white paper - transform your growth strategy now

8/6/2019 White Paper - Transform Your Growth Strategy Now

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Remove barriers between hotel technology,marketing and operations

Transform your

growth strategy now


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Contents

1. Foreword 3

2. Executive summary 4

3. Preface: the road to hotel industry recovery 6

4. The collision of economics, technology and guest empowerment 8

5. The industry perspective: focus on growth by fusing business needs and IT 18

6. IntroducingtheITpathnder 24

7. Techniques to ensure business transformation 27

8. Conclusions 32

9. About Robert Cole 33

10. About Amadeus 34

11. Appendix 35


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Growth is the new watchword for all those in the hospitality sector.

While there has been a lot of discussion in the last three years about the globaldownturn, its impact and its lasting legacy, we are starting to see the narrativechange.

In 2011, we are seeing all hotel groups and c-level executives embrace a more

optimistic and determined approach to securing growth. And that is what thisreport is about.

Last year, we commissioned two reports that explored possible futures forthe hotels sector by looking at the forces of change shaping the next decade.However, with this report, we wanted to explore the three-year horizon and thedifferent approaches needed to make the most of todays market opportunities.

We wanted to investigate how organizations could transform their growth strategies by removing some ofthe barriers between hotel technology, marketing and operations. This paper looks at how best to go aboutthis and the impact that a more integrated approach across these three disciplines will have on the guestexperience.

ByintroducingtheconceptoftheITPathnder,whichisabreakthroughideadesignedtohelporganizationsmove beyond a silo approach to technology, this paper makes a valuable contribution to understanding howtechnologycanbestsupporthotelgroupsmaximizeefciencyandgrowth.Throughexploringthedifferenttechnologies, both from a back-end and front-end perspective, we hope that it will spark new thinking and newapproaches both amongst hoteliers and those of us in the business of technology.

We hope that this paper provides some valuable insights as you plan for the next three years. And we lookforward to exploring these ideas further with you in the coming few months.

Jrme DestorsDirector, Hotel ITAmadeus

1. Foreword

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Aligning business and technology priorities for 2011-2014

Economics, technology andguest empowerment collide

The combination of constrained budgets,technological advancement and consumerempowerment between 2008 and 2010 presentedchallenges for the hospitality industry, but withthe current recovery underway, opportunitiesnow abound. Hotel IT environments are poised for

transformation with cloud computing assisting hotelcompanies turning toward asset-light operations.

Broad consumer adoption of mobile computingtechnologies, social networking and locationbased services have given hotel guests tools tocommunicate marketing messages that are moretrusted than traditional forms of advertising.

Fusing business needs and IT

1. Aligning business and IT prioritiesLike most organizations, hotel business leadersare focused on discovering innovative methodsto grow, attract new customers and reduce costs.Similarly, hotel IT leaders are also prioritizing cloudcomputing, virtualization and mobile technologies.However, hotel IT leaders are attending tocore central and property system platformsbefore following other industries in developingcollaboration and web 2.0 initiatives.

2. Identifying key business drivers and the enterprisevalue chainTo bridge business objectives and IT objectives, acommon vocabulary is required to open lines ofcommunication across business units. Outcomesmust be material results from clear actions andideallyreectingmeasurableeconomicvalue.Externalgrowthandinternalefciencybusinessdrivers should relate directly with the customervalue chain to maintain consumer focus.

3.DeningstrategichotelbusinessprioritiesHotel business leaders are seeking to expand theirproperty portfolios by growing room counts andexpanding into new territories. Brand developmentalso rates high as a priority both the repositioningof existing brands and the launch of new brands.Additionally improving guest satisfaction andimprovingoperationalefciencyareinterrelatedforhoteliers as both share the goal of enhancing theguest experience.

4.DeningstrategichotelITpriorities

Hotel nformation technology leadership isprioritizing enhancement of core CRS and PMSplatforms while strengthening direct distributionchannels. From an infrastructure perspective,virtualization of systems, with migration to cloudcomputing and SaaS to increase security, reliabilityand scalability head the list of key goals.

2. Executive summary

Amadeus engaged RockCheetah to explore how hotel companies can align business and IT strategies to drivebusiness transformation during a period of economic recovery; specically, the three year time period from2011 through to 2013.

Having survived the most dramatic downturn in the history of the hotel industry, many hoteliers areundertaking new business initiatives that rely heavily on IT to drive business growth.

This white paper provides an overview of the current industry hospitality environment and key business driversto provide insights into how hospitality executives can seek to bridge business and IT objectives. The reportdraws on desk research, a global survey and executive level hotel interviews.

Transform your growth strategy now - Remove barriers between hotel technology, marketing and operations

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The IT pathnder

By establishing the role, function and approachoftheITPathnder,hospitalitygroupsmaygaingreater alignment between corporate businessand technology objectives, identify appropriatesolutions and implement the initiatives thatcreate the greatest economic value.

TheITPathndersaretaskedwiththree

fundamental tasks: understanding how theoperating environment impacts key businessdrivers; linking IT initiatives to corporate strategy;and road-mapping methods to create economicvalue from IT initiatives.

5. Getting the ideal infrastructure in place

Hospitality executives on both the businessand IT sides of the operation do not perceiveinfrastructure solely in the realm of hardwareand software. There is also a highly perceptiveacknowledgement of the importance ofexperienced management personnel to overseethe design and support of the platforms. Hotelsinterested in virtualizing systems are also seekingsuperior technical support of mission criticalsystems.

6. Understanding the essential deliverables

ThesentimentthatITPathndersmustspeakbusiness to business people and technology totech people was shared by several leaders. Forhoteliers,itwasessentialthatITPathndersensured delivery of core platforms and planningprocesses for the organizations to be successful.

7. Quantifying business impactA holistic approach to measuring performanceis preferred by hoteliers. While business impactmust be benchmarked against measurablestatistics, hotel executives sought to reachbeyondstandardnancialperformance

measures and track guest satisfaction, associateengagement, owner adoption, and technicalservice levels to provide a comprehensiveperspective founded on measuring the economicvalue of various initiatives.

Ensuring businesstransformation

Every hospitality organization is different,with different product portfolios, competitivepositioning and shareholder objectives. As aresult,ITPathnderscannotrelyonaone-size-ts-allapproachtoestablishtheoptimalITroadmap for a property, brand or managementcompany.

8. Eliminating dangersWhile hoteliers cited future economic disruptionsas a potential risk, internal risks were alsofrequentlyidentied.Mostsignicantly,resistance to change was highlighted by

companies as a leading barrier to success, evenby individuals that characterized managementopenness to change as an organizationalstrength. Strategic and executional failures arealso areas of concern.

9. Capitalizing on opportunitiesVirtualization, with its promise of reduced datacenter, payroll, hardware, software and servicescosts presented a strong value proposition forIT. Mobile computing is seen as an importanttechnology to enhance customer engagement,

and most importantly, holding the prospect formonetization due to superior reach, targeting,transaction and viral capabilities.

