Once Holiday Inns began popping up along U.S. freeways, and through most of the last century, there wasn’t much slowing hotels down. Even when economics looked grim, it was assumed people would continue traveling and always need a place to stay.
But right after the turn of the century, the industry was hit with a few particularly challenging obstacles, and major threats emerged. It was around 2002 when OTAs began interfering with hotel distribution (although we didn’t immediately learn the ramifications). Ten years later came Airbnb, which has grown from a blip on the radar to a verifiable competitor, stealing demand in many major markets.
Now, with disruptors nipping at their feet, hotels can no longer afford to remain stagnant and continue providing the status quo. Hoteliers must look for new and creative ways to attract and acquire business, learn from their new competitors, and develop a nimble Revenue Strategy.
Unfortunately, the technology to enable an agile and more holistic Revenue Strategy is not available to everyone. Because of their propensity to develop proprietary software in hopes of differentiating themselves, the industry’s largest entities – hotel chains like Marriott, Hilton and IHG – are still operating on legacy technology systems that were built more than 25 years ago.At #HotelDataConf there was a collective call to ditch legacy #revenuestrategy technology Click To Tweet
Some hoteliers have reached their boiling point. At last week’s Hotel Data Conference in Nashville, there was a collective call to ramp up innovation and stop holding operators back from innovative strategies to achieve their goals.
“It’s been an issue since the heyday,” said Patrick Dunphy, CIO at HTNG. “It’s 10 times better than it was 20 years ago, but we still have a far way to go.”
“When it comes to attracting Millennials and the Z Generation, the brands are behind the times,” added Andrèa Thibeault, senior VP and regional e-commerce manager for MCR Development.
But it wasn’t just franchisees; brand representatives admitted as much.
“Part of it is on us: we need to learn more about the technology. We’ve felt the pain of having legacy technology,” said Jess Petitt, VP of global business analytics at Hilton Worldwide. “I mean, the GDS is much older than I am, and how many people are creating the same reports in Excel? We need to start adopting the technology that gives us an advantage.”
“Yes, the brands are not where they should be,” added Ted Schweitzer, La Quinta’s senior VP of media and digital commerce. “La Quinta has been looking at innovation and we need to catch up all the way.”
Pettit admitted it’s hard for a company the size of Hilton to have a flexible infrastructure and roll out mass system changes.
“There’s a challenge on the skill set too, even the top hotel schools are still teaching Excel,” he said. “That’s the reason we have so much concern with the sharing economy: They’re moving faster than us and we don’t understand it.”
Where to Start?
An obvious place to start is by replacing outdated systems with cloud-based, plug-and-play solutions that communicate well with each other.
“Look at the PMSs today versus where they were 25 years ago. You’re not seeing dramatic differences like we should, and that needs to change,” Pettit said. “We need to enable our team members with better information and better technology.”
Much of the pain points identified at HDC surrounded loyalty and distribution. Solving these issues starts at the property level by being more effective at collecting guest information, panelists agreed.
More advanced data, such as how much an incoming guest typically spends on vacation, is available but underutilized.
“I couldn’t even check in at 4 p.m. yesterday,” said Susan Guimbellot, VP of revenue and channel analytics for Hospitality Ventures Management Group. “Why aren’t we varying prices based on check-in and check-out times? I’m ready to do that with our revenue managers but the brands’ tools just aren’t there.”
Other hoteliers pointed to more obvious solutions.
“From a Hampton Inn all the way to a Waldorf, the process of recognizing a guest should be the same,” Petitt said. “How do you recognize someone on their first trip or first visit to the website? The reason Amazon is so good is because you go there every week and they can recognize those cookies and personalize your experience.
“It’s such a messy process, and that’s something basic that we can’t do.”
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Tags: 1:1 marketing, APIs, big data, closed systems, Duetto, Hilton, hotel brand technology, hotel distribution, hotel loyalty, hotel pricing, Hotel Revenue Management, hotel revenue strategy, hotel sales and marketing, hotel technology, hotel yielding, HTNG, HVMG, LA Quinta, legacy technology, MCR Development, open systems, Personalization, RMS