Hotel Tech Partnership: A Framework to Unlock New Commercial Growth

We start with a simple premise – the industry is at its most complex, and hotel chains need partnerships to survive. Pioneering hotel tech solutions are helping hospitality brands boost metrics in a big way. We’ve seen well-implemented innovation in areas such as day rental, upselling, guest engagement, sustainability and distribution lead to £500k+ of additional revenue for a single hotel. Given the challenges facing the hotel industry in 2020, hoteliers need to be proactive in order to boost their bottom lines.

With an increasingly competitive landscape and growing traveller expectations for personalisation, selecting the right partners for your hotel group is vital in order to stay relevant and thrive. 
However, each partnership requires careful selection, implementation and management. This takes a considerable amount of time and expertise – as does scaling across a hotel chain.

A Framework for Hotel Tech Partnership Strategies 

Having run travel tech start-ups and built hotel partnerships, we understand the complexities of the task at hand. Pooling our first-hand experience with that of weeks of discovery work with chains and hotel tech and service providers we have developed a framework for partnership strategy – we know how best to capture the opportunities and challenges when partnering up with tech providers.

It takes time to perfect this, and we’d recommend a helping hand, but we were keen to share:

  •     How to prioritise areas of your hospitality business to focus on
  •     How to identify potential partners across the hotel tech & service landscape
  •     How to simplify the onboarding, while also de-risking a partnership
  •     How to measure and manage a partnership to success
  •     How to scale a partnership across a portfolio

Stage 1: Planning a Partnership 

planning hotel tech partnership

First things first, you need to actively bring together a cross-functional team to review your strategy, business plans and goals to identify the areas you wish to improve. Review your strategy against your profit and loss (P&L) statement, and wider industry trends, to see which departments are performing well and which have room for improvement.
The team should discuss and debate key questions including:

Objectives: Are your key metrics growing in-line with your expectations, and if you have the data, your competitive set?
What is your plan to increase bookings of ancillary services such as F&B, events, wellness, car parking, etc?
Guest Satisfaction: Are you getting positive guest reviews? What are some of the common topics that come up around the guest experience?  

Cost management: How are your distribution costs trending?
What is your plan to reduce waste, as part of reducing costs and minimising your environmental impact?
How are payroll costs compared to last year, and average costs per booking? Have the team taken any steps to simplify or automate day to day activities?

Once you have prioritised areas of your hotel to focus on, it’s time to start looking at who can help you achieve this. 

Stage 2: Producing a Shortlist of Potential Partners

shortlist hotel tech Partners

There are thousands of providers out there offering a vast array of different services. This is a blessing and a curse.

On the one hand, there is ample opportunity to find a partner to boost key hotel metrics across a wide range of sectors.

On the other hand, it will take a considerable amount of time to examine all of the potential partners and produce a shortlist of companies that offer solutions to your strategic goals. But it’s vital that you undertake this research to identify which providers are appropriate for your hotel and its specific objectives. 

The right partner will likely want to support you across a number of areas and can achieve goals that are not always obvious – for example upselling platform Oaky have found success offering free welcome meals to fill up restaurant seats and create a buzz which in turn leads to increased F&B revenue. It’s a very effective tactic, but it’s unlikely that it would be your first thought when analysing Oaky’s product. 

For this reason, it can be helpful to work with an innovation specialist or a consultancy firm that has experience delivering hotel tech partnerships. This can save you time delving into the ever-expanding catalogue of hotel tech providers and ensure that you are introduced to the very best that the hotel tech sphere has to offer.

Things to consider when forming a partnership shortlist include:

What features does this provider offer?

How do these features translate into benefits for your business?

Are there ways to tailor their service to meet your specific objectives?

Will this partnership be a commercial success?

Stage 3: De-risking Your Hotel Tech Partnership

You’ve got a shortlist of potential partners. Now it’s time to vet the providers to make sure they are up to the task.

If you are planning to roll out a partnership across an international hotel chain, you need to know that your chosen provider has the competency and capability to deliver across a global network of properties.

Many burgeoning hotel tech start-ups are perfect for independent hotels, but the complexities of dealing with a global hotel chain may well be beyond their means.

Sites like Hotel Tech Report can help you find information about providers, but nothing beats first-hand experience so you might want to consider working with a hospitality tech consultancy firm that has a broad understanding of the industry and an intimate knowledge of how the best hotel tech providers work.  

This could also help you get a good deal as it is often very difficult to find information about previous client fees, whereas a partnership specialist can advise you on the appropriate negotiation strategy with each potential partner.

Whether you enlist the help of a third-party or not, it is vital that you negotiate a good package and only pay for the features and services that you need.

If you decide to go it alone, you will also need to conduct due diligence on each potential partner, examining their accounts, insurance, legal and GDPR policies to ensure they are suitable to work with.

Once you’ve vetted and de-risked each company, you need to decide which one/s to progress with.

Stage 4: Testing Your Hotel Tech Partnership

graphs testing hotel chain tech partners

It is vital that you run a pilot project to test the suitability and effectiveness of your chosen partner. 

You should aim to get all of the appropriate stakeholders on the same page to set some predefined strategic goals to measure the success of the pilot.

This step can be difficult as a hotel tech service could sit in multiple departments, however, if you do not predefine the success of the pilot it can become much more difficult to determine if the partnership is worth progressing with. 

Sometimes a third-party with deep hotel chain expertise can be helpful to get all of the appropriate keyholders together to make sure the partnership does not get siloed in separate departments.

It is also important to measure and refine the service as you go. This requires time and expertise, but it is necessary to ensure you are getting the best out of the partnership.

Stage 5: Scaling Hotel Tech Partnerships Across Your Portfolio

Scale Hospitality brand partnership

If the pilot meets your predefined strategic metrics and is deemed a success, it’s time to scale the partnership across your global brand.

This is perhaps the most complicated part. You will need to ensure that the experts across your business, such as Revenue Managers and Operation Managers, feel engaged and accountable. Their ownership is crucial to the success of the partnership moving forward.

You will also need to consider how you are capturing and sharing data from the partnership across your portfolio. It’s important that you continue to learn from the project in order to optimise performance.

We recommend you create the specific role of ‘Partnerships Leader,’ to help manage the partnership across your properties. This could either be assigned internally or you could look outside of your organisation to those with the specific experience and expertise.

The process is certainly not easy but, if done correctly, partnerships lead to massive improvements across many different departments. When scaled globally, these improvements lead to £100ks of additional revenue.

You may also find that following this framework to work through a partnership helps breed a more efficient culture among your staff, with an openness to the benefits of working together across departments.

If you would like to learn more about partnership strategy, please get in touch for a free partnership audit.

 

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