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info@stayntouch.com • 301-358-1356 • stayntouch.com

Become a HOTEL TECHNOLOGY SAVANT

in 5 Easy Steps!

Introduction

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Ask a group of hoteliers why they got into the industry and you can be pretty sure that almost none will say they are in it because they love technology.

After all, the hotel business is a people business. Tech is not. So,

traditionally, hotel technology was seen as a necessary evil. It

was hidden away in a closet or basement room and was, touched,

changed or updated only when absolutely necessary.

But that kind of thinking is so 20 years ago. Back then, technology

was unfamiliar and hard to understand. Today, we are all walking

around with a super-computer, disguised as a phone, in our back

pockets. It is our interface with our world and most of us can’t

get through our day without spending several hours interacting

with some sort of information technology. Shopping, socializing,

banking, scheduling, traveling, learning, playing, etc. …Today,

technology is intertwined in everything we do. It isn’t some sort of

blinking, amber-screened monster sequestered away in a closet

somewhere. Technology is integral to the quality of our everyday

lives.

The same holds true for our businesses. Just as embracing

the newest personal technology can improve our personal

lives, embracing the newest business technology will make

our businesses more competitive. And the good part is that

while the technology has become more sophisticated over

the years, it has actually become easier to understand.

Strange but true! How can this be? Just look at your phone

again. It is the perfect model for the current state of software.

You have small portable hardware with a set of applications

(apps) that constantly pull and push data from the Internet.

The applications automatically update and you don’t need to

be a programmer or even trained to work them.

That same concept is now available for your hotel’s

technology stack. And by understanding and taking

advantage of these new hotel technology concepts, you WILL

improve your hotel’s competitiveness and profitability. This

e-book will examine the current state of hotel technology

with the sole aim of making you hotel-technology savvy. We

will be covering:

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• SaaS and the Hotel Industry. Software as a Service (SaaS)

has been revolutionizing the business world for years now

(see Salesforce), but it is just now making in-roads into

hospitality. We’ll answer the questions: How is SaaS applied

differently to our industry? What is the business culture

shift that is happening as a result? What benefits will SaaS

deliver to hotels?

• The Cloud PMS and Security, Payment and Liability. When

hoteliers consider moving to a cloud-based PMS, it always

seems like a good idea until they start to worry about

security. While it is natural to fear the unknown, we will help

dispel some common and persistent myths and shone a

light on this important but misunderstood area of concern.

• The CFO’s Guide to SaaS. Software features can be sexy and

exciting, but you are running a business, so at some point

the dollars need to add up. We will take a look at the dollars

and cents of SaaS hotel software and how it will change the

way your CFO or controller budgets and forecasts.

• The Risk of Technology Decision Paralysis. New technology

options means technology decision-making. And that is

something few hoteliers want to deal with. But if you freeze

and do nothing, the competition will run right by you. So in

this section we have provided some guidance on how to get

through this process.

• Application Program Interfaces and the Hotel Industry. Or,

“How I Stopped Worrying and Learned to Love APIs.” Yes,

talk of APIs is usually reserved for the engineers and not

hoteliers, but understanding this little piece of jargon will

actually transform your view on hotel technology and will

help guide your technology strategy and investment into

the future.

Step 1The Hotel Industry and SaaS. Does it Differ from Other Industries?

Adoption of SaaS is growing exponentially in most every industry, with SaaS cloud hardware and infrastructure software spending projected to reach $55B in 2026.

In a ZDNet article published last August, Gartner placed SaaS

on its way to the “Plateau of Productivity” that focused on

applications such as Salesforce, Office 365, Box and others. These

are all highly utilized business applications, and the trend towards

the implementation of SaaS solutions to drive engagement and

productivity is now a business imperative.

The advancement of SaaS solutions has always addressed much

broader business functions rather than industry verticals so it

makes sense that they would see a higher level of early adoption.

CRM, ERP, and HR can be seen as horizontal SaaS applications

that touch much larger business segments and can leveraged to

bring down costs and driving up efficiency. By 2020, penetration

of SaaS versus traditional software deployment will be over 25%

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and packaged software will shrink to 10% of new enterprise

installations (source: IDC 50th Anniversary, Transformation

Everywhere).

Now, it is the hotel industry’s turn to ratchet up the adoption of

cloud-based property management systems, focusing on vertical

adoption of SaaS products. This does not mean that our industry

will not purchase horizontal SaaS solutions, it just means that

these horizontal solutions do not necessarily meet the needs of our

relationship and service-based, complex ecosystem.

