The Property Management Puzzle

Technology innovations are changing all aspects of the lodging industry. While significant resources are being funneled into modernizing the guest experience — from bandwidth, to in-room technology, to mobile solutions — there are equally massive shifts taking place behind the scenes. Hotel management systems are shifting from on-property to cloud-based, from tethered to mobile, from data-heavy to insight-rich. Some lodging companies have been at the forefront of testing out new innovations, while others are waiting and evaluating. Over the long-term, the result is the same: a massive, impending re-architecting of how properties are managed.

A significant chunk of hotel IT budgets -- 19% -- is spent on property management systems (PMS), second only to the 20% spent on guest room tech (HT’s 2013 Lodging Technology Study). The industry is also mid-stream in a massive replacement cycle, with 40% planning to upgrade their PMS by the end of next year.

The capabilities that hoteliers are seeking in those upgrades are like pieces of a puzzle, and the industry doesn’t have a finished picture yet. Some are ready to embrace cloud-based solutions; others want to expand their mobile capabilities; and others are excited about the possibilities rich data can provide in personalizing the guest experience. HT spoke to both hoteliers and PMS vendors for feedback on these and other trends.

“I think it’s really about the ability of the PMS to grow with the changing need. What we need today isn’t what we needed just two years ago,” explains Venita Yelley, VP of operations for boutique hotelier MCM Hotels (www.mcmhotels.com), with 10 locations across the American South West. “We had to add emailing the folio, for example, because two years ago no one emailed folios,” she recalls.

Piecing together integration
Yelley’s hotels run Northwind Maestro PMS (www.maestropms.com), where a core benefit is simple interfaces. “If I’m looking for customer X, I can see all the information in one easy place.” Looking forward, one of Yelley’s biggest humps comes when acquiring new properties, and an inability to easily extract data from the former PMS. “That’s a hurdle that needs to be overcome,” she explains.

Meanwhile, Ed Nickelson, IT director for Pinehurst Resort & Country Club (www.pinehurst.com), is grappling with the growing complexities of selling rooms online. “The rest of the world has gotten really good at how they provide their services to the online world – they do it better than hospitality does.” It’s easy to fill an online shopping cart in retail, but not so with all of the packaging and back-of-house factors that go into a room reservation. “You’re selling a bundle first, and then adding parts and pieces to the bundle later,” Nickelson says. “It would be great to see the online booking experience driven by the PMS, but for a lot of these vendors I don’t know how feasible that is.”

Both Nickelson and Yelley are experiencing different symptoms stemming from the same challenge: better integration between systems. Vendors’ willingness to do so, Nickelson says, isn’t where he’d like it to be. “In trying to work through relationships where we use multiple vendors, everyone has their own POS product, their own PMS in this space. Unfortunately some are better at some of those pieces than others. Everyone talks about HTNG, but when you go from one vendor to another, I haven’t had a lot of cooperation and my counterparts say the same thing.”

Shifting the platform to the cloud
Every vendor and most of the hoteliers HT spoke to predicted that property management systems would eventually migrate to the cloud. Pinehurst runs Agilysys (www.agilysys.com) PMS in a virtual environment on a privately-hosted cloud. “We’re an hour and a half from a major metropolitan area. There are enough providers selling the bandwidth we’d need for redundancy in a true web-based cloud environment,” says Nickelson, whose 2,000 acre property is located in North Carolina’s rural heartland. “If I look at it from a city hotel perspective, absolutely; there’d be no downfall to cloud.”

Indeed, Agilysys reports that many of its customers are increasingly seeking cloud delivery of services. Rather than accessibility, however, integration is a challenge, particularly in cases where the interfaces of existing business solutions are not friendly to above-premise property management systems.

“Just because they’re in the cloud doesn’t make it easier to integrate,” agrees Dan Connolly, PhD, associate dean for undergraduate programs at University of Denver’s Daniels College of Business. “One of the promises of the cloud is that it becomes easier to integrate, so you can go more best-of-breed in your solution choice, but you still have issues with data structure and architecture.”

Choice Hotels has been running its proprietary ChoiceAdvantage cloud-based PMS for the past 10 years and in April launched a new division, SkyTouch Technology (www.skytouchtechnology.com), to bring the system to market. The SkyTouch Hotel Operating System includes a combined property management system, a rate management system and interface modules.

SkyTouch is currently seeking to partner with other best-of-breed players to add functionality. Senior leadership met with other cloud-based providers at HITEC 2013 that share the goal of integration.

“The way I view it, it’s a platform,” says Choice CIO Todd Davis. “You really want to get to a platform-as-a-service in the cloud, where the property management system is the key component…there are experts out there that know other components; use their knowledge and create a platform in the cloud where it’s 100 percent web-based.”

Like many smaller operators, Yelley took an interest in cloud for MCM Hotels, but the company wasn’t ready to fully commit. “We did the big conversion in 2010 and cloud was too new at that point,” she recalls. “There still were security issues in the minds of people with data just floating around out there.”

Enabling mobile capabilities
Despite challenges, cloud’s ability to enable user mobility will be a motivating factor for hoteliers’ to make the switch. Micros (www.micros.com), for one, just introduced its Opera Mobile product this year as an add-on to its cloud-based Opera PMS. The company is also deploying OPERA9, which leverages many cloud-optimized technologies and integration with third-party service providers.

