Why siloed hotel tech categories should be removed from our vocabulary

As both a keen traveler and someone who works in hotel technology, I straddle two very distinct worlds. ‘Traveler me’ knows what it’s like to experience the seamless – to book a hotel with hours to spare, to navigate a foreign town and find great coffee with the help of satellites 12,000 miles overhead, and to post the experience on social media – all with a few taps of my smartphone.

‘Hotel technology me’ probably knows too much. This version of me knows that the revenue team downstairs is likely bogged down in antiquated, siloed systems that can't speak with each other, in real-time if at all, to match the speed of progress. This me also knows that, because of this literal lack of connection between systems, the B&B I recently checked into hasn’t changed its rates in eight months and is leaving huge amounts of money on the table. Yes, this me even knows the reasons why the ‘personalized’ ad I was just emailed included some very fundamental errors.

It’s a disconnect of experiences that isn’t just ironic; it’s unacceptable.

Why hasn’t the hospitality industry, which thrives on providing impeccable service to a tech-savvy clientele, evolved in tandem with its guests? And, given we have the tools and knowledge to break down these barriers, why is industry-wide progress so painfully slow?

As industry insiders and leaders, we owe it to ourselves to ask these questions loudly and regularly, and to hold each other accountable. We should take it personally that findings from SiteMinder’s Changing Traveler Report 2023 showed 78% of travelers globally saw our sector as either average or behind when it came to tech adoption.

We also need to open our eyes wide, and deeply examine how an industry like retail for example has evolved, and shifted from once highly-fragmented to integrated for the purpose of streamlining operations and enhancing the experience of its customers.

The industry transformations happening around us

Let’s dive for a minute into the world of retail, which both we and our customers know so well. Retail was once an industry defined by disconnected experiences. Physical stores, online shops and customer service centres largely operated as separate entities with little to no interaction, and shopping was anything but seamless. Were you ever impacted by ‘in stock’ online, ‘out of stock’ in store? It was a really great way to sprinkle some genuine frustration onto your Saturday morning.

Today, the vast majority of retailers have taken an omni-channel approach to provide shoppers with a unified experience. Customers can browse products online, check availability (accurately), and opt for home delivery or in-store pickup, the internal systems working in harmony to ensure the ordered management of store inventory.

Importantly, the industry has also harnessed the power of big data and analytics to fine tune its marketing efforts. By integrating data from various touchpoints, like online browsing behavior, purchase history and in-store interactions, retail providers are now able to generate personalized recommendations that are likely more impactful than in any other industry, boosting not only sales but loyalty when delivered consistently – all of this the result of connected, flowing streams of data.

The guest problem with siloed hotel tech systems

Unlike users of retail tech, users of hotel tech are met with an environment that remains largely fragmented. Hotel technology is traditionally divided into numerous categories (you’ve all seen the re-hashed visuals): Property Management Systems (PMS), Channel Managers, Customer Relationship Management (CRM), Revenue Management Systems (RMS) and more. Every couple of years, a new mega diagram emerges in our industry, depicting the extent of the choices now available to hotels – and, rather than be appalled by the lack of connectivity between the systems contained within these diagrams, we seem to applaud the sheer volume of choice, forgetting that choice can be paralyzing without consideration for best-of-breed systems that connect seamlessly with others.

We should welcome and embrace specialization, but equally we should ensure that it never operates in silo as that can often lead to inefficiency or, worse yet, become visible to guests. Hoteliers are often forced to juggle multiple systems, each with its own interface, data formats and learning curves, not only complicating operations but also increasing the risk of errors and inconsistencies.

The cost of little system-to-system integration to hotels is significant, spurred by sync issues, inefficient rate updates, lack of coordinated real-time insights, and the need for shrinking teams to become comfortable with several solutions. These are but a few of the issues that are leading to both lost opportunities and revenue.

An environment has been created that is squashing, rather than harnessing, innovation among hoteliers who feel frustrated rather than enabled. Similarly, it is encouraging hotel tech companies to literally think in boxes, rather than openly. If you're one of the few who dare to step out of your lane, you can expect to be penalized by reducing yourself to category speak at events, or being forced to select a specific category in awards programs and even... editorial features, such as HOTEL Yearbook Technology’s :)

If the above struggles are coming from even our most seasoned hoteliers and industry vets, spare a thought for the smaller properties that make up the industry’s majority.

The harsh reality for independent operators

The reality is that for the world’s hundreds of thousands of small properties, complexity is either the reason they use technology minimally, or don’t use it at all. We are talking about hoteliers that are looking to change their rates for an upcoming event in the same hour they are ordering the new pillow sheets and trying to find their cleaner’s updated bank details.

They are doing their best, but are under pressure, balancing the demands of guests with the need to maintain profitability. In this high-stakes environment, the complexity and fragmentation of technology can be overwhelming. As one of our customers recently remarked, “Being a hotelier is very stressful. If you get just a few of these revenue management strategies wrong, you can ruin your business or life with debt.”

This sentiment is echoed across the industry. Hoteliers face an uphill battle against outdated systems that don’t communicate well with one another, and rather than the current tech landscape supporting hoteliers in their quest to provide an exceptional service and maintain a competitive edge, it often feels like an additional burden.

How many small accommodation providers understand what a ‘platform’ is, for example? And recognize the value of a single location that encompasses a multitude of capabilities, from distribution to revenue management to payments – but also establishes APIs to make itself open to an entire ecosystem that fills in the gaps? I’d suggest very few, versus the number that have an awareness of what an isolated tool is, like a booking engine, for example, and ignore the importance of connecting that booking engine to critical complementary systems such as online review platforms.

The path to convergence

At SiteMinder, we’ve witnessed firsthand the transformative power of best-of-breed technology that opens up the entire travel ecosystem.

Over the years, we’ve developed a holistic revenue platform to allow hoteliers to move at the same speed as the travel environment around them – and, importantly, established best-in-class integrations that welcomed a world of choice. From PMS-to-distribution-to-RMS integrations, to PMS-to-hotel-application integrations, we created APIs that have literally broken down the barriers crippling our industry.

Insight into the needs and behaviours of more than 41,000 hotels globally has driven us to envision a future where hotel technology isn’t divided into arbitrary, siloed categories but rather is unified into a cohesive ecosystem that doesn’t simply combine multiple capabilities, but drives real value to a hotel’s bottom line.

We’ve begun asking ourselves the most fundamental of questions, like:

• Why can’t the industry bring together different elements, like distribution, intelligence and revenue optimization, into a single cohesive platform like retail has done so effectively?
• Why can’t we allow properties to change their rates at speed, or make it simple for hoteliers to access and manage multiple distribution channels with one agreement?
• Why can’t we embrace partnerships as well as we embrace choice and competition?

The answer to all of these questions is: we can, and our collective team is on a mission to bring this to life.

A unified call to action

In some aspects of our industry, the future can be difficult to imagine, but in others, I find it can be crystal clear. The future that I see is one where ‘traveler me’ can be proud to be a lover of hotels and how they do business, and where ‘hotel technology me’ will witness an integrated, dynamic ecosystem continue to come to life.

This is the future that we must be looking to collectively march towards. It’s one where hoteliers of all experience levels can enjoy the functionality of sophisticated technology, where forward-looking minds can adopt best-in-class tools with new levels of support and ease, and where the antiquated, siloed tech categories that have long divided us begin to fade away to create an elevated experience for accommodation providers and their guests.