“Moving to the cloud” is meant to simplify a hotel’s operations, but making the actual transition from a physical data center to one hosted on the internet isn’t as simple as clicking the upload button.
“Cloud tech can be a robust, scalable and safe solution when properly scoped, sized, selected, trained on, installed and maintained,” said David Atkins, principal at Digital DNA Infusion, a digital management consultancy. “Or it can be a mess that you can’t wait to get away from.”
The two biggest advantages of cloud-based systems are the ability to retrieve data quickly, often in real time, and the ability to retrieve that data from anywhere, by any employee, and from any device. Another draw is that maintenance and upgrades are handled by the provider, rather than a company’s internal IT team, which can greatly reduce costs.
‘No standard application’
Preferred Hotels & Resorts, a collection of 650 independent hotels in 85 countries, put its entire infrastructure in the cloud in 2008 but has since piecemealed out several applications to different cloud providers. “There’s no standard application of the cloud,” said Charles Zieres, Preferred’s vice president of information technology. “You can pick and choose providers based on what you need.”
At Preferred, websites are hosted on Rackspace, while Microsoft Office 365 hosts the company’s emails. Data backups are done with Amazon storage, which Zieres said can store 20 more times data for about half the cost of a data center. All this has increased Preferred’s “up” time, and making the transition to the cloud was no more complicated than moving from one physical system to another.
Legacy burdens
These benefits, particularly real-time access, aren’t always possible when hotels have legacy applications retrofitted to the cloud instead of using a “true cloud” service like the ones Preferred uses. Retrofitted applications, because they are so monolithic, also can’t be integrated with other cloud services within a hotel’s infrastructure, meaning pertinent data can’t be easily shared or seen.
One way around this is re-architecturing the legacy applications onto modern frameworks such as Platform-as-a-Service (PaaS), thus offering cloud benefits while retaining an application’s business logic.
Another option is to switch to a “true cloud” service that can be integrated with other cloud-based applications, typically those that fall in the Software-as-a-Service (SaaS) category.
Hilton Worldwide is just “beginning their journey” into cloud computing, said Michael Leidinger, vice president of IT infrastructure and operations, but the company wants to move away from monolithic microservices and embrace more true cloud solutions. Currently, about three dozen of Hilton’s hotels are using a cloud-based server for property management systems, while several proprietary legacy applications are being renovated for the cloud.
Integration is key
For Leidinger, the key to cloud computing is integration between all software systems. “A full-service hotel is running a couple of dozen different applications,” he said. “So things like single sign-on, clean interfaces between the apps and the ability to manage data is important.”
Hilton is also working on moving existing property branch exchange (PBX) into the cloud, which can then be integrated into other apps and services, significantly reducing maintenance and equipment costs.
But all hotels should conduct the usual due diligence on cloud solutions and providers. They may even find that a cloud move doesn’t make sense for their business. “If cloud computing is part of your upgrade path, look at your options,” Zieres said. “Don’t do it just because it’s the new buzzword.”
Leidinger echoed Zieres’ warning. “There’s no one size fits all. Each organization has to define what they are trying to achieve. In some cases, it may make sense to put something on a (remote) server.”
Leidinger also stressed that hotels should be proactive in managing cloud providers. “You can’t take anything for granted,” he said. “Make sure they are delivering their services, living up to their end of the agreement and that their performance is within defined service levels.”
Atkins, the digital management consultant, said cloud technology is an area for explosive growth and can be material ROI to a hotel, so long as it’s done right. “If you do not properly plan and explore the various offerings, cloud technology, like anything else, can be an expensive and unnecessary loss for the P&L,” he said.
Moving to the cloud shouldn’t be a given. Here are some pros and cons for hotels to consider before taking the leap.
PROS
- Data is available quickly, often in real time
- Data can be accessed from any device
- Maintenance and upgrades handled by provider
- Cost savings (if the transition is handled well)
- Ability to choose more than one provider
- Less system downtime
CONS
- No “one size fits all”
- Legacy applications might need to be retrofitted and integrated
- Making an informed decision requires time and money
- Due diligence required on solutions and providers
- Cloud providers still need to be proactively managed
Getting personal
Cloud technology is also proving valuable in customer relationship management.
Millennium Hotels & Resorts recently unveiled a slick proprietary digital platform for online booking by adding destination tips, out-of-hotel experiences, loyalty program access, discounted rates and tailored hotel recommendations. It’s this last feature that demonstrates the company’s foray into innovative CRM practices.
According to a statement announcing the platform, Millennium looked for direction at the retail sector. (Think of the personalized “You might also like this” recommendations that pop up during online shopping.) The company custom-built a CRM system called Rainbow, which connects the databases of over 125 Millennium hotels, making it easier to learn about customer behavior and send targeted communications.
Starwood Hotels & Resorts has been using a proprietary, cloud-based marketing platform for the past four years called Most Valuable Promotion. When guests are searching on a Starwood website for a hotel, this platform pulls together detailed information from previous guests—whether they are a member of the Starwood Preferred Guest program or not—and then presents “hyper-targeted” offers based on their past stay behaviors and preferences.
“There’s no noticeable delay from the time you would type in SPG.com to when the page [with the offers] renders,” said Chris Norton, vice president of CRM applications and channel intelligence for Starwood. “That’s what you talk about when you talk about the power of the cloud.”
Sixty Hotels, New York, found collecting guest information through its existing PMS and CRM platforms was difficult and prevented the hotel from communicating with previous guests. Nina Libby, director of e-commerce for Sixty, said the company turned to a service that links up with the hotel’s Wi-Fi network, allowing guests who sign onto the hotel’s Wi-Fi to either login through a social app such as Facebook or enter their email address. With the guest’s permission, demographic information is collected that can turn into personalized offers, Libby said. The company’s costs start at US$500 a month per property for simple data collection.
Contributed by Juliana Shallcross