Searching for Hospitality’s “Holy Grail” – Sustainability

We hear so much about how tourism, hospitality, and especially hotels will ride the wave of Big Data into a revenue sunset. But underneath the hyperbole, there is a certain reality, the realization that sustainable businesses simply must emerge. It is also true that companies that provide the most stunning technological advancements in this field, cannot thrive unless their clients do. In this report we’ll examine how a hotel technology vacuum is filled, and how long term business strategies are formed from the ground up.

Bridging the Divide

Anyone involved in the hotel revenue field has had to contend with slow-to-move legacy systems, and operational systems archaic as the Flintstones. These legacy systems are retarding growth and bogging down growth for new and old hotel businesses. Everybody knows fthe front and back offices need to adopt new tools and strategies, but hoteliers’ lack of familiarity with the new digital tools, and how best to use them, is a very tall hurdle. We can see this clearly by looking at companies engaged in creating a solution, companies like Berlin based SnapShot GmbH. Last week I talked to the firm’s Head of Consultancy & Education, Janel Clark for some insight into how her firm crosses the “knowledge” divide.

Under the direction of SnapShot co-founder and COO, David Turnbull (below), Ms. Clark takes Big Data analytics training to key schools and training sessions of Europe. The most recent ones, a boot-camp at Ecole Hoteliere de Lausanne and at ESSEC Business School, saw Clark not simply imparting SnaShot data use intellect, but taking input from industry experts at these learning institutions.

Clark offers a holistic and forward-thinking approach to students, while at the same time gathering vital input for the development team in Berlin and Brno, Czech Republic, where the startup has cranked up a tech hub. Clark reflected upon the key takeaways at these two key sessions in a recent blog post at SnapShot. When asked about the biggest ideas being communicated to students, Ms. Clark said:

“We try and communicate to students to challenge things once they arrive in the industry. We let them know that when they go into a traditional hotel setup there will be a lot of challenges there from the organizational standpoint. And we teach them how best to help integrate guest data, like preferences and technology usage, into functional expertise.”

Ms. Clark goes on to discuss the current state of the “back of the house” operations, and how legacy systems in place for decades hamper efficient operations. The SnapShot executive also hits on more key elements that power any viable hotel strategy going forward. Considering guest behavior: “understanding the way we buy things, the way we research hotels, all the options that are available to us as guests and potentially bookers”, these necessities have been handled in the same way for decades. She says that, “tracking information in the same way, looking at the same data, using the same market segments”, is endemic of an unsustainable hotel business ecosystem.

So for SnapShot, helping hoteliers see things in a new way is fundamental to the company’s own success, and the company takes education very seriously. In fact, from what I have gleaned SnapShot’s approach is not so much about traditional training, as it is about creating a discussion around the problem. Like one of the beta startups I used to test back in the early 2000’s, SnapShot relies heavily on key feedback, the loop that helps developers build the most successful tools.

The Long Tail of Hotel Business

But using data to grow sustainable revenue for hotels is only one facet of the overall power of data intelligence. A Business.com report I mad recently included insight from the head of the University of Surrey School of Hospitality and Tourism Management, Dr. Graham Miller on this subject. I asked Dr. Miller about the “long tail” of data innovations, here is part of what he had to say:

“Analysing the data produced by running our business can allow us to understand where we can make the most significant changes first and where we need to focus our attention. Using data to improve our sustainability performance is no different from using data to improve our financial performance.”

For hoteliers, we now see a kind of “Holy Grail” of trending business strategy for the future. The term “sustainable” is almost always directed at green and environmental subjects, but “survival” note is well used for hotels too. One reason legacy systems clog the ecosystem of hotel business now, is that the ecosystem has been patched together, over and over again, in order to ostensibly “save” money. As we can easily see now, “saving” today can cost ten times as much tomorrow. Waste and inefficiency can appear as stunning business success, in the short term. Perhaps this is far too deep a concept to discuss here, but the bottom line is that hotel decision makers will either win or lose 5 years from now, based largely on decisions they make today. I asked another hotel operations specialist, Plateno Group’s Director of E-Commerce & Distribution Europe, Tomasz Janczak about why hotels lag so far behind other industries, and his take on where the industry is headed. Here is what he had to add:

“With regards to business intelligence, hospitality was always slightly behind, but the direction our industry is heading recently, offers new-found hope that we will soon catch up. I forecast, that in the near future there will be not much space left for legacy systems, which still dominate the market. There are analytics solutions, which could be used already as one management dashboard, and I think this is the a bridging phase to a more stable next generation of tools.”

Janczak went on to suggest an ideal scenario, where the industry changes its overall approach, and one where analytics will be the core module, with all other systems built around the analytics “brains” that power operations. From a technology standpoint, the legacy point of pain seems very much like any other tech paradigm. Computers were once huge, bulky behemoths that stored data on reel-to-reel magnetic tape, then they started to become smaller, and smaller, and more powerful to the point where the average smart phone is as powerful as any home computer back in the day. Legacy booking and analytics systems hotels use, they will become boat anchors in the next two to five years. As for the future of hotel operations, I find it hard to imagine an industry run by gigantic mainframes running tape drives, and with punch cards for input in the world of business tomorrow. Sustainable business, the long tail of survival, is inextricably linked to improvements.

Get Ready to Evolve

The movement to first bridge, then to redesign how the hotel management ecosystem operates is a foregone conclusion. Just two years ago hotel technology media questioned whether legacy or cloud based systems were superior. Meanwhile, the most experienced experts in the field knew for many years, that legacy systems would eventually falter. Douglas C. Rice, then CEO of HTNG, was already talking about system integration before 2013. Discussing the biggest rub for integration, Rice found the “lack of standards adoption by both vendors and hotel companies” to be the biggest hurdle back then. The technology analyst and adviser went on to discuss the suffering we still see going on today, “vendors suffocating under the maintenance cost of hundreds or thousands of legacy interfaces”. Today the discussion goes on, but it has become a “cloud versus legacy” issue for the most part.

I’ll be honest, I am no advocate of a totally “cloud based” business ecosystem. Every time my LAN fails at home because of bandwidth fluctuations, and every time a wait for a million years for my smartphone to download a Facebook update at a sidewalk cafe, I curse the cloud. In my ideal future a new type of inter-connection exists. It seems to me a new hybrid form of systems integration is the next big thing, and not just for hotels. The so-called internet of things (IoT) foretells of such a paradigm. Technology has reached a point now, where data, people, markets, and algebraic efficiency are possible. But truly sustainable business will never be built solely on a foundation that can fail. The discussion will take this turn very soon, I feel.

For the hotel director or owner reading this, “positioning” your operations is the most vital strategy at the moment. By “positioning” I mean, taking part in the discussion and creating the right business environment for your hotel(s). My old friend, award winning author and legendary future business guru, Brian Solis (above) talks a lot about the new (R)evolution in business. A notion of his applies well here. Solis tells key decision makers to: “Shift from a rut of management to that of leadership”, and to create the perfect environment for an exceptional future business. I would tell hoteliers to “create an environment where sustainability is the goal, for the alternative is unsustainable”.