The transition to cloud-based property management systems (PMS) has been a topic of great debate for years. While the question used to be, “Should we or shouldn’t we?” now it’s simply a question of when.
Several operators have been embracing cloud-based services for years. Choice Hotels, for example, started moving its ChoiceAdvantage PMS to the cloud almost a decade ago, according to Brendan Gibney, director, Franchise Operations for Choice Hotels Canada Inc. in Mississauga, Ont. “We started with economy brands, then moved to mid-scale ones over time. Today, we have over 500 properties on cloud-based systems in North America and are continuing to add more in Europe.”
The team realized the benefits of cloud-based systems early in the game. For property owners, those included cheaper cost of entry and the ability to manage operations remotely. Having a simple, easy-to-use reservation system especially makes sense with economy brands, which offer self-service capabilities and have a higher staff turnover, Gibney notes.
The flexibility is also a plus. “The system we have is constantly evolving. Because a PMS is a data-gathering and intelligence tool in your hotel, things such as loyalty programs can easily be integrated into the essence of the brand,” Gibney says.
During the past two years, Choice has been focusing on expanding its Choice Privileges loyalty program features, including adding an automated and linked enrolment process that is triggered at check-in. For existing loyalty members, the system will automatically change the background colour on the screen so staff can immediately recognize the membership level. Last year, it also added a program to allow consumers to book small blocks of rooms directly through choicehotels.com. “There’s no need to call the hotel and provide names. It can all be done online,” Gibney says.
As far as future integration is concerned, the sky’s the limit. “It’s very, very simple to connect to interfaces, whether it’s POS (point-of-sale) systems in restaurants and spas or meeting room inventory systems, it can integrate with all the big players.”
Wyndham Hotel Group has only recently introduced a cloud-based model to its operations. Keith Pierce, EVP, Global Systems Operations in Parsippany, N.J., says it represents a fundamental change in philosophy for the organization. “For eight years, we had been using a PMS system that was managed, hosted and supported in-house. We are now moving out of that. Part of that migration has been the need to integrate a revenue management [component].”
The transition involved partnering with third-party companies, including New York-based Infor’s EzLite for its revenue management system (RMS) and Southlake, Texas-based Sabre Hospitality Solutions for its SynXis Property Manager. Other initiatives included the integration of New York-based TravelClick with EzLite to enable continuous input of real-time competitor pricing data as well as the integration of Atlanta-based Elavon’s Fusebox gateway and Simplify payment security software application with SynXis Property Manager, to ensure all credit-card information at the property level is protected.
A couple of factors convinced Wyndham to move to the cloud, Pierce explains. The first was the presence of proven, global third-party providers. “You also need your organization’s executive team and partners to be aligned philosophically when you outsource these tools,” he adds. Finally, with 15 brands in 70 countries, the company had reached a point where language, currency and taxation issues were increasingly challenging to manage. “We have now reached a scale where we have to decide how to keep up with the rapidly changing pace of technology.”
Pierce notes a number of advantages to the switchover. “On the ownership side, it optimizes opportunities in the marketplace and helps them manage things much more efficiently by giving them a stable, reliable, new technology and feature set.” Corporately, the new system gives Wyndham the ability to track individual properties’ adoption and revenue gains as a result of the RMS. “It also gives us a scalable system that can handle multiple languages and currencies,” he adds.
Plans are in place to roll out the system to 4,500 properties beginning this summer, at a rate of 300 to 400 a month, says Pierce. “It will take us a year to get through all of them. The good news is it will be a fairly seamless migration. In our latest pilot, we migrated a property in one-and-a-half hours.”
Many large-scale operations are looking seriously at making the transition to the cloud for their PMS functions and more, notes Dan Candido, principal with Amanico ITMS management consultancy in Toronto. “A cloud-based model saves property owners capital costs, because the equipment no longer has to sit in a property’s data centre. It’s not just upfront hardware costs, however, it’s the service agreements to keep that hardware running and the need to change things out every four years. A management agreement [with a cloud provider] can save a significant amount.”
On the operator side, cloud systems also centralize all facets of the business. “You can now pick up business intelligence from one area and have complete control of guest profiles when they check in at another property. That type of continuity is one of the most important things in building loyalty,” says Candido. Centralization also means easier integration of customer relationship management and RMS solutions.
Of course, it does come with risk — albeit a slight one. “You have to give some thought to business continuity planning. You may want to consider having a local backup database that you can switch to in the event of a lost connection, especially in regions of the world where Internet services may be spotty,” says Candido.
For Pierce, the cloud simply makes business sense. “Going to cloud takes us out of the PMS business.”
Volume 27, Number 4
Written By: Denise Deveau