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01/19/2022

Why Hospitality Needs a Tech Reset

Gaps between the PMS and CRS have created a gap that prevents the personalization guests desire from their hotel stay.
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Man and woman on vacation watching sunset

Hospitality has an exciting future, despite the ongoing uncertainty around COVID. People will continue to travel and will need somewhere to stay. But the exact configuration of that future is uncertain, other than the fact that the industry needs better technology to meet both known and unknown changes yet to come.

The hospitality sector is often described as fragmented with a wide product variety (big box conference hotels, resorts, boutique B&Bs …) each of which has a different price point, service ethic, business model (including management and ownership structure), target market and competitive set. Developing a cloud-based platform that knits together a CRS, PMS, and other components of the hospitality stack from scratch, which can accommodate all these enterprise use cases, requires a tech partner that not only has a genuine commitment to partnerships, collaboration and community, but also a proven track record and the ability to heavily invest in R&D and innovate.

Recently, Marriott International became the second major hotel group to agree to move to the Amadeus Central Reservations System (ACRS). In this article, we explore why that is exciting as well as our vision for a fully integrated future.

History lessons

A brief look at how that fragmentation came into play can offer a roadmap towards consistency. Hotels have always had two main technology systems – a property management system for operations and internal use, and a central reservation system which handled all guest interactions before they arrived on-site.

The gaps between these two systems have become embedded in how the industry operates. Being treated like a stranger at check-in when you are a top tier loyalty member sits uneasily with the current travel trends around personalization and experience; and is a result of the highly fragmented technology solutions that exist today. Aligning the historically disparate functions of the CRS and PMS into a single platform is a must for any forward-looking hotel or chain.

Getting personal

The hospitality industry needs technology which can deliver on the “personalization” demands of travelers, who also want an “end-to-end” or “seamless experience.” Often these buzzwords are used interchangeably and lose their precise meaning, and while there is a clear distinction between the two, technology can help hotels satisfy the demands of both.

Specifically, hotels should be better at personalization, based on the data they already have. Most hotels can work out manually whether a guest is a business or leisure traveler, and there are some other fields that can be categorized to create personas. While this is still not individual, segment-of-one personalization, it does create value by providing some degree of curation.

Looking ahead, Amadeus believes that attribute-based selling is the way ahead for hotels, and this ability has been embedded natively into the ACRS. Rooms in a property have different attributes and a system is needed which not only allows these attributes to be indexed but also parses them through to other systems which sit on the same platform such as loyalty schemes, revenue management and operations. Helping a hotel to sell a sea-view room with early check-in to guests who will pay a premium for this product is an example of how an integrated platform can enable a hotel to deliver the truly personalized experience a guest is seeking, while also creating genuine and sustainable increases in revenues.

It is also an example of why hospitality needs a technological reset, in which the PMS and CRS are as one. On the simplest of levels, if the CRS is selling early check-in as an additional service, then the operation teams will need to know which rooms have to be ready and at what time.

End-to-end is in high demand

The hospitality industry could be center stage when it comes to a “seamless end-to-end” experience, which is in high demand by travelers. There is a clear need for integrated search, shop, book, pay, and onsite interactions with customers. Only then can all areas of a hotel be empowered to fully understand guest behaviors and expectations, and then deliver on them as anticipated. 

Clearly, the move towards a cloud-hosted platform which replaces decades of legacy infrastructure will take time and requires a strong commitment from the hospitality industry as well as the technologists providing the platform to drive this paradigm shift in the sector.

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Amadeus' Francisco Perez Lozao
Francisco Pérez-Lozao Rüter, President, Hospitality, Amadeus

ABOUT THE AUTHOR

After the acquisition of TravelClick in 2018, Francisco (Paco) Pérez-Lozao,  was appointed President, Hospitality to further drive Amadeus’ vision to be a global leader in this area. Today, Amadeus has 50,000 + hotel properties as its customers.  

An industry veteran, Paco joined Amadeus in 1993 as Market Manager for Europe in charge of consolidating Amadeus’ operations in Western Europe and expanding our business in Eastern Europe. In 1996, he transferred to the Corporate Strategy area. As Director and, subsequently, VP of Business Development and M&A, he took on responsibility for strategic growth and diversification projects (e.g. Opodo).

In 2009, he was appointed Vice President, Corporate Strategy and was responsible for Amadeus’ overall strategy definition. This also included the Amadeus Group’s Mergers & Acquisitions (and post-merger integration) activities, the overall coordination of Amadeus’ second IPO in 2010 and the search and development of new business opportunities for Amadeus.

In 2011, he became Senior Vice President Strategic Growth Business to support growth in key areas of the travel sector, such as Airport IT, Business Intelligence, Mobile and Digital Payments. Some of these Amadeus businesses evolved to become top players in their respective sectors. 

After the acquisition of TravelClick in 2018, he was appointed Senior Vice President, Hospitality to further drive Amadeus’ vision to be a global leader in this area. Today, Amadeus has 50,000 + hotel properties as its customers. 

Prior to joining Amadeus, Paco was a Consultant in the Strategy practice of Accenture and a Research Director at the Technical University of Aachen (Germany).

Paco, a Spanish-German dual national, holds an MBA from INSEAD, Paris; a Master´s Degree in Civil Engineering and a Master´s Degree in Industrial & Business Engineering, both from the Technical University of Aachen.