hotel technology
DESCRIPTION
Hotel tech paperTRANSCRIPT
-
5/26/2018 Hotel technology
1/15
HOTEL TECHNOLOGY IN 2014:Funding a Hyper-ConnectionTech spending increases as hotels scramble to meet guest expectations
A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
Hotels reveal detailed IT budgets &spending allocations
New analysis compares projectimportance and performance
Guestroom tech upgrades focus on
connectivity, WiFi and HD content PLUS:New data on IT leadership and inuence
-
5/26/2018 Hotel technology
2/15
TABLE OF CONTENTS
TECHNOLOGY GROUP
www.edgellcommunications.com
PUBLISHER
Lenore OMeara
EDITORIAL
EDITOR-IN-CHIEFAbigail A. [email protected] EDITORDorothy [email protected]
STUDY AUTHOR
Mehmet Erdem, PhD. CHTPPresident, iHITADirector of Hospitality Technology& Innovation / Associate ProfessorUNLVs College of Hotel Administration
SALES
ACCOUNT EXECUTIVELeah [email protected] EXECUTIVEHope [email protected] TO PUBLISHERJen Johnson
ART/PRODUCTION
CREATIVE DIRECTORColette [email protected] DIRECTORKelly A. [email protected] MANAGERLynn S. [email protected]
ONLINE MEDIA
VP, MEDIA INTEGRATIONRob [email protected] OF LEAD GENERATION& AUDIENCE DEVELOPMENTJason Ward
[email protected] DEVELOPMENT MANAGERScott [email protected] EVENT PRODUCERKaren [email protected]
MARKETING/EVENTS/CIRCULATION
DIRECTOR, EVENT PLANNINGPat [email protected] MANAGERJeffrey Zabe
SUBCRIPTIONS 978.671.0449REPRINTS: PARS Intl, 212.221.9595 x319
CORPORATE
CEO/CHAIRMAN Gabriele A. [email protected] Gerald C. [email protected] PRESIDENTJohn Chiego
CORPORATE OFFICE
4 Middlebury Blvd. | Randolph NJ 07869973.607.1300 FAX: 973.607.1395
FOUNDER DOUGLAS C. EDGELL 1951-1998
[INTRODUCTION]
4 | Annual Study Measures Objectives and Outcomes for Hotel Technology
Study authors outline the updates to this years report, and offer key ndings from the research.
Results indicate that IT investments are on the rise as hotels seek to boost connectivity for esca-
lating guest expectations.
[CHAPTER 1: BUDGETS & INVESTMENT PRIORITIES]
6 | Tracking Hotel Technology Investment Areas
This section provides a breakdown of IT spend by sub-segment, and as an industry-wide per -
centage of revenue. Overall, technology allocations in 2014 will focus on property management,
guestroom technology and connectivity.
[CHAPTER 2: IT STRATEGY & PERFORMANCE]
8 | Guest Expectations Bring Increased Pressure
Hotel IT executives reveal their technology goals and top challenges in 2014. This years research
includes new queries into the perception and inuence of technology teams at their respective
organizations. In addition, an importance-performance analysis shows valuable insights into areas
where technology is and isnt satisfying hoteliers needs.
[CHAPTER 3: IN-ROOM TECHNOLOGY]
12 |Hotels Reveal In-Room Technology Priorities
Guestroom investments focus on bandwidth, WiFi and HD television content. Tablet rollouts in-
side the guestroom are stagnant. Meanwhile, HSIA pricing edges towards a tiered-access model.
[CHAPTER 4: ENTERPRISE SYSTEMS]
15 | Enterprise Upgrades Focus on Property Management
Hotels rank their upgrade plans across 16 enterprise and above-property technology areas. PMS
systems and business intelligence will be priorities in the coming months. Hotels also evaluate op-
tions in cloud, big data and payment.
[CONCLUSION & METHODOLGY]
18 |Evolution for Technology Leaders
Guest expectations are rising rapidly and IT budgets are on the increase, creating opportunity for CIOs
to embrace leadership roles.
Copyright 2013 Hospitality Technology. All rights reser ved. No part of this pub
lication may be reproduced or transmitted in any form or by any means, elec-
tronic or mechanical, including photocopy, recording or information storage and
retrieval systems without permission in writing from the publishers. For article
reprints & e-prints, please contact PARS International at (212) 221-9595, Fax:
(212) 221-9195 or email: [email protected]. POSTMASTER: Please
send address changes to HOSPITALITY TECHNOLOGY, P.O. BOX 261, LOWELL, MA
01853. PRINTED IN THE U.S.A.
WWW.HTMAGAZINE.COM LODGING TECHNOLOGY STUDY 2014 HOSPITALITY TECHNOLOGY 3
-
5/26/2018 Hotel technology
3/15
HT LODGING TECH STUDY 2014
4 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
The state of the lodging industry since the recession is looking
brighter, with near record-high prots reported in 2012. Despite
the good news on prots, revenue growth has been moderate
(Host Almanac 2013 by STR Analytics). Moreover, some leading
experts in the industry point to ongoing uncertainty across lodg-
ing segments (Hotel Year Book 2014). The 2014 outlook for the
global lodging industry reects a competitive environment with
strategic opportunities and threats for all entities involved.
The authors of the 2014 Lodging Technology Study strongly
believe that one of the key purposes of technology is to de-
crease uncertainty. Technology has evolved rapidly in recent
years, creating both an opportunity for improving operations
and guest services, and presenting challenges for executives
who are tasked with implementing these projects. In order to
assist hotel executives in their decision-making process, Hospi-
tality Technology (HT) magazine produces this annual Lodging
Technology Study.