To answer the question, “Does it differ from other industries”? Yes,

it certainly does. The hospitality industry is a fast-paced, 24/7/365

business that is dependent on a plethora of systems. In the past,

there was a designated room in the hotel where these ‘traditional’

systems resided. This is also where they broke down. In other

trades that run from Monday to Friday, 8 AM to 5 PM, the mission

critical nature of platforms is not as extreme as in our industry.

Not to discount other sectors as times have changed and there is

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an emerging necessity to have on-demand

platforms in all categories. However,

the pressure of the of the hospitality

environment makes other industries pale

by comparison.

Hotel systems leading the pack when it

comes to migrating to the cloud and being

delivered in the SaaS structure include

property management systems (PMS), point

of sale systems (POS), sales and marketing

systems and guest service platforms (guest

engagement).

Of course, there are both benefits and

challenges in implementing SaaS solutions

for hotels. The benefits are substantial,

and they focus on cost savings, flexibility,

scalability, employee productivity, and

guest service. Being able to deliver

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information seamlessly and quickly within the property and

throughout the chain while enabling the ultimate in guest service

and satisfaction is the primary driver for SaaS adoption for most

hoteliers. The cost savings are impressive, however without happy

guests and the data to ensure that their needs are met so that they

return, saving capital is only part of the reason why SaaS solutions

for hotels is on the rise.

There are also some roadblocks that impact adoption. One of them

is letting go of the peace of mind you get knowing that all your

mission critical systems and data are just a few floors away in an

onsite computer room. The other is the issue of integration and

interfacing. There are often 50 different technologies running a

single property, all of which need to communicate with each other.

Ensuring that integration and interfacing is working seamlessly

within a SaaS deployment can make the decision to move from

on-premise to the cloud a little more disconcerting. That is why

it is essential to partner with only the most experienced and

innovative technology providers who have a proven track record

and understand the unique needs of the hotel environment.

The hospitality industry has indeed reached the Gartner “Plateau

of Productivity.” The industry understands the need to embrace

SaaS products and platforms to not only better engage with guests

– but to also integrate with a multitude highly popular external

applications and data feeds. This necessary evolution can only be

accomplished if hoteliers move away from on-premise systems

to SaaS. That being said, behind every great tech innovation is

the need for effective tech implementation, and there is a bit of

a mash-up going on within the industry these days. Hotels are

looking to gather information on guests, their buying habits, where

they are coming from and what are their true preferences are – and

the solutions available today do not meet all these requirements.

Hotels need to get their data from countless different sources.

The interconnectivity with other industries, other applications

and across the globe will ensure that to remain competitive and

relevant, the hotel industry will need to be at the forefront of SaaS

delivery and adoption.

Step 2Cloud PMS – A Safe Bet for Security, Liability and Payments

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There was an article in Yahoo news back in January about hackers that took not only the hotel but all of its guest’s virtually hostage.

They did this by hacking the hotel’s property management

system (PMS). Unfortunately, in most hotels, all technology is

interdependent, and as such, they were able to lock the guests in

their rooms, or out of their rooms as the door locks were integrated

with the PMS Software. The hackers demanded cash, and they

got it. Though this makes for an interesting news item, the

ramifications of such a hack are far and wide.

In a report researched by Sky High Networks, the percentage of

organizations that experience at least one threat per month from

data exfiltration (hackers) is 49.8%. Over the last ten years, nearly 1

billion consumer records were stolen through data breaches in the

United States. That is a lot of hacking! As cloud usage continues

to soar, we can rest assured that these percentages will increase.

There are also several different types of attacks; these include

Point of Sale intrusions, Denial of Service attacks, like the one

mentioned above, and Insider and Privilege attacks, perpetrated

by those who have rights within the systems.

Over the last ten years, nearly 1 billion consumer records were

stolen through data breaches in the United States. However, we

are beginning to trust cloud-based solutions more and more every

day. When you think of it, we use OneDrive, Salesforce, Skype for

Business, Exchange online and Cisco WebEx without even thinking

these are cloud solutions. We also pay online using personal credit

cards on sites such as Amazon, eBay, and the list goes on and on.

This does not mean that we must stay vigilant, it only means that

people are becoming more and more comfortable working and

transacting with POS solutions they cannot touch or feel.

In the hotel industry, we are lucky to have so many technologies to

choose from and an even larger number of companies delivering

these technologies to our industry. This, however, can make the

decision process regarding the purchase of new technologies quite

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daunting. When looking for a property management system (PMS),

which is the beating heart of your hotel, many variables must be

considered. Feature/functionality ranks highest on the list, but

security should be a very close second.

