Why Hotel Technology Hasn't Kept Pace with Revenue Management

By Michael McCartan Managing Director Europe, the Middle East, and Africa, Duetto | October 01, 2017

The overreliance of legacy technology solutions and the lack of data integration are possibly the single biggest constraints on the hotel sector today. The reasons for this are deep-seated in the history of hotel technology. Most hotel operations have built up their technical systems and applications piecemeal over the years. As a consequence the teams that were created to support them looked at things from a narrow viewpoint. These organisational silos limited data exchange between teams, and that has evolved into limited data exchange between technology systems. In order to drive revenue, hotels need to drive technological advancements in two ways:

  1. Predictive Data Analytics – To better understand the market demands and customer needs in order to optimise on revenue through an Open Pricing strategy, ultimately culminating in personalised prices.

  2. Machine Augmentation and Learning – To remove friction from the guest experience by replacing redundant human interventions with automated processes, allowing hotel staff to engage with the guests only in ways that truly enhance their stay.

However, their technological inefficiencies and organisational habits make it very difficult for hotels to break free. Things are changing, and hotel companies are seeing the benefits of using best-of-breed, cloud-based technology solutions that don’t require a huge capital investment and can be replaced relatively easily. However, there is still a large level of fragmentation between the various technologies they are now employing. This is holding back the access to and analysis of customer data.

At the other end of the technology spectrum sit the online travel agents ( OTAs ). They occupy a walled garden environment where they have all of the data that they need in one place and organise themselves around analyzing that data to build the complete picture of online guest interaction in order to see the business opportunities.

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Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.