Is Your Hotel Technology Stack Ready for the Future? 7 Key Considerations for Revenue Managers

This article aims to provide revenue managers with the essential considerations that should guide your decisions when constructing a future-proof technology ecosystem.

The hospitality industry is on the brink of a transformative era.

Technological prowess was once an advantage for the more savvy hotelier, whereas now it’s a core component of commercial success. 

For hotel revenue managers, this evolution presents both challenges and opportunities. The right commercial technology (tech) stack can be the linchpin that differentiates your properties from thriving and those struggling to keep up in a highly competitive market. 

However, with a vast range of technological solutions flooding the market, the process of selecting and implementing your perfect tech stack can feel like cautiously negotiating a maze. 

This article aims to provide revenue managers with the essential considerations that should guide their decisions when constructing a future-proof technology ecosystem. 

By focusing on these key factors, you can confidently build a tech stack that not only optimizes current revenue streams but also adapts to future developments and ultimately secures long-term growth for your hotel.

What is a hotel tech stack?

A hotel tech stack is a collection of digital tools that a hotel employs to manage its operations, enhance the guest experience, and, most critically for this discussion, drive revenue.

For revenue managers more specifically, this encompasses the interconnected suite of solutions focused on things such, optimizing pricing strategies and distribution channels and improving the overall revenue management framework.

Historically, a revenue manager’s tech stack was relatively simple, often relying on tools such as a Property Management System (PMS), a Customer Relationship Management system (CRM), Central Reservation System (CRS), and Point of Sale (POS) software for transactions.

However, the modern hotel tech stack has undergone a significant transformation. It’s now a multifaceted ecosystem of interconnected tech solutions that touch nearly every aspect of a property’s commercial functioning.

Critical components within this ecosystem that are particularly relevant for revenue managers, which I’m sure you will be aware of, include: PMS, Rate Shopping tool, Revenue Management System (RMS), Predictive demand intelligence, a Booking Engine, and more.

The main objective of this ecosystem is to maximize a hotel’s revenue performance and overall profitability by automating tasks, improving efficiency and empowering well informed, data-driven decision making.

Why is it important to future-proof your hotel tech stack?

Today’s hotel tech environment is constantly evolving with a range of providers. Implementing a tech stack that sets you up for the hospitality world of tomorrow as well as the present day, provides you with a competitive edge and ensures long-term success.

Several factors underscore the importance of this proactive approach:

Technological advancements: Areas such as Artificial Intelligence (AI), machine learning and automation underscore the pace at which technology is moving. To stay competitive and capitalize on these innovations, you must have a tech stack that is able to adapt and integrate emerging technologies.

Changing guest expectations: Guests are increasingly accustomed to the seamless integration of technology into their daily lives. The modern traveler has come to expect personalized experiences, smooth digital interactions, and mobile-first solutions throughout their journey.

A future-proof tech stack empowers you to effectively meet these evolving expectations through the use of guest data, which in turn can significantly enhance guest satisfaction and foster long-term loyalty.

Market dynamics: The hospitality market is inherently dynamic, subject to a multitude of influencing factors including economic fluctuations, shifting travel patterns, and intensifying competition. A forward thinking tech stack provides hotels with the crucial agility and inherent scalability needed to effectively respond to these ever-changing market dynamics

Embracing new technologies extends beyond just keeping pace with industry trends. A modern and well-integrated technology stack offers a multitude of benefits, including the facilitation of seamless data flow across different systems, the automation of routine tasks, a reduction in human errors, the potential for increased revenue generation, and much more.

But not all tech stacks are created equal. Below we will provide a comprehensive list of the top seven factors you should consider when building the perfect future-proof tech stack at your hotel.

1. Harness the potential of Artificial Intelligence

Artificial Intelligence (AI) has emerged as a transformative force within hotel revenue management, offering sophisticated capabilities that extend far beyond the limitations of traditional technology.

To build a truly future-proof commercial tech stack, you should prioritize the integration of worthwhile AI applications.

While AI undoubtedly offers substantial advantages for hotel management, it is crucial to recognize that its role is not to supplant human expertise entirely.

View AI as an intelligent advisor or a collaborative co-pilot, adept at handling intricate data analysis and automating routine tasks, while you maintain strategic oversight, and use deep market knowledge and judgement, particularly in situations where human empathy is needed and customer satisfaction is paramount.

Leading AI solutions will go beyond processing vast amounts of data and deliver actionable insights that you can readily translate into more informed data-driven decisions.

AI should significantly reduce manual errors, enhance overall operational efficiency, and empower revenue managers to concentrate on strategic initiatives that drive long-term growth rather than being bogged down by tactical, day-to-day tasks.

