How Open APIs are Transforming the Hotel Industry
There is certainly a beneficial impact on the hotel industry when technology providers can integrate with other systems using proprietary or Open APIs to assist hoteliers in cutting costs, driving revenue and delivering exceptional service. However, with the vast number of vendors floating around the hotel technology industry, the utilization of APIs to drive results has become a driving force in hotel software selection.
When one looks at the complexity of hotel operations, the complex nature of inventory distribution and all of the other touchpoints that affect a hotel, it’s no wonder that systems need to communicate effectively with each other. In a Phocuswright research paper titled, APIs: A Strategic Imperative published in April of 2016, Bob Offett, the writer of the article stated that there is a growing API economy where there are a number of businesses solely focused on being providers of APIs. The growth of APIs has been surging, and this is a very good thing. It levels the playing field and enhances the decision-making process when looking at purchasing hotel PMS systems.
In the paper, Offett writes that “APIs are the digital glue that enables new revenue for exciting business, and provides for new ecosystems, many of which have yet to be defined.”
The hotel industry is at a technological expectations cross-road. Hoteliers are inundated with a vast number of service providers, technology vendors/partners, and distribution challenges. Hoteliers have to deal with all of these issues, and on top of this, they have to ensure that their guests are happy. Being a GM/Owner of a hotel today is incredibly more complex than it was 20 years ago. Hoteliers need to look at companies that enable them to focus on the real aspect of why hotels were built in the first place. To offer a guest somewhere comfortable to rest and to deliver excellent service, ensuring that the next time the traveler returns, they choose to stay at your hotel. Of course, it also comes down to running a profitable property. Getting back to basics on-property should be a hotelier’s top priority, leaving the technology to take care of itself.
Many APIs are now trending towards open interface architecture, whereas in the past, technology companies looked at these types of integrations as revenue sources. Companies would keep the data behind private iron curtains, practically holding the hotelier hostage. The introduction of Open APIs is forcing technology vendors to add value to their primary offerings rather than trying to rely on revenue from interfaces. Ultimately this is a huge win for hoteliers. By working with technology partners that have a clean, Open API which other developers can readily connect to, hotels to can implement other systems without limitations and the fear of yet another cost.
The technological beating heart of any hotel is the property management system (PMS). In the past, it was likely stored in the basement of a hotel, possibly connected to another “parent brand system” and also connected to other on systems such as the POS, a PBX, a Call Accounting system, a spa system, and so on. These connections would have been serial, and though they functioned and served their purpose, the hotel’s technology infrastructure was unable to scale in concert with new platforms that no longer needed to reside on-premise.
So, fast forward a few decades, and we are now in a time when new solutions for the hospitality industry are launched virtually daily. Many of these products are cloud-based and not handcuffed by antiquated technologies. Most of these systems seen as periphery systems –systems that are important such a guest engagement solution. However, if a hotelier does not implement one of these types of periphery systems, they may not be detrimentally impacted in the short term. The real transformation is happening with primary systems. Systems that are imperative to have in order to run hotel operations at the highest level.
The main system, as stated early, is the hotel’s PMS. Choosing a PMS that has the flexibility to deliver an Open API is key and will help you make viable future technology investments. Being able to implement a cloud-based PMS, with a Software as a service (SaaS) delivery model that enables a hotel to instantly connect with guest service applications, as well as many other applications, is finally a reality.
As guest expectations continue to change and the technology that surrounds our industry keeps evolving, decisions related to transitioning to new platforms and solutions can seem daunting. Fundamentally, hoteliers need to look for systems that provide technological flexibility by using Open APIs, and ultimately, select innovative systems that deliver on their promises.