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Monthly Archives: October 2012

Having a standard but perishable product as a base (a bed, a shower and a breakfast), hotel managers are trying hard to make their offer unique by adding services of any kind to the pure sleep, shower and eat story, or even create entirely unique guest experiences around the hotel stay. This is valid for all segments of our industry: at the low-end, where hotels try to automate as much as possible to continue to be able to offer competitive pricing or at the high end with very high touch services.

But finding that one great idea, which gives a lasting competitive advantage, is not very easy and even harder to hold-on to in today’s highly networked world.  It is therefore crucial that once such an idea pops up, hotel managers can move fast, putting the idea into action and ride it as long as the wave is rolling. Hotel managers should therefore ensure that they have the right vehicles in their garage, which allow them to move fast and agile, once the idea comes around the corner.

During my last visit to Berlin, I got in touch with a great new business idea, enabled by today’s mobile phones. It was a car-sharing app, which allows you to check for available cars around your current position, enabled by the GPS in the phone. Signing-up through the phone, one can see the position of the closest car, reserve it, walk to it and drive. And once not needing the car anymore, one just gets out of it and leaves it where it is. The hotel manager who told me about this app was as excited as myself and had already great ideas how this could be integrated with his hotel. He could send out a pre-stay email to all guests arriving with a link to the sign-up for car share at a preferred rate and the costs of the drive would be automatically posted on the guest’s hotel bill. Taking the idea further, guests could use their loyalty points from the app to pay parts of their invoice in the hotel, members of the app could get a 10% discount at the bar by presenting a QR code on their phone, guest could see the closest location of a car directly on the TV in their room and reserve it with one press of the remote control. It impressed me how this hotel manager was not only thinking about the obvious – putting a simple link on his website – but he wanted to turn this into a real guest experience story, differentiating himself again a bit more from the hotel next door.

Four weeks later, on my next visit to Berlin, I was of course interested to hear how this story progressed and therefore went back to see the hotel manager. To my biggest surprise and disappointment, I was then told that he had stopped this great idea. Having talked to the software provider of his legacy PMS, he received the information that integrating the app as desired would be possible, but that the company would have to integrate it into each of their 20 different software versions currently on the market and test it thoroughly in each version. Furthermore, the development would take several months, be quite costly and also require a hardware and software upgrade on site, to the newest of the 20 versions. Considering all this, the hotel manager had decided to give up on his idea.

On a Software as a Service (SaaS) platform, there is no such thing as different versions and no such thing as upgrading hardware or software to get to the next level. (Just think: did you ever have to upgrade Facebook to the newer version?) With just one software version and one database, SaaS companies are able to move significantly faster and more agile than legacy software providers. Turning an innovative idea such as the one from this hotel in Berlin into reality could be done in small but fast incremental steps, each of which can be immediately used in the live environment, and feedback from the customers can be integrated “as you go” into the development process. For example, the first step could enable the ability to charge the cost of the car from the app to the hotel bill. The next step two weeks later could be to add the car booking feature on the TV, and improve the charge functionality based on first reactions of the guests. So instead of waiting six months and then getting everything at a high price and praying that it works, the hotel could start immediately, gaining benefits from the euphoria, tailoring the functionality with feedback from the guests and most important being a first mover on the market.

It is true that SaaS software is still new, especially in hotels. But when making your choice for your next hotel software, don’t only think about where you are right now, but where down the street you want to be in three to five years. And if you don’t know exactly where this street is leading you to, because things change so fast, you’ll at least want to ensure that you have an agile and flexible vehicle, so that you can follow the next sharp turn at a high speed and not end-up in a dead end.

After all, I suspect that you did not imagine only three years ago that social media would play such an important role in your hotel marketing or that you would read this hotel blog on a tablet. But more about that in future blog posts!

Cloud or on-premise? When choosing from among hotel software vendors, hoteliers are frequently confronted with a choice between traditional on-premise or locally installed software and cloud-based software which exists in the internet. When comparing prices of these two types of systems, the comparison seems at first glance quite simple. The cost of on-premise software consists of an up-front license fee plus annual maintenance fees whereas cloud software vendors generally charge a monthly fee. What hoteliers tend to overlook are the hidden costs associated with on-premise software – both at the time of installation and later during normal operation of the software.

In order to objectively compare the financial implications of both types of systems, we have compiled a list of the hidden costs.

