Solutions For All Sizes
Around the world, hotels big and small are discovering efficient point-of-sale and sales and catering solutions.
By Joan Marsan, Technology Editor -- Hotels, 9/30/2000 11:00:00 PM
When the 129-room Chateau Cartier, Aylmer, Quebec, was sold two years ago, the new buyers wanted reports on the revenues generated per function room. The sales and marketing staff had been lumbering along with a book-based system—book, as in bound paper. The only way to generate the figures the buyers required was to go through the books and manually add up numbers. The process took days.
Now that the property has a computer-based sales and catering (S&C) system in place, such tallying takes seconds. “Questions are answered much more easily,” says Patricia Pearson, director of S&C. “Customer conversations are easy.” In addition to accurately summarizing revenues generated, the Northwind S&C software installed at the Chateau Cartier forecasts, budgets, eliminates duplicate bookings and increases staff efficiency.
Because the hotel’s sales staff of seven shared the same single set of books, each member spent time retrieving books from the last user before completing calls or closing deals. “Now all the information is on the screen,” Pearson says, accessible from every computer terminal, whether in the sales office or at the front desk. “We spend less time running around. Productivity has gone up.”
Similarly, Kirk Brady, director of the sales team at the Estates of Sunnybrook, Toronto, Ontario, saw an increase in productivity after installing the Northwind system, proving that S&C systems can boost productivity regardless of the size of the hotel. The Estates offers three meeting or banquet rooms divided between two properties, one with eight guestrooms, the other with 12 guestrooms. At this small operation, Brady decreased his five-person sales and accounting staff by two members. “People are afraid of change,” Brady says, and when employees decided to leave rather than adjust to the new, computerized system, he found he didn’t need to make new hires. The remaining salespeople’s productivity had increased dramatically, eliminating the need for replacements. The savings quickly recouped Brady’s costs, which, at CAN$100,000 (US$67,500), were generated largely by his need to purchase UNIX and dummy terminals, and install fiberoptic cables linking the terminals and the two properties.
Local Or Long-Distance
The Northwind system appealed to Pearson and Brady because the locally known, smaller company seemed accessible and more willing than larger companies to modify the application to serve their needs. And the applications were less costly than those provided by larger companies. While many hotels with systems designed by bigger developers already in place find it more cost-effective to simply add in the point-of-sale (POS) or S&C module, these smaller properties and those transitioning from a manual to a computer-based system do well to search the local market before settling on a particular system.
When General Manager Pétur Snæbjörnsson of the 41-room Hótel Reynihlíð, Lake Myvatn, Iceland, elected to transition from a manual to a computer-based POS system, he selected an Icelandic developer, Hospitality Solution Center (HSC). Unlike other locally designed software, the HSC offering connected directly with the hotel’s book-keeping program, vital to Snæbjörnsson, as he strives to keep accurate details on the sales per guest at the hotel’s 180-seat restaurant and 70-seat café. The US$10,000 system promises a three-year return on investment, Snæbjörnsson says. The only drawbacks in the switch from manual to computerized systems, he says, are the need for increased technological support and upgrades.
Similarly in Russia, many hoteliers are drawn to solutions developed locally. “In restaurants in Russian hotels, international chains are using international POS systems,” says Nikolai Balba, managing director, Libra International, a firm that distributes and installs hotel technology in Russia. “Independent hotels are increasingly looking at local POS solutions. This is due to their relatively low cost; matured functionality; and, most importantly, compliance with local requirements: tax, fiscal, reporting, integration with accounting and F&B control systems.”
While local POS solutions have an undeniable appeal to many Russian hoteliers, S&C systems are another matter entirely. Few Russian hotels have S&C systems installed, and those that do possess the systems rely on international models, which allow them to standardize their relationships with foreign travel agents. Because these properties must rely on international S&C systems, they often must also incorporate international POS and other systems, even if there is no corporate structure requiring them to do so. When the 1,972-room Russian-owned and -managed Izmailovo Hotel, Moscow, decided to streamline operations to bring its policies and practices in line with international standards, they selected the LodgingTouch property management system (PMS) because it integrates with the Hodges and Irvine ESP2000 S&C product.
The ASP Answer
While the Hótel Reynihlíð’s Snæbjörnsson noted the disadvantages of the technological support and upgrades that computerized systems require, new application service provider models (ASPs) promise to ease the hiring and cost impositions modern technology has placed on many hoteliers. The five-property Prima Hotel group, Israel, relies on the services of a single IT manager to keep their PMS, accounting and POS systems up and running. Enabling this scaled-down staffing situation is the group’s reliance on an ASP solution from Silverbyte, a program that provides PMS, accounting and POS modules. The chain has no computers of its own, as it basically rents all software and equipment from Silverbyte as part of a single service fee.
“The expenses are much less than buying your own equipment,” says David Frankel, IT manager, Prima. “The monthly charges are somewhat more, but there is no need for full-time support in any hotel,” a great boon as more hotels face a tight labor market, particularly with respect to technologically skilled employees. Additionally, the remote, limited-access system provides additional data security. “If someone accidentally turns a computer off, nothing goes wrong,” Frankel says. All data still are safely stored off-site.
ASP offerings are rapidly appearing in the marketplace. Most have been in beta versions, but they are becoming widely available. “The promise of ASP is a better support mechanism for POS users, a lower total cost of ownership, and ultimately a greater dividend from technology,” says Brent Christensen, manager, strategic programs, Infogenesis. “We also are seeing hospitality operations interested in creating more of an enterprise-view approach to their technology. With the advent of lower-cost connectivity in the form of wide area networks (WANs), hospitality operators are looking to harness the power of an integrated data view where they can access, analyze, and interrelate data from all front- and back-office systems.”
