Some hoteliers (brands & management companies) believe that developing tech solutions in-house is cheaper and provides better customization to the hotelier’s concrete needs and control over the ongoing maintenance and performance. Another school of industry-thought believes that hoteliers should focus on their core competencies: providing the best customer experience and best returns possible to ownership and outsource technology applications, products and solutions to specialized vendors.

So the question is, in this era of rapid technological advancements and adoption of next-gen technologies such as AI, IoT, automation, robotics, blockchain, etc., should hoteliers keep technology developments in-house or outsource to specialized, well-funded vendors?

Lyle Worthington
Technology Executive and Consultant & Past President of HFTP Global

“Building tech in-house can be cheaper and can provide more customized solutions, but only if you know what you are doing and you invest properly. You need to understand how to build software and, more importantly, how to maintain it. It is never an “invest and rest,” you will always be enhancing and fixing bugs. That said, I think you should feel comfortable investing here for the right projects. I don’t mean huge things like a PMS, but perhaps a service that automates certain tasks in your PMS via its API, or your own website and mobile app. Extend or enhance things to make your company more efficient.”

Jai Govindani
Chief Technology Officer at Red Planet Hotels

“This is definitely a divisive topic within hoteliers and extremely subjective – so what follows is my personal view: Buy what you can, build what you can’t. If a product/service/platform is commoditized to the point that there are various providers in the market, it’s unlikely (not impossible) that hoteliers will be able to add value by building that particular piece of technology. That’s not to say that a well thought out technology platform that is 100% tailored to the operations of a particular business won’t do well – however, most hotel companies are not structured to successfully build that kind of tech.”

David Sjolander
COO at Hotel Technology Next Generation (HTNG)

“It depends on the company’s size and what they are building.  However, in the large majority of cases, it makes more sense to buy than build.  When you buy, you have less control over functionality and it is slower to get changes made, but you benefit by speed to market and the enhancements that come from all user ideas.”

Michael Schubach
Chief Technology Officer at Rosen Hotels & Resorts

“The build-or-buy technology question is hard to answer if you’re part of a software development organization, but harder still when you represent a proprietary user community – even a sizable or highly specialized one. The argument is traditional: stick to your knitting. A hotel company may not be the best judge of software design, documentation and long-term maintenance. A hotel company rarely opts to build its own beds; why would it write its own software systems?”

Bryan Hammer
Vice President IT at Belmond

“A large chain may have more resources better suited to development in house.  This requires a high level of funding, process maturity, infrastructure and deep skill sets.  In return for the customisation and control they get over the environment, they also take on the responsibility to make sure they are incorporating all of the legal, statutory, and regulatory requirements, no small task these days!  Smaller chains won’t have these same resources and will definitely not want to take on the risk and liability to make sure privacy by design, PCI, and GDPR are built in.  Even if they had a small development team, there is a higher risk having that in house knowledge in the hands of just a few people.  What happens if someone takes a job with a new company, gets a long term illness, etc?  Better for the small hotel companies to outsource to professional companies with a proven reputation, and specific skill sets focused on this rapidly evolving  next gen space.”

Timo Kettern
Corporate Director of IT at Bierwirth & Kluth Hotel Management

“For a smaller hotel management company like us, we cannot afford in-house developments – not budget- and not resource-wise. We will always look to partner with vendors for technologies that help us achieve our operational and financial goals.”

Jon Davis
CTO at Village Hotel Club

“I would always be an advocate of buying ‘off the shelf’ solutions where possible, and I believe it is becoming increasingly easier to do this, although there is still a way to go! With the rate of change in technology, I am more comfortable relying on solutions that are used by other hospitality experts, which should, in theory, allow for a wider group to impact research and development.”

Floor Bleeker
CIO MEA and Global Accor Strategic Programs

“To develop your own solutions, a big and expensive team of specialists is required. A typical software development cycle has project managers, product managers, developers, testers, security specialists, DBAs, and functional and technical analysts involved, amongst others. For most of us the first question would be: can we even afford to develop our solutions in-house?”

Ian Millar
Professor at Ecole hôtelière de Lausanne

“This is a tough one. Yes hotel companies should concentrate on being hotel companies but if we look into why they have in the past built their own systems it is probably due to existing ones not meeting their requirements, overly expensive and poor integration with other systems and lack of ongoing support (what industry people have told me). So basically born out of frustration of existing off the shelf solutions. Today where the new breed of technology solutions are taking a more open and collaborative approach, Open API’s and with a more cloud computing platform it makes sense to go with off the shelf solutions. With 5G around the corner, AI and IoT coming our way there will also be a new wave of solutions for hotels run their operations.”

Source: https://www.hospitalitynet.org/panel/125000032.html