Digital Transformation in the Hotel : Hotel Technology Report

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In the wake of the pandemic, the hotel industry has undergone a transformative phase, shifting from its traditional face-to-face approach to incorporating groundbreaking technological innovations. This surge in digital adaptability, especially the integration of non-face-to-face technologies and the burgeoning role of online sales, has redefined hotel operations.

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For an industry that prided itself on offering unique guest experiences, these new-age technological advancements were initially unfathomable. Through this piece, brought to you by ONDA, we aim to guide you through the progression of hotel technology, emphasizing the pivotal role of the hotel management system, so that you, our esteemed hotelier readers, are well-prepared for what the future holds.

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“The Advent and Evolution of PMS in Hotel Operations”

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The Property Management System (PMS) can be best described as the core of hotel operations, streamlining processes like room reservations, check-in/out procedures, billing, and even the management of auxiliary services.

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Many credit the inception of Hotel PMS to ‘Fidelio’ in 1987. However, it's pivotal to recognize the earlier contributions like the software developed by 'MICROS' in 1977 and the guest-centric PMS by 'Springer-Miller Systems' in 1984 that set the stage for the Fidelio PMS, which is now a cornerstone in today's hotel operations.

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The 1980s and 90s saw PMS emerge as a revolutionary tool, gaining massive traction for its ability to automate and optimize hotel operations. By the 2000s, the industry witnessed the dawn of cloud-based SaaS PMS, a paradigm shift from the traditional on-premise systems to more flexible cloud solutions.

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“Why SaaS PMS?”

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The inherent advantages of SaaS PMS - cost efficiency, enhanced functionality, and immediate access to the latest tech updates - have made it the preferred choice for many. 

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While traditional systems are plagued with outdated tech, slow updates, and high maintenance costs, SaaS PMS offers unmatched accessibility and scalability, available anytime, anywhere with just an internet connection.

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“The Rise of OTA and Metasearch in Online Sales”

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Since the introduction of online hotel reservations by Travelweb.com in 1994, online sales channels have witnessed exponential growth. 

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With industry giants like Expedia (established in 1996), Booking.com, Agoda, and metasearch platforms like Trivago and HotelsCombined, the online room sales landscape has been thoroughly revamped.

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However, this market is still dynamic. First of all, the OTA market is growing every year, and startups are constantly being created to target the vertical. 

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Recently, companies such as Google in the global market and Naver and Kakao in Korea have also entered the online accommodation booking market, either directly or indirectly, which has significantly changed the market. 

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“The Need for CMS in a Multichannel Sales Era”

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The influx of sales channels, including OTAs and metasearch platforms, although beneficial, brought with it the challenge of manually updating each reservation into the PMS. 

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Enter CMS (Channel Management System), the solution to the intricate web of room sales operations, providing an efficient, unified platform to manage diverse sales channels such as OTA, metasearch, and even the hotel's own website.

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The early inklings of CMS can be traced back to the late 1980s, with systems like THISCO (The Hotel Industry Switch Company) paving the way. Established in 1988 by 17 leading hotels, THISCO developed an interface linking the hotel's central reservation system with five major sales systems. 

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The true prowess of a CMS lies in its real-time connectivity with multiple sales platforms, auto-updating rate and inventory changes, and ensuring optimal room distribution across channels.

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Choosing the right CMS, one that aligns seamlessly with your hotel's sales channels, can significantly elevate your sales strategy.

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“Direct Bookings through Hotel Websites using BE”

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The advanced CMS systems meant hoteliers no longer had to individually manage numerous sales channels. They could automate most tasks, saving precious time. 

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However, as the clout of OTAs grew, so did the commission fees, pushing hotels towards promoting direct bookings through their websites. This need gave birth to the Booking Engine (BE), a system that facilitates direct room reservations on hotel websites.

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BE allows customers to book directly on the hotel's website, including selecting rooms and promotions, making payments, and supporting multiple languages. If you use a booking engine connected to Channel Manager, hotels can operate more efficiently. 

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Which is the major advantage of the Booking Engine?

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Many hoteliers recognize the benefits of a booking engine as lower fees and increased sales of packages and add-ons.

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The biggest benefits of using a booking engine is the ability to access guest data. Unlike reservations through OTAs, bookings via BE grant hotels access to all guest data, allowing for personalized offerings and enhanced customer satisfaction.

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"The Rise of B2B Bed Banks (Wholesalers)"

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With the proliferation of online sales channels, we previously discussed the emergence of channel managers. Another concept that came to life due to the increased channels for hoteliers to manage is the Bed Bank and Wholesaler.

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A Bed Bank, or Wholesaler, is a B2B accommodation sales company that contracts hotel rooms in bulk and resells them to travel agencies and OTAs. They emerged from hotels' desires to delegate online room sales to specialized B2B companies and focus on operations and guest services.

