Mr. Ellis

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Upping the Ante: The Evolution of Hospitality Technology In 2015

By Bernard Ellis, Vice President of Industry Strategy, Infor Hospitality

2014 has been a big year for the hospitality industry as a whole. Business is improving, and many hoteliers are seeing larger Revenue per Available Room (RevPAR) gains than they have in several years. Technology has played a critical role in the effort to grow revenue while simultaneously managing rising costs, and it will continue to be an important part of changes in the industry as we enter the new year.

Some technology trends from 2014 will persist into 2015 in a continuation of their current state, but others will shift in focus as business applications, and the mindset of hoteliers, change to examine existing processes in new and different ways. Ultimately security, the cloud, analytics and big data, and human capital management strategies will be primary focus areas for organizations looking to minimize costs and increase efficiency.

Continued Movement to the Cloud

According to a recent study, 33 percent of hotel and gaming companies are already using cloud-based applications for property and revenue management.(1) Another 35 percent intend to migrate their property management system in the next eighteen months, half of which intend to move to the cloud. Most cite cost savings, enhanced guest services, increased revenue, and improved operational efficiency as motivators for selecting cloud deployment.

These numbers prove that the cloud is no longer a "bleeding edge" route taken only by few. Its benefits have been clearly established, and many hoteliers are shifting from apprehension to recognition that this is the logical next step for their business applications. Companies are now asking how do we move to the cloud, rather than why. The most important thing for organizations taking this route to remember is that selecting the right vendor is critical to a successful cloud implementation. Choosing a solution that delivers the same in-depth, industry-specific functionality as an on-premise system while demonstrating compliance with ISO-27001 guidelines is essential to ensure that the organization's needs are met and security remains a priority.

Integration is also key because cloud-based applications cannot maximize their potential if data silos are created in the wake of their implementation. Benefits will not be fully realized unless systems are connected for automated, real-time information exchange, which also enables a holistic view of the company and allows for easy upgrades. Visibility across multiple properties is critical for better decision-making and optimization of revenue management.

Security Magnified

Often synonymous with the cloud, security will continue to be a top priority in 2015. Organizations should be sure that their systems have the ability to completely separate credit card information from transactions, ensuring that only a "token" is stored alongside other customer data. Checking with technology vendors to ensure this capability is available with new and existing systems, both on-premise and in the cloud, should be on every company's check-list in the upcoming year.

However, recognizing that not all merchants can be relied upon to properly secure data, the movement to chip-and-pin technology will reduce potential consequences of a security breach. By October of next year, American banks and credit card companies who issue chip-and-pin cards will no longer bear sole liability for fraudulent charges. Hotels and casinos are expected to invest in solutions, already commonplace in Canada, Europe and other countries, that read the chip and capture the guest's PIN for validation. Whoever chooses not to make this investment, whether the credit card issuer or the merchant, will be responsible for reimbursing any monetary losses that result from fraudulent transactions.

Combining Data and Science

The ability to not just consolidate data, but analyze it in a way that produces meaningful, actionable results should be a primary focus for hoteliers in 2015. Industry-specific business intelligence (BI) tools provide the ability to capture data from a multitude of instances, including property management and financials. Among a multitude of benefits, this creates a unified reporting structure, but most importantly, it allows managers to analyze data from a holistic viewpoint to facilitate better business decisions regarding pricing and resource optimization.

In the upcoming year, organizations will also look to advanced BI technology in connection to marketing strategies. Using this functionality to gather information about guests allows companies to target the right individual with the right offer, increasing the likelihood of response. Hoteliers should seek out vendors that provide customer relationship management (CRM) tools with real-time offer capabilities and the ability to flexibly integrate with a BI application. This combination creates a powerful technology environment that can improve response rates by analyzing guest behavior and preferences, thereby increasing sales and improving customer brand loyalty.

