While we wait for things to slowly return to normal, we’re glad we were able to return to ITB this year, even if in virtual form. This year’s conference had some inspiring and interesting discussions covering numerous topics. We were especially excited for our Chief Architect, Michael Heinze to speak on a panel discussion about, “The Modern Hotel Technology Stack.” Joining Michael were Iris Steinmetz, Senior Director of Operations EMEA at HRS (Hospitality & Retail Systems), Henrik Steen, Director of Software Engineering at Cloudbeds, and Timo Kettern, Corporate Director of IT at Bierwirth & Kluth, hosted by Lea Jordan, Co-Founder of techtalk.travel.
Some of the subjects covered included the challenges with designing a modern hotel technology stack, how COVID-19 has influenced this, how (and if) to integrate cloud and legacy solutions, integrations in general, what a future-proof tech stack could look like, and much more.
Lea Jordan, Co-Founder, techtalk.travel: Should hotels have an above-property level data strategy, then translated down to properties?
Timo Kettern: Absolutely, yes. For ease of use and ease of deployment and scalability, going above property is the right decision. I want a centralized model. It’s a lot easier than if I’m on property. However, it also becomes more challenging because, in more jurisdictions where a hotel operation is happening, you need to ensure that your above-property system can handle all of those jurisdictions and languages.
Lea: Henrik, you were very passionate about the topic of cloud rights. What’s the role of cloud technology within setting up our modern hotel technology stack?
Henrik Steen: I think the whole world has gone cloud in the past 20 years. Hotel systems are going to end up going that way, too, for a long list of reasons. The main thing that those cloud systems do is the interoperable matches you’re talking about. On the integration with proprietary hotel systems you have to deal with, integration is becoming a bigger and bigger part of the game.
What we’re looking at as a company is trying to say, “Okay, we have all these integrations that we have to deal with including from all our own distinct systems, on different payment methods, all the other things we need to deal with, and the external systems we need to do is hide that from the user.”
Our job is to try and simplify that because it’s an increasingly complex base. It’s like looking at the insides of building your own car. We’re trying to give you a steering wheel and gas pedal where you don’t have to worry about the carburetor.
Lea: Let’s go to the cloud. But is it as easy?
Iris: On going to the cloud, I think we all agree that this is the way it will go. But, the steps to get there depend on various possibilities. We have certain areas where infrastructure is not good enough and the internet is not good enough to actually allow for this. I am just working with a customer in Pakistan who is super interested in going to the cloud, but it’s just impossible as they sometimes don’t have any form of communication for five days.
But, the other aspect is certainly the legal requirements, the fiscal requirements, and a lot of local knowledge is required for that to stay up to date. This is something, which in my day to day, plays a large role because with the global footprint we have, we get a lot of these challenges actually.
Lea: Where is the adoption of cloud for you for the brands you work with, Timo?
Timo: What I see, with the North American brands we operate with, is they all want to shift their business to the cloud. But actually, the constraints come with the legacy systems which are there, which need to also either be migrated onto a cloud platform, or you need to find intermediate ways to make it cloud compatible. There is a clear push from the big brands to go towards the cloud. The challenge they’re having is getting their entire technology stack on there and to get all of their technology partners to go in the same direction. Some of them have hotels in 150 countries, so you need to make sure that your tech stack works in 150 countries, and under each jurisdiction. That’s a challenge for them to move to the cloud. So, the brands I think for a while will still have a hybrid model where some of the core systems will be in a cloud format, but some of the systems will be sitting in the territories, and some of the systems will remain on-property for the foreseeable future.
Lea: Is the property management system really at the heart of the tech stack? Or should it maybe be like a database, like a customer data platform?
Michael Heinze: That’s a really good question. Many hotels historically were centered around the PMS, because that’s all they knew. Everything else came later. It wasn’t intended for today’s perspective in the system. I believe the differentiation between PMS and CS, for example, will happen less and less. Likewise, for the guest profile. Still today, there are so many systems and every system requires guest information and works with a specific subset of all the profile data. So, it’s really challenging.
If you centralize your hotel information center on one cloud-based system that provides corporate services, distribution services, marketing and other tasks you want to do, that will help the whole tech stack, especially if you’re operating in multiple countries, perhaps even on multiple continents.
And I believe this is looking different from organization to organization because that’s actually not the technology. That’s a human problem most of the time, and you need to work with those humans to actually get them on board, and take those steps forward. Whether that’s in Pakistan or in the Caribbean, we all have those extra corner cases. But, if you want to move away and move forward, you need to focus on energy that can be inclusive of all those special cases, that’s the challenge. And that’s where mentors like us that have international experience can come in and provide an approach to actually move the organization forward.
Lea: Right. And Henrik, I know that your leadership team at CloudBeds is very vocal about the fact that they think the term “property management system” is outdated. What’s the vision?
Henrik: It’s just one facet of the things we need to do for the hotel. We have the Property Management Systems, integration with all the internet booking agencies, and all the other parts of the system. The way we are headed is very much expanding on those integrations so that it feels like one system. You have one system interacting with others. In that system, you have an overview of the identity of the customer everywhere, without making it so you have to interact with different systems with different UIs all the time.
Lea: Timo, what do you see as the potential in collaboration between departments?
Timo: The crisis over the last two years obviously had a huge financial impact on us hotel operators. Tech stacks come with a cost and that tech stack currently is more or less fixed. It’s based on the number of bedrooms for example or the number of outlets you have.
It would be helpful to move into a scenario where the hotelier would then be charged by occupied, rather than by available. So, that would make the tech stack become more a variable cost dependent on the occupancy. The benefit for the vendor is, we are doing really well and are very successful using the technology stack from one of the vendors, and then they are also getting more revenue. So, I’m looking forward to a business model where the hotelier is being charged on occupied or per used function of specific technical technology items.
Iris: I see it, as well, from a technology point of view. And you always have to make a certain investment to harvest the fruits. To look to combine both of these goals will be challenging, not impossible, but challenging to satisfy the need of both. In a hospitality environment, we have to become more flexible when it comes to contracting.
Lea: Call to action to the audience how they can improve their own tech stack.
Iris: Sure, I think we should not forget the objective of why you would want to change your tech. Second, I think in the end, we’re in hospitality, this is always about the guest experience. And if you think on how to achieve that, then there are various items, which we discussed today playing into how easily the staff can deal with the software. So, the more time they can spend with the guests, for example, the better. On the other hand, if you don’t have the interoperability of the different tools you’re using, you will not have proper data. And if you don’t have proper data, again, you’re lacking on some part of the picture, which will hamper you in providing the right guest experience.
So, in the end, when you build up your tech stack, when you try to improve on your tech stack, think of the data and all the data flows because that will give you the transparency you need to service your guests.Iris steinmetz, Senior Director of Operations Emea at hrs
Henrik: I would say extending the guest experience is probably one of the new frontiers as well. You know, 90% of the world’s population has a cell phone right now. Extending that in everything from messaging, your both pre and post-stay interaction with a guest, I think is going to be one of the new frontiers in what we’re all doing.