{"id":4493,"date":"2022-09-13T05:38:00","date_gmt":"2022-09-13T12:38:00","guid":{"rendered":"https:\/\/www.cardonet.com\/news\/?p=4493"},"modified":"2022-09-13T05:38:04","modified_gmt":"2022-09-13T12:38:04","slug":"hotel-technology-due-diligence","status":"publish","type":"post","link":"https:\/\/www.cardonet.com\/news\/hotel-technology-due-diligence\/","title":{"rendered":"Hotel Technology Due Diligence"},"content":{"rendered":"\n<p><strong>A hotel can\u2019t run well without up-to-date and effective technology. Gone are the days of handwritten logbooks and \u2018analogue\u2019 check-ins.&nbsp;<\/strong><\/p>\n\n\n\n<p><strong>Having outdated or broken technology is about as bad as having leaky pipes and bad insulation &#8211; both make your guests\u2019 stay less pleasant, and their return less likely.&nbsp;<\/strong><\/p>\n\n\n\n<p><strong>Conducting a technology due diligence on the hotel that you\u2019re considering buying will help you avoid these pitfalls.<\/strong><\/p>\n\n\n\n<p>That might seem like a strange comparison to make, but&nbsp;<strong>good technology has become the bedrock of smooth hotel operations<\/strong>. Hotel technology might refer to the systems that control your reservations or property management, or the Wi-Fi used by staff and guests &#8211; either way, if it isn\u2019t running well, your employees will have to spend valuable time fixing unnecessary issues, and your guests\u2019 stays will be peppered with difficulties.<\/p>\n\n\n\n<p>Because hotel technology is as important as it is,&nbsp;<strong>you must be sure it\u2019s up to scratch before you buy a hotel<\/strong>. Due diligence is the process of ensuring that what you are buying has the value of what you are going to pay. Whether you\u2019re new to hospitality and looking to purchase your first or are planning to expand your current portfolio,&nbsp;<strong>it\u2019s a vital aspect of any acquisition<\/strong>.&nbsp;<\/p>\n\n\n\n<p>Traditional hotel due diligence would refer to quality checking the following components&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Legal due diligence:&nbsp;<\/strong>Is the hotel involved in any ongoing court cases? Is it following all compliance regulations?<\/li><li><strong>Technical due diligence:&nbsp;<\/strong>Is the building safe? Are the piping and electric wiring up to standard?&nbsp;<\/li><li><strong>Market due diligence:&nbsp;<\/strong>Is this the right location to own a hotel? What is the competition like? What sort of clientele should you expect?<\/li><\/ul>\n\n\n\n<p>In addition to these, though, you should undertake a technology due diligence for any potential purchase.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conducting a\u00a0hotel\u00a0technology due diligence\u00a0exercise<\/strong><\/h2>\n\n\n\n<p>If you\u2019re not familiar with hotel operations, you might underestimate the role that technology plays.&nbsp;<\/p>\n\n\n\n<p>When conducting due diligence on any technology used by a hotel,&nbsp;<strong>these are some red flags<\/strong>&nbsp;you should look for:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\"><li><strong>The IT is\u00a0outdated.\u00a0<\/strong>Like with any other industry, hospitality technology seems to advance at light speed. You want to make sure you know if the technology being used is outdated. If it is, you can begin to sketch out how you are going to update it. While there\u2019s not always the business case to make sure you have the newest of every technology that you use, it\u2019s good practice to have a sense of how the current technology compares to what is on the market.<\/li><\/ol>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>The staff don\u2019t know how to use it.&nbsp;<\/strong>Top-of-the-range tech is only as good as its users. Your technology due diligence should take account of how competent the staff is at using it. Once you\u2019ve done this, you\u2019ll know what upskilling you\u2019d have to provide so that your technology can be used to its full potential.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>The IT is\u00a0not cost-effective.\u00a0<\/strong>Effective hotel technology is valuable, and that sometimes comes with a hefty price tag. A lot of the time that price-tag is worth it, but you may be able to find some financial inefficiencies in the hotel\u2019s technology strategy &#8211; for example, is it paying for software licenses that it does not use?\u00a0<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>It\u2019s not integrated.&nbsp;<\/strong>Hospitality technology varies in use, and it\u2019s likely that the hotel you\u2019re considering will use multiple technology packages for different purposes. The best-case scenario is that the front-office and back-office tech is integrated for seamless operations.<\/li><\/ul>\n\n\n\n<p>Let\u2019s take a look at where your focus should be when conducting a technology due diligence.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Hotel\u00a0Software Due Diligence<\/strong><\/h3>\n\n\n\n<p>Much of the technology you\u2019ll find in a hotel today is software-based, although some still requires physical technology infrastructure to run.&nbsp;Here are two major components you can expect to find:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Revenue management<\/strong><\/h4>\n\n\n\n<p>Hotel&nbsp;Revenue management systems are essential to a modern hospitality business. This is back-office technology that allows you to have an&nbsp;<strong>efficient and accurate view of how you should be pricing your rooms<\/strong>. A good revenue management system will work through information such as historical trends, market data, and your hotel\u2019s specification to give you the price that best matches what your customers will want to pay with what is most profitable for your business.