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Trends in the future of cloud-based hospitality tech for 2022: Aditya Sanghi, Co-Founder, Hotelogix

Tuesday, January 11, 2022, 12:35 Hrs  [IST]

Looking at how hotels globally have adapted in response to the changing market and business dynamics in the last couple of years, one thing is clear – they are trying their best to be as innovative as possible. And in doing so, they have been quick in leveraging the power of new-age hospitality technology solutions, primarily cloud-based ones. Regarding technology adoption in the hotel industry, cloud-based solutions are in demand, and their acceptance is set to go up. Here is what HT's 2021 Lodging Technology Study has to say about it - 

Around 38% of hoteliers found integrating with legacy systems difficult. And to get rid of such limitations, hotels will have to look at cloud-based solutions, leading to higher implementation.

Let’s look at the Indian hotel industry

As stated above, we have seen the same trend in India, where cloud adoption looks quite promising. A recent Gartner forecast suggests that with a 30% rise from 2021, public cloud implementation will reach $7.3 billion in 2022. There are a few reasons behind such a rise in demand. The shift to the cloud has been happening for a while, at a much lower rate pre-pandemic. But it got its due traction very recently since the onset of the pandemic and its related restrictions that evolved the market dynamics.  

Reasons for increased implementation

Many foreign and homegrown chain/group brands are aggressively expanding in India. They are doing so by acquiring or signing management contracts with standalone properties in mostly smaller cities. This helps them become asset-light with a much-reduced go-to-market timeframe. We expect such portfolio consolidation to continue at around 20% for another couple of years. This is paving the way for the rapid adoption of cloud-based hospitality tech solutions. Here are some of the most prominent reasons –

Reduced IT CAPEX

Owing to the ongoing business uncertainties, hotels are doing everything possible to reduce IT expenditure, and they have understood that the cloud is the only way to go about it. It becomes costly for chain hotels with on-premises solutions and their associated long-term upfront investments. Plus, there is no guarantee of the desired business outcomes and ROI. However, being available on a monthly subscription model, cloud solutions empower hotels to save significantly on CAPEX while reducing software ownership costs.

Another essential aspect in this context is – data security. Traditionally, hotels make additional investments to create a secure cyber environment while working on legacy systems. But this is not the case with cloud applications. The Hotel PMS provider handles data security by implementing industry-standard TLS/SSL encryption to transmit data and saving the same on firewall-protected servers with automatic backups and recovery.

Centralised multi-property operation

We have seen many chain hotels struggling to ensure efficient multi-property operation with legacy systems. Our customers state this as the #1 reason while migrating to our cloud Hotel PMS. Due to the restrictive nature of a legacy system, it is impossible to manage all multiple properties from a central location. But with the cloud, this concern vanishes as they can now manage the entire group operation with a single sign-on and centralised control.

Better accessibility

With cloud-based applications, hotels can gain unprecedented mobility as they are no longer required to be at the property to access the Hotel PMS. They can access it from anywhere and anytime over the web or via the Hotel PMS mobile version. While it helps them manage operations on the go, it expedites their real-time decision-making capabilities, leading to enhanced productivity. Not only this but also the management can now allow the non-guest-facing staff working remotely to access the hotel software and required data without worrying about security.
Seamless third-party integration

We have this practice of asking our new customers – what made you abandon the legacy application for a cloud hotel management system? The #2 most stated reason after centralised control is this – integration capabilities with other cloud-based third-party solutions, including revenue management, channel management, CRM, online/internet booking engine, business intelligence, point of sale, and online reputation management. Such integration allows for a 360-degree hotel operation. 

Enhanced guest experience

Legacy systems don’t have the right features to allow hotels to offer contactless services via their (guests) smartphones. Being unable to technologically assist hotels to offer exceptional guest services in line with their changing needs, they were on the verge of extinction. On the contrary, the cloud is a game-changer in this aspect. Today's guests want to do everything right from making a reservation to selecting rooms to check-in/out on their smartphones, and the cloud is the way to accomplish this.

Cloud was already on its way to replace the old legacy application because of its restrictive and limited capabilities. Many valuable services are regularly added to cloud applications, making them robust, modern, and operationally imperative. In simple words, cloud-based hospitality solutions have the elasticity to respond and realign themselves with the changing market and business dynamics. This has made hotels in India consider cloud solutions as a must-have tool to drive overall business growth.

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