Hotel Technology Ecosystem Explained

The above diagram recently went viral on LinkedIn and I’m happy to share it with the wider audience on the most powerful industry platform.

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After thoroughly examining and dissecting a variety of diagrams and maps of hotel technology from various sources, I have put together a comprehensive, yet user-friendly outline of our Hotel Technology Ecosystem, which I’m excited to share with the industry.

This diagram explains the current hotel technology map by arranging existing tools into color-coded categories while also placing them on the spectrum of guest-facing vs back-office tools.

So, picture this: this map takes the spaghetti mess of hotel tech and turns it into a rainbow of clarity. The goal of this diagram is to help industry professionals have a clearer understanding of how the ecosystem is structured, how different tools are grouped and where they’re placed on this map based on the relationships between them, their functionality and their role in the ecosystem.

This outline that organizes technology solutions in this manner, didn’t exist in our industry before.

This is your new, cleaned-up, organized hotel technology ecosystem of Hospitality 2.0.

Let’s review it together.

How to make sense of it all? It’s actually pretty simple.

What you see here is a comprehensive map of types of technology solutions that are currently available for lodging accommodations in our industry. This here is a roadmap of tech solutions for hotels – mostly software, with a sprinkle of hardware.

On the left you see an axis, which decides if a tech tool is: Customer-facing or Back-Office. It’s important to understand though that this axis is more like a spectrum, as there’s no strict boundaries in our industry for anything, this including. In our tech world, lines are as blurry as your vision before your morning coffee.

So the technology solutions are placed on this map according to where they fall on that spectrum. Some are strictly back office tools, some are strictly customer facing. But some are more of hybrids (for example, Guest Feedback and Survey tools, or Direct Booking tools), so that’s why they’re placed in the middle of the spectrum.

On the map, you see technology solutions organized in 5 different categories: Operations, Revenue Management / Brainy Insights, Marketing/Sales, Guest Experience, and Distribution. The tools that fall under these categories are color-coded for your tech-challenged convenience, according to the color of the category.

Operations

Each category has a superhero, the most prominent representative. In the spotlight in the middle of it all we’ve got the PMS (Property Management System) that sits in the center of a hotel tech stack. It’s like the hotel’s Swiss Army knife.You can’t really operate a hotel without a PMS, though there are still some lodging properties out there in the world that haven’t yet implemented that core piece of technology. The PMS falls under the Operations category, although it plays an important role in all of the categories, due to the fact that it sits on the most valuable data: Reservations, Stays and ARI so most technology solutions are dependent on it (via integrations). We will talk about integration dependencies more towards the end of this article.

Revenue Management / BI

At the center of the Revenue Management category is the RMS (Revenue Management System), it’s the heaviest and most complex piece of this category (and arguably, of the entire tech stack). Although, in my opinion an RMS is a must-have for any lodging property, there are less than 30% of hotels in the world that currently use one.

Marketing / Sales

Next category – Marketing and Sales that features many technology solutions, with CRM (Customer Relationship Management) being the most prominent representative. Just like with the previous example, CRM is used by a relatively small portion of global properties (mainly chains).

Guest Experience

Guest experience category is represented by various Guest Apps that have multiple functions: they can do everything from booking a room to ordering room service, and even making your bed if you ask nicely. There are also various other products, many of which involve hardware, like in-room wifi, tablets, guest entertainment, etc.

Distribution

And last but not least – Distribution category, the most convoluted part of our tech ecosystem, although I believe I managed to keep it rather simple in this view (I surprised myself here). Notice that CRS (Central Reservation System) is displayed as the key part of this category but it’s important to understand that CRS is only present if we’re dealing with branded (chain) hotels. Independent properties don’t have this as part of their tech stack, they use a Booking Engine and a Channel Manager instead. Those technology solutions exist to connect the PMS to the end consumer via leisure and corporate channels like property websites, OTAs and GDS. Easy-peasy.

The catch

What I also have to mention is that, just like with the Guest-facing vs Back-office spectrum, there are no clear boundaries between these categories that we just discussed. Some solutions are on the edge. For example: a Booking Engine is an important part of distribution but some diagrams place it under marketing. Or Guest Feedback and Surveys are directly related to guest experience but sometimes placed under Operations, as they’re (hopefully) used by the management to improve service.

So, again, just like everything in our industry: these categories are not carved in stone and the lines are blurred. But this diagram should give you a good level of basic understanding of what is what.

Now, an attentive viewer may have noticed that some tools are sitting within the pictured hotel building while others are placed outside. This is not random. While this is a very (very very) rough grouping, some tools tend to be perceived as more property-level than others. Meaning, that if we were dealing with premise-based technology, they would be sitting on a server in the back office at the actual hotel and not in the corporate office. Very roughly, that would be all things that are related to operations plus a group of guest experience related technologies that have to do with guest arrival and guest stay.

Again, this is more of a logical grouping rather than one that would define where the tool is actually installed, especially considering that most modern technology products are now in the cloud so even PMS wouldn’t reside on premise, it would reside on somebody else’s server who knows where. But hopefully this logical grouping will help you organize these solutions better in your head and put them on the right shelves.

Well there it is. Your new, cleaned-up, organized hotel technology ecosystem of Hospitality 2.0, now with extra glitter.

One more thing I have to note. A very important thing. What’s not depicted in this diagram is the tangled web of relationships between these various tools. If I tried to map that out, there would be arrows going in multiple different directions and you’d need a magnifying glass to make sense of it all. The relationships between technology solutions in our industry are very convoluted and there are as many exceptions as there are rules, which results in complex integration dependencies between most tools and the PMS, the centerpiece of the hotel tech stack. But understanding these connections and integration dependencies is like having the keys to the kingdom when building your tech empire and selecting specific providers from each category for each use case. Proper integrations are key to fully functioning, optimal tech stack.

No rotten tomatoes please

This concludes our tour of the hotel tech wonderland. Seasoned hospitality pros may see something they don’t 100% agree with and raise an eyebrow. To which I’ll say: as with everything in our industry, the guidelines and boundaries are blurry. And there may be exceptions to everything. What I described above and what you see on the screen is the map that I have organized in my head over the last 20 years of being active in the industry: as an operator, technology vendor, lecturer and a consultant, having worked with various technology solutions and various types of hospitality operators. The goal of this diagram is to help you make sense of the digital chaos, to help industry professionals have a clearer understanding of how the ecosystem is structured and how different tools are grouped and where they’re placed on this map based on their functionality and role in the ecosystem.