2. Lean towards platform consolidation

You’ve heard of Frankenstein right? Whether you’ve read the book or seen the film, the name hints at a creation gone wrong. Assembled from mismatched human parts and jolted to life by mysterious science.

Now, think about your hotel’s tech stack. Are you piecing together a ‘Frankenstein’ of fragmented systems, each operating in its own silo and refusing to play nicely with the others?

It’s a surprisingly common trap for hoteliers, this urge to collect disparate tools and then try to force them into a cohesive whole. But just like Mary Shelley’s creation, a fragmented tech stack rarely ends well.

Instead, it creates a perfect storm of data silos, inaccuracies, operational inefficiencies that drain your team, missed revenue opportunities, and a weakened ability to craft and execute a unified commercial strategy.

Smart revenue managers are increasingly seeing the clear advantages of bringing their key technology solutions together on a single, comprehensive platform. Here’s why that’s a move worth serious consideration.

Benefits of a unified commercial hotel platform

• Reduced complexity: Managing a smaller number of solutions can streamline operations and reduce the learning curve for hotel staff, allowing them to become proficient more quickly and efficiently.

• Cost savings: Consolidating technology vendors can potentially lead to substantial cost savings compared to managing multiple subscriptions, maintenance agreements, and complex integrations between disparate systems.

• Improved data consistency: A unified platform inherently ensures better data accuracy and consistency across different hotel functions, providing a single source of truth for critical business information.

• Streamlined workflows: Integration within a single, comprehensive platform is often more seamless and reliable than attempting to integrate disparate systems from various vendors, leading to more efficient and less error-prone workflows.

While the allure of a single, unified platform offering complete functionality is hard to ignore, the ‘perfect’ technology solution for you will likely involve a strategic combination of a core platform for revenue management essentials, complemented by specialized solutions designed to address more targeted needs.

3. Prioritize forward-looking data over reliance on historical data sets

Tired of making decisions based on what was, not what will be? What if you could peer into a crystal ball, glimpse what’s next, and anticipate tomorrow’s trends?

Today’s travel and hospitality landscape is permeated by unpredictable booking patterns and shifting market dynamics. As a result, traditional reliance solely on historical data for hotel revenue management is becoming increasingly inadequate.

To build a resilient and future-proof commercial tech stack, revenue managers must prioritize the integration and utilization of real-time, forward-looking data.

The significance of forward-looking data

Forward-looking data provides invaluable insights into future demand patterns and emerging market trends, empowering you to adopt proactive revenue management strategies rather than simply reacting to past performance data.

This type of data enables you to anticipate future demand surges and potential dips, understand the geographical origin and characteristics of this demand, and react effectively, particularly during periods of significant uncertainty.

Accurate demand forecasting, grounded in comprehensive forward-looking data, is absolutely crucial for optimizing a wide range of hotel operations, including pricing strategies, targeted marketing efforts, inventory management and staffing level adjustments.

Types of relevant forward-looking data:

• Flight and hotel search data: Analyzing hotel and flight search and booking data can reveal crucial information about arrival patterns at a destination and help hotels identify key origin markets that are driving future demand.

• On-the-books (OTB) data: This key dataset reflects confirmed reservations currently held by the hotel, providing a solid foundation for forecasting overall future demand and revenue.

• Events and holidays: Accurately Forecasting the impact of local and national events, as well as holiday periods, is crucial for predicting demand spikes and adjusting pricing and inventory accordingly.

• Short-term rental data: Monitoring the availability, pricing, and booking trends of alternative lodging options, such as vacation rentals and serviced apartments, provides a broader understanding of the competitive landscape within a destination.

Forward-looking data can enable you to anticipate market shifts, identify emerging trends, and adjust pricing and marketing strategies well in advance, providing a significant competitive advantage and optimizing revenue generation.

Utilizing forward-looking data requires more than just access to the raw data itself. It necessitates the implementation of the right technology to accurately analyze and interpret the data, translating it into actionable insights.

4. Champion seamless integrations

The true value of a hotel’s tech stack lies not just in the capabilities of its individual components but in the effectiveness with which they communicate and share data.

Data serves as the lifeblood of successful revenue management. When systems within a hotel’s tech stack are lacking connectivity, this vital data becomes fragmented, making it difficult to access and analyze in a holistic manner.

The lack of a unified view can significantly hinders a revenue manager’s ability to make informed decisions and optimize revenue generation effectively. Investing in technology platforms that offer robust Application Programming Interfaces (APIs) and prioritize open integration capabilities is absolutely crucial for future-proofing a hotel’s technology stack.

APIs act as “digital bridges” that enable different software systems to communicate and exchange data efficiently.

