and improve efficiencies in housekeeping and maintenance. This includes booking-related guest communications using tools such as traces and messages. Loyalty support: The ability to support multiple languages and currencies is a requirement in today's globalized travel environment. Hotels that do not provide this support are at a disadvantage when competing for international visitors. OPERA’s Customer Loyalty Tracking Cloud Service helps hotels with properties in multiple countries to achieve seamless personalization, regardless of a guest’s primary language. One single customer record can be transliterated into multiple languages, which eliminates the need to create multiple guest profiles. Hotels with properties in different countries can address guests according to local conventions -- especially important with high-value guests, who want to be addressed accurately wherever in the world they are. To drive loyalty-based marketing, guest behaviors accrue automatically to profiles, so hotels can build relevant packages and services based on guest history, including the length of stay, expenditure in restaurants and bars, and other preferences. The rich guest profile can then be used to personalize the experience on subsequent visits -- and to market to guests in between visits. Want to see how Oracle Opera stacks up on feature functionality? Launch comparison Oracle Hospitality: Pros and Cons For quick reference, here are a few of the most revealing pros and cons. Sometimes the pros can be cons, so we’ve addressed both sides of certain aspects of OPERA. Pros: Cloud-based. Cloud technology is more affordable and flexible than hosting on-site servers, reducing ongoing maintenance costs and minimizing upfront investments. Cloud-based products are usually more simple and reliable on the IT infrastructure front. There's also the added security benefit of regular updates and fewer on-site vulnerabilities. Integrated platform. Oracle Hospitality offers a suite of applications for hospitality, including the Micros point-of-sale system. If your property wants a single vendor to handle F&B, as well as kitchen and property management, you'll be hard-pressed to find one with a product suite similar to Oracle’s. Extensibility. The system is built to scale alongside your business. If your hotel group plans to grow into traditional brands and properties, the system can grow with you. Large corporation. A large company means more stability and past performance. It also means that future staff are more likely to be familiar with the software, which reduces training time. Customizable bundles. At the lower plan, OPERA allows hoteliers to select 55 features (out of 150) to customize a bundle that works best for them. See the image below for the breakdown. Read Oracle Opera Reviews on Hotel Tech Report Cons: Price. For properties that have specific needs or properties of a certain size, it may be too expensive to pay for a full-featured solution with unnecessary functionality. For example, the minimum package includes 55 features, which may be too many for some. Large corporation. Smaller properties may get less attention than larger accounts and unless you are a big management company (or a mid sized brand) you are likely to experience long customer support times especially during critical periods like holidays. Many companies opt to work with third party support and implementation specialists who can help you fix problems in short period when Oracle corporate has slower turnaround times. Contract complexity. Another challenge with larger companies is red tape. There's a lot to navigate in the Hospitality Cloud service descriptions and on the Oracle Contracts page. Opaque legalese can be a turn off for those use to simpler agreements from emerging vendors. This is par for the course in the enterprise software world though so just make sure at least one person on your team (preferably your IT manager) has past experience purchasing enterprise software to facilitate the process. Make sure to carefully review your contract and ensure that you have the right guarantees around training, support and integrations. Tips and tricks from OPERA customers During conversations with recent OPERA customers, the most common recommendation is to be very clear and consistent when communicating with the vendor. The company is quite large, so it's possible that inquiries can get lost in the shuffle. TIP: Do not hesitate to reach out often and as needed to ensure that your implementation needs are met. Another recommendation is to train staff in batches. By providing group training, it creates a sense of camaraderie and empowers the group to help each other with inevitable issues. One front desk manager suggests posting a laminated cheat sheet of OPERA shortcuts next to each terminal. This helps new staff learn to navigate the system more confidently. TRICK: OPERA Help can be accessed from any screen by clicking F1. Getting started: On-boarding and implementation The implementation process depends on a variety of factors, such as whether your property is transitioning from another software and if the property has a significant amount of existing data to import. Your implementation manager will schedule an initial consultation to go over the on-boarding plan. Depending on your property’s room count, staff size, and existing digital infrastructure, expect a 3 to 6 month implementation period, on average. While we heard from our hotelier network about delays amongst the first clients who signed during the rollout of OPERA 9 those growing pains seem to be behind Oracle and implementations are back to normal. ** Should you go with Opera for your new PMS? Ultimately, Oracle (formerly Micros) is undeniably the incumbent in this space and as a twist on the old Xerox adage: “nobody ever got fired for buying an OPERA PMS.” Micros has been in the game as long as anyone and despite some bumps along the road is widely viewed as the most powerful platform in the industry today. Because of its legacy and resources, Oracle has had the ability to develop thousands of features that many other top rated property management systems who are newer to the market just plain haven’t had time to develop yet. If you are a super picky hotelier or IT Manager with super demanding needs and a portfolio of full service properties - you’re wise to at least get a demo from Oracle. A PMS is the operating system and nucleus of your hotel. This is a big decision so it's critical to do your research up front. Get lots of demos, do lots of online research and pull insights from your peer community so that you can make the best decision for your property. PMS is not a "one size fits all" category so it's important to deeply understand your own internal requirements then align those with the best fit for your property.
Bringing new technology into a hotel is supposed to make day-to-day operations easier and more efficient, but that’s not always the case. Too often, hoteliers find that complex software is difficult to use or that various tools do not communicate with each other. To the busy hotelier who doesn’t want to spend hours on the phone with tech support, a technology solution with a focus on automation (and integration) can be a true asset to a hotel’s operation and enhance guest experience. With automation in place, employees can spend less time completing hotel checklists and more time delivering excellent service. What is automation? In the simplest terms, automation allows you to “teach” a process to a computer program so that the program can repeat the process on an ongoing basis without the need for human assistance. Automation is all around you - from the self-service checkout machines at the supermarket to the notifications you receive on your smartphone - and it’s now becoming more common in business operations. Automation isn’t a new concept, but it is certainly gaining traction in recent years as more and more technology companies offer automation solutions that are affordable and easy to use. In fact, according to Deloitte, 78% of survey respondents plan to invest more in automation over the next three years, and employees are onboard too - only 17% of respondents experienced employee resistance to the new systems. How does automation apply to hotels? Automation is quickly becoming one of the top tech and hospitality trends because it can enhance operational efficiency and save time for employees, which in turn can boost revenues and increase guest satisfaction. Think about a front desk agent’s daily tasks: checklists to complete, reports to run, and problems to solve. With automation, a computer program could handle some of those routine checklists and reports, freeing up more time for the front desk agent to focus on delighting guests. It’s also possible to automate other aspects of hotel operations. Processes like managing your team, setting rates, room assignments, upselling premium room categories, and scheduling staff can all be automated, which would allow employees in those departments to devote time and energy to other tasks. In-app automation is par for the course; however, the best run hotels are laser focused on cross-app automation. As an example, your housekeeping software should automatically reconfigure rooms in your PMS when a VIP gets upgraded. Similarly, your upselling software needs to know real time availability to automate upgrades. Many automation services now offer APIs for hotels, so it’s easier to get started than you might expect. How do I start to automate my hotel’s processes? Curious to see how automation can benefit your hotel? The first step is to find the right technology solution. Zapier is one of the world’s top automation service providers, offering a huge marketplace of apps and integrations with programs like Gmail, Microsoft Excel, Salesforce, and more. Zapier has recently partnered with hotel property management systems, so now Zapier’s suite of tools is easily accessible to hotels. Zapier is quite simple to set up, but since the system is used by a variety of industries, there aren’t many apps in Zapier’s marketplace that cater specifically to hotels and the functionality that’s offered is quite rudimentary for the time being. In addition to Zapier, several other companies offer integration services with a hospitality focus that allow your hotel to properly automate across applications and maximize your investments. Connectors like Impala and hapi.io work to bridge the gap between individual software and apps that a hotel might use, and PMS marketplaces like protel, Mews and Hotelogix also feature a breadth of services with automation capability. What can a PMS marketplace offer my hotel? A PMS marketplace is a fantastic way for hoteliers to begin their automation journey. With all the standard PMS features to run your hotel property, a PMS marketplace also offers add-on applications that bring incremental value. Examples of these add-ons include rate intelligence tools, email marketing, hotel CRM software, and payment processors. protel clients benefit from instant connections with top providers via the protel app store Instead of working with a hotel CRM that doesn’t communicate with your PMS, for instance, thus requiring an employee to copy and paste email addresses into the email tool, it’s much more efficient to use a PMS marketplace with apps that communicate seamlessly. Your hotel’s CRM not only needs to pull massive amounts of high quality data from your PMS to properly segment clientele, but it also must feed data back into your PMS to deliver operational guest intelligence for your on property staff. One such PMS marketplace can be found with protel. protel recently announced three great additions to their PMS marketplace: Atomize, OTA Insight, and Oaky, which hoteliers can access through their intuitive, 1-click-connect platform. When leveraged together with inter-app automation - these three apps can save time and money at any hotel. OTA Insight offers business and rate intelligence, so revenue managers don’t need to spend time combing competitors' websites in search of pricing intelligence. Atomize sheds light on the hotel’s own historical rate and occupancy trends, helping to automate a lot of the leg work and decision making that revenue managers must make daily which frees them up for more strategic tasks. Oaky’s app delivers upsell options to guests during the booking process and pre-stay experience, which can take some work off the front desk team’s plate while increasing total RevPAR. Since these three apps are all housed in protel’s PMS marketplace, they share data and work seamlessly with the PMS itself. The setup process is effortless for protel users; only one click is needed to activate each additional system from the PMS marketplace. Having these kinds of systems seamlessly connect unlocks power that fragmented systems just can’t. When your PMS is tracking total revenue per available room (tRevPAR) including upsell revenue, your revenue management system can then price rooms based on total expected revenue rather than just rooms revenue. This can help to both acquire new guests and increase profitability. It’s time to hang up with tech support for good and start reaping the benefits that automation can bring to your hotel: incremental revenue and increased guest satisfaction. Hotels can most easily realize these benefits by adopting a hotel-specific platform like protel. Automation services like Zapier offer a wide variety of services, but without certain functionality designed for hotels, like upselling options and rate intelligence, these more generic systems fall short. With a system designed especially for hotels, properties can use technology to increase guest satisfaction and profitability.
