Eventual Integration

Hotels benefit from makers of works-in-progress promising them the world.

By Joan Marsan, Technology Editor -- HOTELS Magazine, 2/1/2000

Few characteristics will heighten a system’s appeal to hoteliers as much as integration. Increasingly, PMS software designers cater their graphical interfaces to reservationists needs. They incorporate rudimentary yield management capabilities, assisting the quest to achieve maximum revenues for each room and each stay. Many offer add-on modules that handle spa bookings, schedule tee times at adjacent golf courses and make restaurant reservations. But all these amenities can’t compete with a user-friendly, no-frills system that promises automated integration capabilities and Internet readiness.

Looking To The Future

The 2,046-room Westin Stamford/Westin Plaza, Singapore, switched from their established HRGAS system by Inter-American Data Inc. to a beta version of MICROS-Fidelio’s OPERA in August of 1999. While any IT director might feel anxious as he or she anticipates the transition to a new system, OPERA promised to set the Westin’s managers in good stead. This assurance, as it so often does in a world of rapidly developing technology, came not with the offer of a complete package, but with the guarantee of enhanced integration to come.

“Previously, the HRGAS system did not have the necessary interface facility with the CRS,” says Maggie Quek, EDP manager, Westin Stamford/ Westin Plaza. “With OPERA, we expect to be able to directly interface with Starlink [the hotel’s CRS] in about a year’s time.”

Quek was willing to take a gamble, switching from a system that could not support a PMS/CRS interface to one that doesn’t currently offer such an interface, but promises to in the not-too-distant future.

Encouraging this risk taking was an unprecedented amount of automation. While the Westin awaits its PMS/CRS interface, it benefits from a reduced cost of operation, improved reliability and performance, and higher productivity, Quek says. The hotel’s US$2.75 million investment in the OPERA system has allowed the automated melding of front and back office functions, a point of sale system, a call accounting system, the Saflok security system, the guestroom movie system, and a voice management system including room status update.

The Automated Advantage

“I’ve never seen automation work to somebody’s disadvantage,” says John Burns, president, Hospitality Technology Consulting. In addition to its obvious time-saving boons, automation obviates manual input, making errors less likely. This compounds time savings by minimizing the number of corrections necessary. It reduces guest complaints, minimizing the time allowances necessary to address such complaints and the cost of appeasing angry customers. Correspondingly, automation increases satisfaction and potential return rates.

Most importantly, however, automation allows computers to handle tasks that humans are too conservative to execute in the most profitable manner. Directly linked PMSs and CRSs can increase the number of bookings at a hotel because both channels remain permanently open.

Humans are notoriously too conservative, Burns says. They close manually operated channels earlier than necessary, limiting the receipt of last-minute bookings and revenues, because they excessively fear overbooking.

“If there’s a human involved, there is a tendency to be too conservative,” Burns says. So much so that in yield management systems, a decrease in human intervention—even in systems that don’t fully, automatically integrate the PMS and CRS-corresponds with an average two to four percent increase in gross rooms revenues. Yield management companies are so certain of this increase that some even guarantee such results. IdeaS, Inc., Eagan, Minnesota, delivers a 4% revenue hike guarantee along with their yield management system.

Even without such pledges, Burns says, “I have yet to hear a story where a property did worse due to automation.” But this promise of betterment resulting from integration isn’t a guarantee of a smooth or rapid installation process. The Westin, for example, expects to have waited a year before integration between the CRS and PMS is complete. But in the meantime, no one is complaining. System integration is at a higher level than it was previously, and OPERA can easily expand to handle a multi-complex environment, exciting to a property with more than 2000 rooms and 12 food and beverage outlets.

Independent Gains

Independent properties, contrary to conventional wisdom, may have even more to gain from integration and automation than large multi-complex operations. The independent hotelier of the past may have found little use for a PMS that programmers prided themselves on having linked to distant reservations systems. But today’s independent hotel stands to gain by automatically exposing its room availability to a wide range of reservation channels. A PMS that promotes this exposure could be a property’s best bet at hiking profits.

John Egan’s Big World, Stowe, Vermont, is home to a host of winter activities, a bustling 60-seat restaurant and a 13-room lodge. Owner Bernie Isabelle manages the property, but is off-site frequently. When considering PMS options, front office operations were just one of his many concerns. He also wanted a system that could take reservations while he was away and a low-cost service that could help him get online.

Isabelle took a risk and began running the beta version of innSynch, a PMS that links with inntopia.com’s Internet reservations service. While the system was brand new when Isabelle installed it in July, he says the transition to the real-time, live, browser-based system was painless. And even though he switched over in the system’s infancy and in his slowest season, he saw bookings rise by at least 10%.

