How Hotels are Getting into the Cloud

Many hospitality operators may still use on-site software and servers, but the cloud is – slowly but surely – winning the day at many hotels.

February 17, 2016 by Alex Collins, IT Services Consultant

hotel industry it services

For the hotel industry, change has been long in coming… but it's coming nevertheless. Many hospitality operators may still use on-site software and servers, but the cloud is – slowly but surely – winning the day.

Still, there's a long road ahead. The legacy software that many larger establishments have committed to may be difficult to migrate to a cloud-based platform.

“The hotel industry continues to lag in two megatrends: Cloud Computing in general, but more importantly the Software-as-a-Service (SaaS) model,” complains Craig Weissman, CTO and cofounder of Duetto Research. “Many hotel brands still hire their own development and operations teams and build what usually turns out to be incredibly inefficient and extremely expensive software.”

“Many of [their] applications are written in older languages and run under even more ancient operating systems. This makes it difficult for them to migrate to the public cloud in the near term,” explains Barry Shuler, CIO and IT Consulting Principal of Design Management Associates. “To migrate this front office functionality to the 'cloud'… will require significant redesign and rewriting of existing custom-developed applications, or replacement with Commercial Off The Shelf equivalents.

“In either case, it is a huge risk and an equally significant investment of time and money to accomplish the ultimate 'cloud' strategy,” Shuler admitted. “But it will happen… eventually.”

The cloud: small hotels' unfair advantage

As with many other industries, it may be up to smaller, nimbler hotels to show the way forward with the cloud, mainly by using it as an unfair business advantage.

“A cloud model works best for budget properties essentially because it is cost effective and does not require a large team to manage,” explains Aditya Sanghi, CEO and cofounder of hotel management systems provider Hotelogix. “Providing a cloud based solution ensures hotels can access information on-demand and scale the solution as their operations grow.”

The benefits are clearly loaded in favor of the SaaS model, where applications are hosted in the cloud for users to access via the Internet.

Usability. Legacy systems used to be limited to a particular computer (usually tied down to a particular location). SaaS manages the feat of remote access from any authorized device, while keeping functions centralized and accessible from a single platform.

Implementation of SaaS is lightning-fast. No need to wait for specialized programs to be developed for the property; the provider will deploy pre-existing applications customized for the client. Even off-the-shelf applications will be easy to integrate with online booking websites and the property's social media profiles, all the better to increase the hotel's accessibility with Web users.

Maintenance. The legacy systems may already have been paid for, but they require continuous investment from their owners, including (but not limited to) software updates and patches. “It’s not your job to worry about patches, hardware, consultants or networking!” Weissman says. “That should all come automatically and without any additional fees if you’re partnering with a true SaaS provider.”

Cost. Compared to legacy systems' high capital and maintenance costs, SaaS offers services on an “as-needed” basis, billing only for the storage and computing power needed by the hotel. Because hotels no longer need to invest in proprietary infrastructure, they can invest the savings in serving guests and expanding their business.

For Duetto Research's Weissman, SaaS and the cloud play to the strengths of the hospitality industry: “Leave the technology to the tech company so you can take care of your guests.”