Hospitality trends indicate that your hotel’s old property management system just isn’t cutting it. Guests demand mobile check-in as travelers are more connected than ever. Can your PMS handle the needs of tomorrow’s traveler? Hilton Hotels & Resorts recently revealed mobile check-in as one of the most popular features with its HiltonHHonors app: “One-third of guests have used the digital check-in with room selection available on the Hilton HHonors app,” says Dana Shefsky, Senior Director of Digital Product Innovation at Hilton Worldwide. Despite the rising popularity of mobile check-in, many PMS systems today are outdated and ill-equipped to integrate with new mobile platforms of the future. The lack of mobile check-in capabilities is one of several reasons that the majority of hoteliers (and their guests) are unhappy with their current property management system. A survey by Fuel Travel reported that 55.2% of hotel managers were not satisfied with their current PMS provider. Hotel technology must evolve to allow hoteliers to keep pace with the needs of an increasingly mobile traveler. Hoteliers around the globe are flocking to modern property management systems and mobile check-in is amongst the reasons that your peers are looking to the cloud (get it, cloud PMS?). Reason #1: Your PMS vendor’s customer support is unresponsive A property management system, when it works, is supposed to make your job easier. But, when a PMS fails and you can’t take bookings, the system quickly becomes more trouble than it’s worth. Every minute your system is down, you’re losing revenue and failing to deliver a five-star guest experience. Your team members get demoralized when trying to deal with an unresponsive or unhelpful customer support team. If PMS downtime is the norm, rather than the exception, it’s time to find another solution. Smaller PMS providers like Hotelogix tend to rate higher for customer support because they have cloud based infrastructure that is easier to service and more manageable customer bases which leads to stronger client relationships. Hotelogix gets rave reviews for their customer support, posting a score of 4.7 out of five points. One reviewer writes, “Customer service has always been fast, attentive and helpful. Any concerns or questions we have had have been answered to the fullest and promptly. We always receive any updates in regards to software or if there will be any down time while they fix Hotelogix.” Hotel managers love Hotelogix’s 24/7 customer support availability. If something goes wrong – and with any PMS system, it inevitably does – Hotelogix’s team is known for being on standby to troubleshoot at a moment’s notice. Reason #2: Your Property Management System doesn't integrate properly with other hotel software Without the right integrations, it’s extremely difficult to run a hotel. Housekeeping and room assignments are impossible to manage. When you miss out on the right integration to upsell, you miss out on revenue. You shouldn’t have to pay through the nose to give your system the ability to integrate with other software – especially with so many open APIs available. If this sounds familiar, you aren’t alone: “53% of hoteliers cited outdated technology architecture and the effort required to integrate systems as the top pain point holding back investments in new technology. Integration has long been a heated topic, but businesses in the space are gaining real momentum in 2018.” A poorly integrated PMS system can hinder every other facet of your operation. Pioneering PMS companies are building app stores to solve this problem like the Hotelogix app marketplace. These kinds of marketplaces provide a roster of third-party solutions that integrate fully with your PMS. Reason #3: Your PMS doesn't support mobile check-in Travelers are increasingly checking into flights using mobile apps or from a mobile-optimized webpage. By some estimates, 46% of leisure travelers and 61% of business travelers use a smartphone to check into their flight. Flights are just the beginning of that has become an increasingly mobile travel industry. Because most flight check-ins happen via mobile, guests want to have that same experience when they arrive at the hotel. Studies show that 60% of guests will elect to stay at a hotel that allows them to check-in via their mobile device over one that doesn’t have that capability. Guests are beginning to expect to be able to avoid the front desk formalities on arrival; instead of waiting in line to check in, your hotel staff can greet a weary traveler at the door and show them straight to their room. The key takeaway: your hotel PMS system must be equipped to handle mobile check-in. If your property management system isn’t able to keep up with the expectations of your guests, it’s time to consider a new PMS. Reason #4: Your new hotel staff has trouble learning the system The employee turnover rate within the hotel industry is 73.8% each year, according to the Bureau of Labor Statistics. That means more than six percent of your hotel staff are departing every month. To put that in perspective, the national average turnover rate across all industries is 17.8%. Every time someone leaves, a replacement employee must be hired and retrained. Those hiring and training costs place a huge burden on your operational budget – even more so if your PMS is difficult to understand. New team members need coaching on everything from the company culture to disaster preparedness. The most critical training a new team member needs is on the reservation and check-in process. An old PMS makes this training even more challenging: the system’s poor design, non-intuitive UX, and confusing instructions complicate the learning experience. Feature bloat makes it difficult to discern what parts of the system are relevant to the new team member’s job – and what features are just unnecessary or irrelevant. Many old property management systems lack quality training content, such as online videos. This lack of training resources only adds to your bottom line. How to Select Your Next Cloud PMS Vendor Like a Pro If this article reads like a checklist of everything that’s wrong with your PMS, then it’s time to select a new vendor. Start by reading verified reviews on Hotel Tech Report. Hotelogix, for example, stands out for their customer support, user-friendliness, and integration marketplace. Customer’s love Hotelogix’s flexibility, easy to understand design, and fast set-up. Hotel Tech Report also has a tool that allows you to compare feature functionality between different PMS options. See the difference between Hotelogix and your existing PMS with ratings on ease of use, ROI, implementation, customer support, and features and services side by side. Create a checklist of integrations you need today and ones you want tomorrow then make sure your next partner has them using Hotel Tech Report’s marketplace functionality. Hotelogix has a wide range of integration categories available, from hotel management tools to reputation management, IT and security, and marketing platforms like Mailchimp. Last but not least, ask what the relationship will look like once you sign a contract with your new PMS vendor. How long will it take for the vendor to respond to your support calls? What training materials does the vendor have available? What’s their NPS rating from current clients? References from similar clients on Hotel Tech Report can give you insight into how the new PMS vendor treats their partners. These tips and the resources on Hotel Tech Report can help you find the right PMS to upgrade your guest experience – without sacrificing your team’s sanity in the process.
Hotelogix is the latest in a line of hospitality technology vendors that have recently launched a marketplace. The thinking behind these initiatives is that existing customers should have a clear place to find integrations that work well together. By providing a source of vetted partners, hospitality technology vendors hope to improve implementations and encourage better long-term outcomes. The new marketplace features third-party solutions that integrate fully with the Hotelogix hotel management system. To navigate the latest marketplace, we’ve identified a few useful integrations for hotels of different sizes. Top Marketplace Apps for Smaller Hotels Smaller properties prioritize reasonably-priced solutions that help staff provide better service more consistently, as well as provide functionality that makes independents more competitive with chains. These properties usually have less complicated operations without on-site F&B or spas. For properties that do have those on-site amenities, many available solutions have unneeded functionality -- which can make those solutions cost-prohibitive. Training and on-boarding also take center stage, as the smaller staff can’t afford to take too much time learning a new thing. Benefits must be observed quickly and without a long ramp-up period. Here are a few solutions that integrate with Hotelogix to help smaller properties compete more effectively. #1 Tripadvisor Review Express Tripadvisor Review Express allows hotels to automate the review process -- saving time for hotels with limited staff. Rather than spending time manually asking guests for reviews, this automation means less time spent requesting reviews and increases the frequency, recency, and velocity of reviews by encouraging every guest to leave a review. When used regularly, TripAdvisor claims that “the average Popularity Ranking for highly engaged hotels was 63% higher than their non-engaged counterparts.” As this guide to Review Express emphasizes, regular reviews keep engagement high and automated templates reduce manual work. Benefits of the integration: Review Express collects all TripAdvisor Reviews of the hotel added by recent visitors and Hotelogix makes sure that these are directly displayed on the Hotelogix front desk so staff can respond rapidly. #2 Bookingsuite RateIntelligence Bookingsuite RateIntelligence is the Booking.com family’s rate manager, ideally suited for smaller properties that may not need a full-featured rate/revenue management solution. It's a cloud-based rate shopping tool that gives smaller properties an edge with access to the kind of rate intelligence used by larger brands. Smarter pricing decisions can be made based on market demand data and competitor intelligence, the Rate Manager. Benefits of the integration: Single login to access, instant access within Hotelogix to top five competitors’ rates on RateIntelligence, compare prices with competitors’ and update rates in your PMS, and single click to update rates on all your channels. #3 Intuit Quickbooks Intuit Quickbooks has evolved into a comprehensive accounting solution, which is well-positioned in price and functionality for smaller properties. Quickbooks reduces headaches around manual management of invoices, and payables. It’s simple and efficient, with a handy “at a glance” dashboard to track performance. There’s a companion expense app so you can take pictures of receipts, and pull them into Quickbooks. Also, integrates cleanly with TurboTax if you decide to tackle your taxes solo. Benefits of the integration: Individual tracking and handling of credits and commissions given to TAs & corporate clients, as well as advanced payments & payments against settlements can be managed through separate account head. #4 Mailchimp Email Marketing MailChimp’s email marketing software is simple to use and easy to access across devices. With its template and visual editor, the company has eliminated design barriers to creating classy email campaigns, as well as pre-arrival and post-stay communications. For small properties without a marketing function, the do-it-all GM can design templates, run campaigns and use analytics to get better with time. It’s generally recommended that hotel marketers work with email marketing and CRM platforms such as Revinate and Guestfolio but very small properties may not have enough guest data or return visitors to warrant specialized products. Make sure to benchmark a generalist solution like Mailchimp with specialized solutions before adopting because bad email marketing can actually cost your hotel money through unsubscribes and sendability issues. Benefits of the