Organizations should continue to democratize data and analysis capabilities in 2015, as equipping more users with these tools will only serve to improve operations and guest services. The latest BI applications are user friendly, with information displayed in easily consumable dashboards, which makes information more accessible for the typical employee. Access to critical data enables faster response times and helps managers to pinpoint potential issues before they arise, facilitating a more proactive approach to business challenges.

A growing factor in the analytics conversation for 2015 is pairing science with data. Building on the industry's successful adoption of revenue management, more technology vendors are beginning to ask the question: how can scientific principles be applied to other business applications to better analyze data? This enables the entire enterprise to benefit from decision-making supported by math. The right choice is clearer because figures, based on scientific formulas, support one option over another. Hoteliers should look to vendors that are investing research and development funds in this area, as their innovations will change the face of not just BI applications, but other industry-specific systems over the next year.

A New Era for Human Resources

Cloud, security, analytics and big data are often talking points in the conversation about the future of technology. However, human resources (HR) is beginning to dominate more of the discussion as organizations evaluate how to attract the right employees and provide enhanced services to the existing workforce. A movement has begun to shift from out-of-date HR practices to HR of the future, which is grounded in automation and analytics-based decision-making. This movement will continue to gain momentum in 2015, and hoteliers should take a closer look at talent management, workforce management and human capital management applications that could impact their bottom line.

Consider who suffers the most from a bad hire. Is it the HR department? No, it is the business unit that the employee is a part of. This department is responsible for compensating for the individual's sub-par work and must waste precious time and resource filling the position again if the new hire chooses to leave. Advanced talent science technology is now available to help organizations across multiple industries, including hospitality, better select and retain talent. Talent science allows organizations to analyze behavioral traits that are often considered intangibles, such as discipline or ambition, rather than just skills or experience. With this information, hoteliers are more likely to select the right person for the job with the necessary attributes for success. Not all positions require the same type of employee. For example, front-desk workers must be outgoing and personable, but not so much so that they are inefficient in keeping the line moving. A regional manager candidate would likely benefit from strong ambition to rise above unit level, but someone with high ambition would not be happy in many line-level positions for an extensive period of time. Talent science technology allows companies to isolate the characteristics that are most critical for success in a particular position, and then assess potential applicants to find the best fit.

Relying on technology of this nature can help to reduce turnover and create a higher performing workforce. With employees who are satisfied and well-suited for their roles, hoteliers can facilitate enhanced services to guests. Increased retention also helps to save resources, as managers are not spending valuable time and money selecting and training new employees on a continuous basis.

Predictions

In 2015, it will be more important than ever for hotel and gaming companies to look to the latest technology advancements for ways to improve profitability. Asking questions such as, how can we take advantage of an automated environment to minimize costs, or what can we do to further increase efficiency, are critical in formulating effective business strategies. Hoteliers should closely examine how the technologies outlined here can be implemented in the back office to help boost productivity and enable faster, better informed decision-making. Those who remain on the technological forefront will be poised for the greatest success as we enter the new year.

References:

(1). Hospitality Technology Lodging Technology Study, 2014

Bernard Ellis, Vice President of Industry Strategy for Infor Hospitality is responsible for defining the global go-to-market strategy for the entire Infor solution suite for the hospitality, travel, and leisure industry vertical. In addition to general product positioning, brand messaging, and industry relations, Mr. Ellis directly oversees product management of Infor’s hospitality-specific PMS, RMS, and POS industry applications, and pursues their tight integration with Infor’s world-class solutions.. Mr. Ellis also guides these other solution groups on the “last mile” functionality required to achieve specialized hospitality editions that outperform best-of-breed industry solutions, yet are still cost-effective to implement. With his launch of Infor CloudSuite™ Hospitality in 2014, Mr. Ellis marked over 15 years of evangelizing SaaS solutions. Mr. Ellis can be contacted at 202-232-3839 or bernard.ellis@infor.com Extended Bio...

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