By: Jason Q. Freed
We are in what can undoubtedly be called hospitality technology’s golden age.
For decades, hotels have lagged industries such as airlines, retail and banking in adopting more efficient and innovative technology solutions. It didn’t help that, as the internet was turning industries upside down, OTAs beat hotels to the punch and convinced them to hand over the keys to their inventory at steep mark-ups.
But one could argue that OTAs have had their heyday and the end of their incredible run is in sight. The top hotel brands have fought back admirably and regained share of bookings, and there is more help for independents than ever before. With distribution strategies somewhat in check, hoteliers can turn their focus to adopting more integrated, cloud-based solutions that automate repetitive tasks and create more efficient workflows.
There is such a massive opportunity to disrupt an industry running on mostly outdated, legacy software that there are, in fact, too many start-ups throwing their hat into the ring. Hotels are still moving many processes from paper to digital, and it can seem like there is an individual solution for nearly each step along the way.
Because of this, engineers and data scientists are in the highest demand. New entrants have slick functionality and promise double-digit revenue increases, but integrating into fragmented and backward systems to share data and files requires an incredible amount of engineering muscle power.
This leaves many of the traditional solutions providers in fact grappling with their identity and focus: Are we a software company or a hospitality company?
There are benefits to thinking software first. Companies can broaden their reach to serve multiple verticals and can attract highly talented engineers specialized in using data analysis to tackle challenges.
But too many solutions providers have run into trouble by not understanding the market they’re building for and the complex challenges their product users face. Many find that simply working with perishable inventory is an insurmountable obstacle in itself.
Perhaps the solution is not unlike most other situations in that it lies somewhere in the middle. Building solutions that will push the hospitality industry forward requires a deep understanding of both guest-facing and back-end processes as well as how to build analytics-driven platforms at scale.
In 1998, when longtime friends Rod Jimenez and Jim Whitney joined forces at Webvertising, one of the first companies to think of the Web as the new GDS, neither of them even knew what a Central Reservation System was. Jimenez was a banker who had worked with hotels and knew Whitney, who had built one of the first-ever “websites” for his research laboratory at NASA.
Webvertising eventually became iHotelier, which — long-story-short — was sold to TravelClick in 2003. At the time, TravelClick was “STR for the GDS,” slicing and dicing GDS bookings data and converting it into reports. Since, TravelClick has added several other data-driven technology solutions and was acquired by Amadeus in 2018. Jimenez says the CRS products available didn’t change much from 2003 to 2010.
“When my non-compete came to an end in 2008, I started hearing from clients that we should look at the CRS market again because there hadn’t been much innovation,” he says. “We were bullish because clients were telling us they were dissatisfied.”
Jimenez and the majority of the original crew teamed again in 2009 to launch Windsurfer CRS and soon after, in 2012, merged with Sceptre to form SHR. Over the past eight years, SHR grew quickly by taking a David vs. Goliath approach, providing low-touch solutions for independents and small brands. Years later, after Amadeus acquired TravelClick and Sabre began swallowing many of its competitors, Jimenez knew it was time to expand beyond CRS and introduce complementary products that would not only assist in bookings and distribution but give hoteliers a more complete view of the guest and use the combined data to increase revenue.
Therefore, in October 2019, SHR launched Wave, a highly automated and low-touch revenue management solution, and just this month launched Maverick, an in-house Customer Relationship Management tool that ingests guest data from both the CRS and third-party distribution partners.
The crux is that, for the first time, a CRS, CRM and RMS have been built with all the interfaces in place from scratch. There are hurdles and challenges ahead, and much more development to be done, but the possibilities to change the way data powers the entire guest booking experience is not lost on Jimenez.
“We have a vision of creating a datalake and transfer layer that allows us to extract data from all the systems, apply machine learning and let the systems optimize the message at the individual guest level, including when the guest first hits the booking engine,” he says.
It’s a lofty goal, but with deep data engineering experience and thorough understanding of the hospitality tech stack, SHR is in a prime position to deliver a more personalized booking experience while securing hotels’ optimal rates.
Summary: With the incredible innovations around data science and machine learning, many hospitality solutions providers are grappling with whether they are a software company or a hospitality company.