integration: MailChimp lists update automatically with new bookings, cancellations, check-ins, and check-outs. Data imported into the relevant list includes room type, number of rooms, rate/package type, reservation booking deposit, tax amount, country, date of birth and gender of the guest. This information can then be used to segment lists and write copy for each specific segment. #5 STAAH Channel Manager The STAAH Channel Manager handles online distribution so you can manage them easily from one place. When a customer books a room from one website, availability is automatically updated across all other channels including your property’s booking engine. STAAH also has an integrated suite of software, including a reputation manager, booking engine, website, and gift voucher manager, which can be a convenient one-stop-shop for marketing a small property. Benefits of the integration: Single log-in to make instant updates and manage multiple OTAs, as well as analytics to determine rates, stop-sell limits and evaluate the success of sales channels. Direct connection to PMS minimizes manual errors that lead to overbooking and double-booking. Top Marketplace Apps for Mid-Sized Hotels Medium-sized properties may sometimes feel stuck in the middle: too large for solutions geared towards independents and yet too small for enterprise-level systems built to manage major operations. Many medium-size properties have F&B operations, sizable staff, and established revenue management procedures -- all of which require solutions with adequate functionality. Except without the enterprise-grade price tag! Medium sized properties generally have larger teams, a marketing department and dedicated resources for functions like revenue management. Here are a few solutions that help medium-sized properties increase productivity and grow their business through better revenue management. #6 SiteMinder Channel Manager SiteMinder’s channel manager provides the benefits of channel management to hotels with more complex online distribution needs. With granular controls over inventory allocations to individual channels, SiteMinder supports a sophisticated revenue management strategy. For medium-sized hotels that welcome guests from all over, the hotel’s base currency automatically gets converted to the currency of a particular transaction -- helpful for providing a consistent experience for guests. Benefits of the integration: The direct integration into Hotelogix eliminates any chance of overbooking or double booking, and also prevents errors arising from manual consolidation of booking data. #7 Beonprice Revenue Management The Beonprice revenue manager maximizes profitability by optimizing rates for every room sold through an intuitive and easy-to-use interface. The tool starts with a hotel’s historical booking data and then recommends pricing based on using local and national events, e-reputation, transportation price, weather forecasts and exchange rates. By automating rate setting using artificial intelligence and all the available data, medium-sized hotels can devote more time to optimizing other areas of the business. Benefits of the integration: Rates are published in real-time, using the latest data from the property management system. With this real-time, scalable, automated and flexible execution of rate publishing, hotels can more fully manage revenues and unlock the value of existing data within a PMS. #8 Repup Review Management Repup reputation management helps hoteliers make sense of online reviews by aggregating all reviews into a single dashboard. Using a combination of natural language processing, data mining, and business logic, the tool evaluates performance so hotels can win more business, increase revenues and build customer loyalty. For mid-sized hotels with lots of moving parts, management won’t have a direct line of sight into everything; Repup can surface issues and identify problems before they magnify. Benefits of the integration: Hoteliers can access complete review data within Hotelogix front desk. The centralized dashboard showcases 60 days of reviews and social media mentions from over 15 online channels, such as Expedia, Booking.com, and Facebook. There’s also an option to configure Guest Feedback Form which can be shared with guests right from the dashboard. #9 Xero Accounting Xero’s accounting software has become a popular choice for hotels with more complex accounting needs, such as multi-currency accounting, payroll, inventory management, and customized recurring online invoices for regular suppliers. For managers on-the-go, there’s a mobile app that mirrors many of the core management features of the web version. The platform is flexible: a robust set of integrations that medium-sized hotels plenty of control to customize workflows and sync Xero with POS, hotel CRM and other tools. Benefits of the integration: Room revenue, as well as corresponding taxes, commissions, and other charges are first recorded in Hotelogix and then automatically synced with Xero -- no more manual imports from the PMS to accounting software! Also, only fully settled folios get synced with Xero, which avoids a lot of headache around cancellations and unsettled folios. Top Marketplace Apps for Hotel Groups & Large Hotels Larger properties and hotel groups employ more people and serve more guests across more complex operations. They need enterprise-level systems that can adequately manage all of these moving parts. The sheer number of options leads to a complex evaluation process. Any new tech tool must integrate seamlessly and work well with everything else in a hotel’s tech stack. There are many interdependencies that make a challenging road for implementation. Not to mention the fact that a larger operation has more stakeholders, such as security and IT, that must approve any new vendor. Depending on the group, and the tech being implemented, on-boarding new tools can take months -- or more than a year for more mission-critical systems that require careful testing. So ease of integration is paramount for larger properties and hotel groups. Here are a few solutions that help larger properties and hotel groups manage complexity at scale and leverage all available data to build a healthy business over the long-term. #10 OneLoyalty OneLoyalty is a Loyalty Management Software that allows hotels without access to a larger loyalty offering to provide best-in-class loyalty programs to their guests. The independent hotel loyalty program also extends to employees and vendors, as OneLoyalty offers tools to engage across stakeholders to foster more loyalty. With OneLoyalty, hotels can offer rewards, coupons or other perks to their guests. A companion mobile app can ping guests with unique offers and alert guests to upcoming promotions. Benefits of the integration: With direct integration, hotels can more easily use the sales tool to attract more customers and increase the share of wallet. Customer profiles benefit from the direct integration, which makes for simpler segregation of customers to personalize offers and thus deepen re;relationships with past guests. #11 Snapshot Business Intelligence Snapshot business intelligence tool positions itself as “hospitality’s data platform.” The comprehensive data analysis platform is the backbone of a hotel group’s data practice. Since Snapshot thrives with larger pools of data, the solution is ideally suited for larger properties and multi-property groups. The Snapshot sweet spot is facilitating access across disparate systems and data sources. Hotels benefit from enterprise-grade custom visualizations that surface insights derived from this comprehensive view into a hotel’s business. Benefits of the integration: Hotelogix sends all past and future bookings and transactions to SnapShot for accurate hotel data analytics. Your dashboard is updated after every night audit, as Hotelogix sends an incremental report to SnapShot automatically. In addition, Hotelogix helps track reviews and social follower trends from SnapShot thanks to connectivity to social media and TripAdvisor. #12 Comtrol In-Room Devices Comtrol in-room devices have been providing networking and data communications for over 30 years. The stability of the company makes it a preferable partner for many larger operations that prize longevity -- after all, it’s important to know that a mission-critical vendor for communications, IT, and networking will be in business when you need them most. Comtrol gear ensures that the PMS maintains consistent contact and data transmission to accurately manage guest accounts. Benefits of the integration: With a direct connection into the PMS, Comtrol can ensure adequate functionality across in-room devices. For such an important part of the guest experience, such as room locks and keycards, this functionality must work without fail. In addition, there are potential benefits for enhanced customizations, such as personalizing the in-room entertainment with guest greetings and other guest-specific information. #13 Vertical Booking CRS The Vertical Booking CRS integrates with over 200 channels, which gives larger hotels more granular control over inventory distribution and allocation. The company also provides on-going training, which is especially beneficial to large operations that will naturally experience higher turnover. The CRS can be set-up to suit hotel groups and chains by defining which functions are managed centrally and which are managed independently for each property. In addition, chains can view performance at the chain level and property level, with staff assigned roles that offer access to the system according to individual roles. The graphic below maps the workflow for chains and groups. Benefits of the integration: A tight integration between the property management system and the central reservation system reduces errors and keeps the team focused on maximizing guest satisfaction. All reservations, whether made through the hotel's website or other channels, are instantly updated in the PMS. An added benefit for larger chains is that Vertical Booking’s CRS can integrate with multiple PMS, so if a new property has Hotelogix, it can be quickly integrated into the workflow.
When enterprise companies spend loads of money on technology they usually think about building tech in house so they can have more control over development and ultimately save money. Sometimes this equation favors building tech in house and other times it does not. Several high profile failures in the hotel industry include a collaboration amongst all major hotel groups to create an online booking platform called Room Key which was eventually shuttered. We’ll discuss this initiative and more in detail below. Most sophisticated enterprise companies (think Nike and McDonalds) understand that they are not tech companies so they effectively outsource their tech R&D spend to 3rd parties that are focused on innovation. Could McDonalds build software to help franchisees manage their listings? Yes, but they partner with Yext. Nike could definitely build prototyping software in house for its digital products, but it chooses to partner with InVision. Firms like Nike and McDonalds have become innovators by being experts at identifying trends and partnering with top tech companies to meet their core business goals. So the question is, if McDonalds and Nike outsource their respective technology needs - should hospitality companies really be building tech in house? We believe that when hotel brands try to build tech in house it ultimately brings them into precarious waters, here's why: 1. They lack the resources to compete with pure play technology companies 2. Hotel brands usually underestimate the ongoing effort required to maintain and scale a technology business (let alone multiple business lines and products) Hospitality companies don't have the resources to compete with tech companies Charles Schwab is a massive financial institution worth more than $60B. The firm could easily build custom marketing automation solutions for the business but they choose to work with with Marketo because they know that Marketo will be able to innovate over the long run. Even Citrix and Microsoft, technology companies themselves, use Marketo’s marketing technology so that they can