10. Leveraging organizational strengths ITPathndersmustaccuratelyidentifybusiness

dynamics and measure their impact fromanorganizational,stafngandpartnershipperspective. Commitment to change must bereinforced through the expression of economicbenetsthatcanbesharedasacommongoalacross diverse constituencies.

AligningbusinessandtechnologygroupsistheprimaryroleoftheITPathnder.IfthePathnderfunctioncan develop strategies that eliminate danger, leverage strengths and capitalize on opportunities, asmeasured by economic value, the probability of success is greatly enhanced.

Insummary,thedisciplineofHotelITPathndersrequiresexceptionalcommunicationandanalytical

skills, a deep understanding of the organizations unique value propositions and IT capabilities, and mostimportantly, a determined, goal-based mentality to provide the leadership necessary to map the course ofaction that delivers the greatest economic value to the organization.

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3. Preface: the road tohotel industry recovery

Over the last three years, the scarcity of operatingprotsandinvestmentcapitalresultedinbudgetconstraints, headcount reductions and projectdeferrals. The economic downturn also delayedenhancement to or replacement of many legacy

platforms that hinder hotel industry operationalefciencyandstrategicmarketdifferentiation.

Over the same period, the technology sector wasundergoing a dramatic transformation. Mobiletechnologies, cloud computing and social computingall experienced unprecedented growth as the long-promised prospect of anything, anytime, anywhereaccess to information hit the mainstream. Rapidadoption of these new technologies by travelers alsocreated a new generation of tech-savvy consumerswith increased expectations.

As a result, a gap has emerged between the businessgoals of the marketing and operations teams tosatisfy heightened guest demands and the goals of ITgroupstaskedwithimprovingefciencyandreducingcost.

Having already cut non-essential spending,the overwhelming sentiment across executiveboardrooms is that advanced technology representsthe key to both containing operational spending andenhancing marketing effectiveness as the businessclimate improves. In many cases, the objectives are

clearandthestrategicwhat,where,whenandwhyquestionshavebeenansweredbyexecutiveleadership.

This however, leaves operations, marketing andtechnologyleadershipcontemplatingthewhoandhowcomponentsoftheequation.

This whitepaper will focus on exploring the role of

technology in helping hotel groups to grow, engagecustomers and transform businesses over the nextthree years. A key consideration will be the leadershiprequired to bridge the gap between businessobjectives and IT objectives over the three-year timeframe.

A cross-section of hotel industry executives andsenior management were contacted and askedto complete a survey describing key businessand technology priorities, essential deliverables,environmental factors and ideal techniques for

bridging business/IT gaps. Due to the strategicnature of the questions, participants were assuredthat strategically sensitive answers would be heldinstrictestcondencewithnoattributiontotherespondent.

Following the tumultuous events of the years 2008 through 2010, hoteliers around the globe are againoptimistically focused on growth. Corporate plans to expand into new territories, attract new customers andimprove service offerings have returned to the top of the boardroom agenda.The question is how best to go about it?

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Mobile technologies,cloud computing and social

computing all experiencedunprecedented growth

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The perfect storm of economic decline, technological advancement and consumer liberation may have createdconsiderable challenges for the hospitality industry, but the current recovery now presents unparalleledopportunities for organizations capable of allocating scarce resources to initiatives that reduce asset loads,improve information exchange and leverage customer self-service.

Before investigating methods to reach potential solutions, it is important to understand the externalenvironmental factors that are responsible for both dictating limitations and introducing opportunities tofacilitate change.

4. The collision of economics,technology and guest empowerment

Figure 1. Comparison of Key Global Hotel Industry Metrics 1,2,

A key indicator of hotel demand, worldwide realGross Domestic Product (GDP) growth should begood news for the hotel industry. North Americaand Europe are expected to lag behind globalaverages,withAsiaPacicspacemorethandoublingEuropean and North American growth over the nextthree years. Renewed growth may be welcome, butslimmed expense budgets have not been returned topre-recession levels. Also, one should not disregardthe damage incurred to the underlying fundamentals

of the industry during the recession. The severity ofthe recession was vividly illustrated by declines acrossall key hotel industry operating metrics across allgeographic regions in 2009 (Fig 1) 1,2,.

Based on the bell-weather Revenue per AvailableRoom (RevPAR) statistic, the setbacks have alreadybeenovercomeinAsiaPacic,butprogressisslower elsewhere. Positive outlooks for operatingperformance including demand growth outpacingsupply growth and rates exceeding occupancy growthare encouraging, but do not paint an accurate pictureof the industrys capability to support investment. 3

Painting by numbers: Hotel industry recovery

2008 2009 2010 2011 2012

Demand

North America (%)Europe (%)

Asia&Pacic(%)Middle East & Africa (%)

-12%

0%

12%

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2008 2009 2010 2011 2012

Occupancy

North America (%)Europe (%)

Asia&Pacic(%)Middle East & Africa (%)

-12%

0%

12%

2008 2009 2010 2011 2012

Avg. daily rate

North America ($)Europe()

Asia&Pacic($)Middle East & Africa ($)

-20%

0%

20%

2008 2009 2010 2011 2012

RevPAR

North America ($)Europe()

Asia&Pacic($)Middle East & Africa ($)

-20%

0%

20%

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In 2009, the impact of operating performance onindustryprotabilitycausedCornellUniversitySchool of Hotel Administration professor JackCorgel to remark that the only time unit-level hotelprotsdeclinedmorethan20%was72yearsearlier.Needlesstosay,protdeclinesinexcessof30%have a wide-ranging impact on hotel values, debtcoverage, default covenants, and solvency4.

Hotel investments funded through CommercialMortgage Backed Securities (CMBS) provide a glimpse

into the extent of the problems. In March 2011,FitchRatings reported one in seven US CMBS hotelswas unable to meet its mortgage obligations thislackofcashowfromoperationslimitsanownersability to fund capital investments5.

Publicly traded Real Estate Investment Trusts (REITs),owners of large hotel portfolios were devastatedduringtheglobalnancialcrisis,withmanyforcedto reduce shareholder dividends to conserve capitalas the credit crisis eliminated sources of debtnancing.SinceJanuary1,2008,thecumulative

return on the Hotel REIT index was -28.7%; the sectorunderperformed the Standard & Poors 500 index by-24.3%6.

Given that REITs create value through theappreciation of underlying assets or from operationalcashows,theytendtodedicatecapitaltopropertyacquisitions and on maintenance of their propertyportfolios.

It is also important to note that after a sustainedperiod of belt tightening, property or brand levelcapital expenditures for technology enhancement orreplacement are competing with deferred repairs &maintenance, replenishment of depleted reserves forreplacement and brand-driven Property ImprovementPrograms (PIP).

