Change Is in the Air – Dispatch from Berlin

By , Chief Evangelist & Development Officer

 

Hospitality leaders gather and agree—technology is the key to survival

  • Breaking down data silos
  • Transforming the traditional hotel tech stack
  • The personalization of technology

Every year, in early March, while most people are shaking off the effects of winter, 10,000 exhibitors from over 180 countries gather in Berlin for ITB, the world’s largest tourism and travel trade show. At ITB and its surrounding industry events, like the International Hotel Investment Forum (IHIF), more than 100,000 trade visitors showcase their destinations, negotiate deals, launch brands or products and discuss the state of the global tourism industry.

A typical ITB and IHIF experience for me is spent discussing the future of the industry with a wide variety of recognized industry experts: hotel CEOs, founders of travel tech startups, consultants, heads of pricing and revenue management and a number of innovators looking to disrupt the industry. It is fascinating to hear these movers and shakers talk about how they see the future and how they plan to make it their own.

This year, several themes emerged from my conversations and the multiple panels I moderated or participated in:

  1. In order to remain relevant, hotels must commit to technology investment as a key strategic pillar.
  2. To realize the potential of hotel investments, and make them actionable, data silos must be broken down through the rapid adoption of cloud-based solutions.
  3. We are seeing the merger of traditional hotel technologies (PMS, CRS, CRM) move toward a hotel management system stack (in many cases sitting on marketplaces).
  4. Once data is in place and technology silos are removed, personalization of the guest experience will accelerate, and as a result, the way people shop and book will dramatically change.

Let’s dive further into these themes:

  1. Making technology a key strategic pillar:

At IHIF, the CEOs of Wyndham, IHG, Hilton, Accor and Choice discussed at length whether they should be considered a technology company (as Choice Hotel International CEO Patrick Pacious stated) or a hotel company (as Accor CEO Sebastien Bazin vehemently argued). Times sure have changed.

Forced to act by billions of dollars spent by OTAs on technology (including “in-stay technology” investments) and ever-increasing consumer expectations, the large brands have accepted that it is time to replace their often 50-year-old legacy systems. Everyone agreed that without significant investment in technology, they will not remain relevant. They all have put in motion significant tech infrastructure projects to ensure they are in it for the long haul.

  1. Breaking down data silos:

During an IHIF panel, we all agreed that the industry is going through a significant transformation as to where data is stored and how it is being used. Cloud-based technology has been around for about 15 years (IDeaS has been “in the cloud” since 2004), but as with many things, it has taken the hotel industry a while to accept the benefits of adopting a “cloud first” strategy.

Most recently, in the last earnings call, IHG announced their Concerto central reservation platform, developed in partnership with Amadeus, will enable IHG to consolidate data in one place and enable dramatically new guest experiences. Additionally, an increasing number of data sources are becoming more easily accessible, including customer demographics and related (non-hotel) shopping behavior to predict future hotel bookings.

All major hotels are on a similar path, and it is safe to say that technology providers, startups and the most forward-looking hotel companies see the move to cloud as critical to their success.

  1. Merging and the transformation of the traditional hotel tech stack:

With the adoption of cloud-based technology, the traditional hotel technology stack (PMS, CRS, CRM, Channel Manager, etc.) is being transformed. Leading a panel and a closed-door discussion with IDeaS’ technology partners at ITB, everyone agreed that integrated, cloud-based hotel management platforms with task-specific “apps” (i.e., for check-in, check-out, reservations) are not only easier (and cheaper) to maintain but also allow for persona-based user experiences for both guests and hotel teams. An increasing number of marketplaces, similar to Apple’s app store, offer a new way to buy and implement core technology, especially for independent hotels.

  1. The personalization of technology:

With more data in less places and technology making it increasingly easy and efficient to transfer, clean and access the data, new capabilities to customize and personalize the guest experience are rapidly emerging. At the ITB panel on personalization, we all agreed that over the next 18 months an increasing number of capabilities will provide the early adopters in the industry exciting new ways and unparalleled flexibility to attract and retain guests. Anticipating guest needs (i.e., through combination of historical loyalty data, customer demographics and intent to buy), changing the shopping process to be experience led versus product led and offering customer-choice based shopping experiences (similar to a shopping cart on Amazon) are some of the innovative concepts taking hold.

The industry has focused on technology as one key area to create differentiation and competitive advantage. At IDeaS, we are there right with them, helping to shape the future of hospitality and travel. To say there were impactful ideas exchanged in Berlin last week would be a great understatement.

Klaus Kohlmayr
Chief Evangelist & Development Officer

Klaus began his experience in the hotel industry while studying at the Hotel Management and Catering School in Austria. He also studied business at Henley Management College, real estate investment and asset management at Cornell, and finance and strategy at the Singapore Management University. Klaus participates in various advisory boards, including HSMAI in the Asia Pacific and the Americas and the Cornell-Nanyang Institute of Hospitality Management in Singapore.

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