2013: The Biggest Year Yet For Cloud Computing in Hospitality

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Cloud computing is becoming more and more popular across the hospitality sector. Not only can using cloud-based hotel software allow hotels to appeal to increasingly tech-savvy guests, it can also save time, training and, most importantly, cash.2013 biggest year cloud computing

These days, it’s rare to come across a hotel guest without at least one mobile device. Whether it’s the latest tablet, iPhone or Kindle, travellers are increasingly using digital tools to enhance their holiday experience, doing everything from researching destinations to booking hotels and even giving online feedback.

But it’s not just consumers that can benefit from using online technology. Over the last couple of years, it’s become clearer and clearer to hotel owners that investing in cloud-based hotel management software could potentially revolutionize their businesses. And this year, adoption of cloud-based hotel software is only set to speed up.

Hospitality Technology has named cloud computing a hot topic for 2013, predicting more and more roll-outs of cloud systems. Indeed, according to the magazine’s 2013 Lodging Technology Study, nearly half (46%) of hotel executives revealed a marked desire for cloud-based revenue management solutions.

Other trend reports across the industry have also cited cloud computing as a key trend for 2013, and more and more technology conferences are popping up and focusing on the benefits of cloud-based hotel management systems. For example, February 2013 saw the launch of the Hospitality Technology EXPO, which was heavily focused on the benefits of cloud computing for hospitality companies.

And the industry commentators were clearly onto something, as 2013 has already seen some of the biggest names in the hospitality sector – including Kempinski and the UK portion of the InterContinental Hotels Group (IHG) – making high-profile switches from server-based enterprise software to the cloud.

So what is cloud computing and how can it be used by hotels?

Cloud computing software as a service (SaaS) basically allows hotels to avoid building their own IT infrastructure; instead, software and associated data are hosted centrally ‘on the cloud’. This means hotels only pay for what they use, they don’t need to invest in costly hardware equipment, and all they need to operate their hotel management system is a computer and a web browser.

Almost every aspect of a hotel business can be hosted on the cloud through a cloud-based property management system (PMS), which can cover front desk, point of sale, housekeeping, channel management and global distribution, among other things.

Cloud-based reservation systems are also becoming increasingly popular because of their potential to increase direct booking revenues. On top of that, distribution systems on the cloud can help hotels manage the complexities of distribution through a single online dashboard.

Why has 2013 seen more and more hotels move to cloud computing solutions?

Essentially, the industry has reached a point this year where operators are really beginning to realize the benefits of switching from in-house enterprise software to a cloud-based system. These include:

Saving money

Since cloud services can be purchased on an ‘on-demand’ basis, hotels can avoid upfront investment in hardware as well as associated expenses, such as maintenance costs and the extra manpower needed to run an in-house system. These savings can be significant for hotels.

Indeed, at La Quinta Inns & Suites, a limited service hotel chain that adopted cloud computing in 2007, the company’s operating expenses have been reduced by 50% and they have saved 30-50% in telecommunications bills at each company-owned property.

At Kempinski, the team expects to make similar savings. In fact, the company believes that by

switching to cloud computing solutions, it will achieve savings of 40% over the cost of running a server-based IT system by 2015 (compared to the 2010 budget). Previously, the hotel chain relied on 140 servers for its corporate and shared applications.

Saving time

Another benefit of renting space on the cloud is that hotel managers no longer need to worry about delays in the deployment of the system; it’s ready to use as soon as the first monthly fee has been paid.

Time can also be saved for hotel staff further down the line. Rather than dealing with infuriating hardware glitches, they can concentrate more of their time and energy where it’s most needed – on looking after their guests.

Moreover, system information can be updated in a fraction of the time it takes on a complicated inhouse system. Indeed, one of the reasons IHG decided to migrate its 60+ UK properties to the cloud was the ability to update prices in real time across all of their hotels with a simple click.

Reduced training

With an in-house software system, procedures are often complex and technical, meaning training is required to both maintain and operate the system. But, with a cloud PMS, everything that requires technical knowledge is handled by the vendor and the system is easy to use and intuitive at the end user level.

Not only does this save on staff training, it also means that even the least tech-savvy members of a hotel’s team can easily gain access to the information they need at the click of a button.

Increased flexibility

One of the great advantages of cloud-based hotel software is that it can be accessed from anywhere, as long as you have a computer and an Internet connection. For example, if a hotel owner or executive was called away for a last-minute meeting or even an overseas conference, he would still be able to access any information he required via the cloud-based system; the hotel’s operations wouldn’t be compromised in any way.

In the coming years, flexibility is set to increase still further, as many software companies are developing versions of their cloud-based hotel software for mobiles and tablets.

Appealing to tech-savvy guests

More and more hotel bookings are taking place online, with mobile booking growing at the fastest pace. In 2011, approximately 20% of all travel was booked on mobile devices, in comparison to almost zero in 2009, and this will grow to 80% in the next two years according to Google.

Having a cloud-based reservation system allows hotels to capitalize on this trend, appealing to a clientele that is only set to become more knowledgeable about online booking.

Increased security

Although some operators have concerns about their data being hosted by remote servers, for many hotels, the security benefits of cloud computing far outweigh the risks.

Cloud-based applications are hosted on powerful servers, meaning the possibility of them going down is slim. Moreover, data is constantly being backed up and can therefore be easily recovered, even if a localized computer network was to crash. Cloud technology providers also use SSL encryption to transmit data, as well as saving data on firewall-protected servers.

2013: A turning point for hospitality

Cloud computing has certainly not reached its full potential in the hospitality sector, with some operators still wary of the technology because of its perceived security and connectivity issues. However, there’s no doubt that 2013 has been a turning point for the sector, with some of the biggest names in hospitality migrating from traditional in-house systems to the cloud because of the clear benefits cloud-based systems offer their businesses.

Moreover, with more and more information becoming available to hotel owners – through technology conferences, studies and trend reports – it’s likely that trust in cloud-based hotel software will only continue to grow in the rest of 2013 and beyond.

After all, cloud-based systems can bring hotels back to the very fundamentals of hospitality. If the technology is taken care of for them, and they can save money and become more efficient in the process, hotel staff are free to focus on what they do best – looking after their guests.

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About the Author

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Maansi Sanghi

Maansi Sanghi heads Marketing at Hotelogix, a leading provider of Property Management and Distribution Solutions on the Cloud. She takes care of digital marketing and brand strategy.

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Maansi,

Great artice!
Very informative piece of information.

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