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Now is the Moment for a Revival in Hotel Technology!

The Journey from Traditional Systems to Integrated Guest Experiences & Versatile CRM

Now is the Moment for a Revival in Hotel Technology!

The foundation of the Property Management System (PMS) can be traced back to 1947, marking a pivotal moment in hospitality history when Westin unveiled the first-ever reservation system, dubbed Hoteltype. This groundbreaking innovation set the stage for Sheraton to introduce in 1958, the first automated booking system, Reservation, drawing inspiration from advancements within the airline sector.
This period underscores not just technological evolution but the inception of a customer-focused approach in hotel management, laying the groundwork for today's Customer Relationship Management (CRM) strategies that prioritize personalized guest experiences.

The Evolution of Hospitality: From PMS to CRM Integration

Bridging the gap between property management and personalized guest relations for a seamless hotel experience.

In the late 1970s, the arrival of the computerized Property Management System (PMS) marked a significant shift from manual booking management to automated efficiency. These systems, initially offline and on-premise, revolutionized room inventory management and the daily use of technology by hotel staff. The PMS quickly became the backbone of hotel operations, integrating guest profiles and setting the stage for the modern Customer Relationship Management (CRM) approach to enhancing personalized guest experiences.

Navigating the Complex Landscape of Modern Hotel Technology

Embracing CRM & beyond: Between innovative solutions & seamless integration.

As technology evolved, the hotel industry saw an influx of new solutions, from Customer Relationship Management (CRM) systems to Central Reservation Systems (CRS), Revenue Management Systems (RMS), and Internet Booking Engines (IBE) - among many others. Each new technological addition, eagerly adopted by hotels keen on innovation yet varying in tech proficiency, was designed to integrate with the Property Management System (PMS), the core of the 'modern' IT stack.

However, this often led to a complicated mix of disconnected offline, cloud-based, and hybrid applications. Guest data was scattered across numerous isolated silos, making it challenging to centralize and standardize profiles, ensure real-time data accuracy, and remain compliant with strict privacy laws. A typical hotel's technology stack, which in some cases remains the same today, could be described as a tangled web of systems struggling to communicate and operate seamlessly together.

Dr. Michael Toedt, CEO and Founder of central data management specialists, dailypoint, comments: "As more and more systems were connected to it over time, the PMS was left sitting in the middle of what is often described as a ‘spaghetti-like’ or even a ‘Frankenstein’ IT stack. Tracking guest data such as names, addresses, and contact details had become commonplace from the 1980s – a decade after the PMS first appeared – with CRM systems becoming more popular. But the PMS software available at that time simply couldn’t cope.”

These problems only got worse. By the 2000s, with the rapid increase in online bookings and the integration of channel managers, the PMS had lost its already limited ability to manage guest profiles effectively. Even as cloud-based tech started to replace the old on-premise platforms, the PMS lacked the ability to properly integrate external systems to the IT stack.

Reclaiming Guest Data: The Battle Between Hotels and OTAs

Amidst the rise of Online Travel Agents, hotels strive to regain control over guest data, facing the challenges of data management and leveraging technology effectively.

In an era marked by fragmented data management, hotels found themselves losing control over guest data to Online Travel Agents (OTAs) like Expedia and Despite this, a 2019 study highlighted a shift: amidst fierce OTA competition, hotels were channeling investments into Property Management Systems (PMS) and Customer Relationship Management (CRM) solutions. This strategic focus aimed at enhancing direct guest engagement and data insight, signaling a move to reclaim the guest relationship from OTAs.

Source: HOTREC. Hotel Distribution Study. June 2022.

Revolutionizing Hotel IT: The Shift to Cloud-Based Property Management Systems"

The Overdue IT Infrastructure Reevaluation in Hotels: Beyond Legal and Covid-Driven Changes

Over forty years since the early iterations of Property Management Systems (PMS) were introduced, a surprising number of hotels are only now reevaluating their IT infrastructures. This reassessment isn't just spurred by legal mandates or the evolving guest expectations for mobile and contactless interactions post-Covid. After enduring years of complicated, time-consuming, and costly upgrades, PMS providers globally are setting aside offline and hybrid systems in favor of exclusively supporting cloud-based solutions.

The End of an Era: Transitioning from Legacy Systems to Cloud-Based PMS

This pivotal shift – arriving 13 years after cloud technology became viable – means the future of hotel PMS will be wholly rooted in the cloud. For hoteliers clinging to antiquated systems, some of which barely exceed the functionality of Excel spreadsheets, the transition to a modern, online PMS platform poses a significant challenge.