This goal of achieving greater integration was behind the 963-room Boca Raton Resort and Club’s Daylight enterprise S&C installation. The installation integrated the S&C system with central reservations and yield management systems, with increased efficiencies enabling a four-month return on investment. “There’s only so much you can do to reduce costs,” says Charles Deyo, senior VP, finance, Boca Raton Resort and Club. “The question is, do you get revenue enhancements? That’s where you have the most profit potential.”
The integration between the S&C system and the yield management system allows Deyo to be more selective about group bookings, choosing those that will contribute not only a greater RevPAR, but also a greater RevPAC (revenue per available customer). While the character of the groups staying at the hotel remains the same, and account management strategies remain firmly in place, integration and ASP models promise increased efficiencies and enhanced earnings for hotels.
Tech Briefs
E-Procurement Alliances
In a permutation of the recent e-procurement alliances, the Asian American Hotel Owners Association (AAHOA) announced an agreement with hsupply.com to build a franchisee-oriented business-to-business (B2B) procurement portal for its members, who own approximately 17,000 properties (25% of the U.S. market), and spend more than US$5 billion annually on guest amenities and supplies.
“The real buying power in the hotel industry lies with the franchisees,” says Mohanbir Sawhney, professor of electronic commerce & technology, Graduate School of Management, Northwestern University, Chicago. The AAHOA and hsupply alliance aims to provide a neutral, non-branded site appealing to owners managing properties under more than one brand.
Meanwhile, five European companies, Accor, Bass, Hilton International, Whitbread, and Granada: Compass, revealed they are in discussions to create a B2B, Web-based exchange to launch in 2001.
Marriott and Hyatt have named their e-procurement venture, announced in May, P-Co, and have welcomed Dallas-based ClubCorp USA, owner and operator of country clubs, golf courses and sports clubs, to their venture.
Online Analysis
Phoenix-based Pegasus Solutions launched NetBooker, a tool to help hotels develop bookings-enabled Websites. If linked to the Pegasus Business Intelligence Web-enabled customer relationship management tools, NetBooker may provide site-improving analysis, as IBM’s Surfaid delivered to Dallas-based Omni Hotels.
Supplyline
Hogatex, Munich, announced the rollout of its Starlight system to Accor’s German and Austrian properties...Accor’s U.S. Sofitel properties will install Lake Mary, Florida-based Scala Hospitality’s back-office accounting software...Boston-based Sonesta International Hotels selected Dover, New Hampshire-based Daylight Software’s enterprise sales and catering (S&C) system and Dallas-based Wayport’s high-speed wireless Internet access solution...Aladdin Resort & Casino selected the Infogenesis, Santa Barbara, California, point-of-sale (POS) system...London’s Savoy Group installed the Delphi Multi-Property Edition cross-property sales solution by Newmarket International, Portsmouth, New Hampshire...Starwood Hotels & Resorts Worldwide, White Plains, New York, linked its central reservations system (CRS) with San Mateo, California-based WorldRes’ online booking engine, WorldRes.com...Multi-Systems Inc., Phoenix, will offer its property management system to all Cendant, Parsippany, New Jersey, properties...Travelodge Hotels & Resorts, Sydney, selected the enterprise hotel automation solution by MICROS-Fidelio, Columbia, Maryland...Mövenpick Hotels & Resorts, Adliswil, Switzerland, joined the Lanyon, Dallas, PropertyVault Web-enabled data acquisition beta test...ANA Hotels International, Tokyo, renewed its private label reservation services contract with Dallas-based Pegasus’ Utell service...Berkshire, England-based Corus and Regal Hotels will install U.K.-based Quadriga’s interactive in-room system.
Netline
Meeting the Needs of Niche Markets Recent additions to Bass Hotels’ Web site, in keeping with trends towards more specialized online marketing, focus on distinct customer groups. While partnerships with Web sites devoted to assisting meeting planners inarguably benefit hotels aiming to increase meetings business, direct bookings promise lower commission fees and, therefore, higher profits. So a new segment of the Bass site devoted to meeting planners (www.meetings.basshotels.com) aims to do all that Plansoft.com or StarCite.com might do, but with a Bass-brands-only focus. In addition to providing all the essential hotel meeting space specifications, the site offers virtual tours and a special destination guide describing area attractions, currency exchange rates and weather conditions.
Chinese tourism is growing rapidly, and Bass plans to capitalize on the trend with the launch of its comprehensive Chinese language Website (www.china.basshotels.com) complete with booking capabilities. Outbound travel from China increased from 5.3 million travelers in 1997 to 8.4 million in 1998, a growth of 36.9%. The number of domestic tourists grew 7.2% in 1998 to 694 million. Bass is the first international hotel company to capitalize on the growth with a full-service Web site.
Online Advertising Located in the midst of California’s high-tech heartland, Silicon Valley, the W Suites Newark caters to tech-savvy business travelers. This group of travelers was the perfect test case for a new approach to advertising a hotel’s opening. W launched an online-only advertising campaign in August called the Superstitial through the DoubleClick business and technology networks, and generated 35 reservations within the campaign's first week. Pass-along rates were higher than anticipated, with recipients of the advertisement forwarding it, on average, to two other people. While room nights generated by the campaign keep pace with W’s past direct-mail campaigns, the o-line medium is far more efficient, ringing in at half the cost. “What we discovered was people do react to this, and they do like it,” says W spokeswoman Diane Briskin, who anticipates launching future e-based campaigns for other W properties.
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