REPORT FROM THE U.S.—A swell of clouds has been hovering above the hotel industry, though this is one likely to elicit smiles from cost-conscious executives.
Cloud-based technology—that which removes hardware off property to centrally located servers for on-demand functionality and accessibility—is being embraced by some hotel companies looking to ensure efficiency, increase productivity and save on information technology costs.
Choice Hotels International, for example, has rolled out its Web-based central reservation system, choiceAdvantage, to more than 4,500 hotels throughout the world. The project, which was launched nine years ago, is picking up steam as Choice’s executives target expansion in the U.K., Australia and Germany, according to Todd Davis, Choice’s chief technology officer.
La Quinta Inns & Suites began its journey to the cloud when the company was acquired by the Blackstone Group in 2007.
The goal in both cases? Get as much IT out of hotels as possible.
“The hotel isn’t the ideal environment to run complicated systems,” said Vivek Shaiva, chief information officer for La Quinta. “… Our approach right from day one has been to try to minimize the technology footprint on the property.”
A lot can go wrong on property: hardware can break down; inexperienced users can create headaches; and a lack of skilled engineers can inhibit maintenance.
By moving legacy systems to centrally located IT facilities, hotel companies can ensure systems are operational and up-to-date.
Upgrading 800 property management systems at La Quinta used to take six weeks, Shaiva said. Now because servers are within his reach and properly maintained, the entire process takes only 12 hours, he said.
There are other advantages, too. By taking the burden of IT off hotel staff, the front desk can focus more of their energy and attention where it really counts: the guest, Choice’s Davis said.
It’s also easier to enact immediate changes in case of emergencies, Shaiva said. During hurricanes and other natural disasters, for example, hotel companies can quickly rerouted calls or change dial options.
But perhaps the largest benefit of the cloud is the cost savings. Moving hardware from hundreds or thousands of individual hubs means less equipment, less people to manage it, and more efficient operations that could yield savings in the hundreds of thousands of dollars.
Since La Quinta’s rolled out the cloud in 2007, the company’s operating expenses is 50% of what is used to be, Shaiva said.
“We save money and we believe we have a higher quality overall service,” he said.
Additionally, the company has saved 30-50% in telecommunication bills at each company-owned property, Shaiva added.
The cloud’s cons
Not all is sunshine and blue skies with cloud-based technology. Lyle Worthington, chief information officer for the 349-room Horseshoe Bay Resort Marriott Hotel, opted not to switch over to the cloud, because of connectivity concerns.
“One of the cons is if you don’t have reliable Internet connection or if you don’t have a fast Internet connection, moving some of your more mission-critical applications to the cloud is the equivalent of running it on very bad hardware,” he said.
At the Horseshoe Bay, for example, the hotel is located in an isolated part of Texas that does not have the sufficient bandwidth for a cloud-based solution.
Both Shaiva and Davis cited connectivity as concerns, though they said technology is rendering service interruptions far less common.
The other red flag Worthington cited was security.
“I just don’t trust the company if I can’t see what their security practices are and how their environments are built,” he said. “…I need to feel a little bit more comfortable before I put my name on the line and put my data somewhere else.”
While many proponents would argue that cloud providers are experts and offer nothing but the best information security, Worthington pointed to such supposed “experts” as Epsilon as well as several major hotel chains that fell victim to high-profile breaches.
Worthington does see some benefits in the cloud. The cost savings are there, he said, as are the extra memory and storage capabilities.
“I’m definitely not anti-cloud. I think there’s a place for it,” he said. “… I just need to feel a little bit more comfortable before I put my name on the line and put my data somewhere else.”