Danger from the Cloud: Hotel Business Disruption
Philippine Retailers Association, DSAP, BAHARA
Q: With so many hotel software developers stampeding for the cloud, why do you still caution hoteliers to demand Application based software systems?
George: It’s simple. Business continuity risk. If my hotel management software system is 100% cloud, the instant I lose internet my business is paralyzed.
I’m amazed awareness of this risk and taking measures to mitigate against it don’t come up more frequently than they do. I don’t say this judgmentally. Many of these hoteliers are now my close friends. That’s why I’m aware this problem simply isn’t on many of their radar screens.
Q: So are you saying hoteliers aren’t as aware as they should be of the business disruption risk associated with web-based software?
George: Correct. I should point out that for the most part hoteliers I’m privileged to work with are exceptionally good at risk management. But when it comes to software? Frankly, most don’t have the time or energy to worry about things like web-based versus app-based risk. They hire an IT specialist and expect that guy to handle it.
Q: Most hotels have an IT department. Yet, as you see it, the danger of cloud-based business disruption is still a big problem?
George: Definitely. This is because often there is a disconnect between IT departments and those tasked with running the hotel business. You hire an IT technician, not for his or her business acumen, but rather for their expertise on networks, hardware and peripherals, various hotel software, CCTV, PABX, and door lock systems, and so on.
You ask, “What’s the best we can do on this budget?”. After some R&D the best IT guys come back with the newest, sleekest, solution the budget will bear. This usually includes the newest hotel software which predictably is often offered on cloud-based platforms.
Q: Is the problem with the software developers?
George: To be precise: With software developers and hoteliers. In fairness, the vast majority of developers go cloud-based simply because from the programming perspective it’s easier, faster, and cheaper. Despite my short to mid-term concerns, I myself affirm the trend is there, as is the certainty of majority cloud based applications someday soon. Don’t’ get me wrong: My team and I are very enthusiastic over the long-term promise of cloud based software systems. It’s the transition period in-between where risks are highest for hotels and resorts. The hoteliers’ responsibility is to make these risks known to the developers and compel the developers to address them.
Q: So you see this particular risk as a “short to mid-term concern”?
George: I hope so. But who knows how long "short to mid-term" might turn out to be? 3 to 5 years? More? The real challenge is not with the software per se, it’s with the internet infrastructure web based systems rely upon. For many hotels, many resorts, in many locations we don’t yet have the First World internet dependability taken for granted in places like New York or Singapore. Bear in mind, the requirements for improving internet infrastructure is not to be confused with something much simpler, like a software update. Software updates can happen tomorrow; overhauling internet infrastructure everywhere a hotel and resort needs it could take years.
We had to grapple with this concern almost from the beginning due to the unique needs of our clients: Many of their properties are in exotic locations, thus they’d be out of business on a daily basis if they were dependent on a cloud based PMS. At first blush it was a daunting situation: Clients with exclusive high-end resorts. On the other hand, exotic locations with less than dependable internet infrastructure.
Q: How might you advise hoteliers facing the same challenges?
George: Be aware that yes the future of hotel software is probably web-based, but we’re still in the early phase of the curve. In many parts of the world the internet infrastructure just isn’t there yet. Hoteliers need to press software providers for a solution that takes this into account.
Ask software suppliers to enable functionality of your hotel software systems even when internet is disrupted. This would require a software solution which makes use of an on-site “Application-based” component. This means a software application which is physically installed in an on-site server that makes use of the internet but runs independently of the internet. Take note: If your hotel or resort relies on an off-site server you are exposed to precisely the same business disruption risk because of the internet dependency.
Q: In what ways is an Application-based component advantageous to the hotel?
George: If protects you against internet related business disruption. If the internet connectivity hits the fan and your resort is dependent on a web-based property management system, for example, you’re dead. Knowing this, at-risk hoteliers should demand software systems which allow for and retain all data input while the internet is down. Ideally you should still be able to input new data—say, restaurant transactions, new reservations or departures, or what have you—into the server-based application.
Once internet becomes available, data entered while the internet was down transmits where it needs to go, the entire system updates itself, and you’re back to web-based functionality. No inconvenience to your hotel guests. No disruption to your business.
Q: How many software developers provide systems like this?
George: Not nearly enough relative to the number of at-risk hotels and resorts. But if demand is made for it, software developers will respond. They always do.
Q: Are the risks of being Web-based limited primarily to 3rd world hotels and resorts?
George: If you’re cloud based but for any reason at risk of losing internet connectivity, you’re facing a major business disruption whether you’re in the Seychelles or San Diego. If your hotel or resort is at 100% capacity, or you have a thousand guests at your convention, is that something you’re willing to risk? For many hoteliers it’s a serious business continuity concern.
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