Share prices of hotel brands were also punished onexchangesduringthenancialcrisis,butnottothesame extent as the Hotel REITs. While performing

better than the Hotel REITs, their total returns sinceJanuary 1, 2008 have been -13.0%, lagging behind theS&P 500 by -8.5%7.

Hotel brands continue the trend of reducing thenumber of owned properties to focus on managing orfranchising hotels. Freeing capital from commitmentsto long-term real estate investments generally allowshotels to dedicate resources to directly supportbranding or business generation initiatives.

With tight credit markets, limited cash being

produced from operations, hotel owners focusing onreal estate and hotel brands losing interest in tyingup capital in hard assets, the stage is set for movingIT investments off the balance sheet and ontothe income statement. There is also considerablestructural interest in the industry transitioning ITinvestments into pure business services.

Hotel brands continue the trend of reducing thenumber of owned properties to focus on managing orfranchising hotels. Freeing capital from commitmentsto long-term real estate investments generally allowshotels to dedicate resources to directly supportbranding or business generation initiatives.

Capital investment or capital punishment?

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Budget constraints arent just for hotels

The hotel industry has not been alone in its aggressive cost cutting. Global investment in IT has also beensqueezed by economic downturns. Figure 2 presents the drastic reduction of IT spending in 2009, but also themore subtle pattern that post- recession, IT spending growth tends to remain lower than pre-recession growthrates.

After experiencing a 4.6% year-over-year decrease in technology spending during 2009, Gartner reportedworldwide IT spending quickly stabilized to increase 5.4% in 2010 and is expected to grow at 5.1% in 2011.

2009 2010 2011

Category Spending Growth Spending Growth Spending Growth

ComputingHardware

$326 -13.90 $364 8.9% $391 7.5%

EnterpriseSoftware

$221 -2.10% $236 6.1% $254 7.5%

IT Services $781 -3.50% $782 2.5% $818 4.6%

TelecomEquipment

N/A $427 14.0% $465 9.1%

TelecomServices

N/A $1,593 3.9% $1,647 3.4%

Total Telecom $1,888 -3.60% $2,020 7.0% $2,113 4.6%

All IT $3,216 -4.60% $3,402 5.4% $3,576 5.1%

Figure 2. Worldwide IT Spending Forecast (Billions of U.S. Dollars)8,9

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While IT spending is increasing, not all that incremental spending is falling under the control of CIOs.A separate Gartner study indicates deeper cuts to CIO budgets were incurred in 2009 and that spendinggrowth rates have not rebounded to exceed the levels experienced prior to the downturn. (Fig. 3)

Percent Worldwide Projection for 2011:


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Mainstream adoption of cloud, mobile and socialcomputing, in concert with location based-services have not only changed the IT landscape,but the lives of every employee and hotel guest.

Transforming hotel IT

As hotel performance suffered and IT budgetswere being slashed, three pillars of a technologicalrevolution were being established. Mainstreamadoption of cloud, mobile and social computing, inconcert with location based-services have not onlychanged the IT landscape, but the lives of everyemployee and hotel guest.

Cloud computing shiftscapex to opex

With tight IT budgets and the predisposition of hotelcompanies to migrate toward asset-light operations,cloudcomputingwouldappeartoprovideanidealtfor the hotel industry.

While IT professionals are intimately familiar withcloud computing and virtualization, many hotelmarketing and operations leaders remain unfamiliarwiththeconcept.Simplydened,cloudcomputingis an approach to IT where processing capabilitiesare provided on demand as a service using Internettechnologies to access remote networks that are

shared across multiple customers.

Software may also be provided as a Service(commonly abbreviated as SaaS) and provided ondemand also reducing the amount of on-sitesupport required. With SaaS implementations, thesoftware and its associated data is typically hosted inthe cloud and accessed using a browser.

For the hospitality industry, the combination ofcapital expenditure (CapEx) constraints during a post-recession period where customers are demandingsupportforincreasedtrafcandcomputingcapabilities, creates a pinch for CIOs. Thanks tovirtualization technologies like cloud computing andSaaS, CapEx costs per computing unit (calculationand processing) and per networking unit (routingand communications) continue to decline. As thenumber of networking and computing devicesincreases, operating expenses (OpEx) would increaseproportionally.

Mobile computing anything,anytime, everywhere

2011cannallybedescribedasTheYearofMobile.Afterveyearsofpunditspredictingthatthe following year would be the year that mobilecomputing became mainstream, the evidence isoverwhelming. Morgan Stanley Research calculatedthat smartphone and tablet shipments exceededdesktopandnotebookcomputersalesforthersttime in the 4th quarter of 2010. Fueled by the

1-2 punch of Apple iPhones, iPads and Androidsmartphones, mobile technologies achieved criticalmass.

Likeeverycomputingstep-change,vefactorsdrovethe revolution for broad consumer adoption: greaterprocessing power, smaller form factors, enhancedfunctionality, improved user interfaces and lowerprices. The ubiquity and importance of mobilecommunications is showcased by the followinginfo-graphic transitioning from global usage down tohotel bookings.

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Travel usage

29.7MILLION

M O B I L E R E S E A R C H E R S

P R O J E C T E D B Y

201274% W I T H M O B I L E B O O K E R SGROWTHF R O M 2 0 1 0 T O 2 0 1 2

23% OF INTERNATIONALT R A V E L E R S H A V E U S E D M O B I L E

CHECK-IN50% SEARCHED

A T L E A S T O N C E I N T H E P A S T 6 M O N T H S

FOR TRAVEL

Global adoption

M O B I L E N E T W O R KA C C E S S A V A I L A B L E

F O R O V E R

5 0 % O F N E W I N T E R N E TC O N N E C T I O N S W E R E F O R M O B I L E D E V I C E S

OF

MOBILEINTERNETUSERS

86%

ARE ON TH E

INTERNETWHILE

WATCHING

TELEVISION

O N L I N E E N D O F 2 0 1 0

O F T H E W O R L D S

POPULATION90%

*Google **ITUAligning business and technology priorities for 2011-2014

Mobile computing anything, anytime, everywhere


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Hotel search

Hotel booking

70% OF MOBILE WEB USERS

20 MILES OF THEIR HOTEL

19.5%

S E A R C H Q U E R I E S

A R E O N

M O B I L E

D E V I C E S

B O O K A S I N G L E H O T E L R O O M F O R A

S I N G L E P E R S O N F O R T H E S A M E N I G H T

8 2 % O F H O T E L S B O O K E D

O N D A Y O F A R R I V A L

4 5 % H O T E L S B O O K E D O N D E S K T O P S

V S .

