Ask any hotelier or hotel technology company about their biggest pain points, and inevitably they will mention integration. Interfacing between legacy hotel Property Management Systems (PMS) and third-party systems have plagued the hospitality industry for years. HTNG was created some 20 years ago to create a communication messaging standard for hotel systems and made some initial progress. But till today, connecting hotel systems is still mostly a pain.
The Evolution of the API Integration Game
The PMS is the central nervous system for any hotel. Twenty years ago, the big PMS software companies took this advantageous position to start reaching into every part of a hotel’s need: distribution, business intelligence, revenue management, sales & catering, etc.
Many hotel CIO’s were enamoured with the concept of the PMS company being a one-stop shop. It made their job easier – there was only one throat to choke, as they say. However, specialist software companies began to offer better, more focused solutions to specific areas of the business. As such, the big hotel brands started to demand that PMS companies exchange data with their preffered software. The PMS companies begrudgingly complied with the development of API’s (Application Programming Interface). The integration process was costly and took a long time.
Flash forward to today. The same PMS companies are still reluctant to undermine their own extended services by connecting to 3rd party software. But the landscape has changed dramatically. HTNG was able to help and made some strides. The Cloud has made it possible for small PMS companies to quickly get into the marketplace and put pressure on the legacy players. These cloud-based systems don’t do everything – but they will connect to most anyone. This opens the door for innovation. Small specialist software companies can now connect to these new PMS companies either directly or through API marketplaces such as Siteminder and HapiCloud.
Variety and Competition are the Game Changers
Hotel IT staff have woken up to the new possibilities here. Their software choices now can have a direct influence over cost efficiency and revenue. Plus, hotels have evolved. There are many new hotel concepts that have established a corner in a marketplace that was once dominated by 300-room Marriotts and Sheratons. Unique hotel models have unique technology needs. As a next step from HTNG’s initial standards, Hotel CIOs now want a tech stack that reflects the face of the hotel and can help further differentiate the hotel from the competition.
The large PMS companies are well aware of this trend and, in fact, are morphing their business model in response. API integration is no longer a dirty word for them, but don’t expect a free lunch. These legacy PMS companies still know they hold huge market share. As such, they still have a large amount of control over the timing and price of integrations. They are working towards providing a competitive model to the new independent API marketplaces, where they can be the source for 3rd party software integrations but within their environment and on their terms. Will these be truly “open” systems as start-up cloud PMSs and marketplaces are? That depends on your perspective. Either way, competition is generating innovation, and that is good for hotels, who are in desperate need of innovation right now.
A Need for Open PMS Solutions to Recover from Pandemic
Cost-cutting has reached new levels with COVID. Unfortunately, in the US, hotels will continue to see properties to struggle into 2021 and beyond. Demand will be down for a while and hotels are being squeezed by both local safety ordinances as well as the concerns of guests. So, the trick is, how do we change the way we do business to survive while relying on less revenue?
The answer: Hotels will need better technology systems. They need a tech stack that allows them to become more innovative, nimble, and more customer-centric. They need to be able to try new ideas on contactless guest interfacing and creative ways to generate more revenue form guests who are paying lower room rates. There are many interesting options out there, but which ideas are best? Savvy CIOs know it will be a matter of trial and error. They will want to ability to enable and disable applications quickly and take advantage of the Free Trials that come with many SaaS solutions.
API integration may hold the key to business success and CIOs will put pressure on their PMS vendors to lower the hurdles to integration. Once again, though, the PMS companies’ ability to play nicely in the sandbox with others will be tested. For example, PMS integrations for software Free Trials should, in turn, be free.
Large PMS companies will continue to struggle to turn the battleship. Size makes innovation hard. But it is happening as we speak. In the meantime, start-ups and smaller companies are creating new app ecosystems that are very attractive to some hotel groups. The good news is that hotels that will benefit from competition-driven innovation which, at this moment, could mean keeping doors open. Established vendors such as Oracle are making inroads with their new “Oracle Hospitality Integration Platform,” as is Prote l with “Protel I/O”.
COVID is forcing people to think differently. There is a prime opportunity at the moment for hotels to experiment with new technologies to avail of innovative features and functionality at a better price point. Legacy systems, like the PMS will continue to play a vital role. But API integration will be essential to enable endless possibilities for innovation, give hoteliers a competitive edge and ride out the pandemic.