World Panel
Viewpoint14 October 2019

Why are there so many hospitality technology vendors in our industry? (Part II)

Information Technology

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This viewpoint was created by
Henri Roelings, Founder & CEO at HospitalityNet
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I asked myself the same question the past 25 years while building some or many of these applications along the way. Is it only a hospitality issue though? When building my company StayNTouch, which is selling to the hospitality industry and looking back to what kind of software solutions we ended up using to run our processes, I found the same thing. We had a different vendor/package for accounting, payments, sales, CRM, HR, marketing, website, project management, engineering, etc, we had at least 15 different packages to run our company, some integrated and some not. So it is probably a thing of all industries. 

Having build software, one thing I do know is that hoteliers expect the software to do everything from the start, to build software that does absolutely everything for all departments in hotels is virtually impossible, unless you have endless financial means and years of time, or are able to charge a very high fee to the hotels. MICROS got pretty far with OPERA, but it took 15 years and many 100M of dollars to get to it. Once there, only about 20% of MICROS's customers ended up buying and implementing the whole suite of services. Why, because for some parts of the suite other vendors had a better solution, or the hotel had their homegrown solution. Another reason was that many companies also did not want to put all their eggs in one basket. 

In other industries, the all-covering SAP/ERP implementations in larger corporations were far too expensive for smaller companies, and often not so successful either. 

Vendors to succeed, focus in on a certain business problem, hence you end up with many vendors to have software for all business processes in a hotel or any other business for that matter. 

So to summarize, I believe each business process from property management to revenue management to accounting is complex, too hard for one vendor to do ALL well, and if offered as an all in one, mostly not complete enough for the hotels to buy. Hence we have all these different companies and solutions. A one-stop (or fewer stops) for all could work if hoteliers are willing to accept reduced functionality in each business process, and ask themselves, what is ultimately better for my business 80% of what I need from 1 vendor or 100% from many vendors with ongoing integration headache/cost and effort. 

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