This years study offers an overview of technology trends and
issues facing hotel executives in 2014, and compares this to
historical data going back to 2011. This report includes bench-
marking data on budgets and investment objectives, IT strategy
and decision making, and patterns in both guest-facing technol-
ogy and enterprise systems.
This years research points to an increase in technology bud -
gets, particularly as hotels race to meet escalating guest expec -
tations and provide robust connectivity. This 2014 report also
contains several new lines of investigation, including a section
on IT leadership that evaluates the perceived importance of tech-
nology by the business, and in so doing has identied areas for
improvement (Chapter 2, Fig 6). The report also includes, for the
rst time, an importance-performance mapping grid that expos -
es technology areas that are underperforming (Chapter 2, Fig 7).
Findings overall show that the industry continues to invest heav -
ily in property management technology, is exploring cloud-based
systems, and is largely motivated to add bandwidth in 2014.
We value the contribution of those executives who partici -
pated in our 2014 report. It is their commitment to peer-to-peer
sharing that helps make this research possible.
Annual Study Measures Objectives and Outcomes
for Hotel Technology
I N T R O D U C T I O N
2014 IT investments on the rise as hotels seek to boost connectivity forescalating guest expectations
STUDY HIGHLIGHTS
Technology budgets are on the rise, and the average an -
nual IT spend-per-location is $290,000. The estimated an-
nual IT budget as a percentage of total revenue is 2.81%.
Once again, high guest expectations have outpaced budget lim-
itations as the number one challenge facing IT departments.
Property management systems account for the single larg-
est portion of technology investments, at nearly 20% of the
total budget.
There is a surprising drop in budget allocation for certain guest-
centric IT projects (such guestroom technologies and CRM),
while investments in bandwidth and connectivity are on the rise.
Connectivity is the key driving force shaping IT projects in 2014,
with 66% of hotels in this study planning to add bandwidth in 2014.
Hoteliers should plan their HSIA pricing models to accommodate the
realities of tomorrow. Tiered-access pricing models are on the rise.
The realization for a well-trained and equipped workforce to
manage IT initiatives is evident throughout the report. How -
ever, the general feeling is that IT staff is not always given the
tools and opportunities needed for professional growth.
There is evidence of a disconnect between the importance
of technology in helping hotels meet their general business
innovation goals.
Abigail A. Lorden
Editor-in-Chief
Hospitality Technology
Mehmet Erdem, PhD., CHTP
President, iHITA
Director of Hospitality Technology
& Innovation / Associate Professor
UNLVs College of Hotel Administration
-
5/26/2018 Hotel technology
4/15
6 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
BUDGETS & INVESTMENT PRIORITIESC H A P T E R O N E
gets that are 1% or less of total revenue;
budgets that are at 2, 3 or 4 percent of
revenue; or budgets that are at 5% of
revenue or greater. Approximately one
quarter of the respondents invest 5% or
more of their total revenue in IT. Another
25% of respondents invest 1% of reve-
nue or less in IT. The bulk of respondents
(50% of hoteliers in our study) fall in 2, 3,
or 4% investment levels.
It should be noted that the reported
averages vary from year to year based on
the prole of organizations represented
in this study; and these averages can
be inuenced by outliers, for example
in cases where respondents may be in-
volved in new builds.
Where the Budget is Going
One way to measure IT investment priori-
ties is to follow the money. We traced IT
spend across nine key operational areas
(guest rooms, networking, property man-
agement, etc.). Respondents were asked
to estimate the percentage of their 2014
IT budget that has been or will be spent
across these areas. This list was previ-
ously established by industry experts and
has been used in prior studies. Figure 3
shows the distribution of funds across
these areas and also offers a comparison
between 2012 and 2014 to identify any
changes in patterns.
Results show a drop in IT dollars spent
on guest room technologies and on cus-
tomer relationship management (CRM)
when 2014 allocations are compared to
2012. Just last year, in fact, these two
guest-centric technologies collectively
represented about 30% of IT spend. In
2014, these two categories account for
23%. Indeed, industry experts have re-
ported a growing sentiment amongst
hoteliers that the ROI on CRM and guest
room technologies is difcult, if not im-
When strategically and properly utilized, in-
formation technology can provide lodging
rms with a sustained competitive advan-
tage. One way of assessing the use of IT is
through a review of budgets. There is grow-
ing evidence that hotels have increased
their technology budgets over the past sev-
eral years. Participants in this study were
asked to report or estimate their organiza-
tions 2014 IT budget per single location,
along with their corporate IT budget (if ap-
plicable). Results are shown in Figure 1.
The 2014 industry-wide average for
IT spend-per-location was calculated at
$290K. This is a marked increase over
the 2013 average of $142K. Looking at
market sub-segments, we see similar
growth in all categories.
In the luxury segment, the per-location
IT budget averages at close to $600K,
compared to $280K last year. IT invest-
ment levels in the luxury segment range
from $110K to $2 million. With no outli-
ers observed during the analysis, it can
be assumed that there will be signicant
IT investment across the luxury segment
in 2014.
The single-location IT budget for up-
scale properties averages at $286K,
compared to $174K last year. Midscale
properties averaged $148K per location
($61K in 2013), and economy proper-
ties average $135K per location ($51K
in 2013). There was a wide range report-
ed in minimum and maximum budgets
across these segments, and this is consis-
tent with previous years studies. Overall,
there is clear evidence that hotels plan to
increase IT spending in 2014. For further
analysis, respondents were also asked for
information on corporate IT budgets.
