Why Aren't Hotels Quicker to Adopt Innovative Technology?

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March 28, 2014
Technology | Innovations
Jon Inge - jon@joninge.com

It’s a truism accepted by many that the hospitality industry is legendarily slow to adopt new technology, and that we lag behind many others in introducing innovations to streamline our operations and run more efficiently.

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It’s a truism accepted by many that the hospitality industry is legendarily slow to adopt new technology, and that we lag behind many others in introducing innovations to streamline our operations and run more efficiently.

I’m not sure this is entirely true; there are many examples where we’ve been ahead of the game. You could reserve a hotel room online before the airlines allowed airfare bookings, and we were certainly quick to try check-in kiosks after the airlines led the way. Further, consultants who cover industries outside hospitality tell sadly familiar tales of most companies being reluctant to replace their systems until smoke starts coming out of them.

Nevertheless, there’s no denying that the significant installed base of older technology, both hardware and software, remains a major obstacle to more effective hotel management. It may be unreliable, vulnerable and incapable of interacting with other systems, but as long as it’s adequate, hoteliers see little incentive to replace it. Even if a piece of hardware breaks and must be replaced, there’s often more concern about whether the obsolete utilities required to run the old software can be found and installed on the new hardware than on taking advantage of newer approaches.

Some suggest that this represents an opportunity to come up with a gadget to link these obsolete systems with newer ones to bring them into a more integrated operation, but I believe this would just perpetuate the problems. There would still be a data mismatch between old and new, and the support challenges of the old technology would only get worse. It is better by far to lead by example, to identify those hoteliers who use modern technology to bring quantifiable benefits to their operations, and leverage their knowledge to encourage other owners to replace their obsolete boat anchors.

There are three problems with this; there aren’t many of these tech-savvy hoteliers, the owner/manager/franchisor complex in the U.S. continues to make it hard to achieve consensus on CapEx priorities, and by releasing inadequately tested technology, we keep burning those who have the courage to dive into new approaches.

For as long as I’ve been in this industry there have been a relatively few hotel managers who really get technology, who know how to use it and know what numbers to monitor to ensure above average results.  Many more feel that their priority should be on maintaining an appealing property and good guest relationships. These are fundamentally important, of course, but both guest appeal and good service increasingly rely on technology, and failing to keep up must inevitably lead to a fall in ratings. 

The CapEx priority debates among the owner/manager/franchisor complex have been discussed many times. Owners feel frustrated at franchisor requirements that change before they’ve had a chance to amortize the previous ones, even though these are usually driven by guest feedback, not by whimsy. It’s a constant challenge to balance the maintenance of guestroom and public space appearances with keeping the staff’s technology up to date enough for them to function efficiently. Throw in the ever-present possibility of the management company recommending a change of brand, and the consequent disruption to technology and guestroom standards, and it’s no surprise that technology upgrades are approached warily, if at all. Owner-operators have far more freedom to act; this is one reason that the significant operational and financial benefits of all-in-one hospitality ERP systems are more commonly realized outside the United States, where owner-operator chains are more prevalent. 

We can probably generate some improvement through continuing to increase interoperability between systems, thereby reducing the impact of brand transitions by making the modules closer to plug-and-play (we won’t ever get there completely), but this still doesn’t address the installed base. We need a stronger interest in improving efficiency; waiting out the recession by our fingertips until business picks up again and we don’t have to think about it anymore isn’t exactly a shining business model.

Then there’s the way we actually bring new technology to market. Improvements to established systems tend to be incremental, usually user-driven through enhancement requests.  More radical innovations are much more likely to come from people who haven’t previously been associated with hotel tech, as witness the fresh user interfaces of PAR Springer-Miller’s ATRIO® system and Agilysys’ next-generation GMS (still in development), or new approaches to guestroom lock systems such as y!kes. It would be fascinating to put the problems in front of a bunch of bright Millennials with no prior hotel experience and see what they come up with, or to crowdsource potential solutions along the lines covered in Eggers’ and Macmillan’s book, The Solution Revolution.

Nonetheless, innovation must always be carefully balanced along that fine line between the urgency of bringing something to market to start generating revenue, and releasing it before it’s ready. Hotel systems are complex, and even routine enhancement releases aren’t always tested as thoroughly as they should be; many properties prefer to delay implementation of any new release until someone else has tried it first.  Many promising new ideas fail to get initial traction at all, or turn out to be too slow or too difficult to scale, and every one that fails, burns an early adopter hotel manager who believed in it enough to put his or her reputation on the line to get it funded. We can’t afford to keep doing this.

So here’s a call to arms. 
  • Let's constantly encourage the efforts and publicize the results of those willing to maximize the use of their existing technology and to explore new innovations.
  • Let's continually remind hotel owners and managers of the money they’re leaving on the table by handicapping staff with obsolete technology.
  • Let's encourage younger developers with little experience of existing hotel technology, to come up with new approaches to our operational challenges, and younger owner/managers of “test-bed” hotels to work with them to prove out their concepts and publicize the results. How about college inns such as The Statler Hotel at Cornell, or research labs like that at ECH Lausanne?
  • Let's encourage vendors to perform more rigorous QA and scalability testing before they unleash their products on an unsuspecting public, even in beta sites. 

New ideas are great, but they’ve got to work.

Jon Inge is an independent consultant specializing in technology at the property level. He can be reached at jon@joninge.com or at (206) 546-0966.

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