Until recently, the advantages of a single enterprise solution executing all the functionality of your hotel technology could be justifiably argued.
A single system providing everything from reservations through check-out would ideally minimize the number of different user interfaces for staff and reduce the potential for errors in data storage and processing.
The idea of a functional enterprise system from a single vendor — offering a booking engine, PMS, CRM, RMS and channel management, for example — means that there is only one user interface, one database and one support number to call.
On the flipside, one could argue that advancements in hotel technology, particularly cloud computing, have all but eliminated the advantages of a single enterprise solution.
First, it’s hard to envision a one-size-fits-all solution that appeals to hotels of all shapes and sizes. Additionally, nobody is confident that one provider is able to match best practices for specialized products in the fields of property, guest, channel and revenue management.
Simply put: You can't be the best at all things. If you have a single provider that does everything for you, there’s little chance it can do everything well.
So smart hoteliers are considering a hybrid approach, consisting of many different solutions all plugged into the same centralized, cloud-based platform.
This type of setup fixes three things immediately:
- The number of integrations is greatly reduced
- Guest and transactional data is centralized, not replicated or broken
- All applications can move to the cloud, saving hosting and hardware costs
A best-of-breed approach also solves for gaps in a software suite, where a provider might be proficient in channel management, for example, but lack sophistication in revenue management.
Red Lion Brings a New Approach to Hotel Technology
For a recent example, look at Red Lion Hotels Corporation. Understanding that leading-edge technology, e-commerce and digital-marketing solutions would be critical to a brand turnaround, but realizing the company didn’t have the time or the budget to attack each of these technologies internally, executives decided a best-of-breed approach would give them agility and room for future growth.
In 2014, RLHC announced RevPak, a technology platform that brings together best-in-class third-party technologies to handle reservations, distribution, customer relations, CRM, marketing, revenue management and other tools.
Since systems are all well interconnected, communication amongst them is quick and reliable. This makes it easier for hotels to present customers personalized offers based on their profiles and past behavior.
“There’s a beauty within RevPak because if one system is not working or not playing well in the sandbox, that’s a component that we can remove and replace,” EVP and CMO Bill Linehan told Duetto. “I don’t have core competency in all 12 or all 14 of these systems, but I do have a competency of understanding what it’s supposed to do for us and a competency in understanding what else we would like for it to do for us.”
A Centralized Cloud Solution
The next step is pretty clear. When your database is centralized and above-property, it gives operators access, in real time, to accurate data from all parts of the operation.
For example, consider Adobe’s newest push into marketing automation, with the Big Data behemoth accurately portraying hospitality as an industry with serious communication issues.
One might guess that Adobe is inserting itself into hospitality as a single enterprise solution to solve all of hospitality’s problems in one fell swoop. In reality, Adobe is not building a booking engine, PMS or RMS (to my knowledge). Instead, they are banking on a hybrid approach where Adobe will plug into a centralized platform or database, which is also seamlessly connected to all the tools needed to run a hotel.
With a hybrid approach that allows a variety of different systems connected to a centralized, cloud-based platform, it no longer matters that your technologies talk to each other. They just have to talk well with the main platform. So if you’re shopping for a CRM, which PMS you use no longer matters. Your PMS would essentially connect to a “common denominator” before connecting to your preferred CRM.
Do It Well or Not At All
That is not to say connecting several best-of-breed systems will go without hiccups.
In Hospitality Upgrade, hospitality technology consultant Jon Inge suggests hotels looking to go this route need to ensure they’re asking the necessary questions to their technology partners:
- Which combination of systems will provide the most seamless user interface?
- Will I be able to add or remove components without issue?
- Who will I go to for support?
Once these issues are resolved, it’s clear that hoteliers should move forward with a hybrid approach to their hotel technology stack, where PMS, CRS, CRM and RMS providers should be left to hone their individual craft. Leave developing top-tier systems to the experts, but rethink system integrations by adding a centralized data center through which all systems communicate seamlessly.