Reduced costs, simplified IT infrastructure and administration, scalability, improved flexibility, consolidated view of business, and personalized customer experience are key drivers for the increasing popularity of hosted solutions in the hospitality sector.
The emergence of internet-based applications and hosted solutions has transformed the way IT works. Today, IT is moving away from the software licensing model to subscription or “on-demand” model – commonly known as Software as a Service (SaaS). The SaaS and hosted solution model is not just hassle free, it is also cost effective. Not to be left behind, the hospitality industry is leveraging the advantages of hosted solutions too. As budgetary allocations towards technology get slimmer, hosted solutions offer the sector an opportunity to access cutting edge technology at affordable prices. The increasing need for rapid business expansion, cost reduction and enhanced user experience are also the driving force behind hosted solutions, and, the hospitality sector has not remained untouched by this paradigm shift in IT.
Hospitality Sector and Hosted Solutions
Over the past few years, the hospitality sector has experienced tremendous growth. Thanks to the internet and cheap travel costs, all segments of the industry, from large hotels to casinos and small restaurants have enjoyed economic growth and expansion. However, the looming economic uncertainty is prompting companies to re-evaluate their business infrastructure and cut down on non-essential costs.
In this scenario, hosted solutions become the logical choice to manage a growing hospitality property, reduce operational costs and still provide personalized guest experience. In a hosted environment, all components of the solution are located on a service provider’s data center. The service provider is responsible for managing applications and hardware stack. This reduces the need for up-front capital investment on expensive servers and software upgrades, and allows hotels to maintain minimal IT staff, if any.
With hosted applications and solutions such as unified communications, mobility services, and integrated call centers, hotels can keep costs in check, without compromising on service delivery, increase staff productivity, and drive new revenue streams. Services such as reservation and customer engagement are already moving to Global Distribution Systems (GDS)/ Internet Distribution Systems (IDS) and hosted CRM. It is only a matter of time before entire hospitality ERPs move to the cloud with only core applications on-site.
Benefits of Hosted Solutions
Hosted Solutions can be a game changer for the hospitality sector. Some obvious benefits are:
- 100% application uptime
- Reduced upfront investment costs
- Freeing the hotel from burden of maintaining huge IT infrastructure, maintenance staff, software upgrades and installation
- Saving on cost of energy and space, unlike when applications, systems and servers are on-premise
- Time saved as a result of not having to install the application and maintain it
- Improved resource management allocation – distribution of services and manpower at right time at right place
Can a Hospitality Property really benefit from Hosted Solutions?
While some hotel personnel may be filled with apprehension on the real benefit of hosted solutions, it is important to note that cloud, SaaS and hosted solutions are not new. They have been successfully deployed and used extensively by industries that need to access cutting edge information technology. These industries have benefited tremendously from the cost saving and access to world class IT infrastructure.
With the current economic uncertainty, no hospitality property anywhere in the world has access to huge budgets and while revenue managers are squirming in their seats and general managers sweating over their bottom-line, the benefits to be gained from hosted solutions can hardly be ignored.
For those with questions about how a hosted solution works, it works very like an on-premise solution – it is easily accessible through a browser, from any part of the world. Since your application is on the cloud, you need not worry about your computer crashing and data loss. One big advantage of hosted solutions is their 100% application uptime. The application can be operated, reports generated and printed, data entered and viewed, using thin clients which further reduces investment in infrastructure.
Because the solution is hosted, it is the service provider’s responsibility to integrate different channels of your hotel such as front office, ticketing, reservations, bookings, payroll, human resource management, internal communication, etc.
A hosted solution linked to a GDS/ IDS allows guests to view availability of your hotel rooms real time, and book and pay with ease. This ensures higher room booking and thus revenue.
Another advantage of a hosted solution is that it provides access to world class IT infrastructure and technical expertise at great rates. Operating systems and other applications are constantly upgraded by the provider, meaning you can access the latest features in applications and ensure you are getting the most for your investment. Most hosted solutions have a “pay-as-you-go” service model which reduces the monetary liability on a hotel property. This also gives hotels a chance to change their service provider should they be unhappy with service. Hosted solutions are a shot in the arm for new and small hospitality properties as they can now adopt new technologies at affordable prices.
Leverage Hosted Solutions for Increased Revenue
Looking at the attractive benefits of hosted solutions, it would be correct to conclude that they hold tremendous opportunity for the hospitality sector. Hosted solutions are definitely a way forward for the sector as it helps hotels quickly meet growing guest expectations and demands while saving costs and increasing staff productivity.
Mr. Jacob K.I.
Vice President – Sales, Asia Pacific
Jacob has over a decade of experience at IDS NEXT and has played key roles at the company in Implementation, Support Services, and Quality Assurance, before heading to Sales and Marketing. He can be contacted at firstname.lastname@example.org
This article was published in Hotelier Indonesia.