A cloud based PMS can be more secure that an on-promise based

platform. One may not think so, but this is indeed the case. Most

reputable cloud-based solutions use powerful encryptions. These

encryptions are very strong and cannot be easily defeated. The

trick is choosing the right multi-layered security approach for

your hotel. Having a multi-layered approach ensures that there

are many failsafe measures in place that will enhance the overall

security of your guests and your hotel.

So below are some criteria that you should consider when looking

for a robust a security conscious Cloud PMS.

Choose a Cloud PMS that:

• Takes liability away from the hotel and to a large some

extent from the PMS vendor by using tokenization – (this is

where the PMS does NOT store or transfer any CC numbers)

• Utilizes P2PE encryption – is a payment security solution

that instantaneously converts confidential credit card data

and information into the indecipherable code at the swipe

of the card to prevent hacking and fraud.

• Plans a switch to EMV or know as “chip and pin” outside of

the US – this is the chip and PON technology used by many

credit card companies and is being rolled out in the US

Ultimately you need to choose the best technology for your

individual property. When you decide to switch to a new PMS,

consider one that meets your current needs while addressing

issues that may arise in the future. The future holds great

innovation that will have a beneficial impact on the hotel industry,

but it can also be intimidating and scary when that evolution is

moving so quickly. But it doesn’t have to be. If we set the bar high

enough and we’re using it to solve problems, technology is just

a tool to personalize the guest journey and achieve a 360-degree

view of the guest.

Step 3CFO/Controller Alert: Hotel SaaS Will Make Your Life Easier

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CFOs are constantly being bombarded with companies trying to sell them solutions that promise to deliver on every aspect of their hotel’s requirements.

The challenge comes down to determining which systems fit the

hotel’s unique business needs as well as what the underlying

technology looks like. Is the application delivered on-property or

in the cloud? How will it integrate with other primary applications

that are already be in place? And most importantly, how much

will it cost? What is the ROI? And how will they budget for this new

expenditure?

So, with all the emerging technologies designed to have a direct

implication on revenue, profitability and guest satisfaction – how

can a busy CFO or Controller decide what business applications

will help your employees get their jobs done more effectively with

less risk and up-front capital?

Total Cost of Ownership

In Deloitte’s most recent quarterly (Q3 2016) CFO Signals survey

found that almost 80 percent work in North American companies

that have implemented cloud solutions. The solutions are

primarily focused on the sales and marketing side of their

businesses however primary operational solutions are also

gaining momentum.

There is quite a delta between on premise solutions and SaaS

solutions. A CFO needs to look at the variables related to the

costs of software, hardware, labor, consulting and training

associated with an on-premise solution versus a SaaS delivered

solution.

There are definitely costs savings to be had when implementing

a SaaS solution and the lower TCO allows companies to re-invest

in innovative ideas rather than technological infrastructure.

However, CFOs need to look at the same metrics they use when

purchasing any other solutions or platform. What is the ROI and

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payback period? Does the implementation of the SaaS offering

help to increase guest satisfaction, decrease operational costs and

possibly even deliver new revenue opportunities? There are some

many questions that need to be considered however using the

same decision based metrics may help in swaying a CFO to look at

SaaS in a favorable light.

Proper Budgeting and Forecasting

One of the most aggravating issues that CFO’ and Controllers

must deal with related to technology purchases is delivery and

maintenance creep. While an on- premise ERP suite can also

deliver much of what is needed, the imperatives of scalability and

agility mean on-premise hardware is now viewed as a hindrance to

growth. In light of the demand to also drive unnecessary IT costs

out of business, IT infrastructure and its support and maintenance

costs are now viewed as unacceptable. The older platforms will

have ongoing maintenance contracts for support and upgrades,

but there is always something unanticipated that pops up during

the implementation and use of a system that can be unforeseen.

SaaS fees are inclusive of updates and upgrades to ensure that

the hotel using it stays current on guest and market demands.

Implementing a SaaS solution takes the guesswork away

from the CFO or Controller. They know exactly how much

their monthly spend will be for the solution and the spend

covers everything related to the implementation, support and

initial roll-out of the solution. Managing this from a budgetary

perspective makes life easier and helps with maintaining

positive cash flow. There are no surprises.

Flexibility to change with new business requirements

Finally, as SaaS solutions in the hotel industry become more

widely adopted, the integration of the systems will become

easier and easier to track. SaaS supports agility, rapid scalability,

fast decision making, and real-time information on guests and

the business. The anytime, anywhere accessibility create a

substantial amount of flexibility to manage the ever-changing

demands of the hotel industry. By operating in the cloud, back-

up data and storage capacity is greater and frees up on-premises

bandwidth for other vital business operations and guest needs.