focus on their core businesses. IDeaS, a popular revenue management software company and it’s parent company SAS just announced a 3-year plan to invest $1B in artificial intelligence. SAS is a company that deeply understands the power of focus and investing in its core competencies. "If I want to host a SaaS application, I choose a cloud host. If I want to manufacture a consumer product, I partner with a company like Foxconn. If I need delivery for my restaurant I work with a delivery company. Yet, brands without a technology focus still believe it will be cheaper and more effective to build their own software internally when history has shown us, time after time, that these projects will be over budget, unsustainable, and competitively weaker than the professional tech products in the market." ~Adam Harris, CEO, Cloudbeds The median publicly traded software company spends 23% of revenue on R&D with many high growth firms spending 50% of revenue. It’s hard to imagine that even Marriott could afford the spend levels to develop one competitive product let alone multiple product lines that compete with a myriad of different specialist software businesses. Technology is not a static good so sophisticated enterprise companies buy into the future of a tech product as much as the present. Technology requires immense amounts of capital to scale and increasing investments to remain competitive. Technology requires even more upkeep than hotels. Where hotels build up their capital reserves and renovate roughly every 5-7 years, tech companies are constantly “renovating” their products daily through product sprints. When enterprise companies “buy” tech they are partnering with tech companies for the future as much as selecting products for the present. The reason that the SaaS business model (recurring subscriptions) aligns value so well between buyers and sellers is because the product is constantly being reinvented so it forces tech companies to maintain their end of the bargain. When you sign up for SaaS (software as a service) you are not only signing up for the product today but you’re buying into its roadmap for the future. Hotel companies that try to build tech in house are rarely prepared for the constant investment required to maintain let alone scale products and keep up with the ongoing massive investment, iteration and innovation of tech firms. So what does history tell us about hotel companies who have miscalibrated this decision? Starwood was bought by Marriott for $13B and itself has taken huge losses on technology investments when they were no longer able to invest enough to remain competitive. According to Starwood’s (now Marriott) 2015 10K filing, the firm took a $6M charge for “technology related costs and expenses that were no longer deemed recoverable.” Go back further to Starwood’s 2013 annual filing for stockholders and you’ll find a $19M charge related to “technology related expenses” that the firm “decided to absorb” because they couldn’t collect from managed and franchise properties. When we draw the analogy between maintaining software and maintaining a hotel, Starwood was effectively unable to properly renovate its technology and investors paid for it. Every hotelier knows what happens when you let a property go too long without renovation and the same happens when software isn’t maintained properly. Similar to Starwood building tech in house and having trouble maintaining the infrastructure, Choice created Skytouch PMS internally with the vision of transforming the tech market and has similarly struggled. “In 2014, it [Skytouch] generated a net loss to the company of up to $20 million. Investors have pressured Choice to either make SkyTouch profitable, sell it, or close it down.” Choice stopped reporting the results of its Skytouch division and now includes those results within its “Corporate & Other” expense line (pg. 102 of Choice 2018 10K filing). So while Choice no longer gives updates on how Skytouch is doing - it is highly inprobable that a company like Choice would decide to include the business unit as an expense line if that unit was doing well. In addition to the Skytouch debacle, we've also heard that Choice is winding down its Choice Labs innovation division. Accor, too, recently reported a $288M write-off on tech investments such as AirBnB competitor Onefinestay and concierge service John Paul. Accor even tried to sell it’s distribution to independents and shuttered the project after 2 years, here’s what happened in the words of Accor’s own spokesperson. “This initiative is no longer relevant in regards to the Group’s strategy and its new profile as per today. Results are below expectations” Accor wanted to plug independents into its massive distribution which in theory could add a ton of value if executed well and even that didn’t work. Even when all the big hotel groups banded together to build the online booking platform Room Key they failed (Choice, Hilton, Hyatt, InterContinental, Marriott, Wyndham) - isn’t it time that hotel companies learned this lesson? Even Booking.com had to shut down it’s hotel software operations after some high profile acquisitions - a testament to how tough the business really is. Conclusion: Hotel brands shouldn’t build tech, they should get better at buying it The lesson here is clear - hotel brands need to focus on what they do best. They should leverage their scale and clout to secure great service and attention from tech partners. It’s up to franchisees and investors to ensure that operators stay focused. Hotel brands have insanely complex businesses managing many stakeholders who often have conflicting interests. The business of running a hotel is a huge feat both operationally and from a revenue/distribution perspective. "Because the skepticism exists and because tech can take long, hoteliers reach the wrong conclusion. They decide to build instead of buy. I have witnessed a transformation in travel tech. Increasingly, hotels are embracing the rules of comparative advantage and are embracing tech where they can move fast, learn fast and benefit quickly." ~Alexandra Zubko (former IHG Lead Strategist) Because of these factors, hotel companies who want to succeed in the digital age should be experts at technology procurement and management. Historically hotel brands have been very weak when it comes to technology procurement and management so many have tried to compensate for that weakness by building tech products in house. Unfortunately this strategy often leads to write-offs, burning piles of cash and consequently the executives who lead these disastrous projects being pushed out. "Great technology products enable a valuable job to be done to be easily performed with maximum success and consistent results. With the blistering pace at which the world is changing, our expectations change. That means jobs to be done change. And that means software needs to rapidly iterate and evolve. That is why the world is headed to simple, modular solutions that can nail jobs to be done as they evolve. The smartest brands know that to create compelling and lasting technology advantage, it’s now about identifying and bringing best-in-class interoperable solutions together into powerful system that gives lasting advantage. From a cost, resource, time to market and life time value perspective, you’ll waste literally millions of dollars even before calculating the opportunity cost. Brands need to get amazing at hand-picking and investing in their strategic technology partners who are proven to design, build and iterate the purpose-built software hotels require, so they can then focus on delighting guests, growing locations and enhancing the value of their networks for franchisees." ~Marc Heyneker, CEO @ Revinate Large enterprise brands have some clear motivations: (1) They want to expand to more and more hotels worldwide, and be able to do so quickly and efficiently. That means needing a consistent stack of solid technology that can be deployed, enabled and operationalized to run and add those hotels to the overall system. (2) They want to proudly position their Technology Stacks and enabled programs as unique value-adds that differentiate their Brand and their Brand value. So they can both convince Owners why they’re better, and monetize and justify their Brand fees in an age where consumer preference for brands is in decline. This sometimes gives large enterprises the false sense of belief that they need to build their own. In fact, building your own puts both goals in jeopardy, almost immediately. These multi-million dollar, multi-year, multi-faceted technology projects become sinkholes for capital investment, anchors to business progress and optimization, and turn into tough write-downs as we saw in the examples above. Hotel brands should instead be focused on rethinking their technology organizations to be better buyers and managers. Corporate hotel purchasing units have historically focused on price negotiations and software customization (i.e. product roadmap hijacking) but in order for brands to thrive in today’s hyper competitive markets they are in need of a massive strategy shift. Red Lion Hotels Corporation is one such company that has taken a deep look at how it buys technology and optimizes its tech stack. Red Lion Hotels Corporation CIO John Edwards shared his firm's approach to technology vendor selection with Hotel Tech Report. "At RLHC, we have been able to establish ourselves as leaders in hospitality innovation by focusing on what we do best: finding the right technology partners to create solutions that meet our hotel’s needs. We believe that is the fastest way to change the technical landscape in our industry. RLabs and Canvas Integrated Systems were created to house our already existing technology and innovation solutions, which provide customized best-in-class solutions for our hotels. Our tech stack includes well known industry solutions such as IDeaS, Opera, & WindSurfer as well as new industry solutions such as Monscierge and HAPI." Digitally savvy hotel owners want technological choice and they want the procurement benefits that brands command with scale. The brand development teams that win in the digital age will be the ones who are able to deliver choice to owners around which technology vendors to use, the scale that comes with warehousing and leveraging data from that warehouse and the cost benefits that come from bundled negotiations with vendors. Recommendations to hotel brands who want tech to be a core differentiator 1. Map out clear technology systems required to deliver on core business goals and all potential providers 2. Lay foundational infrastructure for open systems and clean data Design scalable processes to constantly beta test competitive products in the market and identify new products that can drive core business goals. 3. Set aside designated resources for technology management. Hotel groups should maintain a vendor CRM and dedicated staff for managing vendor relationships. This staff should also be tasked with collecting market insights and sharing new technological developments as well as vendor status updates on a regular basis with leadership. 4. Set clear and tangible KPIs with each vendor that must be met in order to retain the contract (e.g. customer support response time) Create clear roadmaps for switching systems in the event that suppliers do not deliver on KPIs 5. Invest in tech startups that fit your strategic criteria above! Highgate (invested in Stay Wanderful, Travel Tripper, LodgIQ, OTA Insight) and CitizenM (invested in Snapshot, exited to Shiji) have been incredibly successful executing on this strategy. They put strategic money to work then derisk their investments by giving those startups proof of concept in their properties. 6. For hotel companies that don't have the resources to start a fund internally like them there are great strategic venture capital firms that are focused on real estate and can do the heavy lifting for you - check out Metaprop VC and Fifth Wall Ventures. Investing enables you to gain access to innovation and lend your expertise without snuffing out the creativity. Leadership is about investing in great people and trusting them to do the work, not about micromanaging every aspect of the process yourself.