5 8 % O F M O B I L E H O T E L B O O K I N G S W E R E W I T H I N

OF HOTEL

*Google **ITU

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Social computing & location-based services

VenturecapitalistJohnDoerrcoinedthetermSoLoMotodescribetheconvergenceofsocialnetworks,location-based services and mobile computing. These three technologies serve as the cornerstones of theconnected lifestyle that empowers consumers by facilitating real-time communication with an individualssocial graph (members of that persons social network) plus the added context of relative proximity.

Theimportanceofmobileandsocialcomputingisnotsolelybasedonsitetrafc.Again,theabilitytoengagewiththeconsumerinreal-timeandmonetizethattrafcisdictatedbyausersreceptivitytothehoteliersmessage or inducements to transact. Nielsen Company research indicates that individuals tend to trustpersonal recommendations far more than any other form of advertising. Interestingly, they also trust thereviews of strangers and editorial content approximately as much as a branded web site. (Fig. 4)

Venture capitalist John Doerr coined the termSoLoMotodescribetheconvergenceofsocialnetworks,location-based services and mobile computing.

Recommendations from people known

Consumer opionions posted online

Brand websites

Editorial content (e.g. newspaper article)

Brand sponsorships

TV

Newspaper

Magazines

Billboards / outdoor advertising

Radio

Emails signed for

Ads before movies

Search engine results ads

Online video ads

Online banner ads

Text ads mobile phones

90%

70%

70%

55%

55%

69%

64%

62%

61%

59%

54%

52%

41%

37%

33%

24%

Figure 4. Degree of trust across various forms of advertising11

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This lack of trust in advertising presents aparadox for both marketers attempting to createrelevant, compelling advertising and technologistsattemptingtoefcientlydeliverthemessageonline and accurately track the results. Aside fromuser-generated content, all other forms of onlineadvertising ranked appreciably lower in trustcompared with traditional media, with text ads onmobile phones scoring worst.

Thisrepresentsasignicantchallengeforhotelbrand CMOs. With inherent distrust of advertisingmessages, social media becomes an even moreimportant tool for engaging with customers to buildtrusted relationships.

Social media drives three distinct stages of customer

engagement with brands:

> Brand reputation> Brand relationship> Brand trust

A number of properties and hotel brands are usingsocial media monitoring tools in an attempt tomore effectively manage brand reputation throughthird party hotel review sites and travel-related blog

comments. In many cases, these interactions arereactionary as opposed to being proactively initiatedby the hotel.

As social media matures, a few hotel brands arebecomingmoreaggressiveatidentifyinginuencersvia social media to nurture positive brand perceptionthat will translate into endorsements to followers.

Most hotel brands utilize guest loyalty programsto support customer interaction, most often withfrequent guests. However, tracking guest stay/spendhistory and point rewards is a bit like measuring

an interpersonal relationship solely based on thenumber of dates or the gifts given/received.

Social media opens customer communicationchannels before, during and after the stay, providingthe hotelier with valuable context, resulting in anability to anticipate guest needs, exceed expectationsand provide an exceptional guest experience.

True brand relationships transition individualsfrom customers to brand advocates. Social mediagives staunch supporters a voice to persuade otherconsumers to establish a closer relationship with thebrand.

Ultimately, brand advocates may evolve furtheras trust in the brand increases. In many cases,brand evangelists not only promote the brand, butindependently defend the brand against detractors,again through social media.

The challenge of social media for hoteliers is howto effectively scale an increased degree of customerengagement to a larger base of customers throughmore frequent and more substantial interactions.

Location, location, location

Ellsworth Statler, the father of the modern hotelindustry, once famously described the three keystomakingahotelfamousaslocation,location,location. 90 years after that remark, the emergenceof location-based services capitalizing on mobileandsocialcomputinggrowthhasredenedthetermchecking-in.Between2009&2010,SNLKaganreported the number of location-based service userstripled to 33.2 million, with Foursquare leading the

way with 273% average quarterly growth12

.

True brand relationshipstransition individualsfrom customers to brandadvocates.

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1. Increasing enterprise growth

2. Attracting and retaining new customers

3. Reducing enterprise costs

4. Creating new products and services

(innovation)5. Improving business processes

6. Implementing and updating businessapplications

7. Improving technical infrastructure

8. Improvingenterpriseefciency

9. Improve operations

10. Improving business continuity,risk and security

1. Cloud computing

2. Virtualization

3. Mobile technologies

4. IT management

5. Business intelligence6. Networking, voice and data

communications

7. Enterprise applications

8. Collaboration technologies

9. Infrastructure

10. Web 2.0

As the research has progressed, some clear and consistent insights have emerged from c-level executives acrossmarketing, operations and technology functions as they investigate how best to implement their growthstrategies in the next three years.

Insight 1: Aligning business and IT priorities

Inlate2010,Gartnergroupcanvassedover2,000CIOsworldwideandidentiedthetopbusinessandtechnology priorities for 2011. (Fig. 5)

Figure 5. Top 10 Business and Technology Priorities in 201113

5. The industry perspective: focus on growthby fusing business needs and IT

Top 10 Business Priorities Top 10 Technology Priorities

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Theprioritiesidentiedbyacross-sectionofprominenthotelindustryChiefInformationOfcers,ChiefMarketingOfcersandChiefOperatingOfcerssurveyedinQ2,2011,weresimilartothesetwo top 10 lists, with two exceptions - both on thetechnology list. Hoteliers, both from a businessand IT background, failed to mention collaborationtechnologies (#8) or Web 2.0 (#10 as top priorities).Instead,severalindustryspecicprioritiesexistprimarily improving brand perception on the businessside and updating core CRS & PMS informationprocessing platforms on the technology side.

There would appear to be two fundamentalreasonsforthedifferenceinhotelindustry-specicresponses. First, the hotel industrys reliance onlegacy technologies to support a highly fragmentedindustry caused hotel companies to avoid dramaticreplacement/enhancement initiatives for systemsthat, for the most part, reliably supported a majorityof traditional business processes. For years, decisionswere made to forego logistically complex andexpensive upgrades as incremental performance andfunctionalityenhancementswerenotcost-justied.The triumvirate of returning demand, technological

step-change and customer empowerment hasnow tipped the scales in favor of broad systemenhancement initiatives.

The reason for hotels not fully embracing theinteractive two-way conversation with customersprovided by Web 2.0 and hesitancy to implementmore collaborative technologies are a byproductof the legacy systems. With a surprising numberof these platforms developed using 1970s and1980s technologies, in many cases, the industry isexperiencing a generation gap. The systems weredeveloped in environments that did not consider the

existence of the other generation. They literally dontplay by the same rules or speak the same language.Withoutaplatformcapableofenablingsimpliedinterfacing to new technologies, the cost and timeassociated with custom integration work underminedapprovals. Again, cloud computing and SaaS havenow produced economic models that give rise tovastly improved returns on investment (ROI).

Over the next three years, many major hotelorganizations will be getting their core central andproperty system platforms in order. Once the newplatforms have been deployed and the ecosystem ofhotel systems is powered by 21st century capabilities,hoteliers will rapidly embrace the integration ofmore collaborative interactivity with customers,employees, business partners and vendors.

