Property management systems: make the right Choice10 August 2012
Having established its property management system in the US, Choice Hotels International is installing it worldwide. Phin Foster discusses the web-based platform with John Thompson and Duncan Berry.
Throughout the vast Mandalay Bay convention centre, Las Vegas, the same line reverberates like a mantra. It's scrawled across the welcome banners, features on the complementary poker chips and forms the basis of a question from the excitable Texan hotelier tapping me on the shoulder in the queue at Starbucks: "Excuse me, are you all in?"
Welcome to Choice Hotels International's 58th annual convention, where more than 5,000 hotel owners, operators and developers have converged. Conversations can be struck up with US Choice franchisees drawn from Fresno to Philadelphia, as well as a surprising number of delegates from the UK, France and even Australia.
For a European more versed with the lingering sense of gloom back home, the mood in Sin City is something of a culture shock. There seems to be a genuine belief that recovery is well underway, not just from the executives up on stage, but also among the throng on the convention floor.
"We're gearing up for our busiest summer ever," CEO Steve Joyce tells me. "Our franchisees are feeling good and the recession is appearing ever further behind in the rear-view mirror."
An expanding portfolio
No hotel group was unaffected by the downturn - Joyce acknowledges that the mood at last year's event was starkly different - but Choice managed to do better than most. This is true not just of the company as a corporate entity, but also of its members, who were able to leverage the tools and delivery systems that a global company with over 6,100 properties affords.
A fundamental element of this success has been choiceADVANTAGE (cA). The group's proprietary property management system (PMS) was installed in its 5,000th hotel earlier this year, having helped drive revenues and occupancy rates during an extremely difficult period.
Introduced ten years ago, this web-based system is now mandated across all ten Choice brands in the US. Now the time has come to introduce cA to a rapidly expanding international portfolio.
"Over the past decade, we've continually added functionality to the system, getting well past the point where it can service all brands and property types," explains Choice's senior director for property systems John Thompson. "Two years ago, we decided to look at the system alterations and enhancements necessary to deliver the same level of effectiveness in other markets."
Variations in currency, language, taxes, laws, reporting requirements, package types and service offerings meant that a straightforward plug-and-play approach was never going to suffice. Analysts liaised with regional headquarters, owners, GMs and front-office staff worldwide in an exhaustive effort to define and implement specific national nuances and requirements.
The value of end-user feedback has been a core component of cA since its inception. Scalability and adaptability are underpinned by a process of continual enhancement, driven by those already on the system. Users can post ideas for new functionalities, which are then voted on by 5,500 colleagues. A dedicated property management team collates and acts on these suggestions, enabling Choice to stay fully versed in front-line and market developments with impressive speed.
"The competition may offer its own proprietary systems, but the manner in which ours is constantly being tweaked and upgraded puts us in a different league," believes Duncan Berry, chief executive of Choice Hotels Europe, UK. "It's a powerful tool in our effort to attract franchisees."
The first UK installation took place in August 2011. There are now five properties running cA, with another eight or nine in the pipeline. The emphasis has been upon encouraging rather than forcing franchisees to sign up and Berry stresses that new users will be Choice's greatest ambassadors.
"It's about allowing our hotels to see the system operating in a live environment," he says. "The important thing is that owners don't just hear this message from us; it's the GMs and staff using it every day that provide the most powerful referral."
"It's the nature of any franchise business," Thompson agrees. "If we tell an owner that something's good for them, they'll instinctively take it with a pinch of salt; hear the same message from a fellow franchisee and it's gospel. With a good base of market installations, it becomes far easier to spread the word."
A strong start
Initial results from the first two UK hotels using cA suggest that the message is a powerful one. From November 2011 to April 2012, room nights delivered by the Choice central reservation system (CRS) increased by 110%, outperforming a system-wide increase of 45%. Revenue delivered by CRS was up 123%, a staggering 92% ahead of the system-wide average.
"Having that direct tie to Choice's marketing and distribution opens up so much to these hotels," Thompson explains. "In every market we've introduced cA, properties get more centrally delivered bookings at a much higher rate - that is, they make more money."
Walking me though the lifecycle of a booking, Thompson demonstrates how the automated nature of the system helps cut staffing costs and minimise human error. "Say a guest goes to our website and books a hotel room," he posits. "Those details are immediately fed into the cA system and the front desk doesn't have to do anything. The guest can also sign up to Choice Privileges and, again, the process is fully automated. Upon arrival, check-in is near instantaneous because the details are already uploaded. At check-out, points are awarded without any manual intervention."
Regardless of such benefits, fears about implementation costs and staff training are rendering some owners hesitant about making the switch. cA's web-based nature goes some way towards allaying the first of these concerns; hotels can run the system on the most basic of work stations, without the capital investment that a server-based PMS requires. Data transfer is also as painless as possible, a process Thompson describes as "a great opportunity to cleanse and start afresh". Once up and running, franchisees can monitor their hotels remotely and all data is backed up, greatly reducing the business risks posed by power cuts or spilt cups of coffee.
Change for the better
While interactive training modules, webinars, downloadable user guides and a 24/7 property support centre are available, ease of use is paramount. "Intuitiveness and usability are fundamental," explains Thompson. "When you visit booking.com as a consumer, you haven't been trained in how to use that site; you instinctively know. This is our aim. There are elements that require some training, but these are made as straightforward as possible."
Ease of use both affords workers more time with guests and makes for better staff. Thomson cites the system's built-in revenue management function as an example. "When you hire a receptionist," he begins, "that person may not know that there's a right and a wrong way to take a booking in order to make your hotel more money. What we have sought to do is have the system take the decision out of the receptionist's hands.
"It will create a forecast of demand specific to your property and set minimum thresholds accordingly. If a booking comes in that doesn't meet that threshold, the user will be advised to hold out for more money. You've just made your receptionist a revenue manager without them even knowing it."
Automated auditing, marketing programmes, PDF-formatted reporting, rates and inventory synchronisation, and better guest insight all fuse to make a virtually paperless revenue generator. The case for installation is strong, but Choice is aware that a degree of hand-holding is necessary.
"Change can be difficult," Thompson acknowledges. "But there is no other web-based system out there with so many users that can guarantee the level of scalability we offer. Our priority now is to get the word out and help hoteliers understand just how much they can achieve."
It remains early days for the international implementation of choiceADVANTAGE, but one thing is clear: Thompson and Berry will not be content until that message has been fully conveyed and their franchisees are ready to be all in.
This article was first published in our sister publication Hotel Management International.