Dave Berkus knows hospitality technology more than nearly anyone. Back in the early 1980s, his company, Computerized Lodging Systems, dominated the nascent hospitality technology market with one of the first electronic Property Management Systems on the market. The immediate popularity of the technology resulted in rapid growth for the company, which was recognized on the Inc 500 list -- twice. Dave also created FOSSE, the property management system technology that Marriott used for almost 36 years. Dave practically invented hotel front desk software and he has invested in hundreds of tech companies since - many of those in hotel and travel tech so he knows this market better than anyone. Today, there are over 700 property management systems for hotels. With such a dense thicket of choices, it's hard to imagine the early days of hospitality technology. These are the days when only a few players dominated, offering truly game-changing solutions that defined how hotels began using technology to operate more efficiently and profitably. Dave is also an accomplished angel investor, having achieved an impressive 97% internal rate of return from over 150 investments to date. His Wayfare Ventures unites five partners from AIG, TAJ Hotel Group and Starwood, alongside a board of accomplished travel industry veterans, to make early stage investments in travel technology startups. Hotel Tech Report’s Jordan Hollander recently enjoyed a wide-ranging conversation with Dave on the Hotel Tech Insider podcast, where the two discussed how Dave’s history in hospitality technology has shaped the way he sees the industry today. These are the most pertinent themes that reveal how this hospitality technology luminary sees the future of hotel tech, as well as what he looks for when evaluating both ideas and entrepreneurs for investment. The future of the PMS With so many property management solutions competing for business, it's hard to envision a post-PMS future. Yet, this future is coming, Berkus says, due to the increased importance of the Central Reservation System. The CRS owns the guest name record, which has made it more of a centralized source of data than the PMS: The PMS systems are, for the chains at least, becoming increasingly less important, as they handle right now in-house functions only. Berkus notes that the cloud PMS companies of today are likely to be the players who evolve these CRS like capabilities so while he believes that their technology will remain a core piece of the tech stack, he believes that what it means to be a PMS will change more in the next 5-10 years than in the last 20 years combined. Guest history has shifted to the CRS, while the PMS has transitioned into a fully operational role for specific properties. As hotels have both consolidated and established micro-brands, the CRS naturally became the way to share guest preferences across the portfolio. The centralization of data cemented the role of the CRS at the center of modern data-driven personalization and marketing strategies. says Berkus: Big Data's being used in very important ways but certainly not just from the PMS system anymore. The question then is: if the CRS could potentially supplant the PMS as the source of all-important guest data, will we need a PMS system in the future? Berkus says yes but the legacy PMS companies will be forced to innovate and more specifically open up their architecture to become platforms themselves because CRS, CRM and even Revenue Management companies of today have the requisite data necessary to become the center of the tech stack according to Berkus. Eventually, Berkus sees most hotels relying on a single cloud-based system that aggregates all functionality into one flow, which reduces errors and increases accuracy as it doesn't require passing information around multiple systems. A hybrid PMS/CRS/CRM solution means a single guest record that enables better, more accurate personalization. The consolidation of functionality also simplifies the tech stack and should help hotels effectively use existing data to power personalization at the individual guest level. A unified tech stack unleashes the full power of data-driven decision making, which will soon be table stakes for how hotels everywhere compete. Rather than relying on incomplete sets of data, hoteliers can constantly make decisions based on the holistic view. A unified tech stack can also be achieved through seamless integrations and Berkus says that “there will always be best of breed solutions in various categories.” This vision will take a while to achieve, and so the PMS will continue to play a critical role for hotel operations: If we look ahead ten years, it would be easy to see a single cloud-based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through. Even with this view, Berkus sees the potential for category leaders to dominate specific verticals, while still providing the essential services necessary to run a hotel. For example, revenue management, which may be a feature of a CRS or a standalone solution -- all depending on how an individual property derives its revenue, and the sophistication of its revenue generation strategies. Part of the problem, he says, is that people confuse hotel tech with quality hotel tech: just because a hotel has a system doesn't mean that it is a good system. For Berkus, this means that the hospitality technology industry has plenty of dynamism ahead of it and he believes that it’s far from maturity. The transformative power of analytics For Berkus, the primary reason for the PMS’ uncertain future is due to its isolation from data and analytics. Even the most integrated systems have challenges when it comes to gathering data from disparate sources into a unified view. Even so, it’s the analytics on top of all of this data that drives profitable hospitality today. Whichever technology hotel uses, It must facilitate the types of analysis that drive “more capable decisions,” across the organization, says Berkus: Analytics are everything. The most important single change that's going to come is the fact that every piece of data that arrives at the central source will be analyzed. You're going to find that more capable decisions will be made to maximize revenue...based upon AI and data analytics. That's your future. The unsaid implications here is that hotels with a sub-par data and analytics approach will be left behind. Hospitality has become not just about the guest-facing product but also the hidden back-end of intelligent data capture and analysis. The top performers will effectively oscillate between analyzing the data and making clear improvements based on this analysis. The data-driven hotel GM As data and analytics move to the core of a hotel’s operation, general managers must evolve their skill sets to match. While operations will never cease to be a part of a hotel general managers role, success in this role is increasingly about the ability to enhance profitability by effectively translating data analytics into actionable initiatives. Currently, GMs have a steep learning curve to build muscle memory around analyzing large amounts of data from disparate sources. As machines become more capable of doing the analysis on their own, the best GMs will be able to take action on the analysis presented by the tools to increase profitability, Berkus predicts: A manager has to be able to add value by adding revenue and by increasing guest satisfaction. Those two things are not necessarily the operational things that a manager today normally concentrates on. Marketing also matters more to the GM of the future. As marketing campaigns become data-focused, GMs will engage more deeply with their marketing teams to leverage a data-driven approach to spend marketing dollars more efficiently. It's all about the relevant message consumed in the right context, as GMs seek to add value in new ways. Sourcing true pain points from sales and marketing Berkus is an active angel investor, and his recent announcement of Wayfare Ventures brings his focus to travel technology. When it comes to developing an idea, Berkus sees real value in entrepreneurs solving true pain points rather than perceived problems: I love it when somebody in marketing or sales develops a company and says “I feel the pain” and let's try and solve the need. As opposed to what I see most often, which is an engineer says I really got an idea and I'm going to make that idea work. The contrarian view is noteworthy in its opposition to the engineer-focused view espoused by many investors and technologists. Part of this view comes from the plummeting costs of cloud computing, as well as the prevalence of APIs which make it simpler to plug into an existing ecosystem without having to build as much technical infrastructure. Differentiation comes less from tech and more from truly knowing the problem and having clarity around what needs to be solved -- rather than building a technically-flawless solution that misses the mark and fails to gain traction because it doesn't solve an actual problem. An early-stage solution that solves a real problem for a specific segment sells itself and helps a startup gain traction at a lower cost. It’s expensive to convince people that a product solves a non-existent problem. Market trends poised for investment As far as trends in the market that have potential, Berkus points to artificial intelligence, robotics, and data analytics as three disruptive forces. However, things change fast. Apps are no longer the hot commodity they once were. Today’s opportunities are all about AI, robots, and data analytics. When evaluating the most exciting opportunities for investment, Berkus expands his view to encompass all of travel technology. This expanded view allows him to see opportunities from the interconnectedness of the travel and hospitality industries, which is a core part of the thesis at Wayfare Ventures. It all comes down to using modern technology to find new revenue that may not have been easy to uncover in the past. Whatever it be, there are opportunities now for revenue that weren't easily available in the past but are today. But the whole point is if guest satisfaction goes up and guests are able to do things they couldn't do before, like order a meal from text, then you're going to have better revenue and more satisfaction. Enjoy the full podcast episode here. Outside of the points covered above, Berkus shares the fascinating foundational story of the first property and yield management tools for hotels.
One of the biggest misconceptions that hotel workers believe is that technology and artificial intelligence will take their job. Here’s a news flash - it won’t. Don’t believe us? Just take a look at history. From early Mesopotamia to 17th century Europe economic growth grew at a steady pace. Blacksmiths forged iron, tailors made clothes and so on. At the dawn of the industrial revolution many predicted that factories would displace this workforce and create mass unemployment. In fact, the opposite happened and factories created an entirely new economy with explosive employment and economic growth. What we see time and time again is that game changing innovation creates growth that in turn delivers net positive jobs. Hoteliers who want to succeed in the future are advised not to focus on the jobs that technology will displace but on the jobs that it will create. The same misconception from the Industrial Revolution resurfaced in the late 70s with the advent of spreadsheets. Analysts thought that they would lose their jobs to intelligent computing programs but found that technology actually empowered them. The top analysts of the 70s were those who were best at doing advanced calculations off hand while the top analysts of the 80s were the ones who knew how to effectively manipulate, visualize and analyze data in spreadsheets (check out this awesome history of spreadsheets). For the hotel industry it’s inevitable that automation and A.I. have been driving a more profitable business model. The trend is also leading to a new breed of top hoteliers with a different kind of skill set. In our interview with FOSSE creator Dave Berkus, he told us that the hotel general manager of the future is going to require less operational knowhow and more analytical chops. Hoteliers believe that revenue managers will lose their jobs when artificial intelligence gets good enough. I believe that artificial intelligence is going to make revenue management an even more valuable skill because it will take more insight and analytical rigor to stand out from the competition set in a data-driven world. ~Aditya Sanghi At the core of this change is the property management system and few have changed the game for the PMS market like Hotelogix founder and CEO Aditya Sanghi. Aditya has launched a wildly successful business in some of the toughest markets like Asia and Southeast Asia (due to language and culture differences). The product he and his team have built is so strong that it transcends these cross border discrepancies and is widely used by hoteliers around the world. Hotelogix is becoming increasingly popular in markets like Europe and the United States - a testament to the incredible company that Sanghi has built. During this interview we learn from Aditya’s unique perspective on life, hotels and business. We also talk about the future of hotel property management systems and what qualities hotel managers must focus on developing in order to succeed in the A.I. revolution. What was your background prior to starting Hotelogix? Hotelogix was founded by Prabhash Bhatnagar in 2008. Before Hotelogix, Prabhash used to offer web solutions’ services, where he interacted closely with many hotels. That’s where the idea of offering a cloud-based PMS to the mid-segment hotels germinated. I joined Prabhash as a Co-founder, as I was always interested in making a product for the global market, and Cloud PMS gave me a perfect opportunity to do so. Before that, straight out of college, I had co-founded another product-based company, EDISPHERE with my brother Ajay Sanghi. I believe that my early exposure to creating products played a great role in shaping my entrepreneurial journey. What made you decide to jump in and create Hotelogix? I had a burning desire to create a product that had global reach and appeal. India was not known as a hub for products back then and I always believed that products would drive the next phase of economy for the country. I started my corporate life as an entrepreneur. I am known to be a ‘happy-go-lucky’ kind of person and have never feared consequences. I think