Insight 2: Identifying key businessdrivers and the enterprise value chain

Therststeptobridgingthegapbetweentheobjectives of the operations/marketing teams andthe IT group is to identify the true goals of eachdivision. With all due respect to corporate protocol,the true departmental goals are probably not the listfrom the CEOs letter in the last employee newsletter,talking points from an investor earnings call or thelatest press release from the corporate developmentteam.

True business objectives are often the unpopular,difcultchangesthatmustbemadetosolvethemost pressing strategic challenges facing thecompany. True objectives may relate to recapturingmarket share lost to a competitor, sun-settingan established product line, or capitalizing on anopportunity that was previously rejected consideredtoo radical. Ideally, the true objectives should bedetermined independently within each respectivegroup, leveraging the subject matter expertise ofthose responsible for departmental success.

The triumvirate of returningdemand, technologicalstep-change and customerempowerment has nowtipped the scales in favor ofbroad system enhancementinitiatives.

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True business goals should share three distinct characteristics:

1. Representoutcomesresultingfromclearactions;ifthereisnotadenitiveresult,itsnottrulyanobjective.

2. Enhancetheguestexperiencebyenhancingcustomerbenets;ataminimum,itshouldbeardirectimpact on the business value chain.

3. Possess measurable economic value; all objectives must be measurable, but those that generatedirecteconomicbenetofferthebestopportunityforsuccess.

True business goals should share three distinct characteristics

Once the respective business goals have beenidentied,manygroupsmightimmediatelyengagein a gap analysis. However, when evaluating anybusiness/technology priorities gap, a structuredapproach is required to effectively link what maypotentially be two very different approachesto addressing business challenges. Identifyingenterprise business drivers will help provide valuablecontexttoestablishacommongroundthatunies

discussions around core principles. Understandingthe key business drivers responsible for generatingspecicoutcomessuchasvolume,margin,protandcustomer engagement will also highlight companyobjectives and help eliminate potentially distractingsubsets of elements supporting departmentalpriorities from consideration.

Linking business drivers to the value chain isparticularlybenecial.ToquotemanagementguruPeterDrucker,Acompanysprimaryresponsibilityistoserveitscustomers.Protisnottheprimarygoal, but rather an essential condition for the

companys continued existence. Tying business goalsto business drivers and ultimately the value chainprovides a common vocabulary for discussions andunites all aspects of the business in customer focus.

The umbrella of the value chain facilitates resolutionof ideas within planning, governance or executionprocesses regardless of their application to productdevelopment, supply chain or customer relationsaspects of the business.

Framing business drivers within the value chaincan also be helpful in bridging business/IT gaps bysurfacing potential solutions that were not apparent

to the individual teams.

Finally, for each business driver, a metric is requiredto ensure that benchmarking, goal setting and gapanalyses may be based on measurable criteria thatare mutually agreed by all parties involved. It is bythese measures that success will be evaluated.

Tying business goals tobusiness drivers andultimately the valuechain provides a commonvocabulary for discussionsand unites all aspects ofthe business in customerfocus.

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Business drivers can typically be categorized into external and internal factors. External business drivers arenormallyassociatedwithgrowth,whereasinternalbusinessdriversarerelatedtotheefcientmanagementofresources allocated to supporting the external business drivers. The following are the top business drivers mostmentioned by the c-level executives polled:

Global expansion> Number of properties> Number of rooms under management

> Geographic coverage

Revenue capture> Occupied rooms> Average Daily Rate> Revenue per Available Room

(RevPAR = Rate * Occupancy %)> Total guest spend

(F&B, recreation, entertainment, etc.)

Guest experience> Guest satisfaction surveys

Maximizing brand> Competitive positioning

> Brand perception

Stafng> Headcount

> Manhours

Operating expenses

Customer acquisition costs

Distribution costs

Process rationalization

External (growth) Internal (efciency)

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The market segmentation, geographic disparities and local customs characterizing the highly fragmentedglobal hotel industry creates an environment where cookie-cutter solutions are neither appropriate norefcient.Strategicbusinessprioritiesarehighlysituational,impactedbylocalizeddemand,competitivesupply,product innovations and perceived value by target market segments.

The panel of hotel executives, when asked to identify the top business priorities for the 2011-2014 period,provided responses encompassing four categories: grow the hotel portfolio, enhance the brand, improve guestsatisfactionandrunmoreefcientoperations.

Each respondent, including the technology leaders, all tied business strategies back to the satisfaction of guestneeds. Notably absent were objectives that reduced costs in isolation from the guest or brand experience.Perhaps owing to experience gained over the past 36 months, hotel executives appear to be supporting thenotionthattheguestiskingandprotsarederivedfromefcientlysatisfyingneeds.

Hotel portfolio Customer satisfaction

> New territories> Global room growth

> Increase guest spend> Increase return guest frequency> Strengthen customer value proposition

Brand development Operational effciency

> Launchnewhotelbrands(inspecic

geographic markets)> Refresh/revitalize existing brands(selected brands)

> Achieve operational excellence

> Improvequalityofstafng> Deploy technology to enhance guestexperience

Insight 3:Dening strategic hotel business priorities

Top strategic business priority over next 36 months:

Increasing EBITDA through increased guestfrequency and increased guest spendAnonymous CMO, Name withheld by request

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Insight 4:Dening strategic hotel IT priorities

Similar to the business priorities, hotel industry fragmentation assures that no two operations are identical andthesinglemostreliableconstantisthatonesizedoesnottall.ExecutivesqueriedregardinghotelITprioritiestypically provided responses in one of two categories platform and infrastructure.

It is interesting to note that all of the platform priorities mentioned share a common characteristic they areall heavily customer focused. Despite operational differences and situational complexities, the executivesmaintained complete directional agreement. In terms of prioritizing platforms development efforts, responseswereunderstandablywidelydivergent,withsomeplacingtheCRSrst,whileothersplacedthePMSrst,however, enhancement to at least one of these two systems ranked near the top of every hotel IT priority list.

On the infrastructure side, there was also alignment again, even from the CMOs, with all reporting thathardening system security/reliability and investigation of cloud migration processes were top priorities. Theimportance of security may have stemmed from the well reported accounts of the industry being a targetofhackersandseveralhighproledatabreaches.Whileperhapsasubtlety,similartobusinesspriorities,commentstendedtofocusontheguestsatisfaction,withprotectingpersonallyidentiableinformationtrumpinginternallyfocusedprioritieslikePCIcompliance.Itwouldseemtheeconomicdownturnreminded

industry executives that hotels are built for guests.