Bookings are but one way in which Isabelle has seen returns on the system. The average room rate increased from US$70 to US$85 on weekends and jumped from US$70 to US$100 for the holidays.

Isabelle finds that the online system allows him greater control over rates. Whereas previously he relied on a stock of printed rate cards, now he takes reservations from customers who view rates online, where they can be raised easily and instantaneously.

As Isabelle’s returns increase, so does the cost of the system. He pays 5% of the rate generated by each online reservation to inntopia. But the gains, Isabelle says, far outstrip the costs, which he considers minimal.

The system not only cures a difficult bookings situation, but it also draws new clientele, expanding the pool of potential repeat customers. “It makes you look savvy,” Isabelle says of offering reservations online.

“And for generating new business, this is the nicest way to do it. You don’t have to be there. They can just look you up online.”

For Isabelle, trying something new enabled him to automate and integrate a vital aspect of his operation. In the process it boosted bookings and revenues and captured a new cast of clientele. It frees him to get out of the office and devote time and energy directly to guests. The gains are concrete. “And I haven’t even used it in the busiest season yet,” he says.

Round-Up Of PMS Providers

More than 40 companies manufacture property management systems (PMSs) for the worldwide hospitality industry. Listed here are those PMS vendors that responded to our survey.

AremisSoft Corp., Surrey, England
Market: Worldwide/No. of Installs: 40
The Aremis system is an enterprise solution that uses an open access database to handle property management, central reservations and customer information functions on property and online.

Citadel Hospitality Automation, La Veenendaal, Netherlands
Market: Worldwide/No. of Installs: 1,000
In addition to offering a full range of front office functions, the Brilliant! PMS interfaces with other Windows software packages, the Internet and CRS.

Geac Computer Corporation Limited, Markham, Ontario, Canada
Market: Worldwide/No. of Installs: 500
The GEAC/UX PMS offers muli-property capability, unlimited reporting, and an optional golf package. The system was designed for large properties (more than 40 hotels with 900+ rooms installed).

Hogatex Software GmbH, Munich, Germany
Market: Worldwide/No. of Installs: 1,300
The Starlight system, available in Windows and DOS versions, centralizes guest, company and travel agent information within a secure, multi-operational Hotel Management System (HMS). It integrates with Winword, Outlook and Excel for easy reporting. Guest folio functions allow access to specialty charges from other Hogatex modules.

Hospitality Solutions International (HSI), Boca Raton, Florida
Market: Worldwide/No. of Installs: 800
The fully scaleable Jaguar SQL version 4.0 has integrated, two-way capability with the Falcon CRS, incorporates Web and GDS reservations, and includes a rules-based yield management system. A visual graphical tape chart allows room blocking. Crystal Reports customizes reports at the property level. The system excels in large, complex environments

Hotel Information Systems (HIS), Irvine, California
Market: Worldwide/No. of Installs: 4,000
The LodgingTouch system offers a fully integrated and interfaced PMS and CRS with yield management features, an optional central information system for data warehousing, and Internet reservations modules.

Innsite Hotel Services Limited, London
Market: Worldwide/No. of Installs: 500
The Chain Management Solution creates an Intranet-based company network uniting the property management, central reservations and customer information systems. The single-image architecture assures access to current information.

inntopia.com, Stowe, Vermont
Market: USA/No. of Installs: unavailable
Running off of a property’s Web browser, innSynch automatically links the front desk to inntopia’s GDS. The low-cost solution enables front desk management and online distribution.

Megasys Hospitality Systems, Tulsa, Oklahoma
Market: USA/No. of Installs: 100
LodgePro is a scaled-down version of the MegaPro software, geared for smaller properties.

MICROS-Fidelio, Beltsville, Maryland
Market: Worldwide/No. of Installs: 8,000
OPERA integrates the property management, central reservation, sales & catering, customer information and quality management systems. With the recent acquisition of OPUS2, expect a robust, two-way interface with the TopLine PROPHET yield management system.

Northwind Canada Inc., Markham, Ontario, Canada
Market: Worldwide/No. of Installs: 112
The enterprise-wide MAESTRO system includes a YMS and integrates the PMS with customer databases, PBX, POS, key locks and video check-outs. Real-time Web reservations cpaabilities are also included.

REZsolutions, Inc., Phoenix, Arizona
Market: Worldwide/No. of Installs: 600
GuestView offers reservations, availability, guest services, rate management, accounting, marketing, concierge and housekeeping modules.

