How hoteliers can vet their technology vendors
How hoteliers can vet their technology vendors
05 DECEMBER 2018 1:15 PM

There are a lot of choices out there for hoteliers looking to bring on new technology, so it’s necessary they know what questions to ask and what they need to look out for.

REPORT FROM THE U.S.—With any choice, no one wants to make the wrong one. For hoteliers, there are an untold number of technology vendors who would love the chance to show how their product or service will solve their problems.

It’s always a tough decision for a hotelier, whether they are a GM or a property owner, to secure a new piece of technology, said John Burns, president of Hotel Technology Consulting. It’s tough because “what you see isn’t always what you get,” he said.

It begins, however, with having a clear idea of what is needed, such as a property management system, he said, and creating a more detailed shopping list that identifies the major capabilities desired. This helps prevent things from falling between the cracks, and when compiling this list, he said, consult with all parties to make sure it is a clear and comprehensive.

Finding the vendors
The next step requires finding out which vendors are out there, Burns said. Simply performing a Google search for the available products is a good starting point, but that’s an incomplete process by itself. Many of the results will be ads and sponsored search results, he said, and the best product for a particular company might not be on the first page.

Hospitality is an unusually collegial industry, he said, so it helps to speak with fellow GMs and owners about what experience they have with the type of technology your company is looking for.

“Other hoteliers are happy to talk about their experiences and give advice,” he said. “All you have to do is ask. It might be someone you’ve not worked with before, but they’re still remarkably forthcoming.”

Chesapeake Hospitality starts its tech vendor search by aggregating the top 10 vendors, according to Chris Green, principal and Chief Commercial Officer. The company is a third-party manager, he said, so it wants to look at best practices and who is doing business with the big brands. The brands have the horsepower and ability to ensure compliance, he said, so vendors who are working with big brands such as Marriott International have already gone through vetting.

Working with vendors
When getting in contact with potential vendors, it’s important to realize the person hoteliers will speak to first will be a salesperson, Burns said. The hotelier talking to the salesperson needs to pay attention to what is said about the capabilities of the product or service as well as what’s not said.

“With what is not said, there is sometimes an implication or assumption,” he said. “Assumptions are fraught with danger. Skepticism—healthy skepticism—is an important part of the process.”

As that conversation progresses, it leads to a “show me” situation, Burns said, allowing hoteliers to see an online demonstration of the capabilities, which should check off items on the shopping list before moving forward.

Vet the product or service on a usage level, Green said, and ask what value it adds or what pain point it solves. The risk is if hoteliers try something that is too gimmicky, it can create additional exposure, he said. With more technology and crossing of systems, it leads to more opportunities to miss something.

“The question I ask is whether you implement this: Is this solving a pain point for you and guests or making something more efficient?” he said. “Otherwise, it’s not accretive.”

Checking security
The online demonstration is a good time to talk about how secure the product or service is, Burns said. One thing to check is whether it follows protocols as set out in HTNG standards.

“Ask the salesperson in detail what they do in terms of security and what assurances of data security and transaction security they offer to their customers,” he said.

Hoteliers should ask how often the vendor updates the systems with the latest security requirements, Green said. Some compliance standards require quarterly updates and compliance certificates, especially when it touches guests’ personal data.

Hoteliers can hire third parties to test and verify the vendors’ products and services, he said. Similar to an audit of the accounting department, these companies can test compliances to make sure hoteliers are receiving what they’re paying for.

It’s important to be careful who plugs into the hotel system, Green said. Historically, hoteliers have been cost-sensitive about security measures, he said, and that was fine for a long time. However, with the advent of technology and people who try to take advantage of it, not investing thoughtfully in security has greater downsides than the initial cost of investment.

“You have to think the process through of how can people touch your systems, interact with the business and secure interactions,” he said.

Once the vendor submits the certifications and independent testing proves it’s certified, hoteliers can feel comfortable giving the vendor a beta test.

“We’re working with several vendors on things now,” Green said. “A year into it, we’ve not implemented it systemwide.”

Taking precautions
Geography is an issue, Burns said. Sometimes vendors will offer great systems, but the company itself might be located on another continent. Hoteliers will have to ask themselves if the company’s distant location would restrict the ability to provide the support necessary when it’s needed and in a language people are comfortable speaking, he said.

Some salespeople are intense, Burns said, and they want to close the deal. When he’s deciding on a product or service, Burns looks for details that assure him there is substance to what’s offered.

“One of the things we don’t think about in the hotel business when looking for systems is we tend to keep them for a long, long time,” he said. “It’s used by a number of staff around the hotel. Once they enter into a relationship with us, it’s for maybe 10 to 15 years.”

Everyone is in a hurry, Burns said, but the decision to purchase is one that is worthy of a slow and thoughtful process. Installing and integrating a new system tends to be disruptive, he said, and it’s painful to live with making the wrong decision because it’s difficult to swap it out.

While growth is good, a vendor’s explosive growth should give hoteliers pause, Green said. Growth brings pitfalls with it, he said, and extremely rapid growth could mean the company is short of staff and might miss some necessary details. In a tech company, a lot of tech is subscription- or user-based, and it will spend a tremendous amount of money on the front side for customer attraction and retention.

“Do they spend the same amount on development?” Green asked.

Chesapeake looks for stability, he said, and for that reason, it doesn’t talk to brand-new companies.

“In the hospitality industry, I don’t think you’ll miss the next big thing if you’re 50th or 100th to the table,” Green said. “Your pricing might not be as good as at the beginning, but you don’t have to worry about growth pains.”

There are so many tech vendors out there, Green said, and he receives up to 10 offers a day for different technology solutions.

“The market is so full, there’s going to be even more risk for making mistakes,” he said. “That’s why vetting has to be very, very, very thoughtful.”

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