Hotel owners and management companies must increasingly consider a hotel’s tech stack as part of the asset and a driver of value.
During a panel discussion at the Annual Hotel Conference 2023, Neetu Mistry, chief commercial officer, Cycas Hospitality, a multi-brand white label management company, said: “We inherit hotels, we onboard hotels and we build hotels. So, for us, the technology stack is absolutely key to making sure that we deliver the right returns for our owners and our investors. And, for the team on property who have to work with these systems day in, day out.”
Management companies often deal with multiple hotel brands with different tech stacks. To streamline and consolidate operations, operators like Cycas tend to build their own overarching BI platforms that assimilate data from the various brand platforms within their portfolios.
However, when taking over an existing hotel, this in no way lessens the need for close scrutiny of the technology and/or contracts they are inheriting.
“Bad technology decisions can destroy value and, in our company, we have a list of software that we think is bad software. We try to involve our team in the due diligence process very early on to assess the tech stack,” said Wilhelm Weber, chief commercial officer of another white label multi-brand operator Grand Metropolitan Hotels.
Is the existing PMS on-premise or in the cloud? Can Weber and his team integrate with it and extract data? What kind of RMS do they have? These audits are as vital as checking the bathrooms for water leaks, Weber said.
“It's so important for us to drive ADR these days and to drive revenue per square metre. So the RMS is a very important decision for us. If somebody is sitting on a lousy RMS just because it was cheap, that's a minus,” he said, adding that booking engine conversion ratios are another KPI used by Grand Metropolitan during the due diligence process.
Although management companies often have mixed portfolios with a variety of tech stacks, investing in digital guest journey software – from booking to check out – is a way to add value and consistency across a variety of hotel types, said Mistry. And, increasingly, digitising the guest journey is seen as an important way to increase average guest spend.
“It's not just a transaction that the technology facilitates, but it's about the added value that you're giving,” commented Mistry. “How do we ensure that someone that's having an experience in our property is able to consume and spend what's readily available and do that easily, efficiently, and not feel like they've been taken advantage of from a pricing perspective?”
Heather Byron, SVP of services at Alliants, answered: “Technology and digital have a massive role to play in that. The guest data is there and the biggest change in luxury spending habits are with 25- to 35-year-olds who don't want to necessarily pick up a phone or walk to a desk or have to wait in a queue. They want to be on their phones, see what's available, and receive pre-emptive offers and suggestions based on their profiles and preferences.”
Gregory Naidoo, chief evangelist & development officer at Mews, said his company is now offering hotels the opportunity to apply dynamic pricing not only to selling rooms, but to products and services like breakfast and parking spaces.
The latest data taken from the 3,500 hotels that use Mews cloud-native systems shows that the proportion of guests upgrading during online check-in more than doubled this summer. An average of £18 was added to each upgraded reservation with breakfast the leading upsell.
The number of properties selling additional bookable spaces – parking spaces and meeting rooms - increased by 27 per cent compared to summer 2022, said the Mews report, with parking revenue averaging an extra £2,900 per month per hotel.
Naidoo added that Mews is working with its clients to create more actionable data and automation e.g. systems that tell the housekeeper it will be more efficient to start on the sixth floor because that is where most of the departures are.
However, even in the age of generative AI, we are still a long way from the robots taking over. “Very little technology is genuinely intelligent,” commented Chris Crowley, chief revenue officer, Duetto, adding that one size does not fit all when it comes to configuring hotel technology.
Crowley also reckoned the pace of modernisation in the hotel industry was slow in terms of laying the necessary foundations for the future. Many hotels are postponing cloud adoption, and continuing to use their on-premise systems which they consider to be robust and reliable.
Byron concluded: “In isolation, technology is not going to bring you value. The value that technology is going to bring you is when you partner it with staff who understand how to use it and how it's going to make their jobs better.”