HTNG was formed in June just before HITEC 2002 by a group of nine international industry professionals, including seasoned consultants, college educators and senior hotel managers. HTNG's mission, described in its white paper, is to "define a new approach to providing systems and technology services at the property, brand, management company and ownership levels." 

HTNG tells the hard truth; someone had to do it. The group does an excellent job of stripping away the hyperbole to spotlight the most egregious technology problems in our industry: the lack of inter-vendor cooperation and inability to integrate systems [read: lack of interfaces], poor technology purchase financing and lagging adoption of new technology. To its credit, HTNG goes beyond naming problems and recommends solutions. Some aspects of its solutions, however, although carefully researched, might be unrealistic from the vendors' perspective and deserve a closer look. 

Three problems and the solutions

Problem No. 1: The first problem HTNG tackles, lack of inter-vendor cooperation and poor system integration, is a primary cause of the obstruction of data communication between systems and deserves to be on the most wanted list as a productivity killer. This system-to-system disconnect causes countless hours of data rekeying. 

At most hotels, for example, the front-office system does not even automatically transfer revenue numbers to the owner's back-office accounting system. At many other properties, the sales-and-catering system pick-up for group room blocks must be printed out daily so the reservations manager can manually update property-management system rooms' availability. Both of these problems could quickly be solved with the purchase and installation of the correct interface, or communication link, between systems. 

Vendors know their users need interfaces to communicate with other systems and willingly develop as many as possible to serve their clients, enhance their system's value, and provide an ongoing revenue stream.  This is good business. Interface sales are highly profitable because most are already written, and at many companies interfaces represent an important profit center. 

We do not see the problem as a lack of vendor cooperation, but as one of competitive practices. It is regrettable that some vendors do charge a much higher price for interfaces to third-party products competing with the vendors' own applications, which often imposes a price barrier to interface adoption. Nevertheless, hundreds of interfaces are available; hotels need only to buy the technology they need. 

Solution No. 1: The HTNG white paper recommends our industry adopt an open-systems standard through which all vendors have access to each other's communication protocols. On its face this is a great idea, but vendors have invested a great deal in their present systems, they already offer hundreds of interfaces, and companies like No Barriers and Comtrol specialize in enabling communications between systems on dissimilar platforms. The reality is that problems arise as vendors and users have greater access to systems. 

Open access, whether granted to users or other vendors, results in risks to security and system stability. Support liability also becomes an issue when anyone but the vendor supplying the application has more than minimal access to the system. 

HTNG suggests that the hospitality industry, like the banking industry, would operate better if it were the domain of a small group of three or four major technology providers like EDS, IBM, Cisco and others that can develop and install large enterprise solutions that will not depend on hundreds of separate companies interfacing to one another. HTNG is correct in saying the industry is fragmented, but vendors are already responding to these problems in their own way. 

Many companies with complementary products are actively investigating and entering into strategic partnership agreements or acquisitions. Newmarket International and Passkey, VIP International and Hotel World, Pegasus and NetLedger, MICROS and Opus 2 are examples. These companies and others like them are already working to bring about better cooperation and provide stable, efficient enterprise solutions to the industry. 

Enterprise solutions were already in the spotlight as the hottest technology at HITEC 2002. This is the direction technology is moving in hospitality and other vertical markets, but it does not mean that all modules in an enterprise solution must come from the same vendor. "Best of breed" is still a compelling strategy. 

Problem No. 2: The second problem targeted by HTNG is poor technology purchase financing. Right on. The majority of the hotel industry has a "front-of-the-house" mentality that puts a higher value on purchases that guests see and touch than on infrastructure. This kind of budget prioritization usually places funding for new technology right behind paying the exterminator. 

The team at HTNG covers this issue in depth. They also know most hotel controllers set the depreciation schedule on computer systems at five or seven years, often leaving hotel operators crossing their fingers hoping they will have the funds to buy a new system when the time comes. 

Solution No. 2: One of HTNG's solutions to improve technology financing is for vendors to adopt a monthly leasing model for system purchase, thereby easing the sticker shock most hotels experience when pricing new systems. Some vendors already have tried this type of purchase plan; others are actively implementing it now, mostly with budget properties. 

More flexible methods of technology financing, like monthly leasing, or per-use transaction fees that link payments with property revenue, would certainly ease the process of acquiring new technology for hotels, but could have an entirely different effect on vendors. 

For every system they install, vendors incur substantial upfront costs for trainers' salaries, hard costs for third-party software such as Windows XP and SQL Server, as well as hardware to support the new application, and many suppliers are simply not able to amortize these expenses and make payroll at the same time. 

Problem No. 3: The third problem HTNG confronts is the industry's reluctance to adopt new technology, which can be linked without much effort to poor technology financing. The facts are clear: our industry is risk avoidant and cost conscious. This is a logical combination because old technology carries little risk and costs less than leading-edge systems. 

I think most vendors would agree that if hospitality took technology adoption more seriously and was willing to back it up with greater systems investment, at the very least there would be less downtime, guest service would improve through better customer relationship management implementation, and operators would quickly have the applications they need to analyze property performance and manage with better information. 

Solution No. 3: What would give new technology adoption a higher priority in our industry? A measurable return on investment. When a new system can demonstrate that it will pay for itself in two years and increase revenue by even 2 percent, the business case is strong enough to stimulate purchase. This is already happening in the areas of yield management, sales and catering, and electronic distribution services. 

HTNG's ideas reflect a global maturing of technology development that cuts across markets and industries. Systems are becoming smaller, faster, wireless and more transparent. Delivery channels like the Internet are replacing on-site servers, and outright purchase and ownership of technology is giving way to more flexible financing strategies. Hospitality vendors are already adopting these new technologies and forming partnerships to better serve the industry, and the result will be efficient enterprise systems that provide a free flow of data across system boundaries. 

Kelly Blake, president of VIP International, speaks for many vendors when he explains, "Adoption of HTNG's guidelines depends on client hotels pushing for it.  Compatibility will not happen overnight, but if the hotel community gets behind it, it will move forward. Vendors cannot force clients to stay with existing technology. At the end of the day, systems companies must drive business and revenue for their users." 

The HTNG white paper, its analysis and insights are well done. In the hospitality industry, it has already become a catalyst for the kind of new thinking and development taking place across the entire technology landscape, and this is exactly its purpose.