Hotel sales automation entails optimizing multiple facets of the sales process, encompassing marketing, customer service, booking procedures, and payment processing, through the implementation of various technologies.
As one might expect, this has its own set of advantages and disadvantages.
On one hand, some might argue that technology is crucial for enhancing efficiency, while on the other hand, critics may say that it diminishes the travelers' experience and, in fact, may have a negative impact.
In this article, we explore both sides of the argument in pursuit of an answer to the question: Is hotel sales automation a good idea?
Benefits When You Automate Hotel Sales
First, let’s take a look at what sales automation brings to the table in terms of benefits.
Hotel sales automation can be achieved through a wide variety of software solutions, such as:
- Booking engines
- Channel managers
- Property management systems (PMS)
- Central reservation systems (CRM)
- Revenue managers
The biggest strength of such tools lies in their ability to improve the flexibility and speed of the booking process, thereby contributing to an upswing in room sales.
Sounds perfect, right? But, how does that work?
Using a booking engine or channel management software, for example, enables you to set up and effortlessly manage online reservations, making them available 24/7 across multiple distribution channels like OTAs or your hotel's official website.
In simpler terms, potential guests no longer need to attempt reaching you via phone or email to get a room at your property.
Say a working mom wants to book a room at your property, but finds it challenging to make a phone reservation amid her busy day.
Faced with this complicated process, she might abandon the idea of booking with you altogether.
But, being able to log onto her computer later in the day, go to your website, pick a room and date, and complete the booking hassle-free, could be a game-changer for her.
This is the approach adopted by the Heritage Hotel in Tisno, Croatia.
By implementing WebBookingPro's Booking Engine, they successfully set up room reservations directly on their website.
Source: Heritage Hotel Tisno
The Booking Engine, easily navigable and accessible on all devices and browsers, epitomizes flexibility.
Guests can select a room, check availability, and book within minutes, all from the comfort of their homes, at any time.
At the end of the day, travelers value a prompt and efficient hotel booking system.
If you don’t provide that, they are likely to seek alternatives that do.
Therefore, by automating sales, you not only simplify and expedite the room reservation process but also reduce the likelihood of missed sales opportunities, ultimately increasing your property’s occupancy.
Consider property management systems as a prime example, significantly expediting the check-in process.
These software solutions efficiently handle records of guests' stays and room inventory, allowing staff to confirm room availability on demand and access guest data and payment information within seconds of their arrival.
Gone are the days of manual data entry or sifting through logbooks to see if there are any rooms left available—everything is easily accessible with a simple click.
For guests, this means they can get to their rooms much quicker—something they undoubtedly appreciate, especially after a long flight.
In a similar vein, property management systems offering payment gateway integration enable guests to prepay for their accommodation online, even further reducing their check-in time.
This proves particularly convenient in cases where properties don’t take credit cards and only accept cash payments on-site.
Aside from that, some guests simply prefer online transactions, as you can see in the example below:
Furthermore, advancements in technology now offer ways to eliminate front-desk personnel interaction entirely, giving guests more control over their arrival and departure times.
Self-service check-in/check-out via phone or dedicated check-in kiosks empower guests to complete the process on their own.
They no longer need to worry about adhering to strict check-in times, which is the last thing they want to do after a stressful journey anyway.
The entire experience becomes more relaxed—no rush, no stress.
It's no surprise, then, that contactless check-in has emerged as the top hotel technology popularized by the pandemic people want to see permanently adopted.
Its inherent convenience is what wins travelers over, making it poised to be even more widely employed by hotels in the future.
All in all, sales automation unequivocally translates to guest convenience.
This, in turn, leads to increased satisfaction, an enhanced hotel reputation, and, eventually, more bookings.
Better Decision Making
Automated tools come equipped with robust reporting and data analytics capabilities, enabling properties to monitor their sales performance more efficiently.
This means more accurate, timely, and detailed information is used in decision-making, rendering the process more data-driven and better-informed.