At the corporate level, the budget dif-
ferences between segments were even
more pronounced. The reported average
corporate IT budgets are as follows: $22
million for luxury, $1.5 million for up-
scale, $450K for midscale, and $250K
for the economy segment.
IT Budget as a Percentage
of RevenueIn order to get a better sense of IT bud-
get allocations, we asked each respon-
dent to share their annual IT budget as a
percentage of their total revenue (Figure
2). Overall, this gure was reported to
be 2.81%. We further averaged invest-
ments levels across ve buckets: IT bud-
Tracking Hotel Technology Investment AreasResults show an overall increase in IT budgets, and a focus onconnectivity upgrades
6 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
INDUSTRYSEGMENT MEAN MEDIAN MINIMUM MAXIMUM
CORPORATE-
LEVEL MEAN
CORPORATE-
LEVELMEDIAN
LUXURY $592,000 $300,000 $110,000 $2M $22M $7.5M
UPSCALE $286,000 $250,000 $20,000 $700,000 $1.5M $325,000
MIDSCALE $148,000 $18,000 $1,000 $900,000 $450,000 $30,000
ECONOMY $135,000 $135,000 $20,000 $250,000 $250,000 $250,000
INDUSTRY-WIDE
$290,000 $175,000 $38,000 $962,500 $7.9M $2M
FIGURE 1: TECHNOLOGY BUDGETS IN THE LODGING INDUSTRY
-
5/26/2018 Hotel technology
5/15
WWW.HTMAGAZINE.COM LODGING TECHNOLOGY STUDY 2014 HOSPITALITY TECHNOLOGY 7
of hotels invest
1% or less
of hotels
invest 2% of
revenue on IT
of hotelsinvest 3%
of hotels
invest 4%
of hotels invest5%of revenue or
more on IT
25%
25%
25%
15%
10%
possible, to document. With guests bring-
ing their own devices into the hotel, the fo-cus has largely shifted away from in-room
technology and onto the infrastructure
needed to support those devices. In fact,
one leading hotel CIO was quoted saying
that guestroom technology is dead on
arrival at the 2013 Hotel Technology Fo-
rum. The ndings of this years survey ap-
pear to support such sentiments.
Overall, many areas are receiving a
reduced percent of the IT budget in com-
parison to the previous years. Despite
the lessened emphasis on guest-centric
technologies, the third highest spending
in 2014 and highest growth area when
compared to 2012 investments will be
focused on Networking, Bandwidth and
Connectivity. This is a conrmation that
hotel executives are well aware of the im-
portance that guests place on being con-
nected, and that these areas are in need
of improvement and updates.
Property Management Systems ac-
count for the single biggest investment
area, at 19%. When combined with guest
room technologies (17%) and band-
width/connectivity/networking (17%),
these three areas account for more than
half of all technology spending. Further
insight into the types of investments
across PMS, guestroom, and connectiv-
ity is explored later in this study.
This years results show a noticeable
increase in the Other category. This
item includes IT support/stafng and sal-
aries, and implies that there is an effort
to invest in the human capital needed to
manage IT initiatives. Overall, IT budget
allocation for the top three items has not
changed in the last two years. However,
the uctuations in allocations could be
an indicator of changing priorities.
We further asked respondents to indi-
cate approximately what percentage of
their IT budget goes to Capital Expendi-
tures (investing in innovation) versus Op-
erational Expenditures (maintaining sys-
tems and license fees). Despite the drum
beat for innovation and repeated news
articles on the importance of investing
in technology infrastructure, operational
expenditures represent almost 60% of
the IT budget, while capital expenditures
remain at around 40%. These numbers
are similar to last years reported num-
bers, and consistent with gures report-
ed by both the foodservice industry (HTs
Restaurant Technology Study) and the
greater retail industry (RIS News).
Customer RelationshipManagement
Revenue Management
Workforce Management
Payment Security/PCI Compliance
Point of Sale System
Other (staff and misc.)
Networking/Bandwidth/
Connectivity
Guestroom Technology
Property ManagementSystem
2014
2012
11%
FIGURE 3: TECHNOLOGY BUDGET ALLOCATION
FIGURE 2: HOTELIT BUDGETS AS A PERCENTAGE OF REVENUE
-
5/26/2018 Hotel technology
6/15
IT STRATEGY & PERFORMANCE
8 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
natives entering the workforce, leveraging
mobile solutions for employees may see a
priority increase in the coming years. That
said, our research further indicates that em-
ployee-facing mobile solutions are an area
of marked dissatisfaction among hoteliers
(which will be outlined in Figure 7).
Tech Department Challenges
Respondents were asked about the biggest
obstacles currently facing their respective IT
departments (Figure 5). In the past, insuf-
cient budgets consistently plagued IT inno-
vation efforts and were rated as the top IT
challenge in our research. Consistent with
last years ndings, however, high guest
expectations have outpaced budget limita-
tions as the number one challenge.
Nearly one third (31%) of the respon-
dents chose guests expect greater technol-
ogy advancements than we can reasonably
keep pace with as their top challenge; this
measurement has increased by 3 percent-
age points since 2012, and 7 points since
2011. Meanwhile, Insufcient technol-
ogy budgets came in second in our rank-
ing at 27%, dropping steadily from 33% in
2012, and 39% in 2011. This trend further
supports the overall increase in IT spend
reported in Chapter 1. A growing number
of respondents (at 20% in 2014) admitted
their organizations are primarily challenged
by a lack of internal IT talent, and indeed
this issue has been slowly on the rise (re-
ported at 17% in 2012, and 15% in 2011).