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With the introduction of bed banks, many hotels began managing primary channels directly or through channel managers, while delegating secondary channels to bed banks. Advanced B2B room distribution networks like the "ONDA HUB" that strengthen connectivity between accommodations and sales channels are now gaining attention.

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"Predicting the Hotel's Future with BI Data"

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With the growth of CMS and BE, hotels face a new challenge: selling rooms across various channels like OTAs and their own websites. As the competition for the lowest prices intensifies online, hotel revenue structures worsen. Hence, the importance of data analysis for crafting profitable operational strategies is magnified.

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Business Intelligence (BI) systems predict current and future demands based on past data within the hotel industry. Not only does it provide insights into its own hotel, but it also offers data on competitors' pricing and trends, serving as the foundation for room pricing decisions to maximize revenue.

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"RMS for Hotel Revenue Management"

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RMS analyzes data from PMS, booking engines, etc., to provide real-time pricing configurations tailored to sales channels and room types. By evaluating past room sales data, it forecasts demand, establishes pricing strategies, and secures a price advantage in online sales channels.

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Through RMS, hotels can analyze their own and competitors' pricing data in real-time, formulate room sales strategies, and maximize profits. Larger hotels often use both BI and RM solutions concurrently.

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"Securing Loyal Customers through CRM"

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As the proportion of OTA room sales increased, hotels felt the burden of growing commissions. To boost direct bookings on hotel websites and secure loyal customers, CRM or Customer Relationship Management comes into the limelight.

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In the hotel industry, CRM, a solution to maintain long-term customer relations and encourage revisits, is gaining traction for securing loyal customers.

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So, how does the hotel industry utilize CRM?

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More and more, hotel guests desire personalized service and unique offerings. The core of CRM lies in achieving "ultra-personalization" to enhance customer satisfaction.

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With customer data from direct bookings through booking engines, loyalty programs, and more, hotels can offer services and benefits that are tailored to their individual characteristics and needs. This encourages repeat visits and builds loyalty.

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"Contactless and Keyless Solutions Accelerated by COVID-19"

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During the pandemic, the hospitality industry underwent significant changes. Face-to-face services, once cherished by guests, shifted towards a preference for contactless interactions.

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Post-COVID, hotels faced staff shortages. To manage the increased demand with limited staff, they turned to technology, rapidly advancing contactless and keyless check-in solutions.

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Hotels are moving toward more efficient operations by installing self-check-in kiosks instead of check-in desks and keyless door locks instead of card keys to reduce staffing.

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"Chatbot Concierge Services Using AI"

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Artificial Intelligence (AI) isn't just a buzzword. It's the future. The progression of artificial intelligence and machine learning has led to an influx of hotels employing AI chatbots for customer service.

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Chatbots can free hoteliers from repetitive customer questions and increase customer satisfaction with quick and accurate answers. Chatbots can serve customers on the website, communicate check-in policies, and fulfill simple requests. They can also generate revenue for hotels by delivering offers for direct booking or room upgrades, or suggesting access to amenities.

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What's the most essential feature of a chatbot?

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Having a chatbot with natural tones and vocabulary is paramount. A chatbot that can't communicate effectively will be detrimental to the customer experience.

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“The Rise of Smart Room Management Systems”

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The hotel industry has seen significant technological advancements in recent years. Leading the charge is the smart room management system, a fusion of cutting-edge technologies like in-room tablets, IoT-based power management, and more.

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Have you ever walked into a hotel room and been greeted by a tablet or a voice-activated assistant?

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Such innovations are no longer the stuff of luxury or futuristic hotels but are quickly becoming the norm. This is not merely about keeping up with technology, but about enhancing the guest experience. Young travelers, particularly those who are tech-savvy, are growing accustomed to such amenities, making it essential for hotels to adapt.

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Moreover, beyond just enhancing guest experience, these smart systems provide tangible benefits to hotel operations. With the increasing emphasis on eco-friendly practices, hotels can leverage smart room management to minimize energy consumption. Imagine a system that adjusts the room's temperature or lighting based on occupancy or guest preferences - such innovations are not only eco-friendly but also contribute significantly to operational efficiency.

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“Is It Time for Your Hotel to Embrace Technological Change?”

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A recent survey by 'HotelOperations.com' shed light on hoteliers' perspective on tech integrations. A staggering 85% believed that embracing technology would directly boost their hotel's profitability. Further, 8 in 10 hoteliers expressed that such integrations wouldn't only elevate guest experiences but also enhance the working environment for staff.

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In many Western nations, where the hotel industry is mature, technology has not just been introduced but is continuously evolving. From core operations such as Property Management Systems (PMS) to emerging hotel technologies, the focus has always been on refining operational efficiency and enriching guest experiences.

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So, if you're asking whether it's time for a technological revamp in your hotel, consider the advantages and the shifting industry standards. Technology is no longer just a tool for efficiency, but a necessity for enhancing guest satisfaction and streamlining operations.

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As a forward-thinking hotelier, the real question you should be asking is, "Which hotel tech is most suited to our hotel's needs today?"