What is an API and How Do They Work in the Hotel Industry?
By Hotel Tech Report
Last updated January 26, 2022
4 min read
Really, another acronym? You might feel as if your mind is already boggled by all the hotel industry terminology that you’re expected to know, but we have some good news about APIs. You likely already use APIs on a regular basis, and APIs can play a big part in making your hotel’s technology work seamlessly. By developing a deeper understanding of what an API is, you can better understand the systems at work in your hotel and make more informed technology decisions. And when your technology works effectively (and economically!), your hotel can benefit from more efficient employees and happier guests. In this article, we’ll break down what is an API, describe some API examples, and show how you can incorporate APIs into your hotel’s daily operations.
If you’ve been in the industry for a while - or even a technology user in general - you have probably noticed the huge shift away from analog systems and toward software. APIs are at the core of how the software “revolution” is possible. We can explain the rise of software through economist Adam Smith’s theory of specialization. In economics, he explains that instead of every country producing all the goods they need, each country can produce only what they’re best at and trade with other countries to get the things they’re missing. This system decreases production costs and creates economies of scale. Thinking about software again, APIs enable software companies to become specialized, that is, only building software that has a specific purpose. A network of systems that each provide specific services can work together seamlessly thanks to APIs that act as translators and messages between them.
What is an API?
The acronym “API” stands for application programming interface, although for most hoteliers it might as well be gibberish. Don’t stress though, because the concept is actually quite simple.
In the early days of software, systems were server based which meant that they rarely (if ever) spoke with each other. Think about that first Mac in your house before the internet - it was very much a lonely island.
As processing power advanced and internet speeds increased exponentially, software became easier to develop and more accessible. As the world shifted from a myriad of lonely server based systems to an ecosystem of hyper connected platforms, there became a need to enable seamless communications amongst those systems - enter the API.
Ok, let’s use a hotel analogy to better understand the concept. Imagine you’re sitting at a table in your hotel’s restaurant. The kitchen is the part of the “system” that will prepare your order. What’s missing is the critical link to communicate your order to the kitchen and deliver your food back to your table. That’s where the waiter (or API) comes in. The waiter is the messenger – or API – that takes your request and tells the kitchen – the system – what to do. Then the waiter delivers the response back to you; in this case, it’s your food.
APIs are effectively messengers of data between applications. Every time you book a flight on Expedia you are using an API that delivers pricing and availability from the respective airline’s database onto Expedia’s website. That same dynamic now happens between hotel software and hardware systems.
API Examples in the Hotel Industry
Now that we’ve established that APIs serve as links between two systems, you might have an idea of why they’re so important in the hotel industry. In order for a hotel’s systems to provide value, they need to be able to communicate with each other - and with external players like online travel agencies. What do APIs look like in a hotel environment? Let’s dive into some API examples.
Connecting an RMS to a PMS
In order for revenue management systems to deliver valid and relevant pricing recommendations, they need information from the hotel’s property management system, like occupancy numbers.
Some property management systems, like protel, have developed seamless integrations with specific revenue management systems, which are possible with APIs. Protel, for instance, uses an API to integrate with Atomize, which receives a 24/7 feed of data from protel to deliver insightful pricing recommendations. The API converts the stream of occupancy and rate information from protel into data that Atomize can use in its rate and market analysis algorithms.
Connecting a PMS to upsell software
Is speaking with your front desk staff still the only way for guests to upgrade their room? With an upselling software that connects to your PMS, guests can purchase room upgrades or add-ons without the need for staff assistance.
If your upsell software didn’t communicate with your PMS, front desk agents would need to manually enter every modified reservation. Thanks to an API, the “interconnectedness” of the two systems can lead to more efficient operations.
Protel offers an integration with upselling platform Oaky, so hotels that use protel’s PMS can also benefit from the upselling services that Oaky provides without disrupting current front office operations.
Connecting business intelligence software to a PMS
Your hotel produces so much data on a daily basis that it can be hard to make sense of it. A business intelligence tool can synthesize data from the front office, your F&B outlets, and even competitor hotel performance to deliver valuable insight into your strategy. Was your marketing campaign successful? Do you need to add another cocktail server to your bar staff? BI software can answer many data-related questions about your hotel operations.
However, a BI tool is worthless without a reliable feed of data from your PMS or any other systems that provide operational data. BI software uses APIs to connect to your hotel’s other systems in real-time.
A BI tool like OTA Insight’s Rate Insight offers a seamless integration with protel, which is made possible through an API. Rate Insight receives a steady stream of PMS information from protel so that it can analyze trends and provide recommendations.
By now we hope you can appreciate how API isn’t just another acronym. APIs make technology more user-friendly and efficient, and they’ve made a world of innovation possible in the hotel software industry. If your hotel’s technology solutions don’t have open APIs yet - which allow complementary systems to integrate - then we recommend opening a conversation with your software vendor to explore options for building an API in the future. If your systems do have APIs, then we encourage you to work with your vendors to leverage their technology most effectively and maximize the value that your hotel receives. Interested in switching to a system that offers a broad catalog of integrations? Check out protel’s partner marketplace to see examples of how APIs connect their hotel technology ecosystem.