Hotels, SaaS and the Technology Revolution

It was a cold January morning in 2007, and I remember it like it was yesterday. There was an undeniable electricity in the air, as thousands of die-hard, cult-like fans descended upon San Francisco’s famous Moscone Center, ready for Steve Jobs to change the world… again. I was a young marketing upstart working at Apple at the time, lucky enough to be chosen to witness, what was anticipated to be an historic moment in technology history.

I audaciously made my way to the front of the football-field sized room and managed to steal a last-minute VIP seat. I remember sitting down beside a little old lady, who told me about her memories of when “Steven and Steven started Apple on her street. Just a few houses down. They were such nice, polite boys.” Yes, she was an original Apple shareholder. She was there when the whole thing started. My jaw was on the ground and the show hadn’t even started.

Moments later, Steve Jobs, in his iconic black turtleneck, jeans, and white sneakers, pulled out the original iPhone from underneath a black cloth draped over his podium. Time literally stood still. The entire audience gasped, and then cheered. It was pure magic. People around me were crying, including the little old lady sitting beside me. I was no more than 15 feet away from Steve Jobs. It was one of the most incredible experiences of my life, for no other reason than to witness first-hand the exact moment when technology turned a massive, global industry upside down and set it on an unstoppable vertical trajectory.

From then on, the telephone was no longer “just a telephone” or “something you make calls with.” Quite the opposite in fact. The technology gap had been successfully closed, and there was no going back to the way things were. No more flip-phones, no more Nokia bricks. While some consumers valiantly resisted the global shift to smartphones and their incredible app ecosystem, they would all eventually succumb to a tech ecosystem which is simply too valuable, cost effective, and convenient to avoid.

What I’m seeing right now in the global hotel industry is strikingly similar to what I witnessed back in 2007. Some tech-forward hotel groups have made significant investments in technology over the past few years, while other more traditional operators have chosen to resist the oncoming wave. 

Despite these developments, especially in the realms of guest, operator and overall property automation, many hotels have managed to swim against the tech tide, simply because the market had been hot, and ignoring it was a viable option. Sometimes kicking the can down the road is the easy option. It’s human nature to resist change.

If COVID-19 has taught us anything, it’s that guests now expect a contactless environment when they travel. Only cutting-edge software and smart device hardware will solve this need. The time has officially arrived, for operators to embrace technology wholeheartedly, or fall behind the curve, and fade into the distance.

That being said, if you are still on the technology sidelines, it is not too late to join the party. In fact, sometimes it is advantageous to delay rolling out new solutions in nascent verticals such as this, so as to “leapfrog” over clunky, first-generation versions of new tools and solutions. 

Imagine moving directly from your original 1992 Nokia “brick” phone to the latest iPhone instead. No painful transition to flip-phones, Blackberries and the like. The early technologies in the hotel industry have mostly been washed through the sector now, and we are currently seeing an abundance of new, exciting technologies taking their place. So, for all of you folks waiting… now is actually a fantastic time to be making the leap.

SaaS (Software as a Service) will cause very positive disruption for hotels. The SaaS business model enables continual software improvements, and hotel operators never need to update, exchange, or replace their old technology solutions - or retrain staff.

The evolution of SaaS for hospitality has enabled hotels to benefit from efficiency, scalability and an improved guest experience, all at low monthly costs, that are easy to quantify, even easier to justify, and flexible to suit your situation. In addition, there’s often a streamlined onboarding process, and little-to-no costly hardware to install. This all translates into a significantly de-risked investment, compared to a few years ago when you had to “buy” it. 

At Operto, we have seen resistance to technological change in the hotel industry evaporate overnight. COVID-19 has completely rewritten the playbook. We were already seeing alternative housing challengers, like short-term rentals and serviced apartments, gathering huge amounts of steam. Their tech-first approach allowed these alternative lodging options to deliver the digital experience (including check-in) that their guests want and increasingly expect. 

One global study found that 84% of travelers thought enhanced social distancing rules for hotel public spaces will be the most influential factor in their decision about where to stay during future trips. 

In response, hotels are now looking to emulate and exceed their upstart counterparts, as well as to fully meet the changing needs and behaviors of their guests. Software makes this shift possible. Today, SaaS based tech in the short-term rental and hotel verticals allows for online payment, automated guest messaging, wider property booking listing (more eyes on your rooms equals more bookings), and so much more. 

Legacy hotel operators are now playing a game of catch up with their younger, smaller competitors which were able to pivot their business operations and strategies outside of a large, bureaucratic system. 

Onboarding new technology is a major undertaking for larger hotel operators. Many hotel groups are well aware of the gap that exists, and have made great strides during the pandemic to advance all their processes. With hotel PMS (Property Management Software) providers allowing outside vendors to connect to their systems, interconnected software benefits operations in so many ways. 

While we have seen an increased “leapfrogging” phenomena happening in the past 6 months, for many operators, figuring out how to expedite technology changes in their business will remain a major strategic hurdle to overcome. In addition, there are still hotels that have not made the jump, feeling that “The fragmented nature of hotel ownership means that it's hard to get (technology) investment. Many different entities need to be convinced before a major commitment can be made,” (Floor Bleeker, CIO MEA and Global Accor Strategic Programs). In reality, however, this is no different from the short-term rental market, where owners don’t necessarily control their inventory, and have many stakeholders at play.

Now really is the ideal time to jump in. Impactful investment in contactless guest experience technologies will undoubtedly pay huge financial dividends to those operators that fully embrace the global shift towards technology-first hotels. The change in guest mindset, wanting a touchless experience, is here to stay, and we’ve only really seen the tip of the iceberg so far.

About Steve Davis

Steve is the CEO at Operto Guest Technologies, a property automation system that provides intelligent control of smart home/IoT devices at scale. Operto improves guest experience and operational efficiency for hotels, vacation rentals and serviced apartments. Prior to Operto, Steve has worked as a technology executive across a wide array of global businesses.   www.operto.com