a major factor in becoming an entrepreneur is to not have a fear of failure. I come from a strong sports background, where winning and losing was part of the game. I believe that losing a battle is an integral part of winning the war, and one must enjoy the whole journey. I think I was better prepared to live the life of an entrepreneur because of my learnings from sports and my family background where ‘risk taking’ is normal. There is also a certain sense of joy and contentment in creating footprints for someone to follow. Any footprints that Hotelogix can create for other companies to follow will be a huge accomplishment for me. Changing the life of a customer is another factor that drives me. And, co-founding Hotelogix gave me a perfect opportunity to do that. I realized that the industry would soon transition to cloud PMS as the entire travel world was poised to go digital, and I took the opportunity to drive this change. On how it started… Prabhash had shared his idea in a ‘New Year Party’ in December 2007 while we were sipping whisky by the fireplace, on a chilly winter night. I think my decision was taken in a couple of hours of our conversation. All the above factors were too compelling for me to continue working in Informatica Business Solutions in Bangalore, where I last worked. I have taken some of the most critical decisions of my life in less than a couple of hours. And, I do not regret any of them. Who was your first customer at Hotelogix? Our first customer was in 2009, a small boutique hotel called Faros Suites from Lonian Islands, Greece. Convinced by our ‘try and buy’ model, they took a free trial of our PMS. Back then, we did not have any sales team and the founding team would respond to chat and email queries. After a few days of self-running trial with assistance on chat and email for concerns and clarifications, Angelo, the owner decided to go ahead with Hotelogix. Their decision to implement Hotelogix did not involve any huge financial investment, but it did involve their time and resource investment. They were moving from pen & paper to adopting our cloud solution. Such a transition is never easy. Wow, so your first customer signed up through a trial, is that something that Hotelogix makes widely available for hotels? Look to any industry and software buyers can try different solutions before they buy. We believe that is the future for hotels too and have made trials available to any hotelier who wants to take our software for a spin. Great hotel business starts with a powerful Cloud PMS and hoteliers should be able to see the product in action before they sign on. This is why hotels in more than 100+ countries trust Hotelogix Cloud PMS. Hotelogix is a smart solution that helps our clients stay organised and connected. If you want to simplify your operations, get more business and keep your guests happier - don't take our word for it - try Hotelogix free. The Hotelogix dashboard is intuitive and easy to learn for new staff Who is one mentor that has really helped you scale the business? That would be Shekhar Kirani, from Accel Partners (our investors). He is also on our board for quite a few years now. Shekhar has taught us that it is ok to make mistakes, fail and move on fast. The day and age is not suited for over analysing things to take decisions. He also taught us to how to think like a funded company, and the switch that needs to be made from the ‘boot strapped’ mind-set. Here are a few more things that we have learned from him – On hiring – If you need one sales person, hire three. Choose the best person for the job without losing time. If more than one of them turn out to be good, it is never considered as a bad investment. On our website that is expected to generate demand – The first fold of your home page is for humans, and rest is for Google. Look at your website from that perspective. Don’t overly spend time trying to beautify what pleases the human eye but has no bearing on Google. On any process, like mailers to be sent once a form fill is done on the website - Just copy the follow up mails from some service that is successful and don’t waste time recreating it. On focus: Shekhar has also worked closely with us to bring in lot of focus in the way we think of the road ahead. This helps us choose the next two battles to win, rather than going all out and not winning anything. Hotelogix team building exercise What's one commonly held belief that most hoteliers believe to be true in your niche that actually is false? For example: Hoteliers believe that revenue managers will lose their jobs when artificial intelligence gets good enough. I believe that artificial intelligence is going to make revenue management an even more valuable skill because it will take more insight and analytical rigor to stand out from the competition set in a data-driven world. Hoteliers are used to looking at PMS as a cost centre of the hotel. With the maturity of Cloud PMS, the paradigm has changed. A PMS should not be considered as cost, but as a system that will help them grow revenues and business. Also, for most hoteliers, deciding on PMS is an operational decision whereas I feel it should be more of a strategic decision. What's the most surprising thing you've learned about scaling technology into hotels? The most important thing that I have learned is the difference between products for a vertical vs. horizontal industry. When you are looking at a vertical industry like hospitality, you can’t ensure a frictionless scale-up unless you understand the behaviour of even the housekeeping staff. It requires going deeper into the domain and environment. Another great learning is to choose the battles to fight. ‘Is this the right time to solve this problem?’ is one question to be answered. Gut feeling is important but scaling up needs data backing. Instinct should get things on the table for consideration, but one needs to get to data points to decide on it. Thirdly, support is the most critical aspect of serving a hotel. Even if the product is not evolving and innovating as quickly, one must spend disproportionate time trying to understand how you can be more effective in your support. Is there a company that has been a particularly good partner for you? Yes. We have been partnering with several third-party solution providers to help hotels leverage the power of cloud technology. Some of them have been quite important to us. They are - Vertical Booking Channel Manager - The integration we did with Vertical Booking was first-of-its-kind back then. It was a complete two-way integration to support very critical aspects of OTA distribution like contract allotment vs free sale. Vertical Booking also stood alongside as a robust solution and the integrated offering is still what our customers enjoy. This was the first channel manager integration with Hotelogix and our customers saw instant benefits in terms of nullifying double bookings, getting more OTA bookings, increasing revenue and many more. TripAdvisor Review Express - Review Collection automation, and ability to influence reputation from Hotelogix PMS was the perfect thing to happen. Hotelogix was mainly a solution positioned for independent hotels and we have always believed that reviews are a great leveller between independent hotels and brands. Our customers saw how Hotelogix and Review Express integration seamlessly improved their TripAdvisor ratings, that benefitted them in terms of better ARR and more bookings. Where do you see Hotelogix in 5 years? 5 years from now, I imagine Hotelogix to be a word that is synonymous with Cloud PMS. Hotelogix will be more like an Operating System for hotels, providing various services on top of its PMS platform. We will be a product that is associated with simplicity that drives great customer value. We will be known as a catalyst to this change of bringing about automation to the mid and small sized hotels, and driving the change from on-premise to cloud-based systems for running operations. More objectively, Hotelogix will be the largest Cloud PMS in the South Asia and Southeast Asia markets and will be in the top 3 leading products in developed geographies like the North American market. How will the property management system and overall hotel management software space change in the next 5-10 years? Today, Hotelogix is mainly serving semi-service and limited-service independent and group properties like Hotels, Resorts, Apart Hotels, B&Bs, Hostels and more. You will see specialized product offerings for these different property types. You will also see Hotelogix becoming a key player in anything that needs booking of a room/desk like corporate housing and co-working spaces. Hotelogix as a brand will become a ‘Gold Standard’ in the industry and will be adopted by hotel management institutes to train their students on PMS. Hotelogix will be that self-serving platform that a hotel business can get up and running within no time – where he can quickly subscribe, adopt and benefit from the solution. This means a lot more smaller hotels will be able to avail of our solution without having to go through adoption challenges that come with a new PMS. Hotelogix is highly passionate about small to mid-sized hotel businesses. For a very long time, this segment didn’t have access to great technology as service providers across the globe concentrated on the five starred community, like Opera and Travelclick. Things are changing now. Tech providers are focusing on this segment as adoption of technology lagged in this sector. The popularity of this segment has also been purely driven by market dynamics, where travelers are now choosing to stay in independents and smaller properties. So, it’s time to focus on enhancing the guest experience for such properties. The community should look at creating more services/products that are geared towards the guest. Treating them like 5-star guests by leveraging AI driven technology can be used to serve and monetize better. What are some of Hotelogix's recent product innovations that hoteliers should be aware of? Hotelogix has released its Developer platform. Using this, third parties can develop apps on Hotelogix. Our firm belief is that hotel brands will become more like consumer tech businesses (like Amazon), and each one of them would have technology at the forefront to drive their brand strategy. This would mean, giving them the flexibility to develop apps that are not necessarily provided by us or any vendor, but are customised to their needs. We have toyed with this approach and it has been adopted by a couple of customers. I think this is the ‘Uber’ effect that ‘PMSs’ can provide to brands. Additionally, we would like to promote our Mobile Developer Platform and see if the industry feels it is of value to them. What advice do you have for hotel tech entrepreneurs? It’s a fantastic industry to be in as long as you can empathize with hotels and their guest experience. Hoteliers and hospitality professionals are a very interesting bunch of people. They have many anecdotes to share as they deal with people from all walks of life. Sometimes, entrepreneurs looking to get into the hotel tech space need to be ready to wait it out, if they believe their product will bring value to hoteliers. Like, in the case of Hotelogix, we were clearly ahead of time when we released our Cloud PMS way back in 2009. But now, the environment is great and cloud PMS has emerged as one of the hottest pieces of hospitality technology. Make technology such that it can be seamlessly adopted. A hotel already deals with so many challenges that adoption of something new can become a bigger challenge. Generally, people in operations are the users of technology and your product needs to fit seamlessly in their lives.
Learn how Kevin Brown went from Guest Services Manager to Product Marketer at a $30B dollar hotel tech company in under 4 years6 months ago
Working as a front desk agent at a hotel is insanely hard work. Hotel guests have extremely high expectations: they want to be checked in fast, they want amazing service, a 24/7 smile and they want to be upgraded to the best room for free. They want you to know everything about them but not too much that it’s creepy. They want friendly conversation but they don’t want you to talk too much. Check-in systems break down, reservations are lost, overbookings happen and so much more can go wrong that is completely out of your control. All that said the buck stops with you as the front desk agent. Rarely will guests ever call your GM to tell them how great you were but they are quick to let your boss know when you’ve messed up in their eyes. So you’re frustrated and stressed behind the front desk - what do you do? If you’re anything like Kevin Brown you’ll find your passion and put in the work to follow your dreams. Today Kevin Brown is a Product Marketing Manager at Amadeus Hospitality, creator of global hotel management software like Delphi Sales & Catering, HotSOS operations software and core GDS solutions for hotels. Most front desk managers and housekeeping managers would think that Kevin’s role today is out of reach. The good news is that your successful career as a technology executive is completely within reach. To get there you’ll need curiosity, outside the box thinking, self guided learning and lots of hard work while your colleagues are going out for drinks after their respective shifts. Here at Hotel Tech Report we’ve recently documented similar career rises like how Matt Welle parlayed his role as a Hilton sales rep into becoming CEO at Mews Systems, one of the hottest technology startups in the hotel software space and creator of a leading property management system for hotels. “What I wish I understood far earlier in my hotel career is that the hotel and travel industry actually set the standards of service for every other industry out there. The skills you develop in hotels DO translate, and frankly what you learn about service in the hotel industry is cutting edge.” ~Kevin Brown Kevin began his career in hotels at the Cosmopolitan Las Vegas, a property known for its sophisticated technology integrations and infrastructure. While at the Cosmo, Kevin took every opportunity possible to learn about the technology under the hood of the hotel. His unquenchable thirst for knowledge led him into learning the intricacies of every system in the hotel and developing a clear understanding of what was working as well as what wasn’t. Kevin took advantage of his role at the hotel to build relationships with technology companies, he became a power user of their products and they began learning