Hidden costs of on-premise software prior to going live

  • Cost of server hardware, server operating systems, database software and back-up hardware and software
  • Cost of an air-conditioned server room along with increased energy costs
  • Cost of on-site implementation of the hotel software along with travel costs
  • Cost of on-site training along with travel costs


Hidden costs of during the operation of on-premise software

  • Staff costs for the administration of the system, including timely patching of the operating system and virus scanner as well as system backups
  • Server maintenance costs
  • Costly updates of the hotel software after regular intervals along with hardware upgrades, system downtime, additional training and associated travel costs
  • Annoyed guests and staff due to system downtime
  • Incalculable costs of loss of data due to virus attacks, security leaks and hardware failures

Why does cloud-based software have none of these hidden costs?

With cloud software, all you need is an internet-ready device, user name and password. The cloud software vendor takes care of everything else. Cloud-based software is already installed and running in the internet. The monthly fees should be all-inclusive – without any hidden costs.

It’s been around for thousands of years and it will still be here in another thousand years: the trade show.

For hotel managers in Europe, there are at least 70 shows annually where you can check out the latest products and gadgets for your hotel: from bed sheets to bath foam, coffee cups to coat racks and light bulbs to linens.

But what if you’re looking for a new conference and banqueting software? Or a new hotel management software? Or a new point-of-sale system? At which trade show will you find a good selection of top vendors and knowledgeable technology salespeople?

We’ve asked both buyers and sellers of hotel technology to find out where they spend their trade show budget. We were expecting a wide variation but some clear winners emerged.Image

The number one place to see hotel technology is the ITB in Berlin. Yes, ITB is about much more than just technology. But one walk through halls 8.1, 9 and you’ll see the who’s who in hotel technology. All of the big names are there along with their latest and greatest products. Play your cards right and you can score invitations to parties than can keep you busy every evening while you’re in Berlin. ITB takes place every year in March.

There’s a considerable gap between ITB and the number of two on this list. Despite intensive efforts to generate an international audience, most of the European trade shows are regional affairs. An exception is the IGEHO in Switzerland. Located in Basel at the intersection of Germany, France and Switzerland, IGEHO tends to attract a much more international audience than most.  Yes, you will run into a lot of vendors asking you to sample the latest in Swiss cheese, French wine and German sausage but, let’s face it, there are worse things in life than that. Nevertheless, scattered throughout the vast exhibition area you would have found at the last show 45 POS vendors, 18 financial accounting software vendors, 17 front office software vendors and literally hundreds of other vendors covering every technology need of a hotel. IGEHO takes place every two years in November. The next show is in November 2013.

Finally, the comparatively tiny show HOSPACE received a number of votes. HOSPACE, formerly known as BAHA, is more of a conference than an exhibition, but it is attended almost exclusively by revenue managers and IT professionals from the hotel industry. The accompanying exhibition area is populated only by technology vendors. Equally interesting are the speakers, round tables and panels. So HOSPACE is a place where you not only can meet some of the new vendors, but educate yourself on the latest trends in hotel technology. HOSPACE takes place every November at Heathrow Airport in London.

A few honorable mentions: Equip’Hotel in Paris is a sizable trade show catering largely to the French-speaking world. World Travel Market in London is a smaller version of ITB yet highly relevant for distribution technology. For those venturing beyond Europe, the HITEC, taking place annually in USA, should not be missed and the Arabian Travel Market at the Dubai Convention Center has increased rapidly in importance over the last 10 years.

Trade shows are great if you want to shake a lot of hands, keep your smile going all day and collect a large stack of business cards. But you’ll probably pay top price for a hotel room, fly in packed planes and come home with a hangover after all the parties. Still, if you want to try out on-premise products, a trade show may be the best place to do it.

If, on the other hand, you’re next software decision is going to be for cloud-based software, a trade show may unnecessary. After all, you can try out cloud-based software wherever you want, whenever you want.

Retail is leading the change in how customers find, select, purchase and use products. Only few travel sites have matched Amazon’s ease of use and effectiveness in getting to the product that is right for you quickly.

In another step to free up employees to engage in a more natural way with customers, American retailer Urban Outfitters is getting rid of their traditional POS cash registers and is replacing them with iPads. (Story by BusinessInsider here)

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Urban Outfitters CIO explains that “iPads, cost about 1/5th as much as a cash register, and can be used for so much: They can be turned towards the customer, who can view content, put in personal information, use it as a gift registry and so forth.”

Kiosk solutions like hetras implemented at citizenM are another great way to free up staff to interact with guest in a more natural, friendly way.

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