REPORT FROM THE U.S.—As hotel companies look to replace their core systems (property management, point of sale, central reservations, customer relationship management, etc.) one factor they’ll consider is proprietorship.
Major hotel brands traditionally have built their large technology platforms in-house because doing so offered a unique selling point—a reason an owner would choose one brand over another.
For example, Choice Hotels International in April announced it will market for sale its proprietary cloud-based property management system. Choice a few years ago identified technology—from infrastructure to hardware to software to connectivity—as a differentiator and has placed significant resources into innovation.
However, while brands may use their proprietary technology advancements as a selling point to convince owners to join their system, most owners said it doesn’t matter to them whether a brand offers a proprietary PMS or not.
“As owners, we have no interest in it being proprietary,” said Larry Doyle, senior VP of asset management for Ashford Hospitality Trust. “We just want it user-friendly and cost-efficient. It’s the brand that worries more about that.”
The proprietorship discussion comes on the heels of an announcement from Marriott International that the company will ditch its nearly-30-year-old proprietary PMS, choosing instead to outsource the technology. Marriott in April announced it would partner with Micros and require owners of its 3,800 properties to install Micros’ hosted Opera solution.
Joe DeMontigny, CFO of Peachtree Hotel Group, said “it doesn’t matter at all” whether Marriott, or any other brand, offers a proprietary PMS.
“What matters unilaterally is the interface with the (central reservations system), that’s what’s proprietary,” he said. “We certainly don’t make a decision on a brand to select based on what PMS system they use.”
Naveen Kakarla, president and CEO of HHM, said most brands will claim their technology is proprietary whether it truly is or not. Owners “need to peel the onion quite a bit” to see what is proprietary and what isn’t, he said. Often brands will customize the delivery of the solution so it looks and feels differently than competitors using the same tools.
“Today, with the growth of independent hotels and evolution of reservation technologies, you have such sophisticated independent systems,” Kakarla said. “We are certainly buying off the shelf. That gap has really narrowed in the past 10 years.”
At the European budget brand Travelodge, each of the nearly 600 hotels is corporate-owned and uses the same third-party PMS through IDeaS, which is also used by several other global chains.
Peter Manby, revenue director with Travelodge, said driving revenue and optimizing the guest experience comes down to the quality of people over the proprietorship of the technology.
“You need people who are highly skilled, highly intelligent, highly driven and able to make good commercial decisions supported by the system rather than driven by the system,” he said.
One area in which Marriott will place even fewer restrictions on preferred solutions providers is in the high-speed Internet space.
Concord Hospitality Enterprises, known most for their development, owning and operating expertise, recently has been certified by Marriott to provide Internet service to all Marriott-branded hotels in North America.
Concord is one of 17 certified service providers authorized to install and maintain Internet needs for Marriott hotels.
“Prior to Marriott deciding to embark on a certification process, we had been self-installing high-speed Internet for all of our owned and managed hotels since 2000, so we were well aware of the challenges and the opportunities,” Concord’s senior VP of information technology Brian Cornell said in a news release.