from him as much as he was learning from them. When Kevin first met the Customer Experience Manager at Amadeus Hospitality he knew that’s where he wanted to be. Kevin’s story is an incredible journey that demonstrates how you can leverage your role behind the front desk into a successful technology career so we interviewed him to learn tricks and tips for hoteliers who are thinking about a career in technology down the line. Remember to build close relationships with your existing technology vendors, try lots of different technology products and never stop learning. Can you tell us about your career background in hotels? My career in hotels is quite odd since I only worked in one hotel before I became a part of the tech industry. I originally came from the marketing and production world of the music industry. It was by happenstance stumbled upon an opportunity at The Cosmopolitan of Las Vegas. During my time there I was able to hold almost every major departmental role in the hotel division; both traveler facing and back of house areas. What I enjoyed most about working in hospitality was the blending of so many cultures and nationalities and how much I could learn from people. The only part I dislike about the hotel industry is that it is the most overworked and underappreciated industry. What every hotel industry professional has to go through and deal with on a day to day basis is astounding. To create memorable experiences for travelers is truly nothing short of extraordinary, and yet a majority of the time the only feedback hotel staff get from travelers is negative. Many travelers do not get to peek into how much talent and effort goes into making their stay amazing, and I think hotel staff like room attendants and call center managers deserve recognition for that level of service. What was one technology that you couldn't live without while working at the front desk? I could not live without any tech that automated my work processes and ability to quickly turn data into knowledge. Manual process and effort is the absolute bane of our industry, and with the rapid evolution of traveler and group expectations for personalization and quick response times I do not know what I would’ve done without those empowerment tools. I was lucky enough that I was immediately introduced to technology the moment I stepped foot into the hotel industry, and I feel like I was exposed to cutting edge stuff like chatbots, task automation, and traveler profiling years before hoteliers even knew about it. When the Cosmopolitan opened, the vision of tech integration was a key foundation to the success of the hotel's brand. What would you say is the most widely held misconception that hoteliers have about technology? I think the single biggest misconception is that hoteliers think the solution to their traveler personalization problems is to invest in traveler facing technology and create an omni-channel experience. The biggest problem hoteliers face is actually their staff turnover. What is the point of having traveler facing technology, without experienced staff that have the right technology to empower them to deliver on the brand experience? Your staff must always come first if you want to truly personalize and fulfill your brand promise. This means hoteliers need to balance their traveler facing and staff facing investments more effectively. Tell us about your journey from hotelier into the technology industry. I am 100% a geek and love keeping up with the future of technology. Once I got into hotels, with an immediate exposure to technology, it became a goal of mine to inevitably work with hotel technology. When I was a customer many vendors just wouldn’t listen to the real pain points that my teams had. Many vendors that I was exposed to were just trying to sell their technology without showing me what value they were bringing to solve an actual problem that we had. I developed a strong point of view on what great vendors did and what bad ones did so that I could start adding value and also to help me identify where I’d ultimately want to work. When I met my CEM (Customer Experience Manager) with Amadeus, he and I struck a solid relationship that built over time into a really strong partnership. When my CEM decided to get back into hotel operations, he asked me if I wanted to replace him. Every staff member I met from Amadeus was solely focused on solving problems for their customers. After my interview with my soon to be leaders, and learning that almost every one of my teammates worked in hotels in the past, I knew I had found my new home. The rest is history! What was the most challenging part of moving from hotels into technology? There really was no challenge for me. For me, the adjustment was so surreal to see how greener the side of this world is that suits my passions when compared to the constant, fast-paced nature of hotel operations in Las Vegas. I have to admit, I am lucky beyond measure to let my inner geek out, travel, meet incredibly brilliant people I can learn from, and tell stories that have real meaning for our industry. You obviously loved Amadeus as a customer even before you worked there, what is it that stood out to you about the company? Hospitality is all about the human connection and a property’s ability to deliver positive experiences for guests. Amadeus’ technology solutions provide cloud-native capabilities for the Central Reservations System, Property Management System, Sales & Event Management, Business Intelligence, Media, Guest Management solutions, and Service Optimization. These solutions not only cover the entire life-cycle of a guests’ journey, but offer properties the added benefits of usability, functionality, and visibility into guest data. This represents a game changer for the industry, as venues commonly work with multiple technology vendors and have fragmented views of their guests. Imagine that you're going to open the hotel of your dreams tomorrow. What kind of hotel would it be? My dream hotel to open would be independent, targeted at middle upper to luxury travelers. It would be small with about 75-100 rooms in the heart of Chicago or Las Vegas that catered to music, art, and entertainment with a 40’s-50’s post modern flair. I would also ensure that the property had tactful touches of advanced technology bordering on science fiction levels of experience. I would love to find the right way to bring back the big band era style of hospitality. That post-modern design, and the elegance back then was so timeless. Pairing that timelessness with technology would really be unique in a market so saturated with the same kinds of offerings. I would name it The Indigo. Not only do I enjoy the color, but indigo dye has a really interesting history and it was one of the largest influencers in the globalization of the world. From a technology perspective I would focus on building the hotel with the best infrastructure out there so it was future proof for the next 10 years like fiber lines, BLE, mesh sensors, and building management automation. Otherwise, if I didn’t I would have to keep upgrading every other year or so which is so much more expensive in the long run. I would actually highly limit traveler facing technology, and be tasteful with what channels and tech travelers were exposed to. I would then invest in the best staff facing development tools and technology money could buy to ensure that my staff could work smarter and not harder. I believe staff should always come before the guest, so I would want make every effort to ensure my staff to have every tool they need to easily conduct their day, maintain building integrity, and have knowledge about any traveler they interact with to make the ecosystem engaging and meaningful for both staff and travelers we would host. What's one piece of advice you have for hoteliers who have dreams of working in technology one day? Surprisingly, there are many hospitality tech vendors out there in the world with a majority of staff that have never worked for a hotel a day in their lives. Because of this problem, I think we actually need more hoteliers to move into the tech space than ever before. Thankfully with Amadeus, I am surrounded by decades of hotel experience between my teammates, but almost everyone I work with shared a similar sentiment when they were in hotel operations. Many hoteliers think the moment the work in a hotel, they are sucked into a vacuum of an industry they cannot get out of, and that their skills cannot translate to other industries because travel is so specific. What I wish I understood far earlier in my hotel career is that the hotel and travel industry actually set the standards of service for every other industry out there. The skills you develop in hotels DO translate, and frankly what you learn about service in the hotel industry is cutting edge. It takes years for other industry sectors to adopt hotel industry best practices, so you have more to your advantage than you think. What's one podcast, newsletter or book that you recommend hoteliers read if they'd like to eventually move into tech? Read everything by Malcolm Gladwell. Blink, The Tipping Point, David and Goliath, read all of his stuff. His work opened my mind to new perspectives about how to help others, learn, and gain a greater understanding about what it means to be in service to others. Hospitality is about engaging with people, and dealing with human problems. There is no uniqueness to the problems hoteliers face every day. Travel technology needs as much humanity as possible because travel is all about connecting with a place, with people, and with yourself. What is your favorite hotel in the world? As much as I have thought about this, I honestly cannot pick a favorite hotel in the world. It is just too hard because every great hotel I have stayed at has always offered something different that I enjoy. Each one stands out in its own way. However, I can say this: I think the best hotels in the world are the ones that anticipate my behavior and needs based on what they know about me, especially if they greet me by using my name. What is the most exciting technology you've seen in the hotel tech space that is not built by your own company? Why? Mesh networks and beacon technology. I think that is one of the most impressive future hardware developments not only for hospitality, but for the world. While it is an extremely fine line – where many data collectors have pushed the creepy line to the edge with tech like this – I think that mesh network and beacon technology can truly enhance the lives of travelers and consumers alike. What is one thing that most people don't know about you? I am an identical twin.
In this episode we chat with Dave Berkus, a true hotel hero and one of the most prolific angel investors of all time. Dave is the creator of FOSSE - the property management system that Marriott used for nearly 4 decades. He is one of the most storied entrepreneurs in hotel technology and has invested in countless travel technology startups. In the interview we cover topics such as: - How Dave landed the deal with Marriott to license his software - Why Marriott used FOSSE PMS for almost 4 decades - Why hotels in the future may not even need a property management system - The increasing importance of CRM, Business Intelligence and CRS - Why hotel general managers need to sharpen up on new skills or be replaced by robots Enjoy the full podcast above, followed by a transcript of our conversation. Outside of the points covered above, Berkus shares the fascinating foundational story of the first property and yield management tools for hotels. *** Jordan Hollander: So I think there's something like 700 property management system vendors globally on the market today. I know that you weren't the first but what number were you? Dave Berkus: I think Computerized Lodging Systems was probably the third of the PMS companies. Eco was the first in Santa Ana, California. IBM was the second, and then there are several of us that contend that we were the third. But it was early. It was 1974 when I wrote it, and 1976 when it first began being installed in hotels. Lucky for me, the IBM system was being installed at the brand new Bonaventure Hotel in Los Angeles and the Aladdin Hotel in Las Vegas. Both of those IT managers gave me a chance to sit through a little bit of the process, and the night audits. From that, I had the idea that I could do it better and faster and cheaper with a mini computer and that's how it all began. That same Miramar Sheraton was the first customer. JH: So you created a property management system business in the days before most hoteliers knew what a property management system even was. What was the growth like in those early days? Was it really slow to start out? DB: From 800,000 in the first year to two million to 4 to 12 to 18 to 24 to 30 million. Then these are all 1980, 1981, 2982 and 1983 dollars. About the same as a hundred million dollar business today. JH: Wow, those are some numbers that startups even today almost four decades later would be pretty happy with. A lot of companies think that the only way to get to that kind of scale is through enterprise deals, and I know that you pioneered one of the early ones. Can you talk about the partnership that you had with Marriott DB: I licensed it to Marriott in 1982. Marriott was to use it for a brand new concept that was being developed called Courtyard. They told me there would be 50 Courtyards, so we licensed it accordingly, and went through all the effort of getting ready to put multiple hotels on a single mini computer, which was rare, but I had done it numerous times for other smaller chains. We got three million dollars from Marriott for a universal license for the Courtyard Hotels. That was a lot of money back in those days. We sold them the MAI hardware and the usual markup was about 25%. So I can look at about 14 million dollars that we billed Marriott. So that's not bad at all. But they had the rights. I had no idea that Marriott would then begin to call this FOSSE and distribute it through Springfield, Fairfield, Residence Inns, all of their auxiliary products other than the Marriott and JW Marriott branded hotels. Today, it is now 36 years later. They are just coming to end of life on using it in 2,200 hotels. JH: To most of our listeners, it's going to be pretty unbelievable that a company like Marriott kept the same systems in place for almost 40 years -- especially a company like that that's known for being at the forefront of technology. But I'd like to point out that it's really not just Marriott. We've