HITEC Europe, the annual conference for hospitality technology by HFTP, is home to some of the brightest minds in the hospitality industry, who navigate through essential topics in the field today. Carson Booth, CEO of SnapShot, a Shiji Group Band/HFTP Global Board member, unpacked the topic of “The Future of Integration: There is a Right Answer,” during a panel session on April 10, in Palma, Mallorca, Spain. This panel session, moderated by Ally Northfield, Managing Director of Design Ltd., included thoughts from other industry experts - Lyle Worthington, HFTP Global Past President and HITEC Europe Advisory Council member, and Ulrich Pillau, CEO of apaleo GmbH.
Given the depth of the topic, the educational panel was conducted for over an hour with detailed insights from the experienced panelists. For your benefit, we’ve highlighted the most interesting and informative ideas shared during the panel.
There’s no doubt that innovation in IT can help the industry drive revenue and offer more customer centric offers. However, due to the challenges such as data silos and legacy systems, the hospitality industry is hindered from advancing and taking advantage of its most valuable resource - data. While there is a lot of existing innovation from a technology perspective in companies and startups that are building new applications and software, as highlighted by Pillau, the integration of legacy systems with such technology is not that easy and is very costly.
Without the right technology in place, the value of data is very low. “The amount of data that we generate is not recognized as a valuable asset,” said Booth. “Some hotels are just not able to wake up to that. We need to take a step back. It's more a philosophical situation we’re in right now,” he continued, “Do we see the value of data?”
Changing the mindset about technology and innovation is one of the biggest challenges in the industry. “We look at technology as an afterthought,” said Worthington. “It needs to be thought in a different way - here is a problem I have in my system, I need to find the technology to solve it - instead of the current way of thinking - this is the system that everyone is using, it should work the same for me,” he said.
By looking at other leading industries, we can see the driving forces created by innovation and technology when the concept of open platforms and marketplaces has proven to be a success, like it has for Google, Facebook, Amazon and Apple, where data is at the core of their business.
One of the main data challenges is caused by the decentralized nature of the industry and legacy systems where all data is generated and stored. “The reality is that you own that data. You need access to that data and find ways to emancipate it into a format that you can actually leverage and use. Transform it from data to information to knowledge and wisdom. That’s our secret sauce at SnapShot,” said Booth.
“The biggest challenge we’re facing is getting data out and working with it,” continued Pillau, “I think what we have to promote is really the open systems of data models and openness of platforms.”
One of the ways to solve data challenges is utilizing education to change the industry mindset.
“Educating the industry from technology vendors to hoteliers enables the world to change and look different as opposed to how it looks today,” said Pillau.
Despite the challenges, the industry is in fact moving forward with many leading examples of organizations supporting the education of the industry and introducing higher standards, such as HFTP (Hospitality Finance and Technology Professionals) and HTNG (Hospitality Technology Next Generation).
“Revenue managers are evolving from revenue management to revenue optimization and if they don’t evolve quickly enough to use data science, they’ll be out of a job,” continued Booth. “We all need to look at the systems of data that we have, and move towards data science as a service because that’s really the next step. Revenue management will be the first tangible impact that will hit an individual hotel or a group very, very soon,” he said.
Legacy systems challenges
Although it’s been acknowledged that legacy systems are slowing down innovation in the industry, they are still in use by most hotels as it isn’t as simple as immediately retiring them and installing new cloud solutions.
One of the ways to leverage the usage of your legacy system is to take advantage of the data available. While opportunities for easy data extraction and analysis are not readily available and limited with the legacy systems, hotels can find alternative methods by investing in data scientists who are dedicated to data analysis, for example.
“If you want to have some fun, speak to a data scientist who has never worked in your industry and get them to look at your systems and what you’ve been doing. The questions you will receive are almost mind-blowing because someone with that expertise and knowledge will come in and challenge you to the point of saying 'This is kind of silly. Why are we doing it this way?' I encourage you to find a data scientist and spend a day with them,” suggested Booth.
Another way to solve this challenge is to enhance existing legacy systems with additional features. Worthington commented, “What I think is important is finding ways to augment those systems, so you can continue using them. For example, I don’t say migrate away from the PMS, but migrate away from that particular function of PMS. Don’t migrate away from the point of sale, migrate away from the point-to-point interface that doesn’t work so well.”
It’s not an easy decision to change your core operational systems, especially when it comes to bigger hotel chains, but we should keep in mind that, regardless of extra costs and time, the change of the PMS and other systems gives the opportunity to review and improve things, mentioned Pillau.
Unused data challenge
In the hospitality industry, data is generated throughout the entire customer journey, but if it’s not properly collected and stored this leads to the issue of unused or lost data that restricts hotels from getting valuable customers insights. Unused data is one of the biggest obstacles that the hospitality industry must overcome, and technology is the key to accomplish this.
Tech titans like Apple, Amazon, Google, and Facebook, have paved the way for the tech industry and continue to do so today. Tech titans are not only dominating control of information, but also see data as their product. With advanced technology solutions, these tech titans can control devices and the customer search experience, creating the risk that they can own your customer too. “Everyone saw that Google moved recently into the hotel space, and there’s a real risk of commoditization of the brand experience when Amazon moves into this space. To buy a room on Amazon, it’s going to be a one-click check-out and you’ll be able to have dynamic pricing and dynamic packaging, etc. That’s a real risk,” said Booth.
In order to withstand the risk, the interface problem has to be solved first, mentioned by Worthington, who believes that one of the reasons for the issue of unused data is the big share of manual processes and work in daily operations, which could be automated. This, in turn, generates a negative impact on efficiency and productivity.
Third party data providers
Revenue management technology can also be used to better calculate and predict customer behavior to develop more strategic pricing scenarios. The issue of moving data across multiple systems developed the need for building dynamic models, which can now be solved by third party providers like data platforms and data solution companies.
“You have to co-mingle that data and emancipate that data from source systems as well,” said Booth. “If you try to slam data from one system into another system, it doesn’t co-mingle very nicely, and that’s why we take it to a third party,” he continued.
“The question for hoteliers should be, ‘What is the purpose of getting the data out and what do I want to do with the data?’”, commented Pillau. “Just collecting the data is what you’ll be doing forever and that hasn’t really helped. Intelligent business solutions and data solutions, like what SnapShot is doing, will help you figure out what is really the purpose of working with the data and getting it out of your system,” he said.
Desired skill set
When it comes to future of hotel technology, it’s critical to make sure your hotel’s staff understands the importance of data and has the needed skillset.
“There has been an evolution of revenue management to revenue optimization leading to, in most recent times, data science. Before architecting a data strategy, it is essential to have a clear end vision of what is desired to be achieved with that data,” said Booth. “For any single hotel who probably can’t afford a data scientist, there are services available. For a multi-hotel environment, you absolutely need to start thinking about how you’re going to science that data and drive a data -first mindset into your decision-making processes,” he said.
Worthington pinpointed that, in his opinion, “the most important and missing skill is a systems/information architect.” He added, “The second most important role is user experience role with expertise in evaluating the efficiency and how systems are used.”
The future of integration has endless opportunities as a multi-layered topic with an unlimited reach into innovation. In terms of a quick-fix, the “right answer” to integration is subjective to each organization. However, to summarize in one final line of what the right advice is, each panelist voiced their opinion.
Worthington said, “The key is to take a step back, look at which solution you need to run your business, and then build an integration and architecture strategy around that,” while Ulrich stated, “Look for open PMSs and open cloud platforms.”
Booth drew the topic to a close and said, “Unlock your data, emancipate it, free it up. Get out of the silos to seize the future of integration.”