Platforms Infrastructure

> Central Reservation System update> Virtualize PMS systems> Re-launch of direct channels

(web, mobile, apps)> Sales technologies> Social networking> Enabling guest care/communication

systems - cloud, database, campaign,

tribal, etc.> Enabling trigger based marketing -cloud, database, campaign management

> Security> Reliability> Scalability> Response time

Top strategic business priority over next 36 months:

Relaunch of direct channels(web, mobile, apps)Anonymous CMO, Name withheld by request

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Tobeclear,theITPathndercanbeseenasarole,function or approach. One could argue that the CIOshould, as the ultimate arbiter of IT direction, serveasITPathnder.Forsomeorganizations,thismaybe an effective approach. In others, the businessmay be better served having a separate analyticalresource or function that is free to work acrossdivisional boundaries to propose strategy and make

recommendations independent of c-suite politics.Inessence,theITPathndershouldberesponsibleforthree critical functions:

Inessence,theITPathndershouldberesponsibleforthree critical functions:

UsinganITroadmapasaguide,ITPathndersshouldbe tasked with three forms of output:

Responsible for bridging the business-technologychasm,theroleofITPathnderyieldstwodistinctstrategicbenetsrst,ensuringthatthebusinessgroup understands the rationale for the structure andprioritization of IT initiatives, and most importantly,the economic value derived from the initiatives. ThesecondstrategicbenetisderivedbyITteamsthatbenetfromanend-to-endplanningprocessthat

manages to translate business goals and customerneeds into actionable projects, with assurances of amutual business/IT understanding of ROI targets.

While initial alignment on ROI scoping and projectprioritizationisimportant,theITPathndercreatesthe greatest enterprise value when incorporatedinto the change management process. The ITPathnderlinksresourceallocationstobusinessprocesses and economic value. If changes occur toa technology development plan or a business unitalters the planned deployment of the technology, theorganization is able to proactively model the impacts

of these changes to avoid unanticipated losses.

6. Introducing the IT pathnder

Tobeclear,theITpathndercanbeseenasarole,function or approach.

> Understanding how a dynamicoperating environment impacts keybusiness drivers

> Strongly linking IT initiatives to

corporate strategy> Managing a roadmap to generateeconomic value from IT initiatives

> Identifying ideal IT infrastructure> Prioritizing sequencing of essential

deliverables> Quantifying business impact of IT

initiatives

Traits of an IT Pathnder

A strong technicianwith business

knowledgeTom Conophy, Executive Vice President & CIO InterContinental Hotels Group

Driven by an overarching need to bridge business and IT objectives, organizations require a resource to helpthem to assimilate a multitude of environmental factors and formulate actionable strategies that producemeasurable economic results. This function is best described as an IT Pathnder.

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Additionally,theITPathnderprovidesaninvaluableresource for business analysts accountablefor developing business cases and managingrequirements processes. Based on the high levelworkoftheITPathnder,developingbusinesscasesissimpliedbytheroadmappingprocess,withthealignment of business and functional requirementsimproved through more open communicationchannels between business units and their ITcounterparts.

The following sections provide an industry levelperspectiveontheoutputsanITPathndermight

produce if an assessment was made of currenthotel industry operations, using the panel of hotelexecutives as a proxy:

Insight 5:Getting the ideal infrastructure in place

IfanITPathnderwastolookattheindustryasawhole,therstconclusionwouldbethattheindustryis indeed very interested in moving to an asset-light

model including outsourced data centers, cloud basedapplications, and Software as a Service.

One additional and particularly insightful conclusionfrom the hotel executives was that infrastructure isnot limited to the technology the key is actually thepeople running it. Hotel leadership has discoveredthat similar to the hardware and software portionsof the technology, the human leadership managingthe infrastructure must also be responsive, reliable,scalable and secure.

The hoteliers responses underline the criticalimportanceforanITPathndertoencouragecollaborative, open and honest dialogue withthe business units. Complex challenges involvingarchitecture are rarely solved by applying simplisticsolutions. While the business units do not desireunderstanding the detailed nuances of the ITinfrastructure, it is important that they gain anappreciationforthebenetsprovidedoranyrisksthat may remain. Decisions based on common

understanding of the issues create an environmentmore focused on accomplishing corporate objectivesthan keeping score in departmental won/lostcolumns.

Infrastructure is not limited to the technology the key is actually the people running it.

> Dynamic, web-based applications

> Virtualization

> Off premises hosting

> Strong architecture expertise

> Strong and redundant network

> Service oriented architecture

Asset Light

> Positive, results-oriented culture

> Well trained staff

> Strong guest orientation

> Balanced between internal and externalexpertise

> Willingness to consider external solutions

People

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Insight 6:Understanding the essential deliverables

TheessentialdeliverablesidentiedbyanITPathnderwillalwaysbehighlyspecictoeachoperation and the business environment for itsparticular geographic region. Over the next three

years, hotelier essential deliverables were brokendown into two categories platforms and planning:

Inclusion of the planning aspect within the essentialdeliverablesreinforcestheneedfortheITPathnderrole. The items suggested underline the need forimproved communications, particularly for processesand the alignment of metrics.

Insight 7:Quantifying business impact

The principal methods of measuring business impactprovided by the group of hoteliers was relativelypredictable.FortheITPathnder,theprincipalissueisensuringthatthebusinessimpactisquantiedutilizing the most pertinent benchmarking statisticsavailable. Again, the hotel panel exhibited admirableperspective by taking a more holistic approach andincluding perception based statistics for guests,employees and partners so all stakeholders wereconsideredinadditiontothehardnancialmeasures.

NowthattheroleoftheITPathnderhasbeendened,letsinvestigatesometechniquesthatmay

beemployedbythePathndertoclosegapsbetweenthe objectives of the business units and the IT teams.

> Delivery of Central Reservation System

> Delivery loyalty program> New branded websites

> Delivery on direct booking objectives

> Property-based technology revamp

> Delivering trigger based marketing/predicative analytics

Platform

> Streamlined capital and resource prioritization

process> Processes well understood

> Aligned compensation and incentive metrics

Planning

> Delivery of Central Reservation System

> Delivery loyalty program

> New branded websites

Financial performance

Guest perception

> Guest satisfaction levels

> Associate engagement/satisfaction

Employee perception

> Owner adoption of technology

> System availability

> Adherence to budget/timelines

Partner perception

Technical performance

Looking back from 2014,what three goal must be accomplished?

Delivering new loyaltyprogram that alsodrives increased shareof wallet

Anonymous CMO, Name withheld by request

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From a strategic perspective, if the IT Pathndercan efciently focus effort on accomplishing threeparticular tasks, there will be a high probability ofsuccess. The effective IT Pathnder must work withinthe organization to:

Every hospitality organization is different,with different product portfolios, competitivepositioning and shareholder objectives. As a result,ITPathnderscannotrelyonaone-size-ts-allapproach to establish the optimal IT roadmap for theorganization.

