By David Millili, CEO of Runtriz
There’s some truth to the increasingly ubiquitous saying that all companies are technology companies now. Certainly some more than others, but I’d say hotels have officially waded into—or, perhaps, been shoved in—to tech waters so deep that it’s an apt notion worth considering every time a new technology vendor is up for consideration. Look at the numbers. Hotel technology budgets have been on the rise for many years, and 2019 is no different. While 38% are satisfied with where the technology budget currently stands (or have no choice but to keep it, as is, which is more likely the case), 54% are increasing budgets, some as much as 10%.
Source: Hospitality Technology’s 2019 Lodging Technology Study
While it certainly points to opportunities for new, innovative technologies for hotels, a concern follows it. The same 2019 technology study showed that across guest-facing tech, hotels are on the move to either upgrade, change suppliers, or find a supplier for the first time in a category. Instant messaging (13%), voice-enabled devices (13%), chatbots (10%), and customer mobile apps (8%) are among the popular categories where hotels are looking for a first-time vendor. And the waters are full of companies wanting to jump in and deliver. So how do hotels find the right partners when the tech landscape is madness? Coming up with a list of qualified vendors isn’t the problem. The problem is that the market runs over with opportunities. Here are the ways to narrow your considerations to select a technology provider that will not only produce revenue for your property, but will also serve as a true business partner.
Source: Hospitality Technology’s 2019 Lodging Technology Study
Don’t Overlook the ‘About Us’ Section
The About Us section of most websites gets glossed over quite a bit, but this should be one of your first stops when considering a technology vendor. Of course, you want your tech provider to be hotel-focused because no one understands the complicated tech stack and integration issues inherent to hotels like a company that focuses solely on hospitality. Go a step further and read through the bios. Look for a healthy combination of technology experience, specifically hotel technology, and at least some amount of on-site hotel experience among the company’s leadership team. When hoteliers go on to work for technology companies, it is because they have experienced first-hand the gaping holes in the hotel technology ecosystems and are driven to repair them. They also understand revenue considerations, limitations, and the big picture of guest experience needs.
Tomayto Tomahto: Partner Versus Vendor
Some in the industry like to talk about the difference between a partner and a vendor. A partner, they say, stands by your side, evolves as you evolve. A vendor sells a product, and, theoretically walks away. It’s all semantics and it only sort-of matters. Hotels don’t need every tech provider to be a long-term partner, but in most cases, it doesn’t hurt. This is one of the things hotels must decide early on in the process. (For X piece of technology, we need Y level of provider.) Depending on the technology gap that’s being filled, sometimes an off-the-shelf solution is called for – one that doesn’t require a lot of back and forth. One implementation, one integration. For the most part, however, the tech stack is complex, and many technologies will require thoughtful consideration about how the pieces all work together. How do the PMS and the distribution software work with the mobile app or mobile check-in feature, for instance? In these cases, hotels must look for a knowledgeable partner who not only “gets it” but has also positioned themselves as available to assist, advocate, problem solve, and strategize regularly and with ease. All providers should be invested in the hotel’s overall revenue and guest-experience success. That said, long-term contracts can be confining for hotels that need to keep their options open. Be wary of getting locked in. With a technology partner that performs, this shouldn’t be necessary.
Adjectives: Nimble, Adaptive, Flexible
Most hoteliers have, no doubt, been presented with a “first to market” product, at some point. This means little. First to market is only first to market, not necessarily progressive and adaptable. What hotels need that is harder to quantify is a nimble tech partner, one that doesn’t insist on one way but instead surveys what’s in front of the hotel and what’s ahead for the industry and is willing and able to adapt to changing conditions. An ideal partner demonstrates a willingness to work with your existing systems as much as possible and leads with robust, thoughtful technology solutions.
Revenue Generating and/or Operating Efficiency
This year, the hotel industry is expected to continue to see record occupancy, but with a saturation in supply, the big challenge is building RevPAR. Technology partners need to prove they can do one of two things very well: either create new revenue streams or produce a surplus in operating expenses. Guest experience is essential, no doubt, but this can’t be the only upside because it’s not always an immediate revenue generator. Many hotels are realizing that in-room technology bells and whistles that are fun and good for marketing aren’t always where revenue lies. A seamless interactive experience at their fingertips, however, is.
An Inside Job
While this falls outside the realm of how to choose a partner, it will affect a hotel’s ability to do so with security and ease. Ensure there is a point person who is well–versed in technology systems that can manage or consult on every partner selection. Of course, specific departments must be involved: rooms and front desk for mobile check-in, marketing for CRM or digital offers, and so forth. However, selecting a company that will serve as a long-term partner requires a deep understanding of the technology landscape that should be coordinated property-wide. You don’t want a cloud-based technology in one department and a legacy system in another. You want your systems to integrate as much as is humanly possible, and if you leave it to individual departments to have wholesale decision-making power, some of the core issues around the big picture technology landscape may get overlooked.
By 2020, 85% of correspondences with businesses will not require human interaction, according to Gartner (Inc). This isn’t just about chatbots, but about a wholesale shift in the way companies respond to customers’ needs. Guests are saying they want technology at their fingertips, yet many hotels have been slow to respond. Understandably. Operating a property is paramount to managing a small city, and sometimes technology innovations are swept away by unavoidable operational needs. But this shift in cultural communication must be considered an operational necessity for hotels to stand out in a market overrun with supply. Honing in on technology partners that can meet your property where it is, even if this requires incremental technology implementations, will be essential to raising the bar for guests and profits.
