This summer, an industry panel claimed that we were living in “a golden age of hotel technology.” Setting the scene, the webinar host Paul Peddrick of Roomdex, said: “Given that hotels don’t really have a reputation for being particularly technology forward, this might sound like an ambitious statement. But let’s look at the evidence.”
The transition from legacy systems to the cloud, more affordable pricing and software-as-a-service models that give hoteliers free trials and easy integrations were cited as evidence.
Prices have come down because of the fierce competition amongst the estimated 700 vendors in the hotel tech space, Peddrick added.
“The number of software options is amazing,” he said. “In one digital marketplace alone, for example Stardekk, there are 235 options to choose from. That includes 36 PMS options, 20 distribution options, 14 payment solutions and 9 booking engines.”
From loyalty, upselling and staff comms to building management and stock control, there are software products for almost everything a hotel does.
In addition to increased choice, the pandemic has been the catalyst for an accelerated rollout of new hotel technology.
“It’s probably the fastest time of tech adoption in my career,” said Vibhu Gaind, chief information officer at RBH Hospitality Management, a UK company with several brands in its portfolio of 45 hotels.
Gaind noted a change in attitude amongst hotel owners and brands. Whereas in the past, funding was only available when absolutely necessary, now there is a greater recognition of the long-term benefits of investing in technology.
“Even though it’s not essential tech, but more to future-proof, to be forward-thinking …that’s what is there now. Those conversations are there now that were not in the past,” he said.
In addition to the push by the brands, the rollout of new technology is a focus for asset managers.
“Europe is following the US with growing reliance on asset managers, who have the ear of the owner, the contacts with the brands and the knowledge of the sector,” commented Richard Valtr, founder, Mews.
“Asset managers have the incentive to maximize returns and can use technology solutions to increase margins in what is likely to be a pressured environment for some time to come.”
Indeed, pressures on hotels include staffing and, in the UK particularly, supply chain problems. The requirement to implement wide-ranging tech upgrades could be an extra pressure for understaffed teams and stressed general managers.
New technology requires people to deploy it and, even if new systems are easy and intuitive, they are still a change to what employees are used to.
“You cannot deliver a lot of tech and a lot of initiatives into a hotel all at the same time,” said Gaind. “It’s about having the experience and maturity to say: ‘Yes, we want to do these things, but they need to be part of a bigger overall program.’ You can’t just upgrade everything overnight. It’s about timing and making sure you don’t overdo it.”
Putting the very best tech stack into a new opening is easy; making changes to portfolios while they are operating is a greater challenge.
But hoteliers acknowledge that some short-term pain is necessary for long-term gain and many made good use of lockdown periods to carry out tech upgrades. Jane Pendlebury, CEO of HOSPA, commented: “I know of a number of hoteliers who completely revamped their back office and streamlined all their accounting practices across their chains. Those with good relations with their banks were typically able to secure finance which is why we didn’t see so much distressed property as we might have expected.”
Hoteliers need to make decisions about what tech to deploy first. “What the guest needs has to be at the forefront of your decision-making,” underlined Gaind at RBH Management where automated payment and contactless check-in have been prioritized.
Now, many guest-facing innovations are a direct result of the pandemic and the need to minimize touchpoints. Many believe they are here to stay.
“We’re not going to re-set back to zero. The world has changed. Some of it is forced on the hotel industry,” commented John Burns, president, Hospitality Technology Consulting.
“We have fewer staff and those people who left are not going to come back. Our customers have changed their preferences and what they think is acceptable. We’ve been exposed to new ideas, sometimes forced to adapt.”
Will we still be unlocking hotel doors with our phones in 2026 when (hopefully) Covid-19 is no longer a threat? Probably, since it’s greener than using plastic swipe keys.
Will we still be reading menus from QR codes? Perhaps, again in the interests of sustainability. But hoteliers and restaurateurs are already finding that guests are much more likely to choose an expensive bottle of wine from a luxurious leather-bound wine list. Hotels will provide a choice.
Are We There Yet?
Rather than golden age, now is an industry-defining moment for hotels similar to the shift in market dynamics caused by the rise of OTAs, reckoned Kevin Edwards at Alliants.
He said: “Hotels need to take heed from the retail and ecommerce world. Data is power. Personalization is essential for true loyalty (not a free mocktail at 1pm in the afternoon of arrival) and unless hotels acquire and adapt systems to provide this information to their team members, how can true personal service on a global scale be achieved?”
Others believe the golden age is attainable but still somewhere off in the future. Less than 10 percent of all hotels (with more than 50 rooms) in the world have migrated to the cloud. That’s 20,000 out of a total global estimate of 350,000 hotels. Moving to the cloud is key for hoteliers to benefit from the latest “amazing software options.”
There are other positive developments: more attention to the guest experience, improved screen design, easy-to-use PMS, and APIs that allow custom configuration of systems.
“After decades of moving at a very slow pace, I see a lot of forces for change and I see them impacting more quickly now. We’re not at the golden age yet, but we’re moving and that’s good,” said Burns.