World Panel
Viewpoint14 October 2019

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

Information Technology

— 12 experts shared their view

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This viewpoint was created by
Henri Roelings, Founder & CEO at Hospitality Net
This viewpoint is brought to you by Cyber HITEC
Cyber HITEC
Uli Pillausupplier view
Founder and CEO of Apaleo

Our industry is diverse: The hospitality industry is very fragmented. The raise of AirBnB proves that guests are demanding highly individualized offers. The pressure on hotels to differentiate and make their specific offering transparent end come alive to guests is increasing. The time they have to adapt to changing guest needs is shrinking.

That is why hotel tech is diverse:

Hotels need to be distinguishable in their guest journey, their distribution (not only to vanilla guests), their guest communication, their revenue strategy, their marketing, etc. Technology has become an important factor for hotels to implement their differentiation. This is the reason why there are so many hospitality tech companies. The possible combinations on how hotels make use of different hotel technologies along the above dimensions (guest journey, distribution, …) is endless. Every hotel need their specific combination to differentiate best.

Classic one-stop-shops will fail:

A tech shop that will offer an integrated suite of ONE distribution tool, ONE revenue mgt. tool, ONE marketing tool and ONE guest communication tool has to fail for two reasons: 1st the specific tool combination they offer will fit for a small number of hotels only. 2nd They cannot cope with innovation of continuous emerging new tools, because those new tools will cannibalize their existing tools to the regret of their shareholders.

The hotel industry has been dominated by big, monolithic, closed PMS and other systems over the past twenty or even thirty years trying to insist on their one-stop-shop solutions to be sold to everyone. This has led hotel groups and hotels to be totally dependent on these vendors, but all innovation is coming from new innovative apps on the market. The big guys are trying to keep these apps out, and therefor make integrations costly and very hard. It is just a fact that those big companies totally and constantly fail to be innovative, and this is some that has to change.

The disruption is now coming from open API platform, open PMS and tech market places that can deliver the following:

Hotels must be able to combine arbitrary tools into their competitive IT stack in order to differentiate and compete successfully. Therefore they might choose different tools from different vendors. And they will exchange those tools at a high frequency – they want to use innovative apps immediately when they appear if they strengthen their competitive advantage.

A two-sided marketplace (Hotels and apps) based on open hospitality APIs allows hoteliers to become aware of emerging useful apps early and integrate them into their IT stack at a button click to try them out, learn and come into a continuous process of innovation and improvement. And finally the PMS needs to be completely open as well to embrace the new apps and allow them to integrate at zero cost and almost no effort from both sides.

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