From small hotels with manual bookkeeping to hotel groups with thousands of stores, the informatization development of the hotel industry has gone through a long journey from scratch, from simple to complex, from closed to open. This article takes a virtual “X Hotel Group” as an example to review in detail the gradual upgrade process of hotel system product architecture from the initial PMS (Hotel Management System) to CRS (Central Reservation System), and then to big data, Internet of Things, and artificial intelligence.
I have been working in the hotel industry for 4 years, not only in the hotel software service provider, but also as an IT product manager in the hotel group, I have always wanted to write a history of the evolution of hotel system products, record what I have seen and heard and the industry understanding, and on the other hand, I have exercised my product architecture ability as a milestone.
In order to illustrate the business changes in the hotel industry, I virtualized a “X Hotel Group”, which has grown from a small hotel to a large hotel group with more than a dozen brands and thousands of stores. In this process, new technologies emerge one after another, X Hotel Group actively embraces the changes of the new era, and the product architecture of the hotel system is also constantly improving, upgrading and optimizing.
1. A small hotel with manual bookkeeping
In the 80s of the last century, the spring breeze of reform blew all over the ground, and a small southern town opened an X hotel, with more than a dozen fairly clean guest rooms, a simple front desk on the first floor, a wall key plate behind it, and a kraft notebook, which were all the tools of the X hotel.
The business of Hotel X quickly started, and while making money, distress also followed:
- Manual registration often omits room fees, and manual miscalculations occasionally occur
- The wrong key caused the guest to crash into the room, which led to strong complaints
Product architecture stage 1: There is no IT system yet
2. The introduction of PMS in 100-room hotels
In the nineties, Hotel X had made a lot of money, and at the same time strived for the top, gradually upgrading to a hotel with 100 rooms, including rooms, front halls, finance and other departments, and officially changed its name to Hotel X.
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Hotel X realized that it could no longer rely on manual check-in, room management, and accounting processing, and needed to use computers to solve the problem of manual errors, so it introduced the first domestic hotel management system (PMS).
PMS (Modern Definition) :P roperty management system, hotel management system, is a software that integrates operations such as reservations, online reservations, payments, and reporting. It streamlines processes such as check-in, check-out, room availability tracking, housekeeping, and maintenance scheduling.
PMS helps hotels solve many problems:
- Guest check-in orders no longer need to be manually recorded, they are recorded on the computer for easy query
- The room status is refreshed in real time, and the front desk electronic arrangement is much less chaotic
- The daily night review report has been reduced from 4 hours to 20 minutes, improving efficiency and eliminating the problem of miscalculation
Product architecture stage 2: A set of independently deployed PMS, the main functions are scheduled check-in, order management, room management, and financial statements
3. Many hotels later introduced CRS
Entering the 21st century, with the blessing of PMS, X Hotel has far exceeded its peers in operating efficiency, started the pace of expansion, and has opened 8 X hotels and established X Group in a few years. However, new problems also arise.
- When travel agencies, groups and other large customers come to inquire, they need to confirm the room reservation status of one hotel at a time, and it is impossible to check the room inventory of all X hotels from the group level, resulting in lost business opportunities
- Members are not shared, and a single-store PMS is a data island, and the membership purchased by the guest can only be used in one store and cannot be used in other X hotels, resulting in dissatisfaction among members
- The rise of online travel agencies (OTAs) led by Ctrip has increased orders through Internet channels, requiring hotel systems to connect to OTAs, but each hotel’s PMS is connected to OTAs separately, causing a lot of duplication of labor
Group X has a solution to the problem in the hospitality industry, which is the Central Reservation System (CRS).
CRS: Central Reservation System, is the core system used by the hospitality industry to manage reservations, inventory, and prices, and distribute this information across channels。 In simple terms, CRS is like a central dispatch room for a hotel, managing all bookings and ensuring that the hotel’s rooms, prices, and other information are synchronized across various sales channels (such as the hotel’s official website, OTA, GDS, etc.).
Group X decisively introduced CRS and successfully solved the problem.
- The room inventory of all hotels under X Group is managed in a unified manner, which is convenient for internal inquiry and reservation of X Group
- Member information is unified in CRS, and members can enjoy discounts in all X hotels, which improves members’ loyalty and repurchase rate
- Unified docking with OTA, synchronizing the rooms of all hotels under X Group to OTA, and directly issuing OTA orders to the hotel PMS after placing an order, greatly improving the efficiency of order circulation
Product architecture stage 3: CRS uniformly receives orders from non-offline stores and issues them to PMS, helping the PMS of each store to achieve information exchange such as inventory and membership
4. Establish a hotel brand to open up and join, and develop its own IT system
In the first decade of the 21st century, the domestic economy was booming, and the hotel industry also ushered in an era of large-scale expansion. X Group has not only successfully operated a number of stores, but also accumulated replicable successful experience in site selection, design, engineering, and procurement. Therefore, X Group decided to open up franchise to the whole country, and set up X1, X2 and X3 hotel brands, corresponding to luxury, high-end and economical hotel grades respectively.
At the same time, with the increasing number of hotels, the purchase and maintenance fees of PMS and CRS systems are increasing rapidly every year, which also makes X Group realize the necessity of enterprise IT independent research and development capabilities in the information age. Therefore, the group decided to set up an IT department, recruit a large number of IT talents, independently develop hotel franchise management systems, PMS, CRS, and official websites, and is expected to replace all X hotel systems with self-developed products within two years.