7. Techniques to ensurebusiness transformation

1.Eliminate dangers2.Capitalize on opportunities3.Leverage organizational strengths

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Insight 9:Capitalizing on opportunities

WhileITPathndersmustmaintainadefensiveguard against dangers, the function must also beon the watch for both business and technology-centric opportunities. Surfacing opportunitiesfrom throughout the organization must also be apriority.TheITPathnderneedstoencouragestaffcontributions and vetting processes that recognizethe value of contributors to inspire participation.

Whilehoteliersarecurrentlyexpressingcondencethat future prospects are improving, a surprisinglylimited array of opportunities were named. This

contrasts with the greater quantity and variety ofdangersidentied.Thiswouldseemtoindicatethatthe true sense of the hoteliers is cautious optimism.

Thefollowingareaswereidentiedasthehotelindustrys greatest opportunities over the next three

years:

IT Virtualization hypothetically makes informationprocessing a utility where customers pay only for theservices consumed. Virtualization centralizes manyadministrative tasks, enabling more consistent andpotentially better trained support, improves systems

scalability and makes workloads more predictable.ImprovingthesethreefactorsproducesmoreefcientIT operational environments.

The appeal of virtualization is reduced data center,payroll, hardware, software, and/or services costs.Cloud-based platforms offer superior systemavailability, scalability and disaster recovery asa primary value proposition. Of course, cloudcomputing is not a panacea, it is still relatively newandtheoptimalbalanceofexibility,controlandsecurity is still being sought.

An interesting application for hotels is the cloud-based Property Management System (PMS). Whilea relatively new development, virtually all PMSvendors and major hotel companies are in theprocess of investigating or deploying virtualized PMSenvironments.

All indications are that mobile will continue to growat exceptional rates for the foreseeable future. CiscoVNIMobilepredictsthatglobalmobiledatatrafcwill grow at a staggering average annual rate of92% between 2010 and 2015, resulting in a 26-foldincreaseinthetotalamountofmobiledatatrafc

over that period.

Thesemobiletrendsdonotpurelyreectaconsumers desire for real-time communications, butimpacts the business community as well. In additionto demanding smartphones, many knowledgeworkers are requesting tablet computers. DespiteiPads only being made available for sale in April 2010,Gartner predicts that by 2013, 80% of businesses willsupport a workforce using tablets14/15..

> Increased usage of mobile devices

Mobile

Virtualization

> Cloud technology - trigger based and analyticssupport

> Third party technology solutions

> Favorable economics around tech cost

> Capital cost elimination

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If the mobile growth trends fail to capture theimaginationofhoteliers,thereisanothersignicantreason to think very seriously about the futureof mobile computing. Advertising will enablemonetization of the platform.

2009 data from NA Technographics indicates thatthe online channel (mobile+internet) captured 28%of media consumption time, but only garnered 13%ofadvertisingrevenues,agurethatwasontherise. Print media currently enjoys an approximatelyinverse ratio of 26% of media spend for 12% of thetime allocation.

Mobile could play an important role in correcting thatimbalance. Due to the real-time nature of mobile, itpossessesamoreattractiveprolethananyother

channel in terms of reach, targeting, transactions andviral capability. Mobile follows television and internetin engagement due to its smaller form factor anarea that tablets will begin to challenge.

Again, the world of mobile computing is far fromperfect. Different operating system software,hardware capabilities and form factors createchallenges for developers striving to produce aconsistent brand experience. Specialized mobileapplications(Apps)providinghardwarespecicfunctionality may provide the ability to maximize

the utility of a particular mobile device, but theprogramming code may not be transferable toprovide the same experience on a similar device.Conversely, mobile websites may provide a commonexperience across a wide variety of devices, but maylacktheabilitytocontrolspecicfeaturesaswellasnative apps.

The combination of explosive growth and a highlyfragmented solution set provides yet another sourceof challenges for the hospitality CIO.

TheLoaspectofSoLoMoprovidesanimportantcontextual framework that helps organizationsincrease relevance. Proximity awareness enableshighly granular interactions to provide exceptionalguest value and help hotels communicate time-sensitive offers for inventory that normally risk goingunsold. Remembering 82% of mobile hotel bookingsare made within a day of arrival and 58% within 20miles of the property, if highly targeted, locationpotentially becomes an opportunity for guest roomsales in addition to more typical food & beveragepromotions.

Adding the substantially uncharted location-basedfunctionality to the nascent capabilities of socialmedia within the rapidly growing mobile spacecreates yet another integration dimension for IT

groups while marketing and operations teamsstart setting objectives for mobile commerce. Thecomplex interrelationships between hotels, guests,mobile platforms, social networks and location-basedservices will surely give many leaders across severaldisciplines sleepless nights.

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Insight 10:Leveraging organizational strengths

Organizational strengths are the fuel that powersthesuccessofITPathnders.AtoppriorityfortheITPathnderneedstobeidentifyingnotonlythefeatures that rank highly, but the individuals who areresponsible for nurturing those strengths.

Most hotel executives categorize corporate strengthsinto three categories organizational, staff andpartners. Several hotel groups have recentlyreorganized various divisions since the recovery hasbegun. In one case, the business and IT groups havebeen reorganized to work with a greater degree of

interaction.

Itisinterestingtonotethatcommitmenttochangeislistedasastrength,whileorganizationunwillingor unable to change was included as a danger.The interesting aspect is that the same individualsprovided both responses. Another highlightedRelationshipwithhotelownersasastrengthandHotelresistancetoadoptionofguestfacingtechnologies as a danger. Perhaps this indicates thattherespondentswereconicted,however,abetterexplanation might be that the strength is actually acorporate talking point as opposed to a legitimatestrength.

ThisillustratestheneedforITPathnderstodispensewith lip-service to accurately identify legitimatebusiness dynamics and measure their impact.

There is no single prototype that describes theidealITPathnderforanyorganization.EffectiveITPathndersmaydifferinstrengths,withthetdetermined by the alignment of those strengths withthe needs of the enterprise. One critical aspect isthatanITPathndermustworkwithinthecorporateculture.AnITPathndercannotbesuccessful

if working outside of existing organizationalframeworks.

> Relationship with the hotel owners group> Strong property marketing organizations

> Strength of our vendors/partners

Organizational

> New marketing organization and insights

> Optimised IT organization

> Joined up business and technology groups

Stafng

> Leadership alignment

> Corporate sponsorship and commitment

> Commitment to change

> Quality of the people

> Majority are eager to embrace change

Stafng

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Pressed to accomplish more with constrainedbudgets, CIOs will rely on the virtualization of IToperations to drive cost savings while utilizing cloudcomputing and Software as a Service at all levelsofthebusinesstoimproveoperationalefcienciesand improve guest engagement. Marketing andoperational teams will need to capitalize on new

technologies to further empower guests to customizeand control their stays and help customer contactpersonnel satisfy the needs of an increasinglydemanding guest.