Rick Warner Talks Technology
Rick Warner, senior vice president, hotel systems,
Bass Hotels & Resorts, Atlanta, Georgia

Q: Hoteliers face great, constant pressures to provide guests with more and better technological services. What standard level is Bass presently working to achieve?

A: When developing standards, we have to deal with the fact that we are B-I-G. The “B” stands for brands. We have a wide variety of brands serving a broad spectrum of traveler. The “I” stands for interests. We have many special interest groups: BHR Corporate, large franchise, small franchise, guests and others. And the “G” stands for global. Ensuring that a standard works within our BIG framework takes some time and effort.

BHR is learning a lot of lessons from its Tech Pack initiative. Tech Pack, the complete, integrated hotel system for our Staybridge Suites brand, has service as its core objective, for the guest, for the staff, and the franchisee. Our goal was to put technology where it belongs—supporting people, not the other way around. Although this is simple in principle, it is much more difficult in practice.

Staybridge Suites was one of the first brands to provide high-speed Internet services to their guests as a standard both in the room and common areas. There are two multimedia PC’s in the library area of the hotel that are free for guests to use. The fee for using this service in the room is very fairly priced based on the length of stay.

Support for standards for these types of services (let’s call them services, not technologies) has made its way into our other brands. Both Inter-Continental and Crowne Plaza will be providing high-speed Internet services to their guest rooms, meeting rooms and common areas. The roll-out will begin in late 1999 and continue through 2000 for North America and selected locations outside of this region.

Q: What will be standard in three years?

A: Guests will not pay for Internet to the room. This service will be supported by a combination of content, advertising and hotel paid services. The guest may pay for certain guaranteed service levels like bandwidth, inter- and intra-hotel collaborative networking, sophisticated print services and the like.

Wireless Internet connectivity will provide points of presence through a hotel property and bridges with public wireless providers like ATT, Sprint, MCI and other carriers. Additionally, this ability to connect will provide a host of in-room services like climate control, security, custom room tuning. However, these service offerings will not be standard in three years.

Hardware will begin to enter the room, although operationally this remains a bit of an issue. Thankfully, high-powered productivity devices are becoming smaller, more robust and more reliable.

We need to be flexible in how these services are implemented because one size certainly doesn’t fit all, especially when you’re looking at retrofitting an older hotel’s infrastructure to accommodate a new technology. However, we believe that the market (i.e. guests) will drive a lot of the demand. The time will come when guests won’t stay in a hotel that doesn’t have high-speed Internet access available (just as they wouldn’t stay in a room without a telephone today).

Q: What does a hotelier or a chain do to get the most value out of a standard system?

A: If you view each of these systems on a standalone basis, they are increasingly becoming a commodity product that can be purchased from any number of look-alike vendors. The real value lies in how tightly integrated the individual components are, and how well they are being utilized at the hotel. Today, as much as 80% of the functionality resident in many of these systems is hardly ever used.

Operators who can link PMS, CRS, and RMS to achieve true “single image” inventory and train their people to get the most out of the systems that they already have will win in the long run.

Unfortunately, there’s no crystal ball available to predict which vendors will ultimately have staying power. The key is to do a lot of research up front, and draft a good contract with a lot of protective clauses built into it in case things do “go south” (e.g. software placed in escrow, etc.). At BHR, we initiate formal RFP’s before making any major systems acquisitions so that we can evaluate vendors from as many different angles as possible.

Tech Briefs

Hostec 2000

CynterShow UK launched a new event designed to serve the technology sector of the hospitality, foodservice and catering industries in the UK. The Hostec 2000 exhibition and educational conference will run April 11-13, 2000, at the Wembley Conference & Exhibition Centre, London.

Room With A View

Scenery sells, so the 400-room Tremblant Resort, Mount Tremblant, Quebec, maintained mountain views when planning the US$2.7 million Aqua Club La Source, a water park with a 2,800-sq.-ft. (260 sq. m) free-form pool, a 205-sq.-ft. (19 sq. m) spa, a 738-sq.-ft. (68 sq. m) waterslide pool and a waterfall. The park’s 150 ft. (46 m) of glass windows reveal striking views of the Laurentian Mountains.

But these windows to the natural world present a problem. To keep the aqua park’s glass clear and its air pure, a Dectron Internationale, Roswell, Georgia, dehumidifier removes about 145 pounds of moisture per hour, lowering the relative humidity to 50%. The dehumidifier also recovers heat, which is used to warm the swimming and waterslide pools. To save energy, the US$170,000 system’s outside air dampers automatically close during off hours when evaporative rates decrease.

