Hotel Management: We Now Live in a Subscription Based Economy
Changing consumption habits are changing the global business landscape. Currently there is a massive shift underway in the way we consume goods and services; we are moving away from a pay-per-product model to a subscription-based model and would now rather subscribe to services than drum up the cash to own products.
The way we consume movies, listen to music, or even drive around in cars, is changing. Today, we prefer to subscribe to streaming music on the go, rather than build up bulky CD collections; subscribe to Netflix, Amazon Prime etc. instead of traditional video rental and subscribe to services like Zipcar to avoid the need to buy cars. We now value the convenience and flexibility of subscribing to services over buying products outright.
And it’s not just consumers; businesses are now moving to subscription-based services for tools such as billing, accounting, analytics and using products from Salesforce for CRM or Rackspace for cloud hosting. Businesses are recognizing the significant long-term economic benefits that subscription business models make possible – why invest when you have the adaptability and flexibility to either pay as they go, or pay per subscription monthly, or via a long-term contract.
And of course the hospitality industry is no exception. For decades, hospitality technology has been old, cumbersome, and expensive. But with the rise of SaaS and cloud based products hoteliers can now opt for subscription based services for hotel management which is far more intuitive and much more cost effective than their predecessors. There are now a wide range of SaaS and cloud based products available that work together to make an hoteliers life easier such as the PMS, channel managers, reservation systems, customer management systems, data storage, email services, etc.
And while a primary benefit to utilizing subscription based services is the convenience of paying a monthly usage fee rather than investing / paying a large upfront cost, subscription based services offer a plethora of other benefits to hoteliers when considering hotel management tools. With cloud and SaaS computing;
- Hoteliers ‘rent’ computing power. A service provider takes over complete asset management and as a consequence reduces the overall cost of ownership.
- It is easier for hoteliers to scale their services, up or down, based on requirements.
- Separate systems can be easily connected to other software applications, even if these applications don’t share the same provider.
- Data is stored securely and remotely instead of in an on-site physical location.
- The vendor is responsible of taking care of all technical resources and system maintenance, from software updates to top-level data protection and backup.
- There are no recurring upgrade costs to worry about either because they are completely automatic – you are always logged into the latest version.
- Helps to streamline operations and support revenue streams such as upselling, ancillary product promotion and proving a more personalised guest experience.
Subscription based services also mean that PMS’ and channel managers, which were once out of reach or too expensive are now readily available to small properties and independent hotels enabling them to compete on a more level playing field.
The subscription model has ushered in a new facet of the digital world; the way we do business has fundamentally changed. Subscription based services such as cloud and SaaS offer hoteliers a fundamentally faster, less risky, and significantly more cost-effective alternative to on-premises applications for hotel management. Hotels who dismiss these services are missing out on technology that can offer significant advantages.