SnapShot’s VP of Product and Partnership Iris Steinmetz recently took part in techtalk.travel’s podcast titled, "Evolution of the PMS." Moderated by techtalk.travel’s André Baljeu, Iris participated among other hospitality technology experts to discuss the development of property management systems. The participants of the podcast included Daniel Krisch from Oracle Hospitality Solutions, Ulrich Pillau, Founder and CEO of apaleo, and Richard Valtr, Founder of Mews. The panelists discussed the challenges and solutions within the PMS world, AI technology’s role in PMS, and the future of the industry.
Challenges in the PMS world
PMSs are without a doubt the core of all operations in the hospitality industry, but as Michael Schubach, Chief Technology Officer of Rosen Hotels & Resorts, once said, “The history of the PMS will not define its future.” The challenge of the highly predominated market of legacy systems is still there and creates a huge obstacle for solving the issue of integration.
In order for hotels to meet the needs of their customers, the technological development of the world itself is propelling changes in the PMS industry. Krisch said, “What drove it [adoption of new technologies] is the evolution of cloud and customers having smart phones in their hands and wanting to do things differently.” He continued, “There are still today, in 2019, a lot of legacy systems attached to these modern cloud platforms that most of them have adopted by now. However, the challenges of integrating an operations system such as a PMS, are that you need to build such integrations and bridge the old and new world. That is the big challenge, it’s not the willingness to invest or adopt.”
The advantage that cloud solutions are chasing is the “one size fits all.” While this may appear to be the ultimate solution for PMS, the main question focuses on how this can be implemented by big enterprise companies, small chains, and independent hotels.
Krisch shared his opinion on this by highlighting the extreme importance of data security of the systems and that originally the big PMS solutions were built with massive complicity and without considering the “plug and play” approach. He continued, “You can see there’s a massive acceleration of the uptake of technologies from consumers and every single business needs to be flexible and fluid towards that. That’s the biggest challenge from a technology vendor perspective. How do you enable that?”
Marketplace model as one of the solutions
Another obstacle is caused by industry silos and can be overcome by building bridges between PMS and other systems. The Marketplace concept has bridged the gaps for some technologies, but the main question remains the same – is this the ultimate solution that will work for both enterprise and independent hotels?
Steinmetz highlighted that when it comes to the Marketplace concept, we should differentiate from the two main types. One option is when the PMS itself offers its customers access to the Marketplace, where they can enhance the existing system with desired add-on applications. The second approach is a hub of prospective Marketplaces, where solutions are compatible with different PMSs and not dependent on just one of them.
“If you are an individual hotel, the marketplace attached to your PMS will do whatever you need,” continued Steinmetz. “It will give you access to all the add-ons you need, and it will enhance the speed at which you can integrate. If you’re on a larger scale, for example, a management company, you have several PMSs that your hotels are using then certainly you are looking for a partner on a more central-level, who can facilitate a more generic access to the type of software you’re using to have your data in a central place.”
Another advantage of the Marketplace model is that it gives hotels the opportunity to try new technological solutions without excessive investments in time and money as the applications are already pre-integrated with their PMSs. Pillau said, “I think the goal for the future will be that open platforms will allow hoteliers to say, ‘Today, I want to try this internet booking engine and see how it works for my hotel. If it works, I’ll pay for it. If it doesn’t, I’ll try another, which fits my needs better’.”
However, while the Marketplace is an easy and comfortable solution for small chains and individual hotels, when it comes to big enterprise organization, this concept has challenges in meeting their standards. Steinmetz continued, “If you allow for each hotel to access an app that they want to try out and use in that moment, you might end up with 20 different apps all doing different functions and not being able to see a combination of exactly what you want to see.’”
Krisch also highlighted the importance of certification and the whole technological architecture for the big corporations to prove that the integrations work and do not break during upgrades.
Valtr pointed out that we should look at technology as the way to find out what the “best-use case” is for the specific segments of the hotel where there might be different recipes for smaller hotels and larger chains. One of the options is to explore the peculiarities of each segment and to develop this “best-use case” through the introduction of AI technologies.
AI technologies in hospitality
AI, being a hot topic in many industries, has yet to make as big of an impact on the hospitality scene. Of course, while it’s being widely discussed, as Baljeu said, “A lot of people talk about AI, but almost 80% of them probably still don’t know what they’re talking about.”
“When most people think of AI, they think of chatbots, which is probably one of the worst available. I’d love for a chatbot to basically remove the human experience of speaking to a well-trained receptionist, but it’s just not going to happen. Humans are much better than machines when recognizing those types of things,” added Valtr. “AI is fundamentally a buzzword for technology. Artificial intelligence is computer technology, it’s now a buzzword that gets applied to very specific, small-use cases. As we figure out what the workflows are and the better ways of doing those standardized procedures, whether it’s automation or AI, it always has to be in the service of the person who is actually doing that job,” continued Valtr.
