Hospitality Industry: Tech Implementation

The Hotel Industry’s Race to Escape the Dinosaur Age

Comments and Insights:

There are many difficulties with technology implementation in the hospitality industry. Often, as a result of these difficulties hotels, in particular, are left behind the curve.

According to the article, “many companies have made it a philosophy not to be the leader on the tech side” and “large hotel chains tend to conduct major [technology overhauls] just once every seven years.” The hope is that by adopting technology later, companies will avoid having to deal with the bugs and flaws that come along with brand new technology. However, as it turns out, due to the constant evolving state of technology bumps and flaws in design become apparent at all stages of the life of various technologies.

For example, when the room keycard was introduced, it quickly replaced the traditional key-and-lock set of traditional homes. However, after some time hotels figured out that these keycards can become demagnetized—something the industry still faces today. The quick evolution of the television is another example. Consumers typically have a better TV at home than they experience within a hotel room. This is due to the fact that hotel televisions are still largely the same as the ones implemented in 2007.

In conclusion, technology can be part of the getaway experience guests have at hotels, but due to the widely accepted “wait and see” approach the industry is currently pursuing, consumers are often left feeling as if they have to bring their own technology and put up with the minimal technology provided in hotel rooms and suites.

Property Management Systems: Atrio

Moonstone Hotels Selects ATRIO(R) PMS For Their Entire Five Property Collection

Insights and Discussion:

Atrio® is an app based PMS system that is completely hosted on the cloud. The program is built for the way most of us approach new technology. Many of us, especially those entering the hospitality business as young professionals, learn technology by simply looking at it. By this I mean that we expect technology and applications to be self-explanatory. It is an “I want to do X so I will click on X” mindset.

Atrio® is set up so that a new user can use this approach to learn the basic functions of the system. Par Springer-Miller, the parent company, states that an individual will be able to check a guest in to a hotel room with zero training and should be able to make a reservation after only being shown one time! This significantly reduces training costs and time.

In addition, the completely cloud based system minimizes on-site technology and therefore reducing implementation costs and hardware/software investments as well as allowing for seamless updates.

After reading the article, I viewed a YouTube video posted by Par Springer-Miller here: https://www.youtube.com/watch?v=JtqtxN2SBJY. I must say, I wish my property would look into Atrio®!

 

 

2014 Business Travel Survey: GDS Booking Volumes Still Rising

Insights and Commentary:

All of the big three global distribution systems were still expanding as well as increasing productivity and revenue as of June 2014. Amadeus, Sabre and Travelport have each made significant moves in the hospitality industry, although primarily for airlines.

Amadeus is by far the largest and currently most successful GDS with the highest profit, booking volume, and market share (air travel). As of 2014 Southwest Airlines was their biggest client, but they provide GDS services and access to over 100 other airlines as well.

Sabre is second best to Amadeus. The company elected to go public in 2014 and since then their billable bookings, booking share and growth have all increased modestly. During the same year they gained American Airlines, newly reformed at the time, as a client. Presently, the company expects continued improvement in revenue.

Travelport has made the decision not to compete directly with Amadeus or Sabre in that they have chosen not to provide “full passenger services systems to airline on a multi-host basis.” However the company is still working closely with Delta Airlines and researching “add-on” features with their main focus being the continued growth of “beyond air” activities.

Honestly, I was shocked that Amadeus is the largest and most successful GDS. I truly expected it to be Sabre. This belief was based on what I have personally experienced: every OTA I have used required a link to the Sabre GDS, but I can only recall one that required one to the Amadeus GDS. After reading the chapter 8 of D.V. Tesone’s “Hospitality Information Systems and E-Commerce, along with a few research reports I have changed my paradigm.

Regardless, GDSs are still used widely in the hospitality industry. Different segments of the market prefer to book in different ways: via offline Travel Agents, OTAs, hotel websites or on the phone. Those that use either form of TA are using a GDS.

Leisure guests tend to book for themselves with rare exceptions including some forms of international travel and cruise travel. These guests use OTAs or intermediaries such as Travelocity (Owned by a GDS company) or TravelZoo. In the case of TravelZoo, a guest uses the TravelZoo website to access information such as availability and pricing that TravelZoo pulls from a GDS before making a selection and processing a transaction.

On the other hand, business and corporate travelers are more likely to use an offline TA. An offline TA is better equipped to meet the needs of a customer whom is travelling for business. Offline TAs require less information when booking a hotel room then an OTA does, making it simple for a secretary to book the travel arrangements for the guest. In addition, offline TAs can work easily with a hotel to make special accommodations. The hotel receives contact information for the travel agency that booked the stay in case clarifications on requests are needed.

In conclusion, as long as either form of TA is in the market, a GDS will be necessary to streamline bookings and ensure that each TA has the correct pertinent information when making a booking or completing a transaction. As a result, as new OTA options or hospitality enterprises enter the market GDSs are continuing to morph, merge and grow.

Global Distribution Systems

“For the past decade, airlines have been relentless—and successfully so—in their pursuit of direct bookings.” 

1. Based on current trends, airlines (and hotels) are now competing with GDSs. Why did the airline industry adopt the original GDS system and structure?

When American Airlines and IBS created the first CRS, they believed they were creating an IT solution for their on-site agents. It wasn’t until implementation that they realized that SABRE CRS would be very valuable at the point of sale. After American Airlines success, the industry adopted the CRS model, which evolved into a GDS in the 1990s and into our current GDS configuration in 2009, in order to increase revenue, efficiency, and productivity. The system was a huge success: According to the research material the original CRS increased revenue by 400 percent, but only required a 20% increase in employment. (Productivity= Revenue/Resources = 4/.2=20% increase).

 

2. GDSs were thought to be the end of the travel agency business. What is the current role of Travel Agents and why did we still need them?

Travel Agencies provide a higher profit margin than OTAs; therefore they are of great value to organizations within the hospitality industry such as airlines and hotels. Corporate travelers have specific needs including security and risk and expense management and reporting as stated in the research material. Although businesses are concerned with price, they are willing to pay a logical fare to meet these diverse needs. As a result, many businesses rely on travel agents to make arrangements that meet these needs and to work out any details with the property or company prior to the traveler(s)’s arrival.

 

3. With increased direct bookings and restructured fees and commissions, is there a need for GDSs?

GDS is still necessary in today’s hospitality industry and will likely remain relevant for many years to come. GDS is constantly evolving and working to keep up with the ever-changing industry and consumer. As the volume and types of travel websites continue to grow and evolve and as businesses continue to focus their efforts on e-commerce, particularly B2B in the case of the GDS, goals regarding new technology and movement towards a full content GDS will be beneficial despite the risk for fragmentation. Fragmentation would make “all-in” pricing comparisons difficult for the end user, but can be successfully managed by maintaining price transparency.

Cloud Computing

“What is cloud computing? This video describes its uses and advantages.” –VoIPtutorial, YouTube

Discussion Questions:

1. What are the negatives of cloud computing?

2. With the growing reliance on the internet for daily business activities, should we start looking into internet redundancy?

Click here to see my responses and insights.

“Confused about the term “Cloud Computing”? Want to be “with the times” when you talk about new technology buzzwords? This video boils down a section of Cloud Computing, that of Cloud Infrastructure and Cloud Hosting in a way that everyone can understand!” –HighTechDad, Youtube

Discussion Questions:

1. Is cloud computing the answer to everything?

2. What are the pros and cons?

Click here to see my answers to these questions and my opinion on the video.

Do you agree or disagree with my answers? Would you answer these questions differently?