Systems in Harmony

Computer systems have traditionally been considered problematic by many hotel managers, who see them as expensive, difficult to use, ill-adapted to hospitality operations and unreliable. Despite this, the use of IT in the hotel industry has increased dramatically, and today almost every department has its own system.

Property management systems (PMS), yield management systems and types of reservation systems have helped increase front-office efficiency, while recipe costing systems, EPOS and purchasing systems are making F&B management easier. Guest services have been improved with telephones, televisions and IP-based systems, which also generate extra revenue. And there are a variety of accounting, personnel and marketing systems to support back-office and administrative-support areas.

The hotel industry is becoming increasingly high-tech, with electronic innovations from handheld computers to wireless communications now commonplace.

TOO MANY COOKS

Although hotels have been quick to adopt leading technology, most are standalone systems. This means that their full potential is not being realised. All this IT capability would be much more powerful if it was connected to share information. For example, recipe costing would be more accurate and useful if up-to-date prices could be accessed from the stock control or purchasing system. Similarly, security would be enhanced if auxiliary systems, such as telephones and electronic door locks, were linked directly with the PMS.

While such benefits are fine in theory, they are difficult to achieve in practice because each system uses a different technical standard. To overcome this barrier, interfaces have been developed by PMS vendors or third-party systems integrators. However, this results in expensive custom programming and delays implementation. Interfacing problems cost the hotel industry millions of pounds each year, without taking into account the frustration of getting them developed.

An example by Dick Moore, formerly of the Cornell School of Hotel Administration, illustrates the problem. When replacing the PMS of a 200-bedroom hotel, the hardware and software costs might cost around £40,000. However, if the PMS is connected to several auxiliary systems, then customised interfaces need to be developed for each system.

This can cost several thousand pounds each, which means connecting the system can be as expensive as purchasing the system. And even when interfaces have been developed, their reliability is questionable and problems are difficult to resolve. The solution is to select a system where all the components are provided by a single supplier. While this reduces the interface development/ reliability issues, it also prevents hotels from selecting best-of-breed applications and is thus not a popular strategy.

Vendors have been slow to resolve this problem, preferring to blame each other when their systems do not communicate properly – and by locking purchasers into a particular set of standards, they are guaranteed future sales of upgrades, peripherals and support, as few customers are prepared to relinquish their existing system to start all over again.

However, recent industry initiatives may help systems interface more easily. The Hotel Technology Next Generation (HTNG) project, set up by a group of international system vendors and hotel companies, is developing global interface standards for hotel system communication, which will eventually reduce the need to develop custom interfaces. Its aim is that vendors will voluntarily conform to these standards.

This will allow any HTNG-compatible system to seamlessly exchange data with any other. If this can be achieved, the dream of a fully integrated hotel system may come true.

TURNING DATA INTO INFORMATION

The hotel industry has an almost unique level of access to customer data. During the guest cycle, it collects vast amounts of data about where customers come from, what their spending habits are and their likes and preferences. The industry has been good at making use of this raw data.

For example, the Ritz Carlton and the former Savoy Group have used excellent guest-history systems for decades, determining the travel patterns and revenue contributions of each guest, so that managers and staff can provide a highly personalised level of service to frequent customers. And applying technology to the system has made it a more efficient and cost-effective process.

Such access to high-quality guest data, coupled with low data storage costs and the increased processing power available on the desktop, means hotels have the potential to do much more than they did in the past. For example, instead of recording the number of visits and total spend of frequent guests, many hotels are now recording and analysing all guest transactions – a process known as full folio storage – allowing accurate profiles of different types of guests’ spending patterns to be established. This information can be used in planning and implementing precisely targeted direct marketing campaigns.

Hotel companies are also consolidating this data on a chain-wide basis to gain further details about operations. Hilton Corporation’s OnQ system integrates property-level PMSs, yield management systems and accounting systems into a chain-wide database that improves performance by providing the company with an accurate picture of how it is performing.

Every transaction that happens anywhere in the company is immediately reflected in the centralised system, allowing managers to quickly adapt to changing market conditions. It is this responsiveness, coupled with the accuracy of its marketing campaigns, which will give Hilton a powerful competitive advantage over other hotel companies in the future.

Although full, seamless integration is some way off, it is a goal worth working towards, because it will not only eventually reduce IT implementation costs and enhance system reliability, but also pave the way to greatly improved data management.