This smooth data exchange streamlines workflows, significantly reduces the need for manual data entry and manipulation, and improves overall staff efficiency by minimizing the time and effort required to navigate between disparate platforms.

5. Prioritize user-friendly, intuitive design

Prioritizing user-friendliness in technology selection is not simply a matter of aesthetic preference; it is a fundamental factor in ensuring a strong return on your investment in technology.

You need to quickly and easily access data to make timely and informed decisions that drive revenue. A system characterized by complexity or a lack of intuitive design can lead to wasted time, increased errors, and ultimately a failure to leverage the platform’s full potential.

Technology platforms featuring intuitive interfaces significantly reduce the time required for staff training and minimize the potential for human errors, leading to a faster onboarding process and a notable increase in overall productivity.

This also encourages consistent and effective use, ensuring that you can readily access and analyze the critical data needed to make informed decisions and optimize revenue strategies.

6. Embrace Total Revenue Management

Future-proofing your hotel’s commercial tech stack requires a shift from focusing solely on room revenue to a more holistic approach that encompasses all revenue-generating aspects of your property, known as Total Revenue Management.

This involves strategically optimizing revenue from food and beverage outlets, spa services, parking, meeting and event spaces, and other available ancillary offerings at your property.

Why Total Revenue Management is crucial for future commercial success:

• Overall profitability: Total revenue management aims to maximize each guest’s spending potential or the Total Revenue Per Available Room (TRevPAR).
  By considering all revenue streams, you gain a more accurate understanding of your holistic profitability and can identify areas for potential growth beyond room bookings. This will make you more financially robust and resilient in a competitive space.

• Enhanced guest experience: A TRevPAR approach encourages you to create attractive packages and offers that cater to various guest needs and preferences, leading to a more satisfying stay, repeat bookings, and positive reviews.

• Competitive advantage: Total revenue management optimizes all revenue-generating departments, applying the same proven strategies used for room sales to other perishable assets like spa services, dining, and event spaces to avoid lost revenue from unused capacity.

Business Intelligence (BI) tools play a crucial role in consolidating and analyzing diverse data from different solutions, providing actionable insights for optimizing total revenue per available room. By adopting a TRevPAR-focused tech stack, you can unlock significant revenue gains and achieve a more sustainable and profitable future.

7. Ensure scalability and flexibility

The hospitality industry is dynamic, with fluctuating market demand, an evolving technological landscape, an overwhelming influx of data, changing guest behaviors and increased competition. Ensuring that your commercial tech stack possesses both scalability and flexibility is crucial for long-term success and adaptability.

Why scalability and flexibility matter:

• Adapting to growth: As your business expands, your technology should be able to scale accordingly, handling increased data volumes and supporting additional properties or services without requiring costly overhauls.

• Responding to market shifts: The ability to quickly pivot due to changes in market demand, emerging trends, and new technologies is essential for staying competitive.

• Cost efficiency: Scalable cloud-based solutions allow you to pay only for the resources you need, avoiding overspending on unnecessary infrastructure during low-demand periods while also offering the ability to easily scale up if needed.

• Frictionless integrations: Flexibility often goes hand-in-hand with the ability to integrate seamlessly with other systems. This ensures smooth data flow and efficient operations across your entire tech stack. Look for systems with open APIs that facilitate integration with other technologies, both current and future.

By prioritizing scalability and flexibility, you can ensure that your investment in technology will continue to support your hotel’s growth and evolve with the ever-changing demands of the hotel industry.

Choosing the right tech stack for your hotel

Constructing the ideal commercial tech stack for the future requires a thoughtful and strategic approach.

By aligning your technology choices with the essential characteristics and core values outlined here, you can forge a robust and adaptable infrastructure designed to thrive in the dynamic hospitality industry.

Ready to build that future? Discover how Lighthouse’s all in one commercial platform can fuel your success.

Jonathan Gough

Jonathan Gough is Content Team Lead at Lighthouse, spearheading all things content marketing. With a marketing career of over a decade, dedicated solely to travel, tourism and hospitality, Jonathan is passionate about leveraging Lighthouse’s technology to move the sector forward and provide lodging professionals with the tools they need to grow their business.

About Lighthouse

Lighthouse (formerly OTA Insight) is the leading commercial platform for the travel & hospitality industry. We transform complexity into confidence by providing actionable market insights, business intelligence, and pricing tools that maximize revenue growth. We continually innovate to deliver the best platform for hospitality professionals to price more effectively, measure performance more efficiently, and understand the market in new ways.

Trusted by over 65,000 hotels in 185 countries, Lighthouse is the only solution that provides real-time hotel and short-term rental data in a single platform. We strive to deliver the best possible experience with unmatched customer service. We consider our clients as true partners – their success is our success.

This article originally appeared on Lighthouse.