The Migration Challenge: Insights from Dr. Michael Toedt on Moving to Cloud PMS

Dr. Michael Toedt sheds light on the intricacies of this transition: "The process of switching, even when staying with the same PMS vendor, is fraught with difficulties that could lead to operational headaches. Contrary to the expectation of a smooth data transfer, many hotels face the stark reality of losing extensive guest stay histories, as only a portion of historical data makes it into the new cloud-based system."

From Risk to Strategy: Ensuring Effective Data Migration and Compliance in the Cloud

The situation is further complicated by the potential for future reservations to go untransferred, creating chaos at the reception if manual re-entry is not undertaken. This scenario necessitates countless hours of labor-intensive work, risking errors. Moreover, if the data from the old PMS was of subpar quality or failed to comply with data protection regulations, and it successfully migrates to the cloud, these problems will persist, unresolved. This transition, while critical for technological advancement and meeting current hotel operation standards, is dissected in depth in a previous dailypoint blog and White Paper, highlighting the complexities and the careful planning required to navigate this digital evolution effectively.

Transforming Hotel IT Strategy: A Guest-Centric Approach for the Future

Seizing the Opportunity: Beyond the Transition to a Future-Proof Business

As hotels navigate the transition to cloud-based PMS, the real opportunity lies in fundamentally reevaluating and reshaping the IT strategy to future-proof the business. This transformation isn't just about upgrading to an online system; it's about a holistic review and rethinking of the entire IT infrastructure with a focus on placing the guest at the heart of all operations.

Learning from Success: The Critical Role of Guest Insights and Personalized Experiences

Historically, the most successful hotels and OTAs have been those that prioritize high-quality guest insights, using this data to offer unique, personalized experiences that encourage repeat business. This approach, focusing on guest-centric strategies, is poised to be even more vital in the coming decades, suggesting a shift in how hotels prioritize and integrate technology.

Achieving the 'Golden Record': The Quest for a Unified Guest Profile

The core of a robust IT strategy in this new era is the creation and maintenance of a single, comprehensive guest profile – the 'Golden Record.' This isn't about consolidating information within a single platform but ensuring clean, accessible, and actionable guest profiles across the IT ecosystem.

Integrating for Innovation: The Synergy of PMS, CRM, and Open-API Technology

The path to achieving this holistic view of the guest involves not just a singular platform but the strategic integration of multiple systems – PMS, CRM, CRS, and beyond – through high-quality connectivity powered by open-API technology. This approach underlines the importance of interoperability among different systems to gather, analyze, and leverage guest data effectively, ensuring a seamless and personalized guest experience.

Central Data Management: Crafting a Unified Hotel IT Ecosystem

The Bedrock of a Guest-Focused IT Strategy

At the core of modernizing hotel IT infrastructure is the implementation of a Central Data Management (CDM) solution, pivotal for transforming disparate data into coherent, actionable guest insights. This system, augmented by Data Quality Management (DQM), ensures real-time data consolidation and purification, facilitating personalized guest interactions and services.

Seamless Integration: CRS and the Importance of Unified Guest Profiles

The Central Reservation System (CRS), alongside Channel Managers and Internet Booking Engines (IBE), constitutes the next critical layer. Its seamless connection with the CDM is crucial to avoid the pitfalls of fragmented guest profiles, ensuring that personalized, appealing offers reach every guest based on accurate, real-time insights drawn from the CDM.

Reimagining the Role of PMS: Focusing on Property, Not Guest Management

The Property Management System (PMS) reverts to its foundational role in managing physical property needs, such as inventory and housekeeping, distancing itself from direct guest profile management. Yet, its real-time linkage to the CDM is vital, enhancing operational efficiency and elevating the guest experience through seamless data exchange.

Navigating the Future of Hotel Tech: Dr. Michael Toedt on Evolution and Complexity

Dr. Michael Toedt posits that as technology evolves—incorporating AI, automation, and machine learning—hotels face both simplification and complexity. Success hinges on becoming more tech-savvy, critically evaluating technology investments through the lens of cost-efficiency, profit generation, and alignment with a guest-centric IT strategy, thus navigating the current turbulent landscape effectively.

Embracing Transformation: The Leadership's Role in a Guest-Centric IT Revolution

Dr Michael Toedt concludes:

"My final piece of advice is that all tech changes must be led from the top, as respinning the IT stack to become guest-centric isn’t just an IT project. It is a change management project that affects almost all departments within the hotel. It is therefore a topic that CEOs must take notice of, as the likelihood of success rests heavily on the reconfigured IT strategy being supported and driven by the leadership team.

For all hotels taking the golden opportunity for a restart with their IT strategy and tech stacks: good luck!"

Dr. Michael Toedt
CEO & Founder

Let's talk about how your hotel can excel in guest-centric IT innovation, boost CRM and guest loyalty!