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Siegel Sez

May 10, 2019

Definitely Doug

by: Douglas Rice

Alternative PMS Realities
The property management system was the mainstay of hotel technology for several decades –a monolithic system designed to support turnkey hotel management. And given that companies like Marriott are still running a PMS built in the 1980s, we can be fairly sure that some of the newer PMS systems in place today will still exist in 2040. But in a world of increasingly open APIs and powerful enterprise service bus (ESB) platforms, does this architecture still make sense? More and more companies are betting not. And if it doesn’t, what will become of the beloved PMS?
Let’s dissect the tasks a typical PMS performs. To be sure, it keeps track of product to sell (typically rooms), including whether they are occupied or not, and their housekeeping status such as clean or dirty. It manages guest folios and prepares basic accounting entries. It checks guests in and out, and records payments. These are the core functions that other systems generally can’t do, and most PMSs perform them well.
Historically, though, PMSs have done much more – and many still do. They can manage the customer database (up to a point…transient diners or spa visitors not so much), distribution to OTAs via channel managers, email campaigns, housekeeping, point-of-sale, event and catering sales, and management of credit card authorizations, top-offs and settlements. And one of the most important functions has been managing interfaces with all the other systems used in hotels, from central reservations to telephones to WiFi to door locks and thermostats, from point-of-sale to concierge systems to digital signage. Legacy PMS vendors in particular have made a lot of their revenue from selling interfaces.
Smaller hotels may sensibly opt for the simplicity of a monolithic PMS from a single vendor, but most larger hotel groups have shifted toward best-of-breed software. Rather than a do-it-all PMS, they interface their own preferred products for applications like customer data, digital marketing, distribution, loyalty, sales/catering, point-of-sale, housekeeping, work order management, and others. Newer PMS vendors and even some major legacy players like Oracle are embracing open APIs or standards, which make this easier to do. Legacy PMS vendors in particular have protected themselves financially via interface fees, and by bundling what they consider core services into the PMS pricing whether you use it or not.
But from a technology standpoint we should ask, why are PMSs still managing interfaces? Systems architects will tell you there is much better technology for doing this: high-reliability platforms whose principal role is to manage messaging between systems. Such platforms have been in broad use for more than 20 years in high-transaction volume, physically dispersed environments like financial services and retail, so why not hospitality? Pioneers like Tibco, Microsoft Biztalk Server, and Microsoft MSMQ were launched in the 1990s. Today’s common choices include Microsoft Azure, Tibco, and Mulesoft, which are used by thousands of customers across virtually all industries.
For hotels, ESBs offer some key advantages over PMSs when it comes to managing interfaces. Your PMS can go down without killing all the other systems (major ESBs are extremely reliable). System replacements are much easier because you can mix and match old and new systems at the same time at different hotels, transitioning hotels at a manageable pace over time without major disruption. Hotels and vendors alike benefit from the ability to test an alternative system at a single hotel and simply pull it out and restore the old one if it doesn’t meet the need. Hotels can easily test disruptive technologies from unproven vendors – or even an entirely new PMS. System downtime is much less because individual components can be updated quickly without taking down the whole system (one major PMS now requires 8 hours downtime for an upgrade – not a happy situation for its cloud customers who can’t even choose when it happens!). While hotels may be able to check guests in manually, it can be a problem if they can’t issue room keys, turn on the heating or cooling in the guest room, or enable the guest to log into Wi-Fi.
ESBs create a central point from which all connected systems can be monitored and measured. Even from a corporate office, it becomes a simple matter to monitor, both statistically and in real time, the health of every connected system and device, right down to individual door locks, televisions and thermostats. Measuring and managing the objective quality of the product is a core function of any business, and up until now was virtually impossible for hotels to achieve.
Perhaps the biggest advantage is that an ESB can free a hotel to sell products other than rooms at the same time as the room is booked. A PMS can only do that by creating a package, which may include elements that the guest doesn’t want, or omit ones they’d willingly pay for. Inventory of other hospitality products (like dining reservations, spa treatments, champagne bottles, or tennis lessons) can be managed by any system connected to the ESB. Those products can then be offered for sale “a la carte” in a booking engine, which only needs to know how to request availability and pricing of “something for sale” from the ESB. The ESB can coordinate combining the elements, applying any pricing rules specific to the combination of products and/or guest, confirming the ones selected in their respective controlling systems, and collecting any payment due.
ESBs in hospitality are not new. From memory, Caesars deployed Tibco in the 2000s, The Ascott serviced apartment group uses Mulesoft, and Hilton worked with a company called RoboMQ a few years back; in each case the hotel group or its vendor wrote custom connectors from their existing systems to an ESB. But in the past few years several vendors have launched new hospitality-specific ESB or ESB-like platforms, with prebuilt connectors to commonly used modules from different vendors. Some major chains reportedly are trialing or have near-term plans to use one, while others are developing their own. Could it be time for you to consider one?
To see what ESB and similar technologies can do, here are some companies to look at (as noted in my prior columns, these are not recommendations to buy but rather to explore). iReckonU was an early player, with an ESB approach built on top of Microsoft Azure and driven by citizenM’s desire to make the PMS just one more satellite system. Protel recently launched protel.io and the Protel Marketplace of third-party apps, making its own PMS a satellite system and opening up the possibility of letting customers use a different PMS on their platform (as well as other apps sold via various vendors via the Marketplace). Apaleo takes a similar approach, with an app-based platform where everything (including their own PMS) integrates via open APIs, and nothing but the platform has to be bought from them. Technically it’s not an ESB, but it operates similarly, and also has a store of compatible apps. In each case, once you connect to the platform, you can in theory transact frictionlessly with any other system that’s already connected.
For a simple, independent hotel, none of this may be compelling quite yet – there are a number of good options for cloud-based PMSs. But if you have a more complex hotel, or multiple properties, then ESBs and near-ESB solutions may well be the next major wave in systems integration. Ignore them at your peril!
Douglas Rice
Twitter: @dougrice

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