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When revenues, not RevPar, are rising

October 20, 2017
The hospitality industry is riding a wave of growth, giving us a lot to celebrate. Hotel revenues were almost $200 billion in 2016 – an increase of $10 billion over 2015.

However, before we open the champagne, we need to be aware that RevPAR profits rose only 4 percent last year, according to the 2017 Smart Decision Guide to Hotel Property Management Systems, which adds that hoteliers should recognize the possibility of negative RevPAR in the future.

That doesn’t mean, however, that negative RevPAR is inevitable. In fact, there’s a lot we can do to mitigate the potential negative downturn. To do so, we would be wise to embrace the digital revolution that has enabled the success of some of our biggest competitors such as Airbnb and OTAs.

We can start by upgrading the foundation of our business – the Property Management System. But with the market flooding with new technology solutions, there are some key questions to ask before making the investment:

  • • Does the solution offer flexibility in functionality, including data access and performance reporting? Confirm that the solution is flexible in terms of key areas of functionality, including custom report generation.

    • How easily does the PMS integrate with third-party technologies? The PMS should interface with Internet Distribution Systems (IDS) through Hotel Technology Next Generation (HTNG) standards.

    • How long will it take for problems to be resolved? Get a guarantee on response and case resolution times.

    • What is the total cost of ownership? Are there hidden costs? Ensure that all associated installation, licensing, maintenance, and ongoing service and support fees are included in the licensing.

    • What ROI can be expected? Enhancing the quality of the overall guest experience through a now-generation PMS should lead to more repeat guest stays, and a higher volume of intensity and positive brand advocacy.

    • What is the solution provider’s track record of success? Talk to their other clients, especially those that are similar in size and current technology infrastructure. Ask for their product roadmap, including planned upgrades, new features and functionality, and specific timeframes. Ask about their own company future and vision. Another crucial consideration is cloud capabilities, which allow even the smallest properties to reap full system benefits without a large investment in infrastructure and resources.

The PMS is not new to the hospitality industry, and it still remains the foundational engine on which hoteliers operate. But we need to move beyond its traditional uses, making it mobile, fully-integrated across all property systems and capable of providing real-time guest-specific analytics.

Wherever you are in your technology transformation, the 2017 Smart Decision Guide to Hotel Property Management Systems provides a roadmap to help guide your way.

Filed Under
  • Cloud
  • Mobile
  • Technology
  • Hospitality
  • North America
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