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SaaS hotel applications make it easier to get new users up and

running, turn on modules or features and add new capabilities.

The cloud also opens the door for innovation by introducing

new ways to engage and share information between staff,

departments, and guests with innovative options like mobile

PMS systems.

Software-as-a-Service is booming as hotel companies aim to

reduce their total IT expenditure, but it’s also shifting the IT

balance of power towards the hotel’s financial executives. As

the availability and impact of technology continues to evolve,

CFOs and Controllers will often become the gatekeepers to

technological advancement. However, when it comes to the

hotel solutions in the cloud, leaders are embracing the cost

saving benefits, less maintenance, scalability, superior remote

accessibility, and tighter security.

So, the only question left right now for those hotels who want

to better manage and grow their business is to choose the hotel

SaaS solution provider wisely!

With SaaS, CFOs and Controllers know exactly how much their monthly spend will be for the solution and the spend covers everything related to the implementation, support and initial roll-out of the solution.

Step 4Hotel Technology – The Easiest (and Most Costly) Decision is Not to Make a Decision

If you look on the popular software review site Capterra, you’ll find 75 property management systems providers listed.

The number of hotel technology vendors increases when you

get to the point of sale (POS) systems, Wi-Fi solutions, telephone

(PBX) hardware and software vendors.

Brian Young, the Managing Director of the Castle Hill Inn in

Newport Rhode Island, commented that “There are so many

providers of platforms, primary systems, and secondary systems

that the decision-making process becomes highly involved.

While running a hotel, you need to constantly stay informed

about the latest hotel technologies available and their relevance

to your business. It’s challenging to keep up.”

So once again it is understandable that sometimes it is just

easier not to make a decision. The hotel technology landscape

is moving at light speed so fully comprehending the emerging

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developments, their applicability to your operations and ROI

both from a cost and time/training perspective need to be

ascertained before moving forward.

So how does a GM or IT Manager decide what hotel software

systems to invest in and when is the best time to implement

these systems? There are some basics that should be part of the

decision-making process if you are considering investing in a

new PMS hotel system for your property.

• Does it integrate well with all the other systems you

have on the site that will be complimentary to the new

product?

• Does it have the necessary requirements to do the job?

• Is it technologically advanced and scalable for the future

(cloud, SaaS, )?

• Does it help your hotel drive revenues and guest

satisfaction?

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• Does it help you change the game and deliver exactly

what the guests are looking for?

No longer should the decision be made solely based on feature/

functionality of the hotel management software, but on how

these capabilities genuinely complement the guest experience.

Any new system should also make employees’ lives easier so

they can spend more time cultivating relationships with their

guests and delivering the best service possible.

Just a few years ago, the leading criteria for choosing a new

hotel property management system, would have been as

follows:

• Reporting

• Functional Design

• System Features

• Training and Support

• Security (PA-DSS)

• Corporate Reputation

These requirements all matter in any decision-making process,

but now there are new variables that ultimately make things

more complicated.

Freedom is something that is rarely taken into consideration

when procuring a system. The freedom to integrate, deliver

services, provide the cost model that works best for your hotel,

as well as empowers your staff to build relationships with

your guests. Freedom is a critical element to evaluate when

you embark on the journey to look for any new hotel PMS.

Ultimately, the goal is to provide the executive management

team as well as the front-line employees the freedom to run the

hotel, not spend their valuable time running the technology that

runs the hotel.

These hotel technology decisions will never be easy, but

delaying a decision to upgrade to a new system could have

a detrimental impact on your guests and potential revenue

streams. Also, older systems can be expensive, with antiquated

support and maintenance models. You may find that moving to a

more modern platform decreases your overall cost burden.

Finally, the right decision can be made easier if you work with

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a trusted partner with proven industry expertise rather than

just a tech vendor. It is true that the term “partner” gets used

too frequently – but if you can find a technology provider that

actually does become your partner, they can help you grow

your business, decrease your costs and increase your revenues.

In the end, winning in business is all about making decisions

and executing on them. Your success depends on your ability to

develop speed as a habit in both.

“While running a hotel, you need to constantly stay informed about the latest hotel technologies available and their relevance to your business. It’s challenging to keep up.”

Step 5How Open APIs are Transforming the Hotel Industry

There is certainly a beneficial impact on the hotel industry when technology providers can integrate with other systems using proprietary or Open APIs to assist hoteliers in cutting costs, driving revenue and delivering exceptional service.