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Property management&nbsp;<\/strong><\/h4>\n\n\n\n<p>With\u00a0hotel\u00a0property management software, you have a central digital hub for the day-to-day operations of your hotel. You\u2019re able to manage reservations, bookings, online availability, pricing, and much more, in one place.\u00a0<strong>Your technology due diligence should determine if the hotel\u00a0has an effective property management system and whether it meets your future brand standards<\/strong>.\u00a0A good property management system will significantly reduce the operational headache of a new business once you\u2019re running.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Hotel\u00a0Hardware Due Diligence<\/strong><\/h3>\n\n\n\n<p>These systems have to run on good hardware. Even though the biggest advancements are coming in the form of software, you can\u2019t take full advantage of these advancements unless you have devices that can run them seamlessly.<\/p>\n\n\n\n<p>Imagine this: a potential client has arrived in your lobby to book a room for the night. The receptionist logs into your state-of-the-art reservation system, but the decade-old computer crashes. They try again and are met with the same result. The potential client decides to go to the hotel down the road.&nbsp;<\/p>\n\n\n\n<p>This is, obviously, not great for business. The worst part is that it is completely avoidable.&nbsp;<strong>When conducting technology due diligence, be sure to investigate the state of the physical equipment<\/strong>&nbsp;&#8211; are there enough computers, and do they run well? Where computers can be replaced with tablets, have they been? Or will this cost fall on your shoulders as the new owner?<\/p>\n\n\n\n<p>Also look at physical servers and the network to understand when a refresh is needed and what would be required at that point.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pitfalls of not conducting\u00a0a hotel\u00a0technology due diligence\u00a0exercise<\/strong><\/h2>\n\n\n\n<p>You might be convinced that in an ideal world, conducting a technology due diligence when purchasing a hotel would be beneficial, but can\u2019t justify the cost. That\u2019s understandable &#8211; any acquisition of this kind is already very capital intensive, and money should be saved where it can be.<\/p>\n\n\n\n<p>That being said, the potential cost of not ensuring the technology is up-to-scratch could be huge. Even if you buy a hotel for a great price in an unbeatable location,&nbsp;<strong>outdated and clunky technology will become a burden to your business<\/strong>.<\/p>\n\n\n\n<p>In this scenario, you\u2019ll be left with two choices. You could leave the technology as is, which would create a frustrating work environment for your staff, and a hassle for your guests. That means fewer repeat customers and low employee retention.<\/p>\n\n\n\n<p>Or you could perform the necessary upgrades. That means the potentially hefty technology bill will fall at your feet and turn what was a sweet deal sour.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Who should conduct your&nbsp;hotel&nbsp;technology due diligence?<\/strong><\/h2>\n\n\n\n<p><strong>Hospitality is a specialist industry, as is the technology associated with it.<\/strong>&nbsp;If you want to acquire a hotel, you should use a company that knows the ins and outs of the business and understands what a strong (and weak) technology package looks like.<\/p>\n\n\n\n<p>As exciting as buying a hotel is, it\u2019s also a daunting process. You want to be able to be confident that you know exactly what you\u2019re walking into in every facet of the business.&nbsp;<\/p>\n\n\n\n<p>One last thing: technology due diligence adds<em>&nbsp;value&nbsp;<\/em>to your transaction. With a reliable, experienced, and trustworthy technology partner at the helm of the process, you\u2019ll be able to find undervalued hotels with strong technology packages, as well as know when a purchase is going to end up being far too expensive once technology costs are considered.&nbsp;<strong>You\u2019ll be able to spot value where others can\u2019t.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Cardonet can be that technology partner. We provide expert IT support to hospitality businesses and have two decades\u2019 experience doing so. We know what to look for and can help you throughout the acquisition process.<\/strong><\/p>\n\n\n\n<p><strong>If you\u2019re looking to acquire a hotel and want to find out more about technology due diligence, reach out to us today on\u00a0+44 203 034 2244\u00a0or\u00a0+1 323 984 8908. Alternatively, you can\u00a0<\/strong><a href=\"https:\/\/www.cardonet.co.uk\/contact-it-services.php\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>contact us online<\/strong><\/a><strong>.<\/strong><\/p>\n\n\n\n<p><strong>We provide 24\/7 coverage throughout the United States, United Kingdom and Europe.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A hotel can\u2019t run well without up-to-date and effective technology. Gone are the days of handwritten logbooks and \u2018analogue\u2019 check-ins.&nbsp; Having outdated or broken technology is about as bad as having leaky pipes and bad insulation &#8211; both make your guests\u2019 stay less pleasant, and their return less likely.&nbsp; Conducting a technology due diligence on<\/p>\n","protected":false},"author":8,"featured_media":4494,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[808,604,553],"class_list":["post-4493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-consultancy","tag-hotel-due-diligence","tag-hotel-it-services","tag-hotel-technology"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hotel Technology Due Diligence<\/title>\n<meta name=\"description\" content=\"Conducting a hotel technology due diligence 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