In addition to identifying current challeng-
es, the authors of this years study added
a new objective: to determine the role and
perceived inuence of technology leader-
ship across the overall organization. Thus,
respondents were asked to review a num-
ber of statements related to the organiza-
tional structure and perception of technol-
ogy within their organizations, and indicate
Information Technology is an important
asset for all lodging companies and an in-
tegral part of the strategic management
process. Large-scale information technol-
ogy projects are considered a major capital
investment for any hotel operation. To suc-
cessfully implement technology, companies
must have clear-cut goals, an empowered
team, and an ongoing process for evaluat-
ing the success of IT rollouts. In this section,
we measure these areas. Results show a
clear priority on meeting the expectations of
tech-savvy guests, and indicate that many
IT priorities are on track. Results also reveal
that theres marked room for improvement
in the overall role of technology leadership
in the strategic decision-making process.
IT Goals in 2014
When asked about their companies tech-
nology goals in 2014 (Figure 4), band-
width topped the list: more than two thirds
(66.7%) plan to add bandwidth to address
guest expectations. This supports the nd-
ings highlighted earlier (Budget Allocation,
Figure 3) that investments in networking
amount to 17.35% of the total IT budget,
up from 11.92% in 2012; it also conrms
that offering connectivity to guests is indeed
a top priority. Tied for second place, half of
the respondents (49.1%) will focus on pre-
paring for changes in payment technology
as well as leveraging mobile solutions for
customer-facing applications. Some 42%
of respondents will focus on securing guest
data and nearly the same amount (40.4%)
will be migrating solutions to the cloud.
Responding to trends in distribution
channels (including mobile booking and
the impact of social media), 35% reported
that their companies are developing out
their digital strategy to address changes
in e-commerce. Despite the popularity of
enabling connectivity for guests, only one
out of three respondents (33%) reported
a focus on leveraging mobile solutions for
employee-facing applications. Consider-
ing the ever increasing number of digital
Guest Expectations Bring Increased Pressure
C H A P T E R T W O
Bandwidth, payment and mobile top list of goals, but results show room forimprovement in empowering IT teams and low satisfaction with guestroom tech
Leveraging mobile solutions foremployee-facing applications
Developing a digital strategy to addresschanges in e-commerce
Migrating solutions to the cloud
Creating a secure frameworkfor all guest data
Leveraging mobile solutions forcustomer-facing applications
Preparing for changes inpayment technology
Adding bandwidth to addressguest expectations
FIGURE 4: TECHNOLOGY GOALS FOR 2014
-
5/26/2018 Hotel technology
7/15
10 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
IT STRATEGY & PERFORMANCEC H A P T E R T W O
if these statements are true for their respec-
tive organizations. Figure 6, Technology
Strategy & Leadership, shows the results
of this query.
Our rst objective was to evaluate overall
perceptions around innovation, asking re-
spondents if their companies seek to be in-
novators in both business, and in the use of
technology. More than half of respondents
(58%) said their companies seek to be in-
novators in business practices. A desire to
be innovative often leads to heightened
priority for leveraging technology. Yet, only
42% of respondents felt that their respec-
tive organizations were seeking to be an in-
novator in the application of technology. The
16-point gap reveals a potential perceptual
disconnect in corporate strategy between
the application of technology and its role in
overall business innovation. Further, when
asked to evaluate the perception of execu-
tive inuence at their workplace, only half ofthe respondents believe that the impact of
senior IT leadership (i.e. CIO, VP technology
roles) is equivalent to the impact of senior
leaders who are not in IT roles (i.e. those
in operations, marketing, or other areas).
This could potentially indicate issues with
organizational culture, particularly if IT is
perceived mainly as a support-center rather
than a compass for identifying trends and
business priorities.
Less than half of the respondents (42%)
report that IT staff members are given for-
mal opportunities for continuing educa-
tion. A disappointing 18% of respondents
reported that their organizations mission
statement includes a reference to technol-
ogy. The ndings listed in Figure 6 point to
some underlying issues in terms of the per-
ceived strategic role and importance of the
IT department within lodging organizations.
Measuring Importance vs.
Satisfaction for IT projects
In order to formulate an effective IT strategy,
it is imperative for hotel companies to evalu-
ate the performance of key IT projects and
prioritize their IT investments. A pragmatic
way of achieving this is through importance-
performance analysis. Respondents were
provided a list of 18 technology projects and
asked to rate the perceived importance and
satisfaction of each using a 5-point Likert
scale, with 1 being the extremely unimport-
ant/dissatised and 5 being the extremely
important/satised. The objective of this
analysis is to help organizations set pri-
orities for change when considering IT proj-
ects. The results are presented in Figure 7.
By calculating the mid-points, or averag-
es, of responses given, we are able to plot
each project on a four-quadrant graph. The
four quadrants in Figure 7 can be interpret-
ed as follows: Quadrant 1 represents High
Performance, but Low Importance (Pos-
sible Overkill); Quadrant 2 represents High
Performance and High Importance (Keep
up the Good Work); Quadrant 3 represents
Low Performance and Low Importance
Our organization's mission statement
includes a reference to technology
Our organization has dedicated IT staff that operatein and report primarily to a non IT department
head (e.g. marketing, operations, etc.)
