By Larry Mogelonsky, MBA, P.Eng.
HITEC 2016 generated highly creative yet straightforward ways to enhance the guest experience, streamline operations, optimize revenue and, most importantly, steer the industry into the future with tech innovations.
Right as the weather in Canada starts to become actually palatable near the end of June, it is time once again for the annual pilgrimage to the best hospitality technology trade show in the world. Taking place this year in New Orleans, I entered HITEC 2016 (standing for Hospitality Industry Technology Exposition & Conference for the neophytes among us) as a man on a mission.
A seasoned veteran of the convention, very little fazes me these days. But after six immersive years of new product launches, flashy booth designs, artfully worded press releases, an onslaught of collateral materials and enough espresso to make a turtle win the 100-meter dash at the Olympics, it all gets a bit blurry. Instead, the Big Easy was an opportunity to address the most important issues facing the hotel industry with the people best poised to make change.
There’s not a doubt in my mind that technology will save your property from any problem it currently faces. But only if it is deployed strategically and used wisely.
The vendors at HITEC can be counted as some of the smartest people in the business, and each company presented some highly creative yet straightforward ways to enhance the guest experience, streamline operations, optimize revenues or all of the above. Tackling every exhibitor, though, would be too audacious for a single report. The show is just that large now. So, earlier this year I focused on the top dogs – the property management software (PMS) exhibitors – to see how they were planning to lead us toward greener pastures.
As if I had a seat at the head table for some sprawling corporate meeting or wedding reception, I was honored to sit down with senior executives from Agilysys, Infor, Maestro, Oracle MICROS and Springer-Miller. If HITEC is a room full of brains, then these folks are the prefrontal cortex. My mission was to deduce how each individual was going to help with the high commissions and dilutive branding of the OTAs, the proliferation of alternate lodging websites such as Airbnb, and the vast evolution in travel behavior with millennials at the vanguard. Looking back on my notes from interviews, the following were the most salient topics broached.
Know Thy Property Management Software
Whereas I may be a tad hellfire and brimstone in my prognostications, each of these executives calmly and diligently answered my questions and presented clear solutions for how their respective firms can guide hotels through this turbulent period. First and foremost, managers must make a constant and diligent effort to thoroughly learn all the functions of their PMS.
This was a shared belief among all the software gurus, and even though I’m wise enough to see through any tooting of one’s own horn, the point is nonetheless valid. Every major PMS is a mature product, which means its core functions are stable and robust. Moreover, with each passing year and software iteration, new features are tested and added. Most of these are built to aid hotel executives in making sense of all the granular data – how are people finding your property, in what channel are they booking, where are corporate groups coming from, what does the revenue forecast look like, what are the margins on each channel, are labor expenses being managed efficiently, how do we capture more ancillary revenues from onsite guests and so on.
Any question you might have, your PMS should be the first place to look for the answer. Aside from the issue of a manager’s aptitude with the software – which can be ameliorated through continual retraining, monthly webinars or attending users’ conferences hosted gratis by each provider – integration must next be tackled. As the PMS is the heart of any hotel’s technological arrangement, you can increase vascularity by ensuring that all other systems feed data into this central repository.
After all, the business intelligence capabilities of any system are only as powerful as the quality and quantity of information that feed into it. If a peripheral piece of software doesn’t push data to the PMS, the justification for its sustained usage better be good. For instance, via the generation of customized financial reports, PMS can now precisely account for how much each revenue stream costs by factoring in all booking commissions as well as service and labor charges, and all on a single page that’s easy to digest for harried managers. From there, you can analyze the opportunity cost of shifting laterally to focus on a different market segment and what the binary threshold is for when that changeover becomes fiscally prudent.
Such examinations will help with other top decisions such as whether you are allotting too much inventory to the OTAs or if your marketing efforts to a certain target audience are actually effective, all done internally and without any necessary comparisons to the competitive set. Additionally, with regard to changing traveler behavior, every PMS has diagnostic tools to show year-over-year evaluations of all business by demographic so you can pivot to meet any future trend.
Lastly, if you are ever feeling overwhelmed by the purported omniscience of your PMS, pick up the phone and call your rep. Every provider has upped its customer service game. They are more than willing to give informed counsel on how to maximize your usage of the software or even assist with a specific business situation.
Guest Profiles Are the Future
Another compelling reason for total integration through the PMS is that this will merge all customer profile data and guest preferences into one dossier. While we pride ourselves on the human aspects of hospitality, the future of our industry will increasingly rely on digital ones and zeros, as amassing and acting upon that guest data will help your hotel with all three of the abovementioned problems.
Otherwise known as customer relationship management (CRM), these systems are the biggest advantage of any property, as noted by Ray Carlin, vice president of Hospitality Strategy and Solutions Management at Oracle MICROS. While the first two years of the MICROS acquisition were focused on developing seamless product integration, the company is now at an inflection point as it figures out how best to harness Oracle’s omnipotence.