Online Retail Made Easy

Consulting firm McKinsey & Company, Chicago, released “From Hype to Profit$,” a guide to online retail success. Analysts predict that a minimum of 10% of total retail sales will take place online by 2003. Internet travel retail, which has outstripped other online retail categories, will continue to see formidable growth. Smart site planning is key to online travel retailers keen to profit from this growth.

Hotels hoping to achieve increased online reservations can benefit from McKinsey’s basic wisdom. The guide stresses achieving online profitability sooner rather than later, while acknowledging that online economics differ drastically from traditional models and may require profit-taking at lower volumes.

Properties must select a winning combination of content, community and commerce. The individual hotel or brand’s business strategy and focus will drive the balance of these key Web commerce elements.

Sites must allow for speed and innovation. Few potential guests will tolerate waits online, and all of them will expect a property’s site to evolve as the online medium matures.

Supplyline

GDS provider Pegasus Systems, Dallas, acquired CRS developer Rezsolutions, Phoenix...
Point-of-sale provider Infogenesis, Santa Barbara, California, was designated a premier business partner by IBM...
U.K.-based Quadriga announced the launch of a 40-litre integrated AutoClassic minibar, better-suited for hotels with limited minibar space...
The Hard Rock Hotel and Casino and The Golden Nugget, both in Las Vegas, added electronic reservations capability with Englewood, Colorado-based Sceptre Hospitality Resources’ GDS and Internet services...
San Diego-based Vagabond Inns signed on to use the Wizdom GDS by Parsippany, New Jersey-based WizCom International...
MICROS Systems, Beltsville, Maryland, acquired OPUS 2 Revenue Technologies, Portsmouth, New Hampshire...
Communications network providers NEC Business Network Solutions, Irving, Texas, announced a U.S. distribution agreement with Teledex, San Jose, California...
Hospitality Solutions International, Boca Raton, Florida, merged with foodservice software provider Symbiotic Systems Corp., Boulder, Colorado...
Swissotel, Zurich, has seen a 41% increase in bookings since signing with central reservations services provider TRUST International, Frankfurt. Small Luxury Hotels of the World joined the service in October...
Minneapolis-based Comrol Corporation, data communications specialists, acquired Protocol Technologies, Scottsdale, Arizona, innovators of integration technology...
Grand Hinckley Inn, Minnesota, installed the AREMIS property management system by AremisSoft, Surrey, England...
Starhotels, Florence, agreed to install Cologne-based Prodac’s multi-media systems in more than 3,000 rooms...
Elsafe, Leksvik, Norway, will install in-room safes in all Starwood Hotels & Resorts.

Netline

Meeting Marketplaces The US$100 billion meetings industry has attracted the interest of several Web developers and financiers. Internet Capital Group, Wayne, Pennsylvania, a company holding positions in more than 30 Internet companies, partnered with meetings site StarCite.Com (www.starcite.com).

Investments from Cornerstone Equity Investors, New York, and Comcast Interactive Capital, Philadelphia, helped to bring the total invested capital of planner site PlanSoft (www.plansoft.com) to US$40 million. Both sites are using partnerships and capital to the hotelier’s advantage, providing a space where hotels can hawk inventory, at the cost of a percentage of generated room revenues, to qualified meeting planners. PlanSoft has been on the scene longer (we reviewed the site in our August 1999 issue), but StarCite is soon to offer an exciting auction capability and promises to be a fierce competitor.

On The Auction Block Mims Wright, co-founder and CEO of Bidtripper.com (www.bidtripper.com), is an owner and director of Victoria House Resort, a 32-room, independent hotel in Belize. He says Bidtripper solves a marketing problem for the independent hotelier. Hoteliers can join the service at no cost, placing unsold room nights onto the site’s inventory, making them available to potential buyers who submit bids. If an agreement is reached, Bidtripper collects a 10% commission from the hotel. A unique module, Tripspotter, allows potential guests to create their ideal vacation. Bidtripper sends the information these users contribute to hotels, who may offer them a deal. In this way, the site surpasses even its promise as a yield management tool—it provides hoteliers with invaluable information about the kind of experience their guests hope to have at the property, allowing them to respond one-on-one to customers.

Etravnet.com (www.etravnet.com) offers a different take on the auctioneer service. “Haggle With Us” allows Internet travel consumers to negotiate the price of a hotel room directly with hotels, in real time. On-line consumers choose a participating hotel, select the type of room and number of days desired, and propose a price. Etravnet’s technology converts the Internet request into a telephone call to the hotel reservation desk. The hotel reservation agent can press telephone keys to accept, stand firm or counter-offer for a maximum of three bids. As with Bidtripper, consumers know what they’re getting—it’s not the blind bidding process currently on offer at many sites.