Our organization seeks to be an innovatorin the application of technology
IT staff members are leveraged for projectmanagement tasks outside
of traditional IT scope
IT staff is given opportunities for continuingeducation via a formal program
The perceived impact of senior IT leadership isequivalent to the perceived impact of non-IT
leadership in my workplace
My organization seeks to be aninnovator in business practices
FIGURE 6: TECHNOLOGY STRATEGY & LEADERSHIP
2014
2012
Technology is insufficientto meet our needs
Our company is slow/resistantto upgrade technology
Lack of internal talent necessary tomake improvements
Insufficient technology budgets
Guests expect greater technologyadvancement than we canreasonably keep pace with
FIGURE 5: TECHNOLOGY CHALLENGES IN 2014
-
5/26/2018 Hotel technology
8/15
WWW.HTMAGAZINE.COM LODGING TECHNOLOGY STUDY 2014 HOSPITALITY TECHNOLOGY 11
(Low Priorities); Quadrant 4 represents
Low Performance, but High Importance(Concentrate Here).
Of the 18 projects measured, eight
fall into an acceptable range of high im-
portance and satisfaction (Keep up the
Good Work). Five projects, however, leave
marked room for improvement (falling into
the Concentrate Here quadrant), and
one in particular guestroom technology
takes up a large portion of IT budgets.
Guestroom Technology projects top the im-
portance list (rated with a 4.3 out of 5 pos-
sible points), followed by Website Enhance-
ment (4.09) and Network Infrastructure
(4.04). Last year, PCI, PMS, and Guestroom
Technologies were the top three important
initiatives, and PCI topped the list in terms
of performance satisfaction. This year, PCI
is in fourth place for importance. Perhapsthis is an indication of a declined sense of
urgency about PCI or the result of several
years of successful efforts to improve se-
curity. Social Media (3.87) and CRM (3.8)
were ranked somewhat important for
2014. Augmented Reality Apps came in at
the bottom of the list, perceived as being
unimportant. This could be attributed to the
industrys perception that Augmented Real-
ity Apps are still in a research and develop-
ment stage.
When asked about their level of satisfac-
tion with the current performance of items
on the list, POS, PMS, and PCI received the
highest averages (all hovering at or near 3.4
on a ve-point scale). However, its important
to note that none of the 18 items evaluated
averaged a high performance satisfactionscore (that is 4 or higher) and could be best
described as not evoking satisfaction or dis-
satisfaction. The only item which registered a
level of performance dissatisfaction was Em-
ployee-Facing Mobile Solutions (2.89); also
rated second-to-last in terms of importance.
In summary, tech-savvy guests have
new expectations of their hotel experi-
ences, placing IT teams under pressure
to deliver connectivity, and to deliver
mobile tools for engagement. To meet
these objectives, hotel organizations
should evaluate the overall empower-
ment they afford to their IT leaders, and
ensure that resources are focused in
the appropriate areas.
2.0 2.5 3.0 3.5 4.0 .5 5.0
2.0
2.5
3.0
3.5
4.0
4.5
5.0
IMPORTANCEPERFORMANCE
MID
POINT
3.20Guestroom Technology
Property Management Systems
Point of Sale
Website Enhancements
Distribution Systems
Network Infrastructure
BusinessIntelligence
Customer Relationship Management
Payment, Security & PCI
Social Media
Cloud-Based Technology
CellularInfrastructure Meeting Room Technology
Digital Signage
Energy ManagementAugmentedReality Apps Employee-
Facing MobileSolutions Customer-Facing
Mobile Solutions
MID POINT
3.66
1 ) POSSIBLE OVERKILL
3) LOW PRIORITIES
2) KEEP UP THE GOOD WORK
4) CONCENTRATE HERE
FIGURE 7: IT PROJECT SATISFACTION
-
5/26/2018 Hotel technology
9/15
IN-ROOM TECHNOLOGY
12 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
mands and are rethinking their pricing
strategies for HSIA. As consumers be-
come increasingly digitally connected,
hoteliers will have no choice but to keep
up with the moving bar of what is the
norm for their guests.
In-Room Upgrade Plans
When it comes to near-term in-room
technology upgrades (those within 18
months), increasing bandwidth took the
lead amongst all ten technologies listed.
Sixty three (63%) percent of the respon-
dents report plans to upgrade bandwidth.
This is a considerable increase from
2013, when 51% of respondents report-
ed the same. Not surprisingly, the second
highest priority is wireless Internet ac-
cess (with 47% planning an upgrade in
the coming 18 months); this a clear ac-
knowledgement of guests expectations
to remain connected at all times during
their stay.
In terms of TV-related technologies, the
ability to offer HD content (37%) is spear-
heading near-term upgrade plans, and
at-screen TVs are a priority upgrade for
22.2% of respondents. A quick review of
this years results and previous studies
conrms that 3D TV has not caught on
as an in-room technology priority for hote-
liers. A full 94.4% of the respondents do
not use and report no plans to add 3D TV
in the near future. Unexpectedly, 20.4% of
those surveyed do not use or plan to use
energy management technologies in the
guestroom. Perhaps some hoteliers still
do not see the ROI and savings energy
management technologies offer. Con-
versely, 42.6% have already rolled out en-
ergy management technologies, and 37%
report plans to upgrade within 18 months
or beyond.
In our 2013 report, hotel executives indi-
cated that the largest portion of their IT
budgets were designated for guestroom
technologies. This years study shows
that this category of technologies is to
receive the second largest portion of the
IT budget for 2014; still a substantial in-
vestment at 17%. To determine the plans
for specic in-room technologies, respon-
dents were asked to review a list of ten
items identied by industry experts and
included in previous years studies and
indicate any near term upgrade plans
(that is, within the next 18 months) and
any upgrade plans with a longer time hori-
zon (18 months or longer).
