Competition, collaboration and the future of the hotel industry

by Georgine Muntz
The old adage is that the hotel business is a “street corner” business. Historically, there’s been a good deal of truth to it.

As long ago as the days of “spies” hired to piece together competitive hotels’ rate and group occupancy information by gathering information from lobby reader boards, hotel properties and brands have been notorious for keeping information to themselves and opportunistically positioning to undercut and take business from the competition.

In local markets, that type of singularly competitive thinking can eliminate the opportunity to work productively with neighbor hotels to absorb overflow customers or cooperate effectively in a crisis. In the most challenging of economic times for the industry, it can lead to a race to the bottom in which hotel companies cut rates aggressively to maintain occupancy, breaking through rate floors which then become difficult (for everyone!) to recoup when the economy turns again. (This is a bad idea for many reasons beyond maintaining long-term rate integrity.)

We must give Adam Smith his proper due. Competition is generally a healthy thing, and broadly speaking, the Invisible Hand works.

At the same time, a new kind of operating environment being forged in a post-pandemic world suggests to us that there is a new era of collaboration ahead for hotels and hotel companies.

Here are three important reasons why:

1. Profitability and topline growth turn on data—and no one “owns” it all.
Gone are the days when a hotel could establish sustainable competitive advantage on the basis of partial data alone.

Of course, dozens of technology companies—including ours—claim to have the best data available to help hotels price better, forecast rate and optimize staff time for ultimate profitability. That kind of data is important.
But it is not the whole story.

No one has all the data required for a 360-degree view of the guest, his/her purchase history and proclivities—or an understanding of how to fill every guests’ needs optimally given constraints on staff time and budget. At least, not yet.

That means some level of data-sharing and exchange is necessary, even vital, to getting the information you need to serve guests well and run your hotel profitably.

This has become even more accentuated at a time when data and automation are increasingly complimenting human staff time, sometimes replacing it, in the labor-challenged post-pandemic environment.

Owners and operators need all the good data they can get. Getting as much as they can means accessing it from multiple sources and sharing it when necessary.

2. No one tech solutions provider has all the answers.
As I’ve suggested, as of this writing, any claim to provide a full and complete technology solution for running a hotel optimally is patently false.

There are many fine solutions for understanding your customer better, optimizing your back of house functions, and ultimately, building loyal and profitable return customers.

Ultimately being able to leverage all of them fully will require a holistic platform or platforms, connected by a complete API-first technology foundation that brings applications together seamlessly and enables them to run smoothly and productively to serve the guest and the hotel owner.

Until that fully complete and holistic platform is available—it isn’t yet—all solutions will remain partial solutions that must be integrated with other technologies to succeed.

And that requires, in a word, collaboration.

Tens of thousands of words have been written about the limitations of legacy PMS systems, for example; dozens of start-ups have tried to crack the code that makes property management more seamless, effective and easy to implement.

Imagine what a boon it would be for hotels if all those competitors could get together and offer complimentary solutions that move the ball forward on all fronts!

We are seeing it happen at major brands already, if only by default.

Until completely holistic solutions become available, hotels and the technology innovators that serve them, have no choice but to work together to push innovation forward.

3. The world of work and profit have become intrinsically more accommodating, flexible and collaborative.
Employees used to work in offices, cubicles and silos.

Now they are community-building nomads, working out of homes, in shared office spaces and often, from multiple locations around the world.

Much as that is a boon to a new generation of worker, it is a challenge for a hotel, which remains and will always be, a fixed asset in a defined location that needs service capabilities onsite.

There are several solutions to the challenge.

One is the accelerated adoption of collaborative technology solutions that work together in an integrated way to push the hotel toward making staff’s work routines easier, more enjoyable and more productive. That’s an area in which we are focusing intensively.

A second is accepting the realization that social mores and accepted practices have changed—and a collaborative mindset rests at the heart of it.

As Henry Ford once famously said, “if everyone is moving forward together, success takes care of itself.”

That is even more true today than it was in his day, and nowhere is it more true than in our industry.

The path to innovation, profitability and great experiences, for guests as well as team members, begins with collaboration.

Let’s get started.

Georgine Muntz is the CEO of Visual Matrix, a leading provider of advanced technology solutions for the hospitality industry.

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.