Italian Technology Update: In Technology We Trust

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October 01, 2013
International Update
Danilo Molaschi

Italy is the No. 1 ranked European market in terms of guestrooms offered and ranked No. 4 in the world after the United States, China and Japan. Italians are clever people (think Ferrari, Armani, Missoni, to name a few), but,on the other hand, nobody can say we are first movers, otherwise Cristoforo Colombo would have gone to America with an Italian fleet, and now one-third of the world would be speaking Italian instead of Spanish.

This is, I think, a good rule of thumb to apply to my country to understand its dynamics and philosophy. If you apply this rule to the Italian hospitality market, you will find 97 percent of hotels are independent and a general trend is to wait, and see what happens to the next door neighbor before starting to think about making a change. Technologies in Italian hotels are generally not well developed and acquainted, probably because if the competitor on the other side of the street is struggling this could be a sufficient excuse both to be satisfied and not to make a move.

Being in the market for more than 10 years and representing many companies that develop business for technology products and services in hotels, generally speaking, we presume the current situation and the potential trends within the next couple of years. What I am going to write is not a rule: and we would welcome exceptions.

Business hotels have old fashioned Wi-Fi networks, with service still very often managed by a third-party provider who owns the equipment and demands high prices from guests [in some cases you can find rates of around 20 Euros (approximately $26 U.S.) per 24 hours connection]. On the other hand, many hotels, tired of this restrictions (in the revenue share model, the provider decides the price list unilaterally), have fully turned to self-managed networks, but did not make the intelligent step to exploit the advantages of being independent in pricing and supported by the right expertise of outsourcing at the same time.

Leisure hotels, in many cases, still consider Wi-Fi as a gift to guests and expect guests will not complain about poor service because it is free. They still think that Internet access is only used by professionals to exchange emails from a PC. It is true that Italians still prefer to use smartphones for speech rather than surfing the Web, but statistics say that 50 percent of guests are foreigners and on average carry 2.5 devices connected per occupied room.

Another big technological issue in the country of spaghetti and the mandolin (I have hardly ever seen a mandolin played in my entire life!) concerns PMS and the use of a channel manager.

Don’t forget my preamble and add a bit of “hope in providence” and you can understand why Italian hotels are principally hostages of the big boys (Fidelio, Protel) or of homemade plug-and-pray systems developed by self-styled engineers or captains of one-man companies that can arrange every kind of system and solution for you. Still in my day-to-day experience, I can say that the most widely seen channel manager is still the old affordable system: a general manager plus the room manager who, in his or her spare time will try to maintain a touch of rate parity among websites, and reduce the impact of Booking.com that frequently represents 70 percent to 90 percent of all online reservations.

Quite often the strategic role of revenue management is given to a long-term employee who started working at the front desk or the role is given to the cousin of the owner, when not to the owner himself.

I admit I have been a bit severe with my countrymen, half in joke, half in earnest. I would say that Italian hoteliers have to accept that people expect high standards from our hotels: we are an important country for business and a beautiful place to visit, but “that’s amore” is not enough to bring people here. To be competitive in the age of globalization and fierce competition and with the millennials soon becoming the main target segment both for business and leisure, we need a refresh, in terms of tools and professionalism. The hotel of the 21st century looks more like an enterprise than a big corner shop.

Danilo Molaschi is a new contributor to Hospitality Upgrade providing insight to the hospitality business in Europe and specifically Italy.

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