had some massive Innovations in the consumer and industrial sector when it comes to technology, things like cloud computing and universal access to Wi-Fi. Despite all of this, there's been really no rethinking of what it means to be a property management system and the job to be done. Can you talk about where you see the property management system playing a role in the hotel tech stack of the future? DB: The real question is where were we way back in the 80s when this became the absolute mandate for every hotel over 15 rooms, and where are we today? That story is the story we need to concentrate on. In 1980 or 82 or 84, all of the central reservation systems were written in the 60s. And they were on mainframes. In fact, some of those systems still survive today despite the fact that Amadeus is rewriting IHGs. There are other systems like Marcia that survive from the 60s. Yes, it's true that the UI has changed but it's still flat files on mainframe computer and that will certainly evolve over time. The central reservation systems own the guest name record; the guest name record is the critical element we need to talk about. The PMS systems are, for the chains at least, becoming increasingly less important, as they handle right now in-house functions only. So guest history, which used to be a gigantic important part of a PMS system has been stripped in most systems and is now very much part of the central reservation system. Whether you want to foam pillow or a special kind of anti-allergic something now is known chain-wide as opposed to just at that property where you made the request way back when. That's important. How many stays you've had and where you've had them: for analytics and Big Data, is really important. In fact, that's one of the things that Cindy Estes Green's company uses now as input from many of the chains to help them to understand better who their customers are, where they're going, and occupancy/future occupancy. Big Data's being used in very important ways but certainly not from the PMS system anymore. That leads to the question of: do we need a PMS system in the future? The answer is, for the short-run, yes. Property-based systems get rid of the problem of dependence upon any form of Ethernet or outside communications. In some areas of the country, the reliability of those systems still is a problem. If we look ahead ten years, and certainly beyond 10 years, it would be easy to see a single cloud based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through. Then we have a single guest named record that doesn't have to pass through from one system to another to be validated that they are the same -- what happens if someone changes and address when he's standing in front of the front desk -- all of those things go away. JH: When you say there's going to be a single PMS system or centralized system that's going to take care of all of those functions, do you mean to say that hotels are only going to have one type of software or do you think that there's room for specialists in different categories? DB: So you're always going to have best of breed in some areas. Take for example, revenue management, which is a very important part of all of this. It can either be a feature in a central reservation system or it can control everything else depending on where the real revenue is coming from. So Revenue Management Systems may end up being more important, for example, then CRM systems. Certainly both of them more important than just a simple accounting system at the front desk. We have some things to understand and to evolve over this next half a decade to decade and it's going to be interesting. This is not a stagnant industry, despite the fact that people think that every hotel has a system, therefore the industry is mature. JH: You briefly touched on the growing importance of systems like CRMs, customer relationship management, CRS central reservation systems and even touched on Revenue Management Systems. I know you have quite an extensive history in the revenue management space. Can you talk about your experience there and how it's informed your view on the market today? DB: So I was called at the time by both Marriott and Hyatt, both of them called me to their offices -- Hyatt, Chicago. Marriott, Washington -- to talk about their system and how it could be made into something that was much more. That was something more like the airline system. In the case of Marriott, they had what they had termed tier pricing. You become eighty percent occupied at a future date, then you close to government and other cheap rates. You become 90%, then you raise the rates by 10%. You become 100%, then you raise the rates some more. That was tier pricing and that's all they had. Hyatt had nothing. So both of them said what can you do? I went home from both of those meetings and said, what can I do? The thought immediately occurred to me to copy the airlines. I happened to be a reseller for Burroughs, which became Unisys. And Burroughs let me in to see what was going on at Piedmont Airlines, and Piedmont had copied Sabre. I mean, this is all very insipid industry, isn't it? So I came in and saw the Piedmont system, came back and said even I can do that better. As I came back on the airplane from seeing the Piedmont system, I was up all night in a overnight flight designing what I thought to be a yield management system that would work for hotels. I wanted something different. Artificial intelligence was one of those terms you threw around back in those days, like we are today. In those days it was much more much more gravitas. So I called somebody I knew who had three programmers from MIT who knew how to program in the LISP language, which was the programming language of artificial intelligence. It ran on a UNIX-based machine that was made by Texas Instruments. So I found these three programmers and hired them. I went to Texas Instruments, literally by flying to Austin, and having a meeting with them telling them what I intended to do and getting their buy-in. Together, we designed the very first artificial intelligence yield management system. So we had two systems, two hundred and fifty thousand apiece. The owner of Sonesta refused to pay for it because he thought he could do it on the back of a napkin. I bought back the system from Sonesta and I told my chief programmer to take this code, forget the fact that it's artificial intelligence, and make it a feature in the reservation system. It probably had 80% of the functionality, which we released as an $8,000 'check the box' feature and virtually every customer we had at the time began to order it. Yield management became something people could afford so they bought it -- even if they didn't use it in many of them didn't. That was the beginning and that was 1988. JH: So that year, 1988, was really the year that hotel started using data to make decisions about pricing globally. It's a huge transformational shift in the industry. As we look forward, what do you think the next 5 10 15 years look like and where some of the most important changes happening in the market? DB: Analytics are everything. Decisions are going to be made by analytics that are created by machines. There are a lot of people who will lose their jobs, and then maybe be retrained or other people take those jobs, that are now menial, especially in the back office. These roles have to be replaced by people or by machine analytics and people then act upon those analytics. The most important single change that's going to come is the fact that every piece of data that arrives at the central source, whether it be from a query and a lost sale, whether it be from a booking at a low price that might have been up-sold, whether it be an honored guest that was rebuffed because there was no occupancy. I'm giving many examples but there are hundreds of them. Each will be analyzed. You're going to find that much more capable decisions will be made to maximize revenue than have ever been possible before based upon AI and data analytics. That's your future. JH: I definitely agree that business intelligence is a huge part of the future as we get a more sophisticated and granular understanding of where people are coming from, and how profitable certain segments are. To a large extent, hotels are still using some of these tools and datasets of the past and are waiting around on Tuesday for their compset report. DB: You gotta think of STR and Concur and a lot of these others as the equivalent of the central reservation systems of the sixties. It's nice to have them, they just haven't figured out yet how to make it actionable enough to be worth. So little for the money we need to pay today. JH: So STR is up for disruption, property management system, CRS, CRM -- pretty much everything is on the chopping block here. What are some of the most exciting opportunities that you're seeing today? DB: If we look at hotel tech and expand it to travel tech, which is really where Wayfare Ventures, our latest firm investment firm, operates, there are a lot of ways to do things that have nothing to do with what we were used to in the past. If you can get a plane in and out of a gate five minutes faster, and multiply that by the number of planes and gates that there are going in and out of airports in the US, you can save multiple billions of dollars. I mean that sounds strange over a year's time. If you can do the same thing in hotels by better serving a guest, by up selling that guest, by finding out whether guest satisfaction is a problem or an opportunity. Meaning: can you sell them meals even if the meals are delivered by a third party from outside the hotel? Whatever it be, there are a lots of opportunities now for revenue that weren't easily available in the past but are today. But the whole point is if guest satisfaction goes up and guests are able to do things they couldn't do before, like order a meal from text, then you're going to have better revenue and more satisfaction. Those are the ones the applications that are going to make some sense. JH: I agree with you there. We're seeing a huge amount of demand for our guest messaging software on Hotel Tech Report. We also see a lot of hoteliers looking for merchandising and up selling tools that can help them improve the guest experience while generating more revenue per guest, which is really a win-win on both sides. When you look at the investment landscape and your current portfolio, are there any companies that you're really excited about today? DB: Think of the hotel pool, the hotel spa, all of those things -- even the gym -- which lay fallow during many hours a day, especially in city hotels that are principally business occupied. So a little company called Resort Pass, which is one of our companies, came along and said what would happen if we contract with the hotel to bring in outside guests who are members of Resort Pass who make a reservation to use the pool for two hours when the pool would have never been used at all. The answer was these hotels love it because it's ancillary revenue for fixed assets that really have no other form of revenue generation because they're free to the guest. JH: Resort Pass has been really well received by the market. Like you said, it's almost a no-brainer for hotels. Why wouldn't you want to leverage and get some more revenue out of these underutilized spaces? I don't know the Resort Pass team personally, but I know a lot of the other founders that you've invested with, people like Adam and Richard over at Cloudbeds and John and Chris over at Whistle. Are there characteristics that you think really make great entrepreneurs stand out from the pack? DB: I love it when somebody in marketing or sales develops a company and says I feel the pain and let's try and solve the need. As opposed to what I see most often, which is an engineer says I really got an idea and I'm going to make that idea work. It's like pushing the rock up the hill because they didn't do the research. I have good stories about companies that flamed out, including some of my own, that didn't do the research and end up paying the price. JH: I know when you're investing in companies, you will generally look at the founders and see the quality of the team as one of your key drivers or Theses around an investment, but the other huge aspect is how big is the market and what are the market trends going on. So I wanted to ask what are some of the trends that you're seeing in the market and that you think have the strongest legs behind them. DB: That is a moving target. If you were to say I had an app 8 to 10 years ago, we might have been really excited because there weren't enough apps out there. Today, if you say you have an app, we're just gonna face the other way. So the today answer is we're looking very much at AI, robotics and data analytics. Tomorrow is going to be something else and it's going to be more sophisticated. So if I had to answer it today, it's those three things. JH: As we have a large hotelier audience on the show, do you think that the role of a general manager and a hotel is going to change in the coming years? It seems like we're moving away from an operationally-focused GM -- not to say that that's not important anymore -- but in the future, there's actually a huge shift towards being more analytical and almost acting like a product manager. What do you think that the GM of the future looks like? DB: The high-tech keynote that I gave in Toronto two years ago was entitled "Will tech take your job and it was addressed toward those managers and to the financial managers who were there in the audience. The answer is there are so many things that will be taken over -- not necessarily by robotics, that's the cleaning and the other things perhaps delivery to guests -- it's more the kinds of things that a manager has to learn to do to add value. A manager has to be able to add value by adding revenue and by increasing guest satisfaction. Those two things are not operational necessarily. As the operational thing that a manager today normally concentrates on. Tomorrow that manager is going to be a data analyst and he's going to be very much a marketing person, despite the fact that he'll have a department that supposedly assist at the property or in the chain to do that for him or her. JH: And where there's crisis there's always opportunity. I think that the general managers that are able to capitalize on this trend and sharpen up their skills are going to find that there's more opportunity than ever before in this market to add value and really take their careers to the next level.