Technology Choices That Can Impact the Bottom Line
By Paul West Principal & CEO , priZem Hospitality Solutions | July 12, 2010
We are well into 2010 and perhaps still facing many decisions on whether or not to pull the trigger on possible technology purchases. Certainly, choices must now be more heavily scrutinized in relation to how each may impact the bottom line since there is less of a consistent flow of revenue than in years past. So, if technology purchases of any kind can be made, then it is more important than ever that hotel companies make sensible choices with these purchases while still keeping a close eye on the bottom line. Therefore, the important question is then what would be the kind of technology choices for the year that could directly impact the bottom line?
The last several years leading into the current economics have been filled with discussions and choices pointing to the same technologies - usually High Speed Internet Access (HSIA) and the general Property Management System (PMS). It is not certain for sure how effective these choices may have been for anyone during these last several years but without question, something such as HSIA is an expected option for every traveler today that is also something increasingly expected to be free of charge. For sure accurate reservations, a smooth check-in and a correct bill at check-out are also expected items for the busy traveler. In most cases, the additional expense in implementation costs of either substantial technology undertaking may never really be translated into the calculable return in investment that was expected.
So, it should be that every selection process for technology purchases for any hardware and/or software product within this year and next should include the following points to determine feasibility of the expenditure:
Should technology be implemented mostly because it directly impacts the
guest experience? Clearly the first priority of business beyond making a
profit in the hospitality industry is to service the guest in such a way
that a second visit is being planned even before that guest leaves the
property the first time. Although any technology that can impact the guest
experience is certainly something to consider; it does not in most cases
justify its implementation during times like these. Moreover, it is more
likely as explained below that an impact on cash flow will be realized more
easily from the less obvious technologies to which the guest is oblivious.
Is the current solution too expensive to maintain, too unsightly or too out
of date such that it no longer produces its basic results reliably or
regularly. This is often the first way that businesses recognize the need
for new technology although it is often too late by this time in most cases.
Either way, most any software or hardware that barely made the Y2K cutoff in
the first place should most definitely be included in any review for the
possibility to create a drop in expenses or increase in revenues if replaced
The opportunity to charge a guest for a new system function or service does
not necessarily mean that the guest will be open to paying for it. Trying to
come up with new revenue streams in technology are not only difficult to do,
but they can often end up appearing to the guest as if they are being
squeezed to pay for every little amenity. In fact, as shown below, it is
more likely that it will be less conspicuous to the guest if a hotel can
discreetly cut costs behind the scenes as opposed to trying to add
previously unavailable revenue options. The paying public, particularly at a
time like this, is not unaware of such tactics and in fact is more aware
than ever so as consequently to be more offended as well.
Would the technology impact employee efficiency and consequently impact both
the guest experience in execution time while also saving on hours worked by
employees? This of course, is the kind of item that should be discussed at
every meeting during every type of economy! Any time a hotel or hotel
company can implement new technology that can accelerate the staff to guest
delivery, expedite a staff working process or generally increase efficiency
levels for staff without any deterioration in guest service - or maybe even
improve it with an amplification in the guest service experience, then the
track is open for potential cash flow increase or cost savings.