Contributed by Estella Hale, Chief Product Evangelist, SHR
Dealing with your hotel’s technology continues to be a challenge for the majority of hoteliers. Each year, there are more choices to be mastered, all promising better experiences for you and your guests. Not surprisingly, the buying process for hotel tech is getting more complex.This is why we decided to sit down with two of the savviest tech buying pros in our industry today and pick their brains on the subject. Chuck Valentino, veteran hotelier and Vice President of Operations for Vagabond Inn, and Jordan Hollander, Co-founder of Hotel Tech Report, a premier global research platform for hotel technology. Together, they helped us uncover what shopping for hotel tech has become, where it’s going, and what hoteliers can do to turn it back to their advantage.
Is the current buying process working?
To know where you’re going, you have to be able to honestly assess where you are. And for hoteliers and their tech, that can be tricky. “It’s so convoluted, and every vendor claims to be ‘the best,’” said Jordan. “A lot of the buying is still going on based on who’s biggest, but now there’s more to consider, and lots of smaller companies have become great choices,” he said. “The other big thing is that most hoteliers don’t realize until two years into a tech contract that they may have made a mistake.”
Jordan related an interesting situation to illustrate this. “We do a lot of work with management companies to identify exactly what they need. We had a large company with 5-7 hotels, $50-70MM, that was looking for a new PMS with a focus on integrations. We asked them about integration fees in the proposed contract they were about to sign. They said there weren’t any,” he explained. “But when we looked at the proposal, there were actually $250,000 in fees over a three-year contract! There are often hidden costs unless you know how to ask the right questions up front. There’s a real lack of opacity.”
From Chuck’s POV, hindsight is now foresight. “The devil really is in the details, and we’ve made some bad decisions in the long past. Now we know that it’s the ‘soft costs’ that people miss, like being on hold with customer service forever,” he said. “Support is something that often gets put aside and forgotten about. My biggest decision on purchasing is in time and downtime. No one absorbs that except me -- the hotel business itself.”
What about the erosion of the hotel-guest connection at the hands of channels?
It’s difficult to get vendors to be in the middle of solving problems, so I feel that a huge secondary consequence, another soft cost, is a disconnection from the guest. For instance, out of frustration and fear, hoteliers can tend to give too much weight to what seems stable -- static channels -- rather than real vendor partnerships. This can then tip the scales in favor of the OTAs and take away from direct bookings. Chuck agreed. “Most of the hotel tech systems don’t share well with the hoteliers through this new world order of connections that don’t allow the hotel to engage directly to the guest,” he said. “Our desire to bring as much revenue as possible can blind us all to the real cost of where that revenue is coming from, and what the long-term affect may be.”
What are the biggest mistakes being made now that we should avoid?
According to Jordan, the biggest mistake right now is overconfidence coupled with a lack of information. “What we know is that hoteliers want more info, but just don’t have the time to do the right research. So, they come to our site and just pick the first two products they see. That’s not the best way to go,” he explained. “Hotels need to slow down and know what they are looking for and know what to ask to get through the noise of all the vendor claims out there. At Hotel Tech Report, we try to be a transparent, unbiased third party and help remedy this issue.”
Of course, it’s human nature to be very uncomfortable accepting that you don’t know everything. We all want to show that we are the experts in an area when our boss has assigned us the job of figuring it out. “We did a complete rehash at Vagabond and started from scratch,” Chuck explained. “But most places are not going to do that. They pick a PMS, for instance, and it has two booking engines, and they just go with one of those two, which can seem safe, but in reality, is very limiting."
What do you feel is the next big tech trend for hotels, and what is overblown?
Jordan thinks one of the next big things will be email marketing and CRM. “Revinate, for instance, just launched something that makes email marketing super simple for hotels, helping them get better at marketing over all,” he said. “Overblown to me would be anything that doesn’t impact your real operational efficiency.” Chuck feels that the next great thing is going to be the growing integrations between the CRM, CRS, and PMS. “Maybe we even see that ultimate PMS that drives the CRM. That’s very exciting, because trying to achieve that one to one guest relationship is what it’s all about,” he said. “I feel that we need to use our tech to reach out to the guest on a new level. It’s always, always about engagement.”
What should you do (and not do) today to make better decisions tomorrow?
First of all, you need to think about taking a look at your technology, and make sure it fits your future needs, and if it doesn’t, you need to be open to making some changes. For instance, having a solid RFP process, and asking the right questions can make a world of difference in whether you end up with what you really need, or just what was available at the time. “What we want to do on our site is show hoteliers what vendor can fit their needs,” Jordan said. “You don’t want to put a band aid on a broken arm, so if your PMS is not flexible, we are here to help you find one that is.” Chuck added the issue of duplication of tech features. “Don’t do things in a rush, because before you know it, you’ll have systems that are duplicating each other and wasting time, money, and effort.”
I think hoteliers also need to remember not to rely simply on vendors for information. There is a big world out there, with peers and colleagues who can help give real, holistic views on a particular tech. Do not be shy about reaching out. Use peer reviews and sites like Hotel Tech Report -- basically keep your eyes and ears open. Is your vendor listening to you? Hold them accountable BEFORE you sign any contracts. “Don’t go to the hotel tech supermarket when you’re hungry,” Jordan said. “Be prepared to ask the right questions, take your time, and know your tactics and prioritize them when you have time as a team to reflect on your business goals, THEN start your due diligence and vendor research.”
Agreed. While today is exciting, it only makes sense to take your time and ask the right questions so you’ll be prepared for whatever tomorrow brings to your guests and your hotel business. Remember, read that fine print, don’t jump in too early, but also don’t be afraid to jump in when you feel the time is right -- for YOU and your hotel business.
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