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Evolving, Hollywood Style

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October 15, 2015
Technology Musings
Michael Schubach - Michaelschubach@me.com

Remember Jeff Goldblum in the original Jurassic Park?  Funny, quirky, almost-eaten Jeff Goldblum?  Do you remember his quintessential “butterfly effect” example of Chaos Theory to explain the impact of unforeseen circumstances on complex systems?  “A butterfly can flap its wings in Beijing and in Central Park you get rain instead of sunshine.”  The serious mistake of not considering all possible outcomes – or, more accurately, not being able to even conceive of them – was his very good reason for not resurrecting dinosaurs.

We in hospitality technology are not in the business of resurrecting dinosaurs; we’re attempting to eradicate them. And what is newer and better and more environmentally adaptable than a dinosaur? Our answer is a cloud-based implementation. New cloud-delivered species would earn Darwin’s blessing and approval: the younger breed has the strength and agility to displace the weakness and lethargy of the aged. But we are in danger of forgetting Jeff’s chaotic golden rule: where there’s life – especially new life – there are unintended consequences. Now that life has situated itself above premise, we see that Jeff wasn’t wrong.

The parts are the new whole. There was a time that property automation could be thought of as a singularity. Early property management systems grouped inventory, sales, housekeeping/maintenance and accounts receivable into a convenient whole that helped justify the then massive cost of electronic automation.  Eager vendors – myself in their legion – added allied functionality to help move those mountains. It seems almost unimaginable today but available options then included integrated sales and catering, on-board yield (revenue) management, telephone call accounting, spa scheduling, golf tee times, integrated point of sale and inventory management. Those were comprehensive modules, not lightweight or half-hearted alternatives for small and simple operations.

But the world has evolved differently; what used to be an optional module is now its own world of depth, complexity and dimension. Customers serve themselves, service and product choices earn points, trigger new offers, launch fulfillment systems and, for good measure, the expended inventory reorders itself.  Each facet requires its own – or several – specialized application(s). We no longer buy a system but rather assemble one onsite.  A reservations module, never a simple thing, has evolved into its own ecosystem comprised of inventory, availability, rate, revenue and channel management. Housekeeping and maintenance, traditional PMS staples, are frequently spun off into service optimization (aka rapid response) systems. The PMS core itself is boiling down into guest accounting: posting and auditing, billing and settlement. Applications that used to be layers of the PMS cake are now their own separate cupcakes, torts and pastries, and we serve them up by the dozens.
The unintended consequence: interoperation is the new job No. 1.  The PMS data repository is no longer a destination, but a simpler stop along the information superhighway. Do you recall the days when elementary schools issued grades in citizenship?  To earn an A you didn’t have to have a working understanding of the constitution, you merely had to play well with others. We are more dependent than ever on an era of good system citizenship; whom you know is just as important as what you can do. Good citizenship inspires you to get to know many different vendors and look carefully at overlapping offers; there are many new and different paths to fulfillment.

Small but mighty can sometimes seem just mighty small. As newly engineered applications rise above premise – and here I am thinking of property management systems in particular, but it can be true of any next-generation effort – they are born small.  Being pint-sized is an asset when it denotes a lack of useless flab but it can be a liability when it suggests that an app lacks heft, strength and muscle mass.  To borrow another movie analogy, it’s like Superman’s arrival on planet Earth. Sure, as an infant he could lift the occasional sports car, but take a second look at that outfit he was wearing. Those weren’t superhero’s tights – they were diapers.  It is sometimes difficult to appreciate the merits of precocious prodigies – they’re smart enough but they lack gravitas, experience and operational insight… and they can try the patience of even a proud parent.
The unintended consequence: buyer’s remorse can set in much more quickly than before. Today’s savvier system user has a shorter attention span and a lower tolerance for the half-baked.  Even when adopting cloud-based technology is the justification for the purchase, simply modernizing the platform isn’t enough.  It can be an uphill battle to convince your users that their new, state-of-the-art system is an improvement if it does less than its predecessor did. 

“Easy come” also means “easy go.” One of the big draws for adopting the cloud paradigm is the ability to step away from the local, equipment-intensive environments in favor of remote hosting facilities that are available through flexible subscription plans. Gone is the large upfront investment, and as a result, also gone is the due diligence effort that most buyers forced upon themselves before they invested substantial sums into a system solution. 

The unintended consequence: the upfront financial and psychological commitment to the solution no longer exists. Vendors may attempt to counteract the buyer’s remorse effect by locking subscribers into longer initial terms, but it’s hard to justify “flexible subscription plans” that only benefit the supplier. 

Not unheard of are properties with systems that have been installed less than two years that are willing to start over with another solution. They are no longer attempting to recoup an investment or having to justify maintaining an insufficiently amortized asset. In the new world, buyers are simply swapping out one inadequate link in their supply chain.  Reimagining property automation as smaller, discrete component contributions to a bigger data jigsaw puzzle has resulted in a marketplace full of hot swappable parts.

Adding it all up, Jeff was right: we didn’t – or maybe couldn’t – have seen this coming.  In this new reality, ultra-complex business requirements force us away from monolithic solutions, despite the options and variations they offer. In this new reality, a property doesn’t own technology, it rents a solution. And from the vendor perspective, the vendor doesn’t own a property’s allegiance for a predictable seven to 10-year stretch.  Even with mandatory minimum terms, properties are less tethered to their solutions and more willing and likely to swap out component parts as their needs evolve.

Vendors, be warned: customers may cite inadequate training, incomplete configuration, unresponsive service or anything else, but in the subscription world, it doesn’t matter anymore.  In a highly interchangeable environment, good-bye is the unintended consequence of an ill-considered hello. 

Michael Schubach is a regular contributor to Hospitality Upgrade and can be reached at Michaelschubach@me.com.  

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