Cloud Tech is the Today and Tomorrow of Hosted Hospitality

By Cihan Cobanoglu, Ph.D., CHTP
The Internet became a part of daily life in the 1990s. At the time, no one had heard of “cloud computing.” In the early part of the 21st century, the term “Application Service Providers (ASP)” made its debut.  That eventually became “Web-based Applications” and was quickly followed by “Hosted Applications.” The buzz word now is “Cloud Computing.”

Currently, pretty much any kind of solution is available with a cloud-based option. In the beginning, non-mission critical solutions, such as human resources or accounting, were converted to the cloud. At the onset of the 2000s, mission critical solutions such as the property management system or point of sale were also offered in the cloud. Many of the companies providing these solutions started out with great hopes and unfortunately, many of those early pioneers are not in business today.  

The failures of a few, however, did not deter a new generation of providers and operators alike from embracing this forward-looking technology. Now there are many successful web-based property management systems, like innRoad (www.innroad.com), that operators are utilizing. Choice Hotels (www.choicehotels.com) implemented a proprietary cloud-based PMS in more than 5,000 of its hotels. Online ordering systems for restaurants are now cloud-based. Back office applications such as payroll, human resources and accounting solutions are also available on the cloud.

Many people are not aware that cloud-based accounting was in existence fourteen years ago. M3 Accounting Services (www.m3as.com) software was designed as a hosted application in 1998 when nobody even knew the terminology for ASPs or Hosted Applications. This forward-thinking approach is currently used in more than 3,000 hotels around the world.

In addition to the accounting solutions such as daily sales report, accounts payable, check writer, general ledger, budgeting and a financial reporting module, it also provides business intelligence tools that connect PMS information with accounting data and Smith Travel Research data.  Another impressive facet of M3 is its scalability — it enables a hotel with just 10 rooms and a 1,000+ room property to use the same product.

Research and development pays off
M3’s current practice is a great case study for other companies that want to be successful in offering cloud-based solutions for the hospitality industry. When M3 was approached to be used in the University of South Florida’s hospitality curriculum, not only did management offer its full support, but also distribution of the software to any hospitality school in the world free of charge. This is not only a long-term marketing investment, but it is also helping to educate the future leaders of hospitality with essential skills in finance and accounting.

Similar to M3, innRoad is also available to educators to integrate into their hospitality curriculum. These relationships between software companies and educational facilities are a win-win for all parties.

The time has come for hospitality operators to test drive cloud solutions.  PMS, POS, TV and Wi-Fi services, human resources, accounting, payroll, business intelligence, reservations, PCI compliance, enterprise collaboration, virtual concierge, and sales and catering systems are all available and very productive on the cloud. Currently, there are laptops (Chromebook) that work with only cloud services. In my opinion, in five years, the majority of all hospitality software will be run on the cloud, so operators must be ready and willing to embrace the available technology or risk being left behind.