Additionally, in continuation with pre-
vious years Lodging Technology Studies
and in response to industry-wide pres-
sure to provide connectivity to guests,
respondents were asked about in-room
high-speed Internet access (HSIA) pric-
ing structures employed by their respec-
tive organizations. Overall, there is clear
evidence that hoteliers are recognizing
the increase in guests bandwidth de-
Hotels Reveal In-Room Technology Priorities
C H A P T E R T H R E E
Guestroom investments focus on bandwidth, WiFi access and HD content;HSIA pricing edges towards tiered access
FIGURE 8: IN-ROOM UPGRADE PLANS
iPad/tablet in guestroom
VoIP phone system
Room control devices
Energy management
Next generation electroniclocking system
Wireless Internet access
Increasing bandwidth
3D television
HD television content
Flat-screen television
0 20 40 60 80 100
-
5/26/2018 Hotel technology
10/15
14 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
One interesting area of investiga -
tion is the deployment of iPads/tab-
lets inside the guestroom. Boutique
and high-end hotels have deployed
these devices as an in-room amenity,
offering everything from room-control
functionality to personalized concierge
services. In our 2012 study, adoption
was low (at 5%), but an additional
23% reported plans to add tablets as
an in-room amenity. Despite the roll-
out plans reported two years prior, in
2014 weve seen little change in these
gures: 5.6% have already deployed
them and 24% plan to do so, leaving
the same 70% in wait-and-see mode.
Perhaps, this is recognition by some
hoteliers that guests are more likely
to bring their own devices with them.
Nevertheless, guests are expecting
to be connected through HSIA with
increased levels of bandwidth and
there is every indication that hote -
liers acknowledge this need and are
planning for upgrades to meet these
expectations.
FIGURE 9: HSIA PRICING MODELS
IN-ROOM TECHNOLOGYC H A P T E R T H R E E
HSIA Pricing Models
The debate on having HSIA for free or a
fee still ensues. It appears that momen-
tum is shifting towards offering guests
an option to increase bandwidth. In
2013, almost 55% of hotel executives
in our study offered free HSIA to guests.
For 2014, this gure has increased to
59%, indicating that pressure from
guests for free access is being heard.
It should also be noted that the model
of having tiered prices with a free level
of HSIA access has also increased from
14.3% in 2013 to 21% in 2014. The at
fee model (11%) seems to be less popu-
lar than last year (19.8%).
Having a variety of pricing models
for HSIA is expected, given the differ-
ences across markets and service levels
amongst hotels. However, as guests be-
come more dependent on the Internet
for their daily lives and routines, hote-
liers should expect to see an increase in
demands for high-bandwidth and plan
their HSIA pricing models to accommo-
date the realities of tomorrow.
1 DRIVING MORE REVENUE
2 ENHANCING GUEST SERVICES
3 IMPROVING OPERATIONALEFFICIENCY
4 COST SAVING
5 GAINING COMPETITIVEADVANTAGE
n continuing tradition with the
previous three Lodging Technol-
ogy Studies, respondents were
asked to rank the top ve busi-ness goals for investing in technol-
ogy. They were instructed to com-
pare ve business goals for lodging
technology initiatives, and then
rank them all in terms of impor-
tance, with 1 indicating the most
important, and 5 indicating the
least important.
Theres been very little uctua-
tion in the rank order of these ve
goals since 2011. The top two
goals have remained the same:
driving revenue and enhancing
guest service. Cost saving came
in fourth place for the last three
years. These priorities are very
telling in terms of the motivations
pushing technology initiatives in
the lodging space. We recommend
vendors take note of these unyield-
ing business goals when designing
and marketing their products.
TOP 5 MOST
IMPORTANTBUSINESS GOALS
-
5/26/2018 Hotel technology
11/15
CHAPTER FOUR
of enhancements to their operational sys-
tems. In this section, we report on planned
investments across a list of 16 technology
areas, looking at both near-term upgrades
(within 18 months) and longer term up-
grades (18 months or more). We also
dive deeper into several specic upgrade
areas: big data, cloud computing, property
management systems, and payment.
Figure 10 shows current use rates
and planned upgrades across 16 tech-
nologies. As reported earlier in this study,
property management systems (PMS) ac-
count for the largest portion of technology
spending. Likewise, PMS led the list of
planned above-property upgrades: over-
all, 41% of hotels in our study plan to up-
grade their PMS (35% within 18 months,
and 6% in 18 months or more). Competi-
tion and technology vendors should take
notice of this movement. (Note that the
specic functionality they seek is outlined
later in Figure 13). Business Intelligence
systems are another likely area of invest-
ment, with 37% of the respondents plan-
ning an upgrade here (33% in the short
term, and 4% in a longer time frame).
Pressure to optimize revenue and offer
customized marketing has inuenced
some organizations with 29% of respon-
dents planning to upgrade their revenue
management systems and CRM tools
within the next 18 months.
