October 2018, Las Vegas
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Goodbye to the cumbersome PMS, hello open innovation
apaleo, the winner of this year’s start-up and innovation competition at EyeforTravel Europe, promises to streamline technology integration for hotels
apaleo is on a mission - to solve the headache of hotel technology integration with its open, cloud-based platform.
“Today hotels differentiate by intensive use of technology but existing property management systems (PMS) make it very difficult for hotels to innovate,” says apaleo Business Developer Philip von Ditfurth.
Typical legacy hotel PMSs, like Oracle, which controls 90% of the market, are monolithic, have a closed architecture, and operate a one-supplier-does-all model.
“All these PMSs have tried over time to solve different aspects of the guest journey, hotel operations and so on, out of one hand. But in trying to do everything, they have become the biggest bottleneck for innovation,” says von Ditfurth.
Enter apaleo with a radically different approach: “to concentrate on what a lean PMS should do, and for any type of special function, of which there are many in the hotel space, look out for the best available app for a hotel’s specific needs”.
…in trying to do everything, legacy PMSs have become the biggest bottleneck for innovation
To put this in perspective, there are around 2,000 different applications that support various hotel disciplines. But the old school PMSs, says von Ditfurth, make it extremely hard for these apps to enter the ecosystem.
Another challenge is that today’s PMS providers keep data structures proprietary. “Sometimes you don’t even get access to the data, even though it is the hoteliers data!”
“This is what we want to break up, he says.
Expensive and complicated
To give the issue context, von Ditfurth explains that for the past 15 years or so, a lack of integration capacity has led to bottlenecks both in the guest journey but also for hotel operations. Recently, however, this problem has intensified, as an increasingly mobile and demanding guest has led to a proliferation of innovative applications that support various aspects of the guest journey.
On the customer-facing side, the result is that often guests have to give the same information multiple times during the journey, which “is extremely frustrating”, says von Ditfurth.
Often guests have to give the same information multiple times during the journey, which “is extremely frustrating"
But there are challenges for operations too. Citing an example from the world of distribution and RM, von Ditfurth says new applications are emerging all the time that make life much less complicated for revenue managers. However, the struggle to integrate these new systems into legacy PMSs is not just complicated, it’s very expensive. “If a new technology provider wants to be certified by a company like Oracle it is at least a 5-digit number and afterwards every hotel has to pay a 5-digit number to use of that interface,” he says.
With apaleo’s two-way open API, revenue managers can now “easily complete the loop of extracting price information, comparing it with demand, applying a relevant algorithm, and making a price recommendation which can then be fed back into the system,” von Ditfurth explains.
The idea is to get as close to real-time decision-making as possible. “That’s far, far away from what the old systems can do,” he stresses.
Think ‘units’ not room night
Another fundamental shift in the start-up’s business model is to think of inventory as more than just a room night. Whereas legacy PMSs are designed to cater for overnight stays in bedrooms, and “everything else is a workaround”, apaleo’s platform allows hotels to yield everything from rooms to parking lots, co-working spaces, meeting rooms and more.
The industry no longer wants to only yield rooms
“The industry no longer wants to only yield ‘rooms’,” says von Ditfurth. So instead of referring to ‘room nights’, apaleo works in ‘units’. And its business model is to charge per ‘unit’ per month, which, according to von Ditfurth, will make it a whole lot cheaper for hotels.
Still, even if only considering room nights – there are 7 million hotel rooms in Europe and 60 million worldwide – there is everything to play for.
A three-pillar approach
apaleo native cloud platform rests on three pillars:
Flexible inventory: It is possible to configure everything from bedrooms to beds, meeting rooms, co-working spaces, parking lots and more. “Basically anything you want to manage and put a price tag on, anything you would like to yield,” says von Ditfurth. The platform supports hybrid models, with inventory that can be bookable for a few hours or a few days.
Fully open two-way API: Innovative applications can integrate with the platform within as little as 48 hours.
- apaleo App Store: Already, more than 40 different apps that have been developed for marketing, upselling tools, housekeeping and operations. These apps are housed in the apaleo store, allowing hotels to connect to pre-integrated, innovative guest or staff facing apps in one click. “All apps come on board without any effort on our side. So, there is no limitation in terms of scalability because these apps can all integrate in parallel,” he says.
Although it is early days – apaleo launched last February and delivered the platform eight months later – von Ditfurth believes the team of 12 serial entrepreneurs is well positioned to build a worldwide native cloud-based platform from the ground up. With several hotels clients already on the platform, apaleo is currently gaining traction in its core market – Europe. However, it is also looking to Asia and North America to become the “next big player in property management systems”.
apaleo was one of three finalists to pitch to delegates at EyeforTravel Europe. On Day 2 in a close live vote, 39% of 113 delegates voted to crown apaleo winner. Runners up were travel planning firm Fineway (35%) and booking engine MeetingPackage.com (27%).
If you are innovative start-up and want a chance to shine, why not enter the upcoming EyeforTravel Start-p & Innovation competition in Las Vegas
Main image featuring Tim Gunstone, MD, EyeforTravel Europe (left) and Philip von Ditfurth, Business Developer, apaleo (right)