Industry Update
Opinion Article11 September 2017

Trade in Sentimentality for a Future Proof PMS

By Kevin McCarthy, Principal Consultant at McCarthy Consultancy B.V.

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My team and I have now converted 36 properties to Opera Cloud PMS and another 10 confirmed for migration in 2017, and 20+ to come in 2018. This is one part of a bigger project including Cloud Revenue Management, Cloud CRM, Cloud POS etc. The shift from license upfront payment to the subscription model has brought with it an unexpected hurdle. As we work with our property owners and management for the increased investment into the new suite of cloud systems, being first on Opera Cloud PMS means it's not an easy negotiation, due to the fact a very successful pricing model has been retired and a new unconventional one for the hospitality industry has emerged.


While discussing this conundrum recently with a colleague, he mentioned it was like trying to get someone to buy a brand-new state of the art Mercedes when they have a perfectly fine 10-year-old BMW. This thought provoking point leads me to explore this hypothesis a little more.

Imagine if you will, in your drive-way you have a nice black 2007 BMW 5 Series. You have had it since new, and boy has it served you well. It still looks great, it doesn't look out of date at all, alloys have a few nicks, couple of scratches but no crashes. Inside, the leather is a little scuffed but those seats are more comfortable than ever. The air conditioning works fine, albeit if you have the internal circulation switched on and the back-left blower closed. All the electrics work fine, well, except the left mirror, but come on, how often do you need to move that mirror anyway? These are the things you must spend some time explaining to your family when they borrow your car. The stereo is still the factory version and the 10-disc CD auto changer and tape deck work perfectly well, should you ever find a tape or CD again. OK so the built in Sat Nav now thinks you're just off-roading all the time, but on older highways it's great. Driving is smooth as day 1, even after 120,000 kilometers, it still runs like a dream, barely any problems with the engine, there was that one-time last year when the battery went flat, the fan belt snapped and the bearings went on the front right, but that's to be expected, yes, the parts are expensive from BMW as the car is a little old, they are harder to find. Even with fixing a few bits and pieces, couple of services, you only pay a couple thousand a year maximum to run the car. Yes, you are a little nervous on every service as to what may need to be fixed, but you will cross that bridge when it comes. It doesn't have parking assist, or rear cameras or any other of those new fancy gadgets, but those are just a gimmick anyway, you're not interested in that. Your 10-year-old BMW is part of who you are, and has served you so well you owe it the respect to never trade it in.

Now as you imagine sitting in the scuffed seat enjoying the memories from those nicks and marks of your dash, think about your PMS system. Re-read the last paragraph but replace the car analogy with the name of your lovely onsite PMS system.

  • It has served you well,
  • It still looks the part,
  • You and your staff know it inside and out and you feel at home using it,
  • There are a few ''scuffs'' AKA bugs, you are used to, the provider has little to no plans to fix minor issues like that,
  • There are some workarounds needed, and training staff can take a little longer to explain all those things,
  • Some of the functionality is now outdated and no longer used,
  • New features don't come automatically,
  • System glitches and failures don't happen too often but when they do it does take a little more to get it resolved.
  • Upgrades are always a nerve wracking time, as the success rate starts to decline with age and often side effects bring more problems and costs.
  • Your yearly maintenance has little impact on your budget, as that great deal on the license 10 years ago has paid for itself 100 times over.
  • Overall, everyone is happy with the familiarity and is sentimental to the system they use 8 hours a day, hey they are using this system more in 24 hours than they sleep.

Some of this sound familiar? I am sure it does, now imagine I am the Jaguar salesman who has just pitched the new E Type 0 to you, and not to buy it, to lease it, with the promise of a swap over every year for the next 5 years for a lease cost, 3 times more expensive than your BMW's worth today. Your first thought I am sure includes a bridge somewhere and me leaving it in some violent way.

You tell me why on earth would you need an all-electric car in Dubai, the gas costs nothing here. You don't need all this gadgetry in your life, you have survived this long without it what's the point? Not unlike todays PMS systems, why on earth would you need to upgrade to a more expensive system that has a pile of bells and whistles and a technology roadmap for something that has no concern to you today. The answer is simple, you need to get ready…

The Cloud PMS developers today are daydreaming in hyper speed to anticpate what will come next. When selecting your provider, it's not so much anymore what's under the hood that matters rather what will be under the hood. Ask for the roadmap in your first meeting, what's the current dream of the provider, if its 1 developer or 100, the bigger the dream, the bigger the advantage for you. Yes, you need your core functionality of check in and check out, but for how long will check in be done from behind a desk, or even in the actual hotel building itself? Hospitality is re-inviting itself at a fast pace and technology needs to not only keep up it needs to be ahead. Millennials and their screen addictions and hungry infant impatience levels have molded an uncertain period within hospitality and its technology, whereby hotels need to care for my father who arrives to a hotel wanting a big smile, a key in hand, a long chat about the weather and a breakfast menu at check in and then there is his son just wanting the WIFI login as fast as possible so I can skype my daughter to say good night, and mumbling ''I'll figure it out'' about your hotel as I navigate the exam to WIFI victory on my device while never once looking you in the eye.

The race for future proof technology is here, let's be honest, how comforting is it to know that when the latest and greatest technology is released you will have it automatically. Your iPhone, your laptop, your TV, even if you're lucky enough your Tesla does it too. You don't have to order the guy to come and upgrade your system with Cloud PMS, your system sits in your providers Datacenter and they upgrade it. Not unlike getting that shiny new lease once a year, the butterfly feeling for the new car smell is just the same when release notes come out from your Cloud PMS provider and you see a list of 150 modifications coming your way, and like the Electric Jaguar on lease you don't have to pay extra for the new rear view camera which although life today is fine without it, you do realize after some time that having a camera on the back of your car to help park in that tight spot or more importantly to look out for that wandering toddler really is impacting.

Sustainability, a trendy word in hospitality. What are the carbon emissions on your current PMS system? How would they match up to a Cloud solution? You may say minimal, sure, that's what the first critics would have said about the Toyota Prius too. The emissions on a Prius today is calculated as 70, and the Tesla Type X is 0, only in the space of a few years have we seen the impossible come to reality in the complex and oil driven automotive industry. We only calculate like for like on costs of the servers, the cooling systems in the server room, the electricity to power it but what's the cost to the environment for building it and sustaining it? Why can't your IT systems be green too? Logic says if every hotel chain used one Cloud a footprint should diminish. It may not save you money but helping the planet should count for something. Not so long ago I checked the hotel availability of the hotel I was travelling to in my Cloud PMS system for my reservation on the dashboard screen of my Tesla Taxi enroute to the hotel from the train station in Switzerland. That has to be the alpine green in the CO2 world and something I believe we should all strive for.

With the news, this week of Jaguar Land Rover now declaring all their future cars will be electric only, this is just another sign of an ever-changing world and our collective need to get ready for the unexpected, remember that confidence of sitting in a new car, knowing for now, you are safer than everyone else on the road and my, the fun playing with that new control system. As I prepare for my next version release of Opera Cloud, I eagerly anticipate seeing my teams test results on the enhancements we logged and the features we are waiting for and although we have challenges, the trade in for the subscription package and the future proof confidence that comes with it is already starting to erode the sentimentality of days gone by.

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Mövenpick Hotels & Resorts, an international upscale hotel management company with over 16,000 staff members, is represented in 24 countries with 80 hotels, resorts and Nile cruisers currently in operation.
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