Big Data & Cloud Computing
Technology is increasingly enabling hote-
liers to effectively document transactions
and track guest activity. The lodging in-
dustry is capable of capturing more data
about their guests than ever before. As
a result, traditional data processing ap-
plications are becoming less effective at
managing and analyzing this data. Orga-
nizations across varying industries are
Much attention is given to customer-facing
hotel technologies, but theres a substan-
tial period of innovation happening in
above-property, operations, and enterprise
technologies. From migration to the cloud,
to greater integration, to more sophisti-
cated business intelligence tools, hotel
technologists are evaluating a wide variety
Enterprise Upgrades Focus on Property ManagementPMS tops list of enterprise upgrades, and hotels consider options incloud, big data, payment and more
WWW.HTMAGAZINE.COM LODGING TECHNOLOGY STUDY 2014 HOSPITALITY TECHNOLOGY 15
0 20 40 60 80 100
Big Data
Cloud-based Applications
Compliance Monitoring
Accounting and Financial Tools
Group Billing Technologies
Sales and Catering Technologies
Business Intelligence Solutions
Customer RelationshipManagement Tools
Call Center Technologies
Web-based Reporting
Mobile Back-office Capabilities
Revenue Management Systems
Recruiting or Retention Tools
Labor Management Systems
Central Reservation Systems
Property Management Systems
FIGURE 10: ABOVE PROPERTY TECHNOLOGY IMPLEMENTATION PLANS
ENTERPRISE SYSTEMS
-
5/26/2018 Hotel technology
12/15
16 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
evaluating the use of Big Data applica-
tions to cull and decipher these vast poolsof complex data. However, implementing
a tangible Big Data solution is also widely
seen as cost-prohibitive and complex. To
measure the hotel industrys use of Big
Data, respondents were asked to evalu-
ate the level of maturity their respective
organizations have around processing
and using Big Data to make decisions
(Figure 11a). For the purposes of this
study, Big data was dened for respon-
dents as: information assets that are high
in volume, velocity and variety that, when
captured, stored and analyzed through
advanced techniques, can provide en-
hanced insight and decision making.
The complexities and unknowns around
implementing Big Data are evident in the
responses provided: Almost half of those
surveyed report little to no maturity at their
companies when it comes to using Big
Data for making decisions. Not a single
respondent in our survey reported having
high maturity. Respondents were also
asked how they use Big Data (Figure 11b).
Given that this is not an established tech-
nology concept for many in the lodging in-
dustry, the responses were not surprising.
The largest portion at 44% selected, not
applicable/dont know, while 26% stated
that Big Data is used for identifying trends;
12% of respondents are using Big Data for
advanced reporting and 14% use it for pre-
dictive analysis. If Big Data is indeed the
next frontier for information innovation, the
lodging industry needs to keep up with this
inuential technology trend.
Another trend garnering much atten-
tion is the migration of enterprise tools
to a cloud-based platform. This years
research included a new set of questions
on cloud to determine the scope of its use
(Figure 12). The average implementation
rate across all nine systems shows that
the industry is in a period of transition:
approximately half of survey respondents
are currently not running any applications
on a cloud-based platform, nor do they
plan to. The other half has either already
High Maturity 0%
Do NotKnow
ModerateMaturity
Little toNo Maturity
Other: AdvancedReporting
Don't Know /Not Applicable
PredictiveAnalysis
IdentifyingTrends
11a.) What level of maturity does yourorganization have around usingBig Data?
11b.) How does your organizationuse Big Data, if at all?
FIGURE 11 BIG DATA IN LODGING
0 20 40 60 80 100
Event Management Applications
Concierge Services
Sales and Catering
Customer RelationshipManagement
Point of Sale
Central Reservations Systems
Email
Revenue Management Systems
Property Management Systems
Have plans to move to cloud in 18months or more
Have plans to move to cloudwithin 18 months
Currently running on cloud
Currently not cloud-based and no planto move to cloud in the near future
FIGURE 12 USE OF CLOUD-BASED APPS IN LODGING
ENTERPRISE SYSTEMSCHAPTER FOUR
-
5/26/2018 Hotel technology
13/15
WWW.HTMAGAZINE.COM LODGING TECHNOLOGY STUDY 2014 HOSPITALITY TECHNOLOGY 17
migrated some system, or plans to do
so. Email was the low-hanging fruit forcloud migration, with 50% already run-
ning on cloud and an additional 15%
planning a migration. CRM is next in
line, with 41% having migrated and an
additional 12% planning to do so. Con-
cierge service and event management
applications seem to be the least likely
applications to be moved into the cloud.
It is safe to conclude that there is clear
interest in cloud applications but the
trend is still in early adoption.
In pursuit of identifying patterns, as
with previous studies, participants in
the 2014 study were asked to indicate
which PMS platform innovations were
most likely to be a part of their next up-
grade. Eight innovations were evaluated,
including the addition of two new ones,
and results were compared to 2012
data (Figure 13). Despite the lack of
enthusiasm for employee-facing mobile
solutions discovered during the impor-
tance-performance analysis portion of
this study, almost of half of respondents
selected mobile access for managers
and staff as the capability most-likely to
be included in their next PMS upgrade.
Integration to Social Media was a distant
second with only 28.1% of respondents
reporting that it was a likely upgrade.
All of the updates measured in 2014
are less likely to be included than they
were in 2012; this result is likely due to
the completion of upgrades that were
planned two years prior.
Trends in Payment and SecurityOne area worthy of detailed investigation
is payment and security. Respondents
were provided with a list of technologies
and asked to indicate which are used at
their organizations (Figure 14). Results
were compared with those obtained in
the 2013 study. Many established se-
curity best-practices (such as the use of
end-to-end encryption and regular test-
ing) are not being used by the majority
of those in our 2014 study. There are
2014
2012
Mobile access for managers/staff
Integration to Social Media
Guest-centric wizard to controlguest experiences
Reservations wizard tohandle bookings
Above-property hosting
Room management grid
Direct billing
Automatic data backup
FIGURE 13 LEADING PROPERTY MANAGEMENT PLATFORM INNOVATIONS
Uses non-traditional payment hardware(such as iPads or other mobile devices)
Offers an app for mobile devices thatallows bookings and receives payment
Uses tokenization at the card swipe
Uses a QSA for certifying PCI compliance
Uses end-to-end encryptionfor cardholder data
Self-certifies for PCI compliance
Regularly tests systems and processes
2014
2013
FIGURE 14 PAYMENT & SECURITY PRACTICES IN USE
several possible reasons for this drop.
