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Seismic Shift: Brands Are Looking for Tech Partners, Not Vendors


by Marco Benvenuti, Co-Founder/Chief Analytics & Product Officer
Duetto Research
April 10, 2013

Many hotel brand companies have long been stuck between a rock and a hard place. They’ve invested so much time and money in what have become legacy technology systems, it’s almost impossible to scrap them and turn to more nimble, sophisticated and far less expensive partners.

But at Hotel Technology Next Generation’s (HTNG) annual North American conference in Atlanta earlier this year, several current and former hotel company chief information officers admitted that time could soon be coming.

They were speaking on a panel titled “Seismic Shifts at the Core” and the discussion was about the industry, technology and market developments causing the seismic changes. But the real earth-shaking news was the fact the CIOs were in some cases admitting they had made a mistake.

Now in fairness, their decisions were made a decade ago in many cases, which in the hotel tech world, was a lifetime ago. The vendor community wasn’t ready for scale, their products too generic for the hotel industry, or impossibly expensive to buy and maintain, let alone upgrade.

So many major hotel brands created their own systems, stepping far outside their comfort zones to become software companies by hiring their own developers. The core systems — central reservation, property management, customer relationship management, revenue management — were built and pushed to owners.

The systems today, if not completely obsolete, are well on their way. Owners aren’t happy paying for them and are pushing hard for more innovative solutions. Far less expensive and more effective alternatives are available from dynamic vendors.

The distribution and data science side of the business, in particular, has become far more demanding with new channels, social media and one-to-one marketing. This has exposed the limitations of the legacy systems that weren’t built for those purposes.

And during the last decade, we’ve seen the acceptance of cloud computing, the rise of open source software and a whole new ecosystem of developer tools.

The HTNG panel — Vineet Gupta, CIO of Fairmont Raffles; Tim Harvey, former CIO of Hilton Worldwide; Todd Thompson, former CIO of Starwood Hotels & Resorts; and moderator Ken Barnes, the vice president of IT for White Lodging — agreed that if they were doing it all over again with today’s vendors in the market, they would probably go the route of partnering with outside companies rather than self development.
 
One gets the sense a sea change has begun.
 
About Duetto Research  
Duetto Research (www.deuttoresearch.com) provides hospitality executives with cutting-edge solutions to optimize demand, maximize rate, and minimize cost. Powered by leading Silicon Valley technologists and hospitality industry veterans, Duetto is where innovation and insight meet – to help the hotel industry create new standards of efficiency and profitability, and re-think how revenue management is done.

 
Contact:

Michael Frenkel, MFC PR – New York
For Duetto Research
(212) 808-6559
[email protected]


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