Watch out for the dead-end: drive your IT strategy wisely

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!

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