Carlin explained the OTAs will never be able to get as granular with their customer profile data as a hotel can because they simply aren’t on-site. They won’t be able to customize the guest experience by preselecting a favored bed type and room temperature, or to go fully microscopic, by preparing a welcome tray with the one fruit that the guest loves most. Folding amenities like spa into the PMS will tell you what treatments a customer prefers so you can leverage that information for highly specific promotional offers targeting return guests. Other POS terminal incorporations, particularly F&B, can also be used to tell you if a guest likes craft beer or is a Budweiser type.
The possibilities are endless, but only if you have the data. The more you can track guest preferences, the better you can tailor the on-site experience in order to build advocacy and capture as much revenue as possible.
In this sense, optimizing your CRM is a necessary step in modernizing your loyalty program because you can customize the perks to give faithful guests exactly what they want. Michael McCarthy, president and CEO of Springer-Miller, put it best: “Mercenaries will always sell to the highest bidder, but soldiers can only a part of one army.” Right now, the average traveler is a member of multiple loyalty programs. They don’t endorse any one brand in particular nor do they care to learn about what makes each product exceptional. Joining a loyalty program is purely transactional. But this trend can be effectively reserved if we incentivize guests based upon what they’ve already told us about themselves.
Not only can a pervasive CRM help level the playing field between large hotels and independents, but it is also your best defense against Airbnb and the picky demands of millennials. Hospitality is a service industry, and what better way to serve your guests than by giving them exactly what they want? Alternate lodging providers are able to provide consumers with a unique room and atmosphere, but they will never be able to match us when it comes to service delivery.
Take heed, though, while actualizing guest profile data is today a value-add, millennials are a smart bunch, and as they become more accustomed to travel this will soon transition into an expectation. In other words, hop on the bandwagon, and do so before it leaves town for good.
The Mobile of Things
Another vital activity that all the major PMS companies have completed behind the scenes over the past few years is to migrate their system to the cloud. Not an easy feat in the slightest, this grand movement has helped to unify the many disparate and fragmented on-site tech installations to allow for real-time guest tracking and a more refined “service as a service” model of automatic update deployments that are immediately available to all legacy clients.
The next phase, however, revolves less around technological upgrades and requires more a mental shift. When we first clued in to the true power of the internet to record human behavior on an unprecedented scale, we called it Big Data because we expected the inferences to be earth-shatteringly big. Then when we discovered that most of these findings told us things we already knew about ourselves, we renamed it The Internet of Things.
As smartphones continue to usurp laptops and desktops as the primary user device, it is time once more to reframe this as “The Mobile of Things” so we can properly comprehend what’s needed to become a mobile-first industry that’s in touch with the mindsets of consumers. As the quotable McCarthy elaborated, “Mobile will only really arrive when we stop talking about mobile.” Tossing this through the Mogelonsky translator, shut up and make mobile a reality because your guests are already one step ahead!
Despite all the hullaballoo, there’s light at the end of the tunnel. Dr. Peter Agel, hotel global segment leader at Oracle MICROS, introduced me to one of the first applications of this – the Hotel Mobile app, which allows frontline staffers to update back-of-house operations like housekeeping, check-in and maintenance information directly from their phones. It won’t let a senior executive control all top-level functions like revenue management from his or her phone, but it’s a huge step in the right direction. Even in its current iteration, Oracle’s Hotel Mobile can be a game-changer in terms of operational efficiency and enhancing guest satisfaction.
With every other major PMS following suit with their own native apps, the onus will soon fall on the everyday hotelier to curb the perception of mobile as secondary by deploying these wireless upgrades and encouraging all associates to maximize their usage. Picture a hotel without a physical front desk or any hardwired POS stations. Imagine a property where an app on your phone checks you in an hour before you are onsite, sets the guestroom environment to your liking, and coordinates with the F&B team to have a bottle of Dom Perignon chilled and popped for the moment you open the door.
Mobile wallets, near field communication keycards, location analytics heat mapping – this is where hospitality is headed. It’s only a matter of time and whether you are nimble enough to wield mobile-first to your advantage.
Reward Tech Fluency
The tech world is so vastly complex nowadays that no single manager has the time to keep track of it all. Instead, it is the responsibility of everyone to constantly refresh their knowledge in this area.
Bernard Ellis, vice president of Hospitality Industry Strategy at Infor, framed it rather eloquently. The millennials have grown up in a world of constant electronic change, so much so that they are thoroughly accustomed to it. The hotels that will survive are those that adopt a similar mindset, and it all starts with the people who are in charge.
With technology taking over nearly every aspect of our industry, it is becoming abundantly clear that we hoteliers no longer have the software wherewithal necessary for effective decision-making. To fix this, we must start promoting those individuals who are fluent in IT to senior roles as well as develop incentive programs for current team members to modernize their skillsets. Understanding technology is a primary trait of all future executives, not only to make processes every efficient and cost effective but also to discover new growth opportunities.
My closing notion for you is to kick off this process by reaching out to your PMS and asking what else they can do to help grow your business. Next, be sure to attend HITEC 2017 taking place in Toronto next June, its first time on Canadian soil. ■
One of the world’s most published writers in hospitality, Larry Mogelonsky is the owner of Hotel Mogel Consulting Limited. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Mogelonsky is also a principal of Cayuga Hospitality Consultants and is on several boards for companies focused on hotel technology. He can be reached at [email protected].