A New Kind of Hotel Demand — for Your Technology Partners

You might not expect the leader of a hotel technology company to say this, but hotels need to be a lot more demanding of their technology vendors and partners.

As we’ve seen, there is a sea change happening across the hotel industry, in which small properties and giant brands alike are trying to innovate as fast as the major online travel agencies, the sharing economy upstarts and the lurking threat of Google. The whole industry is highly fragmented. This has driven consolidation among the hotel companies (Marwood, anyone?) to try and approach the scale of the OTA duopoly.

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But a concurrent consolidation in hotel technology also would help transform the industry in a positive way. However, it’s not likely to happen until outside investors turn to the hospitality technology space in a bigger way.

Right now, there are hundreds of vendors tinkering with marginally better systems for property management or revenue management or other functions. But with more money and attention from private equity and venture capital, real scale could be achieved for hotel technology solutions — ones able to thrive in giant branded hotels down to independent properties.

Why Hotels Shouldn’t Go It Alone

While the hotel technology industry is fragmented and disruptive, it is likely to produce some very interesting and effective solutions from companies that want to solve interesting problems — without worrying about the special challenges of running a hotel and serving guests. I’ve long argued that hospitality companies should partner with vendors like these, rather than try to build their own tech systems in-house.

That is especially true given the innovation that’s starting to emerge in the hospitality industry’s race to create value for guests. We soon could have consumers preferring to search for hotel deals primarily with voice commands on their smartphones or a digital assistant like the Amazon Echo. Those guests might soon routinely check out properties via a virtual-reality tour on Google Cardboard or Snapchat’s Spectacles.

Hotels don’t have the resources or manpower to run that race. Even a company as large as Marriott or Hilton shouldn’t expect to become a leader in artificial intelligence, virtual reality or whatever else is next in the global economy. But they could and should cast a wide net, working with partners that can interface with all the new technology entering the hotel space.

The most important upshot for hotels is to make technology choices today that allow them that flexibility later on.

Reshaping the Hotel Technology Landscape

If the hotel industry as a whole indicated that it would spend the money necessary to adopt better technology, rather than sink millions of dollars into its legacy in-house platforms, outside capital likely would accelerate the transformation of hospitality. It’s conceivable that venture capital and hedge funds would turn even more attention to the hotel technology space.

In some segments of the tech industry for hotels, some growth companies would attract the majority of new funding and put other startups out of business. Also, increased investment likely would kick off the amount of consolidation that has needed to happen in hospitality technology for years now. The industry has yet to mature into one with a critical mass of research and development spending to truly elevate a Revenue Strategy that all hotels could adopt.

Until enough hotel brands show their willingness to invest in external solutions, rather than keeping their tech stack entirely in-house, the whole hospitality technology space remains undercapitalized. It can be a self-fulfilling prophecy.

It shouldn’t be a one-sided transaction, however. If hotels take the risk of investing in new systems with new technology vendors, they will have the right to expect more in return from those partners. Your vendors need to be investing heavily in R&D. If they’re not, put them on notice that you’ll move on to partners who are.


Patrick Bosworth, Co-Founder and Chief Executive Officer

As CEO, Patrick spearheads the firm’s strategy and vision, while also championing a new approach to revenue management. Under his leadership, Duetto has grown to nearly 100 employees supporting more than 1,000 hotel and casino properties around the world. Before founding Duetto, Patrick was Director of Yielding and Business Strategy for Wynn Las Vegas.

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