By establishing the role, function and approachoftheITPathnder,hospitalitygroupsmaygaingreater alignment between corporate business andtechnology objectives, identify appropriate solutionsand implement the initiatives that create the greatesteconomicvalue.WithaneffectiveITPathnderhelping to develop a customer-centric IT roadmap,

organizationswillreapthebenetsofimprovedinter-departmental communication includingimproved understanding of corporate objectives andgreater transparency relating to business strategiesand IT requirements.

Armed with an understanding of business objectives,quantiedbytheirrespectiveeconomicimpact,andframedbyconsumerneeds,ITPathnderscanhelpidentify appropriate infrastructure componentsandcongurationstoproduceaprioritizedsetofdeliverables in the necessary sequence to makethe greatest contribution. By creating awareness of

dangers, identifying opportunities and leveragingorganizationalstrengths,ITPathnderscanhelpdrivebusiness transformation to the mutual satisfaction ofbusiness and IT personnel.

TheITPathnderplaysacriticalroleinhelpingcompanies succeed in a post-recessionaryenvironment. The secret is working closelywith operations and marketing teams to bettercommunicate needs in a structure that is moreeasily assimilated by technologists, and rationalizingtechnology initiatives through alignment with

business metrics. By establishing the role of ITPathnder,hotelindustryCIOs,CMOsandCOOsalikewillbenetfromincreasedorganizationalalignment by closing the gap between business andtechnology objectives.

8. Conclusions

An IT pathnder should speak business to businesspeople and technology to tech peopleLisa Fues, Director of Reservations, Inventory, and Distribution Marriott International

With the recovery progressing, the global hotel industry will now be playing catch-up to harness thetechnological advancements of the past three years. An opportunity exists for organizations that caneffectively bridge the business objectives dened by operations and marketing teams, with the ITobjectives dened by hotel industry IT leadership.

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Robert Cole is the founder of RockCheetah, a leading travel industry marketing strategy & technologyconsulting practice. Robert is recognized for his ability to help organizations develop innovative product andcustomer engagement strategies by successfully aligning marketing and IT.

Robert specializes in eCommerce and distribution for the hospitality and destination sectors, with a focus onemerging technologies. Roberts unique travel industry perspective is a result of his wide range of experiencewith travel suppliers, technology providers and both B2B and B2C travel sellers.

His career highlights include serving as corporate director of marketing planning for Four Seasons Hotels &Resorts; leading marketing for Canadian economy lodging brand Journeys End; launching Travel Resourcesand growing its marketing services portfolio to represent more than 600 independent hotels; overseeing

Sabresglobalhotelprogram;establishingindustry-rstdirectinterfaceswhenleadingdistributionatBudgetRent a Car; introducing dynamic packaging to the travel industry at Neat Group; and running global productcontracting for The Mark Travel Corporation, a leading North American wholesaler/tour operator.

Robert has also held leadership positions or been an active participant active in several industry associationsincluding HFTP, The Open Travel Alliance, HSMAI, HEDNA, HITIS and the Cornell Center for Hospitality Research.A frequent speaker at travel industry conferences, Robert is also the author of the Views from a Corner Suiteblog and a self-professed disciple of the global travel industry.

9. About Robert Cole

Robert ColeFounder of RockCheetah

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Amadeus is a leading transaction processor for the global travel and tourism industry, providing advancedtechnology solutions to our travel provider and travel agency customers worldwide. Amadeus acts as aninternational network providing comprehensive real-time search, pricing, booking, ticketing and otherprocessing solutions to travel providers and travel agencies through our Distribution business area, and weoffer other travel providers an extensive portfolio of technology solutions which automate certain mission-critical business processes through our IT Solutions business area.

Customer groups include travel providers (e.g airlines, hotels, rail, ferries, etc.),travel sellers (travel agencies and websites), and travel buyers (corporations and individual travellers).

The group operates a transaction-based business model and processed 850 million billable travel transactionsin 2010.

Amadeus has central sites in Madrid (corporate headquarters and marketing), Nice (development) and Erding(Operationsdataprocessingcentre)andregionalofcesinMiami,BuenosAires,BangkokandDubai.At a market level, Amadeus maintains customer operations through 73 local Amadeus CommercialOrganisations covering 195 countries.

Amadeus is listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges and trades under the symbolAMS.MC.TheAmadeusgroupemploysover10,130employeesworldwide,with123nationalitiesrepresentedatthecentralofces.

10. About Amadeus

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1. International Monetary Fund (April 2011)www.imf.org

2. STR Global -European Lodging Overview (March, 2011)www.hotelnewsnow.com/media/File/PDFs/Industry_presentations/20110307_IHIF_STR.pdf

3. International Monetary Fund (April 2011)

4. HotelNewsNow.com - PKF Hospitality Research releases updated forecast (June 2009)www.hotelnewsnow.com/Articles.aspx/1340/PKF-Hospitality-Research-releases-updated-forecast

5. Fitch Ratings - U.S. CMBS Delinquencies Begin to Stabilize on March Decline (April, 2011)www.pr-inside.com/tch-u-s-cmbs-delinquencies-begin-to-r2526618.htm

6. TickerSpy - Hotel REITs (*REITT) Jan. 2008 Apr. 2011www.tickerspy.com/index/Hotel-REITs

7. TickerSpy - Hotel Stocks (*HOTEL) Jan. 2008 Apr. 2011www.tickerspy.com/index/Hotel-Stocks

8. Gartner - Gartner Says Worldwide IT Spending to Grow 4.6 Percent in 2010 (January 2010)www.gartner.com/it/page.jsp?id=1284813

9. Gartner - Gartner Says Worldwide IT Spending to Grow 5.1 Percent in 2011 (January 2011)www.gartner.com/it/page.jsp?id=1513614

10. Gartner - The 2011 Gartner Scenario: Current States and Future Directions of the IT Industry (January 2011)www.gartner.com/DisplayDocument?id=1526219

11. TheNielsonCompany*E.g.90percentofrespondentstrustedcompletelyorsomewhatrecommendations from peple they know

12. SNL Kagan Cashing Out on Check Ins: Mobile phone location-based services (October, 2010)www.snl.com/Sectors/Media/WhitepaperLibrary.aspx

13. Gartner Executive Programs (January 2011)www.gartner.com/it/page.jsp?id=1526414

14.CiscoVisualNetworkingIndex:GlobalMobileDataTrafcForecastUpdate,20102015www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html

15. Gartner - Gartners Top Predictions for IT Organizations and Users, 2011 and Beyond:ITs Growing Transparency November 2010

www.gartner.com/it/page.jsp?id=1480514

11. Appendix

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AmadeusITGroupSAJune2011

For more information please contact:

Jrme DestorsE-mail: [email protected]

Tel: +33 (0) 497 154 895

Vic Pynn (Americas)E-mail: [email protected]: +1 312 873 1140

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