Product architecture stage 4: Divide the system into two business lines: hotel and franchise
5. Hotel mobile management tools under the wave of mobility
In 2012, when the wave of mobility hit, X Group also took the initiative to embrace the mobile terminal, on the one hand, it developed the X hotel APP, mini program, and H5 for C-end users, and on the other hand, in order to improve the work efficiency of various business departments in the group, it developed franchise development, engineering, procurement, operation APP, as well as mobile APP for room management, ordering, and reporting for stores.
At this stage, in order to facilitate the software development within the group, the IT department encapsulates the commonly used login, phone call, SMS, payment, file storage and other functions and deploys them independently as the infrastructure support system for other systems. For more professional software, such as: HR, OA, finance, invoice, cashier, e-commerce, etc., there are already relatively mature software on the market, and the cost of independent research and development from 0 to 1 is too high.
Product architecture stage 5: Relationship between different architecture levels from bottom to top: infrastructure support system, functional support system, business support system, external system
6. Digital wave, big data, Internet of Things, artificial intelligence
Within a few years, the wave of digitalization has hit again, and X Group already has thousands of stores and 50 million members, as long as the value is fully tapped, it is a valuable asset for enterprises. Along with it are emerging technology products such as the Internet of Things and artificial intelligence, and the IT department of X Group does not dare to be idle, and has spent a lot of money to engage in the bottom layer of data and introduce IOT, AI and other technical capabilities.
Although the X Group’s system realizes data interoperability through API, it is limited to the core data associated with the system, not the full data, and all data is stored in the business system, such as frequent query and analysis, which will affect the performance of the business system. Therefore, it is better to establish a data warehouse, first synchronize the data of all systems to the data warehouse, process the data, and then provide it to the business system through the data set and data center.
In addition, in order to tap the value of members, the IT department decided to deconstruct the membership module from CRS, build a separate CRM system to manage members, and increase user portraits, points system, precision marketing and other capabilities. A new intelligent check-in center has been built, which links self-service check-in machines, public security systems, smart door locks, food delivery robots, etc. through unified packaging of external interfaces, making scheduled check-in and room service more convenient and efficient, and improving the guests’ stay-in experience.
Product architecture stage 6: Add the data base, and the system level is divided into 5 layers
7. The cost of IT self-research is high, and the system is outsourced and developed
With years of IT R&D investment, X Group has basically completed the product construction of the hotel system, which can support the daily operation of thousands of hotels, and can also carry the opening growth of hundreds of hotels every year, and the R&D demand is much less. Coinciding with the impact of the epidemic on the hotel industry, bosses can’t sit still, hotel income has plummeted, and IT R&D personnel with generally higher salaries have become key optimization targets.
On the market, there are two ways for hotel groups to cope with the high cost of IT R&D.
The first is to adhere to self-research, the company organization to improve the concept and awareness of all employees’ data management and operation, IT department and business department work together to maximize the advantages of self-developed software, expand demand growth externally, reduce costs and increase efficiency internally. The plan requires strong control and organization within the group, and patience and mental preparation for short-term ineffectiveness.
The second is outsourcing software, which purchases software from external vertical industry manufacturers at a lower cost, and the IT department manages the outsourcing software, opens up internal and external systems of the enterprise through standard API interfaces, data synchronization, etc., and makes a small number of customized needs. The solution requires the group itself to have strong technical architecture, product architecture, and project management capabilities, as well as consider external systems to meet the requirements of information security and auditing.
X Group adopts the method of outsourcing software, retaining only the core CRS, PMS, franchise system, and self-developed developers of data warehouses. In order to further save IT costs, the IT department has greatly reduced the number of developers, and recruited product managers, project managers, and technical managers to do a good job in demand management, outsourcing project management and technical solution management for the group, so as to ensure the availability and stability of the group’s internal system.
Product architecture stage 7: outsourcing system, outsourcing development
8. Conclusion and outlook: the group’s future product architecture
Hotels account for a large part of cultural tourism consumption, and from the macro PEST analysis, the hotel cultural tourism industry has a bright future. The country encourages the upgrading of the cultural tourism industry, the domestic need for the wine and tourism service industry to boost the economy, the new generation of young people also love to travel more, and more foreigners are willing to travel to China. In terms of technology, hotels have always been a loyal supporter of information technology, compared with other industries, the hotel industry is estimated to be the earliest industry to start informatization, the earliest domestic enterprise engaged in hotel software research and development Hangzhou Westsoft Company is 32 years old, at the same time, the hotel is also a relatively easy digital transformation successful enterprise.
So, where is the direction of system products in the hotel industry?
Personally, I think we can get a glimpse of the current diversification of the hotel industry and the wave of AI.
- Diversification, hotels are no longer just a business of providing accommodation rooms, in addition to living and eating, what attracts guests more is the unique travel experience brought by the hotel. For example, high-star hotels have “room + swimming pool + executive lounge + breakfast” products, scenic hotels will launch “room + ticket” products for two days and one night, and parent-child hotels have “room + amusement park + parent-child travel photography” products. There are also hotels that offer additional services in conjunction with local activities, such as a special breakfast service for marathon guests and late check-out until 16 pm. The products and services provided by these hotels are equivalent to the hotel has considered all aspects of the guest’s stay, saving time and worry for guests.
- With the advent of intelligence and AI, many hotels can reduce costs and improve efficiency through AI. AI voice customer service can handle most complaints and consultations, and can even help guests book rooms; AI robots can replace clerks and handle many hotel routine inspection tasks, including pictures, project information, engineering information, etc.; Even AI can help hotels do a good job in revenue management, predict future room demand, and help hotels do inventory management and price control in advance, thereby increasing hotel revenue.
The above is my thinking on the product architecture of the hotel industry system, I hope it will be helpful to everyone.
