How The Hotel Business Model Is Evolving Through SaaS
Cloud computing and Software as a Service (SaaS) are two terms you hear almost every day. While both are different things they are closely related terms of the same idea – it’s like describing two sides of the same coin. Cloud computing, also known as on-demand computing, is where you use a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer – most users encounter cloud computing in the form of SaaS. i.e. SaaS is a method of software delivery that allows data to be accessed from any device with an Internet connection and web browser.
What’s so great about that? Well, cloud computing and SaaS offer a fundamentally faster, less risky, and significantly more cost-effective alternative to on-premises applications, thus a better solution for hotel businesses.
For hoteliers, implementations of in-house solutions can be extremely costly and time consuming and with constantly fluctuating costs of server hardware, software upgrades, traditional legacy models require IT departments to budget for new server equipment between a 3-5 year period. When it comes to actual software and licence agreements, hoteliers are locked into multi-year contracts meaning the replacement of on-premise software might happen around every 5-7 years for the major hotel chains, but for many hotels the reality is that they might actually hang on to their systems for as long as 10-15 years! With the continuous innovations in technology – 15 years is a long time for any businesses not to upgrade their IT systems leaving them competitively disadvantaged.
However, under the SaaS model hotel businesses subscribe to a licensed cloud provider and software applications are delivered via the Internet. It’s basically like a utility, you pay for what you need and use, while at the same time freeing yourself from all the headaches that IT can bring. By offering clients a subscription based model, hotels don’t need to pay massive upfront costs to invest in the system, allowing them to see a return on their investment much faster. In a nutshell, SaaS is cheap, scalable, reliable, and allows hoteliers to easily manage software anytime and anywhere.
And because applications are now easily accessible, on demand, and mobile, staff are now free to move around their hotel servicing guests. They are no longer confined or constrained by front desk and can now welcome guests at the entrance, in the lobby etc. Using a mobile device, staff can access reservations, capture guest photograph, take signature and complete a check-in via the touchscreen of the mobile device, all while accompanying the guest to their room.
Similarly customer expectations and behaviours are changing; almost every one of your guests is carrying a smartphone or tablet and are changing the way people perceive what constitutes good service. Customers want to be able to choose how they interact with hotel staff and services.
Embracing SaaS means hoteliers can facilitate and offer a self-service model for guests that prefer that type of interaction. At the click of a button guests can book services, make reservations, and customize their hotel stay. Similarly cloud and SaaS solutions also mean that hoteliers can use push notifications to send their guests contextually relevant messages based on profiles, behaviour, purchase history – even location, to promote and sell, ancillary products and services, upgrades etc. For hoteliers, mobile provides a great opportunity to enhance and personalise the guest experience, improve service offerings and hotel operations, and drive repeat business.
All in all, Software as a Service is a great alternative to traditional software providing great dexterity and flexibility for hotel businesses; it enables hoteliers, big and small, to invest in powerful tools without having to bear the huge cost of infrastructure. It allows hoteliers to simplify their processes, automate most operations and boosting their efficiency while providing them with the ability to adapt and meet the ever-changing expectations of guests leading to increased guest satisfaction and improving the property’s bottom line.