However, with the vast number of vendors floating around the

hotel technology industry, the utilization of APIs to drive results

has become a driving force in hotel software selection.

When one looks at the complexity of hotel operations, the

complex nature of inventory distribution and all of the other

touchpoints that affect a hotel, it’s no wonder that systems need

to communicate effectively with each other. In a Phocuswright

research paper titled, APIs: A Strategic Imperative published

in April of 2016, Bob Offett, the writer of the article stated that

there is a growing API economy where there are a number of

businesses solely focused on being providers of APIs. The growth

of APIs has been surging, and this is a very good thing. It levels

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the playing field and enhances the decision-making process

when looking at purchasing hotel PMS systems.

In the paper, Offett writes that “APIs are the digital glue that

enables new revenue for exciting business, and provides for new

ecosystems, many of which have yet to be defined.”

The hotel industry is at a technological expectations cross-road.

Hoteliers are inundated with a vast number of service providers,

technology vendors/partners, and distribution challenges.

Hoteliers have to deal with all of these issues, and on top of this,

they have to ensure that their guests are happy. Being a GM/

Owner of a hotel today is incredibly more complex than it was 20

years ago. Hoteliers need to look at companies that enable them

to focus on the real aspect of why hotels were built in the first

place. To offer a guest somewhere comfortable to rest and to

deliver excellent service, ensuring that the next time the traveler

returns, they choose to stay at your hotel. Of course, it also

comes down to running a profitable property. Getting back to

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basics on-property should be a hotelier’s top priority, leaving the

technology to take care of itself.

Many APIs are now trending towards open interface architecture,

whereas in the past, technology companies looked at these

types of integrations as revenue sources. Companies would

keep the data behind private iron curtains, practically holding

the hotelier hostage. The introduction of Open APIs is forcing

technology vendors to add value to their primary offerings rather

than trying to rely on revenue from interfaces. Ultimately this is

a huge win for hoteliers. By working with technology partners

that have a clean, Open API which other developers can readily

connect to, hotels to can implement other systems without

limitations and the fear of yet another cost.

The technological beating heart of any hotel is the property

management system (PMS). In the past, it was likely stored in

the basement of a hotel, possibly connected to another “parent

brand system” and also connected to other on systems such

By working with technology partners that have a clean, Open API which other developers can readily connect to, hotels to can implement other systems without limitations and the fear of yet another cost.

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as the POS, a PBX, a Call Accounting system, a spa system, and

so on. These connections would have been serial, and though

they functioned and served their purpose, the hotel’s technology

infrastructure was unable to scale in concert with new platforms

that no longer needed to reside on-premise.

So, fast forward a few decades, and we are now in a time when new

solutions for the hospitality industry are launched virtually daily.

Many of these products are cloud-based and not handcuffed by

antiquated technologies. Most of these systems seen as periphery

systems...systems that are important such a guest engagement

solution. However, if a hotelier does not implement one of these

types of periphery systems, they may not be detrimentally

impacted in the short term. The real transformation is happening

with primary systems. Systems that are imperative to have in order

to run hotel operations at the highest level.

The main system, as stated early, is the hotel’s PMS. Choosing a

PMS that has the flexibility to deliver an Open API is key and will

help you make viable future technology investments. Being

able to implement a cloud-based PMS, with a Software as a

service (SaaS) delivery model that enables a hotel to instantly

connect with guest service applications, as well as many other

applications, is finally a reality.

As guest expectations continue to change and the technology

that surrounds our industry keeps evolving, decisions related to

transitioning to new platforms and solutions can seem daunting.

Fundamentally, hoteliers need to look for systems that provide

technological flexibility by using Open APIs, and ultimately,

select innovative systems that deliver on their promises.

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StayNTouch8120 Woodmont AvenueSuite 500 Bethesda, MD 20814

+ 1 301-358-1356info@stayntouch.comstayntouch.com

Author: Jos Schaap

Jos has a 20+ year track record in hotel software technology. He began StayNTouch with the vision of re-inventing the hotel PMS technology; making it simple, mobile and transitioning the software to the cloud. Prior to StayNTouch, Jos spent 17 years at MICROS Systems Inc. (Now Oracle Hospitality), as a Senior Vice President of in charge of global product development and strategy for the Lodging and eCommerce divisions. During his tenure, MICROS’ hospitality products became the global market leader growing the company’s revenues from less than $300 million to $1.1 billion. Jos was responsible for introducing a number of new products enabling MICROS to enter all hospitality segments from limited to full service hotels.