Hotels have rolled out new payment ca-
pabilities, such as tablets at the front
desk and mobile apps with booking
and payment processing. The addition
of these tools brings increased security
complexities. In addition, the payment
industry is in a state of ux as U.S. mer-
chants wait for a migration to EMV/chip-
based payment. Half of the respondents
in this study, in fact, identied that prep-
ping for these changes will be a major
technology goal in 2014 (from Figure 4).
Its likely that the impending switch to
EMV has left some hotel organizations in
a holding pattern. We also know from our
importance-performance analysis that
payment security technologies received
mediocre performance scores. None-
theless, it is clear that payment security
continues to be an important area de-
serving focus in the lodging industry.
-
5/26/2018 Hotel technology
14/15
CONCLUSION & METHODOLOGY
18 HOSPITALITY TECHNOLOGY LODGING TECHNOLOGY STUDY 2014 WWW.HTMAGAZINE.COM
2014 LODGING TECH STUDY
The qualifications of those who par-
ticipated in the study is evident in the
following: The respondents had more
than 1,000 years of combined pro-
fessional experience in the lodging
industry, with more than 70% having
attained a college degree or higher
level of education. Almost half of the
respondents were executives with
their primary responsibility being in-
formation technology. About a quar ter
of the respondents were CEOs, own-
ers, or general managers. The remain -
ing quarter included a mix of diverse
professionals in accounting, revenue
management, sales and marketing,
and operations such as F&B. One half
of the participants in the study reflect -
ed perspectives and decisions at the
corporate level, while the remaining
participants primary responsibility
was at the property or regional level.
Both full- and limited-service hotels
are represented in the study, with the
following break-down across the seg-
ments: 14% luxury, 35.1% upscale,
31.6% midscale, and the remain -
ing (19.3%) in economy or multiple
brands across segments. Ownership
and management models are repre-
sented as follows: multi-unit proper-
ties affiliated with different brands
(26.3%), multi-unit properties op-
erated by a management company
(24.6%), multi-unit properties affili-
ated with the same brand (7%), multi-
unit properties owned by the brand
(5.3%), single-unit property not affili-
ated with any brand (24.6%), single-
unit property affiliated with a brand
(8.8%), and others (3.5%).
Having tracked trends in hotel tech-
nology for the past four years, this
annual report is able to provide use-
ful historical analysis and serve as a
compass for future IT investments.
During that time, this research has
shown a measurable increase in tech-
nology budgets. This is good news for
hotel technologists who are faced with
costly bandwidth upgrades and loom-
ing changes in payment technology.
Connectivity, in fact, was a central
theme in this years research as more
than two-thirds of hotels race to pro -
vide guests with greater bandwidth.
Its clear that consumers are driving
the future of hotel technology. Indeed
this research has confirmed for the
second consecutive year that guest
expectations are evolving at a pace
that is difficult to meet, even with the
increase in financial resources.
Improving the guest-facing experi-
ence is just one critical goal of technol-
ogy, however. This repor t also reminds
us that the bulk of technology dollars
are still allocated to property manage -
ment systems. Hotels show increasing
interest in cloud-based capabilities for
these and other enterprise systems.
Once capital investments are made,
these cloud migrations should free up
funding for other projects.
Equally important to funding will
be well-planned upgrades that of-
fer long-term utility; and empowered
technology leaders that have the
right skills to evaluate guest trends,
orchestrate a cloud-based computing
environment, and proactively guide
their organizations.
Our research shows that IT teams
may well require greater support to
face future challenges, not necessar-
ily in easily-measured metrics such as
funding, but in subjective areas such
as training and executive influence. It
will be up to technology leaders them -
selves to motivate their organizations
and lead this transition. Indeed, as
technology evolves, so does the role
of the CIO. With this change comes
opportunity for those who harness
their potential for influence. Many of
the most important qualities of fu-
ture CIOs will require less technical
expertise and more business- and
communication-savvy: the ability to
bridge the gap between marketing
and IT; the vision to identify new ways
of conducting business; and the com-
mitment to lead.
Survey Sample &
Methodology
The 2014 Lodging Technology Study
was set up as an online question-
naire and distributed during fall 2013
to hotel executives in the readership
pool of HTmagazine via personalized
e-mails. Fifty seven completed sur-
veys were returned over a period of
seven weeks, representing a total of
25,879 hotel properties. The respon-
dents reported that their respective
organizations managed and/or owned
over 49,000 hotel properties. Accord-
ing to the 2012 Lodging Industry Pro-
file report by AH&LA, there were over
52,000 properties in the U.S. Thus,
the representation of properties in
this study is quite considerable.
Evolution for Technology Leaders:Business Savvy and Consumer-CentricGuest expectations are rising rapidly & IT budgets are on the rise, creatingopportunity for CIOs to embrace leadership roles
-
5/26/2018 Hotel technology
15/15
Hospitality Technology thanks the study sponsors and
academic partner of the 2014 Lodging Technology
Study. Their support helps to make this landmark
research possible.
ACADEMIC PARTNER
A S U P P L E M E N T T O H O S P I T A L I T Y T E C H N O L O G Y
STUDY SPONSORS
www.htmagazine.com