To really hit full mobile stride, however, property management technology needs to be better-tailored for mobile interactions. “The heavy footprint of what most vendors require make fully functioning mobile too heavy,” says Nickelson. His call-to-action for vendors is to thin out the footprint.

Springer Miller (www.springermiller.com) is leveraging Windows 8 (www.windows.microsoft.com) flexibility with its cloud-based Atrio POS, released at HITEC 2013. As an extension of the company’s Atrio guest experience management platform, the POS gives users an identical experience regardless of whether they’re on a tablet or stationary workspace.

For mobile PMS to be truly effective, Choice’s Thompson calls for a move towards responsive design. “If I’m checking someone in at the front desk and then pick up an iPad and walk out to the guest, I don’t want to lose my session. The user should be able to maintain the same session with different devices.”

Personalization through socialization
Hotels seeking to create more personalized guest experiences are hopeful about social media (90% actively use Facebook and 78% use Twitter to engage customers, according to HT’s 2013 Customer Engagement Technology Study). What’s still not clear is the extent to which social media can and should be integrated into formal property systems, so that user-generated content can be stored, mined, analyzed and tracked.

PMS provider Amadeus (www.amadeus.com/hotels) sees social media as a significant force shaping property technology. Actions could include property managers posting a pre-check-in welcome comment on a future guest’s Facebook page, pulling in testimonials from opt-in guests, or receiving alerts to particularly positive or negative comments on any of the major social networks. The company is in prototype on a social media integration project that would, among other things, let guests book a room through Facebook and then send a confirmation text to their mobile device.

Choice’s Thompson isn’t fully convinced, and sees that while integration could be helpful, this sort of effort is complex and could lead to a drain on resources. “I agree, from a PMS standpoint, that I want to know everything about a guest when they show up at the front desk. I should be able to see that you’ve stayed with me, and if you posted about our hotel in our social space, and if it was a complaint. But an extreme piece in social design would require significant training and expense.”

Pinehurst’s Nickelson is optimistic. “If there’s an integration that says, ‘I just checked in at Pinehurst,’ like a ‘wish-you-were-here’ tease to your friends, and that somehow becomes interactive with hotel guests, I think it could become very powerful. Simply spewing advertisements isn’t going to have the same effect as something personally connected to individuals.” If his 63-year-old grandmother is using Facebook, then it’s just a matter of time and understanding. “Everyone’s just not sure how to harness that power. Finding the right mix will be the biggest challenge.”

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Vendor Perspectives

HT consulted with the PMS vendor community to get insights into some of the major trends they’re seeing in property management. Here’s a sampling of what some had to say:

Agilysys on Mobile: Customers want mobile PMS solutions that enable staff to serve guests more effectively. However, merely extending applications to a mobile device is no longer sufficient. Mobile PMS devices have disrupted the traditional workflow, and hoteliers are being forced to rethink the entire guest/property process flow. “Mobility in context” is the new watchword.

Amadeus on Groups: Group business is increasingly important and a good PMS is the way to grow this sector. Take unmanaged group business for example, also known as SMERF (social/sports, military, education, religious and fraternal). With these unmanaged group bookings, there may be a discounted rate but no contract. Hotels should be able to look to their PMS to recognize that people are travelling together and, for example, might need to split the invoice. This could be a service distinguisher for hotels.

Infor on the Shifting Center: PMS will remain crucial, but will no longer be the locus that we all used to consider it: e.g. the system in the middle of the diagram to which everything else attaches. Depending on the eye of the beholder, the “core” system deemed as driving the business could be the CRS, the RMS, or the CRM system. Of course, our finance colleagues, not to mention owners, have always viewed back-office accounting as where all the action is. Infor plans to have an unbiased view of this, and provide best-of-breed applications to the entire enterprise that drive results.    

Micros on Mash-ups: Explosions of the mobile use cases and SOA will enable mash-up of many different service providers. Security and Integration platforms will be essential. Outsourcing of IT and consuming SaaS will become a standard.

Northwind on Personalization: There is a trend toward organizations paying more attention to knowing their guests’ preferences, whether through promotion of their social media sites, their loyalty programs, or mining more specific data to target-market their guests. This data is all being leveraged from the PMS. Hotels are leveraging their online booking engines to provide more services beyond just booking rooms, including such things as spa, tee-time and dining reservations.

Skytouch on Positive Disruption:There are two types of industries. The first has been completely disrupted by technology. The second eventually will be. The hospitality industry is in the midst of this transition. Some areas have been upended by technology (just ask travel agents). Others still function much the way they always have. The hotel industry is on the cusp of disruption that will have a very positive impact on property operations

Springer-Miller on the User Experience: Today’s primary PMS users are digital natives who are accustomed to using smartphones and gaming systems with touchscreens. PMS needs to evolve so these users can walk up to a screen and already be proficient. Second to that is cloud computing; from both of these trends come the need for compelling economics. From reducing employee training costs with an easy to use system, to eliminating expensive on-property hardware, the industry is moving towards lowering capital costs and operating expenses.