As the IT commander in chief at one of the world's largest hotel companies, Tom Conophy has a lot of people in the industry looking to him for IT leadership and guidance. InterContinental Hotels Group (IHG) owns, manages, leases or franchises,through various subsidiaries, more than half a million guest rooms in 3,800+ hotels across the globe. The company operates seven hotel brands: InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites. The vast majority of these hotels - nearly 3,300 - are franchised, meaning they are operated by what Conophy calls "OPM," or other peoples' money. This fact alone makes researching, endorsing, purchasing and eventually implementing technology systems a highly sensitive task with literally thousands of stakeholders to consider.
Despite these challenges, system integration across IHG is strong. "From the main components - from our PMS [property management system] and to our CRS [central reservations system] - I think our interoperability is very good," says Conophy. "We have robust connectivity, though not necessarily across the globe because we have some PMSs that aren't fully integrated. In general, however, we're in good shape in terms of how we manage inventory and rate plans."
IHG made the decision several years ago to standardize on the Micros Opera PMS (www.micros .com) and the bulk of U.S. properties are on the Opera platform. "At the time it was the right decision for our company and that rollout has gone well," says Conophy, noting the advantages of operating on a consistent PMS in the marketplace.
A heavy dose of custom enhancements have helped take integration even further. The company has a transformation agenda under way whereby it examines distribution platforms and technologies running in its hotels, what Conophy calls the "hotel ecosystem," and exposes data and content out of the center through open interfaces that use service-oriented architecture (SOA). "At the same time, we're looking at how to select and verify different suppliers for our properties," Conophy says. His team seeks to answer a few key questions: What are core technologies needed at the property and what products will IHG endorse?
"By using our endorsement, we believe that will give us leverage toward the technology supplier to better meet our demands regarding the types of access we want to both the data and to the business logic in the form of APIs [application programming interfaces]," Conophy explains.
As much as possible, IHG avoids the classic model of purchasing and installing off-the-shelf IT and thereby being at the mercy of whatever architecture is used in that particular solution. Instead, IHG's goal is to have an end-state architecture in mind and make technology selections from those vendors that comply with IHG's vision. For Conophy, the logic is quite simple: "If you don't know where you're going, you have no way of making the choices along the way."
For IHG, the ideal solution is a bit of a blend, using off-the-shelf products for their economic advantages and investing in custom enhancements when an initiative is truly strategic and requires greater control. "As the property and guest experience take the forefront in terms of building great hotels that guests love, there are things we want more control over in regard to interoperability, the way data is processed, and the way our guests are interacting with technology. That solution may well come from suppliers that we have good relationships with and it may be that we build custom applications to meet our needs."
In that vein, the company is embarking on a handful of internally developed solutions including a self-service kiosk project that's at a lower price point than off-the-shelf solutions, but with the same functionality. Trial roll outs at select properties will take place in the first quarter of 2008. The company has also built a web-centric call center solution for use in the Philippines and is developing the core infrastructure of an SOA platform coupled with off-the-shelf tools. IHG is also taking its development skills into the guest room with an in-room connectivity hub called SuitePoint HD for use with guests' personal electronic devices.
Taking it to the next level
As far as interoperability within the property space itself - the extent to which different components talk to each other - Conophy admits that the company is about as good as anyone else in the industry. "We're a bit at the mercy of the suppliers of the technology for their capabilities," says Conophy. "In some cases we've gone to suppliers and asked for custom enhancements to better meet our business needs and I'd like to see that not necessarily be a custom activity in the future but actually something that comes out of the box. That's where I think HTNG comes in, in trying to set that tone."
Hotel Technology Next Generation (HTNG) is the trade association aimed at fostering next-generation, customer centric technologies for the lodging industry. Among its primary goals is the creation of an open-standard base-system architecture that provides integration and interoperability between solutions from different technology vendors. Though most of the major hotel companies and technology vendors support these initiatives, movement towards that goal has been slow.
"Without a common voice putting pressure on the technology suppliers, there's not a lot of incentive for suppliers to make changes. That's what's holding back the industry; there's been no compelling urgency to force the hand," says Conophy, also noting that an urgency to push for change depends on where each hotel company is in its roll out and overall IT goals.
"Hoteliers all have different objectives and goals and by default that leads to different solutions," says Conophy. At a fundamental level, Conophy acknowledges that it's all about having a good guest experience, but how that experience is delivered may be very different across brands and in different cultural environments. Some may invest heavily in the in-room experience, while others want to consolidate capabilities to keep costs down. It all depends on each company's individual strategy, which naturally leads to different technology objectives and solutions.
Call to Action
"Like anything else, things take time," Conophy admits. The solution, he believes, requires team work across the board, from both the technology supplier and the hotel community. "I think there needs to be an assessment of some of the major players in the industry, from a technical point of view, and there needs to be a summit where members of HTNG, who represent in theory a few million rooms, should be able to have a dialogue with major suppliers when it comes to things like PMS, POS, sales and catering, etc., and basically say, 'By 2010, we want to have these capabilities implemented across your products.' We have to create our own HTNG mandates."
Of course, for that to work, the suppliers would have to come to the table in good faith and be willing to embrace the concept of openness, access to data, and a common API. They'd need to feel comfortable that their intellectual property is not being compromised by their competitors.
At the same time, the hotel companies need to be willing to cooperate. "Hotels need to understand that, if a technology company makes that investment, we'll buy those tools," Conophy explains.
As for who's currently playing ball, Conophy says that right now it's the smaller vendor companies. "It's clear to me that the smaller suppliers are more willing to adopt open standards - they're trying to get a foothold into the business, where as the established suppliers have been locking them out."
Supporting open standards certainly gives newcomers an advantage over the larger players. The problem they face, according to Conophy, is that it's a matter of what's already been deployed. "In some cases, companies have made investments and it's hard to walk away from them because, remember - it's other people's money. If you've got an owner who's already spent money on product A and we say product B is much better, the owner will say, 'Have I depreciated my current solution fully and what are the switching costs going to be?' You get a lot of questions. Multiply that out by thousands of hotels and it becomes unwieldy."
At the end of the day, it will come down to the support of the largest hotel brands. "Our endorsement is what ultimately drives product A versus product B. If we recommend product A to our buyers, odds are very high that those hotels will buy product A."
For now, Conophy seems willing to play nice, though how long that will last is certainly up for debate. "It may well be that we look at alternatives. We wouldn't be doing our jobs if we didn't. You can only have so many conversations before you have to make radical choices. At some point we'll have to take that approach - but that may not be the right decision for everyone."