That’s what the decision-making is supposed to be in the first place, right?
According to Demi Horvat, CEO of AirDNA, an analytics company that tracks short-term rental data, the reliance on dependable data in the hospitality sector has, indeed, never been more important than in the current unstable, post-pandemic landscape.
The data not only provides insights into the ongoing state of affairs but also aids in forecasting future trends, ultimately contributing to improved sales efforts and increased hotel occupancy.
For instance, by monitoring guests’ booking information, website behavior, or purchase history, you can tailor content, messages, and offers to better suit their needs and preferences.
This kind of personalization proves highly effective in boosting guest satisfaction and room sales.
In fact, research indicates a growing trend across various industries, including hospitality, where businesses are increasing investments in personalization and software solutions that maintain comprehensive guest profiles to deliver more targeted experiences to guests.
Moreover, 62% of companies report better customer retention due to the personalized sales strategy.
Similarly, tracking distribution channel performance allows hotels to optimize their channel mix.
Metrics such as
- Booking volume
- Revenue generated
- Customer acquisition costs
- Cancellation rates
- Guest reviews
help identify channels yielding the best results, as well as those that may be less efficient.
Daphne Beers, owner of Your-Q Hospitality Academy, an online training platform for hospitality employees, agrees that relying on precise information is a must if you aim to build a truly profitable distribution strategy:
"Before you make the decision to use/not use OTAs, the first step is to calculate the cost of sale of both channels. Often enough, we assume that Direct Bookings are more profitable, but when we drill down on the revenues and the cost of sale (so in the end, the NET revenues) per channel, it shows that OTA’s are giving better results.
My advice? Compare apples to apples and be honest in including ALL costs when you make the comparison."
Simply assuming that one channel is more effective than the other without supporting evidence could backfire and actually result in unnecessary costs.
Overall, gaining insight into your sales performance is crucial for understanding what works well for you and what areas need improvement.
However, this is unattainable if relevant data is scattered across multiple spreadsheets or paper forms.
Digital tools, on the other hand, compile and centralize data, ensuring it remains up-to-date, accurate, and serves its intended purpose: to support continuous growth and success.
What to Be Aware Of When Automating Hotel Sales
Automation proves highly beneficial for enhancing various hotel sales processes—until it doesn’t.
There’s no denying that implementing technology in your day-to-day operations comes with its own challenges.
It’s important to be aware of these potential risks before committing to a software purchase, so let’s further look into some of them.
Technological glitches, unfortunately, aren’t uncommon and can pose significant problems for hotels, leading to dissatisfied guests, financial losses, and damage to the property's reputation.
Stanislav Ivanov, founder and editor-in-chief of Robonomics: The Journal of the Automated Economy, emphasizes these issues as a major deterrent for industry professionals considering investing in technology.
And who could blame them? Once you've experienced software failure, you don’t really want to go back to that.
Say your PMS crashed, resulting in the loss of crucial information like guest profiles and reservation details, like in the example you can see below.
Not only are situations like that frustrating for the guests, but extremely stressful for the staff, too.
Just imagine trying to recover all that lost data while the queue of increasingly angry guests becomes longer and longer.
Another common issue in this context is online payment failures.
Guests who prepay for their rooms may receive a system confirmation of payment acceptance, only to discover upon arrival at the property that the payment was never received.
While such scenarios are rarely the hotel's fault, guests may not always understand that and be unlikely to return.
So, to minimize tech glitches and accompanying stress, begin by selecting reliable software providers. Consider factors such as:
- The provider's tenure in the industry
- Software reviews
- The quality of customer support they offer
- Product documentation
However, know that this won’t be enough to protect yourself and your team from tech mishaps completely, especially during unforeseeable events like power outages.
That’s why it’s also important to establish contingency plans, such as implementing an offline booking system, and ensuring that staff members are trained to handle these situations effectively.
That way, you’ll be able to maintain a positive guest experience despite the technical difficulties.