Steinmetz held the opinion that one of the musts for getting to an advanced level is the connection to new generation cloud PMSs and open API platforms, which allows access to all of the data and an exchange of data in a two-way environment. “The key to using AI for hospitality in the future will be around how open those systems are and how you can easily and quickly connect to those systems because AI is based around huge amounts of data. In order to effectively exchange data with modern cloud PMSs and other open platforms, you need to have live access to this data on an ongoing basis in high speed mode. This is something where if the technology is built right, it can be achieved today,” added Steinmetz.
Krisch suggested to look at AI more as the way to leverage the efficiency of operations.
“One example is automatic room assignment. While it may be trivial for a 50-room property, it may not be trivial for MGM in Las Vegas with 50,000 rooms to do a room assignment every single day. This is where big data starts making a lot of sense,” said Krisch. “Due to the legacy world we live in, there’s a lot of unstructured data, but there are technologies today, including data lakes and data warehouse that continue help to collect data and structure those. This is where machine AI can help,” Krisch continued.
Future development of PMS
The genius and beauty of a PMS, in Valtr’s opinion, lies in the enormous amount of data contained within. However, the risk of having the data not cleaned and unharmonized can tremendously impact the usage of the data. For example, if someone misspelled the name of a guest even with such advanced technologies as AI, no further algorithms would work properly.
“Data in a PMS, from my perspective, is never clean and has never been clean in the past. It’s quite the opposite” said Pillau. Steinmetz continued the conversation by saying that PMS will possibly remain the point of entry. “I don’t think it will be the source of truth for clean data because we have a lot of turnover in hotels and human error,” she said. “There are a lot of reasons why this cannot be. Additionally, I think that would again ask for all the integrations to be on PMS side, which I don’t think in future will necessarily be the case. Whoever has a central profile in the future will be the winner in all of this.”
Valtr highlighted again the importance of the architecture that’s based around the database sitting in the hotel, as there are so many other systems involved, such as CRM and CRS in customers’ profiles.
Pillau’s opinion on the future of PMSs was that the system should do what its core does very well, which is everything that is related to reservations, inventory, pricing, payment, accounting and more. However, any additional services which go over and above the core services, where a hotelier or hotel chain want specialized services like guest communications, upselling and RMS should be sitting outside in 3rd party apps.
The new twist of the discussion, introduced by Steinmetz, was that we should not focus on the “system” approach, but instead think about the “platform,” because only then can we reach the level of connectivity that is missing in the industry.
“The days of seeing the PMS as a monolithic thing that does four things well and only four things. That’s why platform thinking is much better than trying to design a single-use PMS. Instead, it will be a design that is more of a kind of ecosystem that leads to a better, more fruitful and more profitable experience for the property owner, management company and hospitality provider at the end,” continued Valtr.
“I’m a firm believer in open API platforms and an API-first approach. The PMS will still be around forever, but the role of the PMS has certainly changed. The role of the PMS has to become leaner, cleaner, easier to install, and use component, and that’s what I choose today for the best approach to be,” said Pillau.
Steinmetz continued, “I believe that data is what we’re looking at in the future and how to best access it will be the crucial factor. Platforms will definitely play a large role!”
“API first and openness to enable innovation are key elements to enable a very bright future,” said Krisch.
“To some extent, it really doesn’t matter what the underlying technology behind it is because at the end of the day, we’re trying to help hoteliers do the job of welcoming guests in and trying to gain as much revenue as possible. I think that is the underlying architecture and the technology we should be speaking about, not only in terms of PMS, CRS, and CRMS,” said Valtr to conclude the discussion.
Moderated by André Baljeu
techtalk.travel is a representation company building a community that embraces wider social awareness, through a driven platform to educate, plan, implement, and optimise technology in the industry.
On the 24th July 2019, there was a thought-provoking discussion about the evolution of PMS. The invited guests Iris Steinmetz, Daniel Krisch, Ulrich Pillau and Richard Valtr together with Andre Baljeu discussed the differences that are required to from a corporate solution for PMSs (ie. top end of the industry e.g. Marriotts, Hiltons, IHGs), compared to a solution for the long tail i.e. independent operator, a smaller group and the future development of PMSs.
If you didn’t have a chance to listen to that insightful podcast, read the short overview to stay in the course of events.
Founded in 2012 with the vision to build hospitality's premier data platform independent of any brand or software provider, SnapShot is now one of the largest hospitality data processors in the world, managing transactional data of over 6,000 independent and branded hotels worldwide, with over 45 different connected PMS systems, and growing. With the release of the Hospitality Data Platform, SnapShot enters its third phase, which brings forward its founding vision: a secure data platform, visualization capabilities, and marketplace.
To find out more, visit www.snapshot.travel.