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Pete Gibson, former Chief Technology Officer of Wyndham Worldwide on how the hospitality industry should view IT as it comes out of the recession.
With the economic downturn, many organizations have focused on efficiency and cost reduction to survive instead of a growth model. The capital for growth and available fiscal resources to undertake new endeavors has not been available since September 2008 and thus CEOs and CFOs with the support of their CIOs have focused on expense reduction to make their numbers. This is especially true in the hospitality industry where occupancy and daily rates have significantly declined thus eliminating growth opportunities. Plans have been pushed out to post recovery or have been scrapped or are just being completed at a slower pace. Organizations are tactically focused on filling available inventory to survive and unfortunately many hotels may not make it through the economic downturn.
While the current economy will force a “shake out” of the hospitality industry and has challenged many operations, post recovery, there will be a much stronger and efficient hospitality industry that will be competing for every reservation. The industry will be poised to return to comfortable operating margins then push for growth. With the improved efficiency some organizations will lag behind in the recovery while others excel. A major factor will be the revenue generating technology solutions and decision support systems.
Over the past two decades computing has significantly contributed to the US GDP yet most business leaders look at technology systems as a “cost of business” instead of a strategic imperative. The fact is early technology adopters and innovators remain competitive longer while less technologically advanced organizations will lag. The early adopters have advanced their thoughts from a “system” to a system of systems (or highly integrated systems) and are now evolving to date centric organizations that can compress decision making from days to hours and improve the quality of the decision.
In the hospitality industry, many leaders focus on the central transactional system. However, the industry leaders look at their technology platform as a distribution system where they can provide room availability and property information to numerous channels from traditional voice and travel agent to Web 2.0 and unstructured group business. The true leaders will focus on improving revenue management and business intelligence systems that can dynamically price each room so the entire property is more profitable instead of focusing on selling to the last room. They will then focus on real time distribution of business information and transactions to the thousands of properties. Thus it is not one piece or a system but the entire data centric distribution and decision-making systems that will improve revenue generation and give a hospitality company a competitive advantage in the post down turn economy.
Compared to other business areas like HR, operations, sales and finance, Information Technology is still relatively young and immature. Most business leaders started using a personal computer the second half of their career. They purchased their first system a little over 15 years ago and now have several computers at home, they have one in the car and they even wear a computer that has more capacity than the first computer they owned. Technology is quickly changing and is poised to dramatically change over the next five years with cloud computing, improved wireless capacity and software as a service. For the leaders in the hotel industry, the future is not about the installed technology which most consider a commodity product but it is about data and services for improved business decisions and customer experiences that will deliver improved revenue in the future.
