Chapter 6: Hospitality Tech

Where does tech fit into hospitality? Turns out, in many places! Hotel tech has been evolving a lot over the past few years to offer better and more efficient solutions to hoteliers.

But let me start by saying this:

The hotel tech landscape is so confusing.

There are so many solutions on the market without any standardization. It’s an extremely fragmented market and if you are unfamiliar with how software works you can get lost in jargon and choice.

When I first heard that 70% of hotels DO NOT use a Property Management System to manage their operations I was shocked! After doing research though, I can see why legacy operators working in a more traditional field would not want to use tech. Where do you even start?!

The tech stack

I’ve broken down the components of the basic structure you need to run an independent hotel. If you’re new to this world like I was, I hope you enjoy the breakdown. If you’re an experienced hospitality professional, please indulge me.

1. Website. This is obvious, if you have a business, let alone a hotel that wants to attract customers from all over the world, you need a website. This is where you showcase your hotel, your service offerings, your rooms, etc. It is your window to the rest of the world.
2. Booking Engine. Here is where things become more specific. A booking engine is essentially another webpage that contains all the information of each room, including photos, description, booking policy, pricing, etc. This is? connected to your website. When you click Book Now on a hotel page, it redirects you to the booking engine. A booking engine can already be integrated with your website provider, or it can be a separate module that you add on top of your website. It’s usually the latter.
3. Payment processor. A payment processor is a service that allows you to receive payment from your guests. It’s the “choose how you want to pay” part of your booking flow. You could integrate with other payment providers (Apple Pay, Google Pay, Paypal, etc.) or give the option for guests to input their credit card information. Payment processors collect a fee for each payment they handle.
4. Property Management System (or PMS). Arguably, the most important software you need for your hotel. This is the heart of your operation. It’s where you set up your rooms, your pricing policy and where all reservations end up, regardless of its source. This is also where all front office operations happen; where you check people in, check them out, and issue invoices. Finding a powerful and capable PMS resolves many future issues. Legacy PMS systems are installed on computers and servers located in the hotel (On Prem) but modern PMS’s are now on the cloud. No need to install anything, just log in to a website, just like checking your email.
5. Channel Manager. This is where things get more complicated. As a hotel, your goal is to maximize your reservations. In a perfect world, you would only rely on your website or manual reservations (phone calls, walk-ins) but in today's world, it’s almost a given you need to list your property on big online platforms. These are called OTAs (Online Travel Agencies). The Big 3 and where most of the reservations come from, are Booking.com , Expedia and Airbnb. So the same room is listed on at least 4 different platforms (including your website). Let’s say the room is booked through your website. That room needs to show up as blocked on the other platforms to avoid overbooking. This is precisely what a channel manager does. It reads real time data from your PMS and updates your listings on each platform. This is also extended to pricing, as each platform has its own commission fees and at the end of the day you want to receive the same money for each room regardless on which platform it was booked on. A channel manager allows you to have different pricing markups for each channel a room is listed. This is why you see a different rate on different channels for the same room.

If you want the best rate for a room, always book direct with the hotel?

These are the basic tools you need to run an independent hotel successfully. Now there A LOT of more options out there, from Revenue Management tools (pricing), to Guest Experience apps (communication with guests, online check-in, etc), Facility Management systems (door access, energy management, housekeeping), CRMs and Reputation Management tools, and so on. Honestly, to me, the rest of these are just add-ons.

How much tech is too much tech?

Going back to our mission, we want people to disconnect from their digital masters and reconnect with themselves. On one hand, tech is a big enabler for sustainability, eliminating the need for disposables like paper, plastic, etc. On the other, you are asking your guest to use the devices you are claiming to help them disconnect from. Balancing this act on when and where technology should be used, is our big bet.

We do not believe tech should replace human interaction - it should instead enhance it. We want to be more efficient, but not lose the human touch with our guests. We believe these small interactions between our staff and our guests is what will make someone’s experience unforgettable.

Think about the last time you went on vacation and had a memorable stay. What made that stay memorable? Do you remember your room in detail? The hotel amenities and facilities? Or how easy it was to order room service? While parts of the above might make a stay memorable, 9 times out of 10, from all the people we've interviewed, what made their experience unforgettable was a conversation or a moment they had with one of the people involved in their stay, whether it was another guest, a hotel staff member or your host if you're staying at an Airbnb.

This means that we don’t want to replace the interactions between guests and staff because that’s where the magic happens. But we could allow guests to check-in online before their arrival. Or reach out to them after their stay to check on their experience.

The age of AI

In an era dominated by AI and automation, commerce is becoming more and more commoditized. The barriers to entry for entrepreneurship have never been lower. You can some up with a company name, logo, website, design and content in a few hours. But guess what? So will billions of other people.

The flip side of this is companies will all feel the same, with the same logo, the same design and the same copy. Consumers will take note of this and will learn how to distinguish between AI and non AI brands.

While AI has a place in Hospitality, in my humble opinion, it should be in the backend logistics that guests don't interact with. Here's my hot take: Every day I am convinced more and more that the brands that will stand out are the ones that do not use AI for customer or guest facing applications.

Authenticity, Personalization and Human Connection will be the true differentiators.

Which is difficult. And manual. And takes a lot of time. And it’s exactly what we are planning on doing.

One of my friends went with his family to a well known hotel with great design and amenities. The hotel had pretty much anything and everything you wanted. Facilities were gorgeous, many kids friendly activities and plenty of space to explore. From their entire experience, the thing they remembered the most and made their stay memorable was the housekeeper playing with their kids.