Hotel level IT decisions are made with a myriad of inputs. Making the right IT based decisions are based on standards, guest impact, costs, and what the goal of the hotel investment is. I have written in the past about the dynamic of Owner/Manager/Brand within our industry. That is, when a hotel is owned by REIT or other investment firm, on a short-term hold, there is typically an initial influx of cash to bring the hotel up to certain standards. For example, if the hotel is of a certain brand affiliation, that brand will issue a set of documents outlining what the hotel needs to upgrade or renovate, also knows as a Property Improvement Plan (PIP.) The hotel management company, along with the owner, will execute the necessary upgrades within the PIP over the course of one to two years.Once renovations are complete, we can fast forward five to seven years when the asset, under a short-term hold, is placed back on the market. At that point in time, spending large capital dollars within the hotel doesn’t necessarily make sense. The hotel may stay in this state until sold, and then the cycle starts all over again.With that cycle in mind, let’s review the types of projects and parties involved in making those decisions.
Speaking strictly from an investment point of view, as an owner we want the hotel to accommodate the guest and to meet brand standard where applicable. We also want to meet the guest’s expectations when it comes to service and cleanliness. Those measurements are critical in our industry. In order to meet those expectations, technology, at various touch points, plays a role. These IT related decisions that affect those touch points, they are falling on asset managers, the management company, consultants, or a mixture of all three.
When it comes to making the right decisions, it requires a balance of understanding and skill. For example, you wouldn’t hire someone to handle security and PCI for your company that didn’t have any certification or experience in the field. The same holds true in many important IT decisions within our industry. Making solid decisions on IT projects requires more than just understanding the dollars and cents. It also requires the ability to understand the technology and how it interacts with other technologies. The details of why a system suddenly becomes cloud based vs on premise, the lifespan of one technology over another, or even a wireless system from one vendor over another- all are cost and project impacting. These decisions, when not properly made, lead to many critical project touch points that could go very wrong.
Currently hospitality is dealing with a large influx of projects to meet certain brand deadlines. These include door lock replacements for RFID, TV and entertainment package upgrades and the never ending cyclical replacement of wireless technology. The nuances of those technologies and how they interact with your guests as well as the design and deployment of the technology can swing the cost pendulum in many directions. Other projects that are typical at the hotel level include PC refreshes, Property Management System (PMS) upgrades, Point of Sale (POS) upgrades, as well as digital signage and the dreaded Phone Switch. As you may infer, a phone switch within a hotel has become an obsolete, but mostly still necessary piece of equipment, mainly used for calling the hotel operator or life safety.
The hotel capital spending cycle for IT continues, and each major system decision is really a decision as to how it impacts the guest most, and what delivers the most satisfaction. Understanding the nuances of capital IT projects is just one small ladder within hospitality technology.