Is technology spending at property level slowly declining?
The IT BENCHMARK REPORT is an annual report published by Ecole Hotelière de Lausanne (EHL), on spending on hotel technology at property level in Europe, Africa and Middle East (EAME). This report analyses and interprets the demographic, financial performance and technology data from an independent survey of EAME, property-level hotels. It reports longitudinal data collected annually, at the end of the fiscal year, from 2007 to 2013 of IT HOTEL PROPERTY LEVEL SPEND, including IT staff and salaries for year ending 2012. The stated levels of IT spending are 'actual' as opposed to projected budgets. Extracted here are some key data and graphs from this years' report produced by Hilary Catherine Murphy, PhD and Alexandre Rappaz of Ecole Hoteliere de Lausanne.
The first graph reports the spend per property for the major regions in EAME with overall average and per region.
Average IT Spend, 2007-2012, per property has remained fairly consistent till 2011 but has dropped in 2012 to 140,870€ per property (after a spike this past year, particularly in North-West Europe, triggered by a few isolated cases of high IT investment). North-West Europe is now one of the lowest regions for IT spend at 121,261€ and the Middle East is highest at 253,612€. Elsewhere, a mixed picture is reported with the Middle East showing the greatest turbulence in IT spend over the last six years.
The second graph presents the regional breakdowns of technology spend.
IT overall average spend per room has decreased in 2012 to 556€, this is the lowest reported spend per room over the 6-year period.
Some explanation of the slowly decreasing technology spend may be the continued caution that persists in EAME regarding economic recovery and the consequent extension of the replacement and upgrading cycle for technology. It may also be explained by the increasing availability of cloud-based solutions. For chain hotels, cloud-based solutions, particularly central property management and reservation systems, promote the ability to centralise content and audit revenues. Finally, the increasingly evolving model of hotel ownership and, particularly the increase in the 'management contract' style of management within EAME, has consequent impact on capital expenditure (CAPEX) and operating expenditure (OPEX) that are reflected in this data set where the 'contract management' model prevails.
The fullTHE IT BENCHMARK REPORT- 2013 can be downloaded at EHL Publications, IT BENCHMARK REPORT 2013
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Hilary Catherine Murphy
Professor of Information Technology & Digital Marketing
+41 21 785 1496
EHL