Automation Means Less Human Engagement
Human engagement is still a crucial element in the hospitality industry.
Some might even argue that introducing technology into the mix could compromise the quality of hotel sales processes and diminish the guests' overall experience.
For example, AI-powered chatbots on hotel websites or social media, despite their ability to handle multiple inquiries at once, lack the personal touch that some guests value.
As a matter of fact, a 2019 survey revealed that 86% of US consumers prefer human interaction over AI-based systems, with half of them believing that AI makes issue resolution even more challenging.
The thing is, such tools often have a limited understanding of guest needs, while human staff excels in grasping behavioral nuances and preferences.
The preferences shared by users on this Reddit post attest to that:
In simple terms, your human staff can adapt to unique situations and provide solutions based on their experience and empathy.
So, does this mean you should give up on automating your sales altogether?
Markus Venzin, CEO of EHL Group, Hospitality Business School, says it’s all about finding the right balance between technology’s efficiency and human touch:
"One of today’s key challenges is that digitalization and technology can get in the way of developing the human touch. But it is up to us as hospitality leaders to define the right balance adapted to our specific business and environment.
Where digital transformation will enable performance gains via AI, virtual reality, and unparalleled speed, humans will hold their ground with social interactions and soft skills like empathy and creativity."
In other words, identify processes that benefit the most from automation and let humans handle the rest.
Even in an increasingly technological landscape, the need for a human touch in hospitality probably isn’t going anywhere anytime soon.
While tech can streamline tasks and improve operational efficiency, humans are far better at creative problem-solving, using intuition and judgment to enhance travelers' experiences, building trust, and fostering lasting relationships with guests.
Technology Implementation Costs
The cost of technology can often pose a significant barrier to its adoption among hoteliers.
According to h2c’s Digital Hotel Operations study, over half of hotel industry professionals find it challenging to allocate a budget for such investments.
Unfortunately, the perceived high cost of these systems, along with the expenses related to training, sometimes outweighs the numerous benefits they can offer.
So, how much should one expect to spend, for instance, on a PMS anyway?
The short answer? It depends.
The final price of hotel industry software solutions is usually influenced by various factors such as:
- The number of rooms
- Types of modules or third-party integrations
- Installation services
- Customer support
For smaller hotels with less intricate software needs, training and installation can be completed within a few days at a relatively lower price.
As the size of the hotel increases, however, so do the system costs.
Consider Sirvoy's PMS, for example: a 3-5-room property may expect to pay $15 per month, totaling $180 annually, while a 21-50-room hotel would face a total annual cost of $516.
Moreover, additional features like a channel manager would incur extra charges, too.
Nevertheless, if you’re considering automating your sales processes, the upfront costs shouldn’t be your sole focus.
Instead, it’s better to delve into the broader picture, assess ROI, and determine whether this new system genuinely adds value to the business.
To emphasize this point further, we conducted a side-by-side comparison of the costs of automation versus the costs incurred due to a lack of automation.
We calculated the expenses associated with a common error, such as double booking resulting from inadequate room inventory management, and compared it with the costs of a PMS, a software solution that mitigates such problems.
It's important to note that the figures presented in the table are illustrative and can fluctuate significantly based on factors such as your location, property type, and many others.
Still, they aptly demonstrate our main point: sometimes, it's wiser to invest a bit more upfront to avoid significant losses in the future.
All in all, you definitely shouldn’t automate every single aspect of your sales just for the sake of it.
Instead, weigh the pros and cons of a system, conduct detailed cost research, and determine whether this new solution truly aligns with your financial strategy.
Finally, it’s time we answer the question posed in the introduction: Is hotel sales automation a good idea?
Our verdict? It can be.
If you give yourself enough time to properly research different software solutions, compare costs against gains, and, most importantly, pay attention to your guests’ needs, you actually stand to benefit significantly from the modernization of your sales processes.
There’s no denying that the advantages of automation are substantial; you just need the right tools to help you get there.