Hotel takeovers, mergers, renovations, infrastructure redesigns, and upgrades are generally a great way to make significant changes to an asset’s integrated technologies. Since every hotel franchise carries its own technology standards, a takeover can significantly change the way a particular property (or group of properties) operate.
The recent Wyndham acquisition of La Quinta hotels & resorts is probably the best example of a successful takeover. Almost a year and a half after midscale La Quinta was acquired for $1.95 billion, the franchise has turned to gold. After a successful year of technology & benchmark upgrades, Wyndham applauded the added revenue and growth in rooms secured from La Quinta properties.
Hotel Management blog discussed in 2017 that there can be strategic value drivers, and operational value drivers that drive the value of a hotel brand. In addition, there are three other factors that also drive the value of hotel brands during mergers & acquisitions that include the global trademark portfolio, value of potential management & franchise agreements, and value of existing management and/or franchise agreements.
High-Speed Internet Access
The modern traveler needs an always-connected experience when at hotels. These highly tech-savvy travelers carry multiple smart devices and require a highly personalized experience. High-speed internet is the backbone to delivering a seamless tech-powered guest experience.
Usually, high-speed internet is available across most branded franchises like Marriot, Sheraton, Hilton, Hyatt, Wyndham, etc. It is, however, the access points and network infrastructure that determines undeterred service delivery.
On the other side of the spectrum, high-speed internet is also essential for a variety of hotel operations. This includes hotel mobile apps, back office hardware, PMS mobility tools, security services, cybersecurity apparatuses, POS machines, etc.
Consider the Starwood hotel case. When Marriott took over Starwood in 2014 they had no idea what they were getting into. Starwood was already a victim of a massive data breach, with hackers having full access to guest personal & financial information.
Fast forward 5 years and a $130 million lawsuit later, Marriott completely revamped the Starwood network infrastructure, revising brand benchmarks and upgrading the franchise to reinforce cybersecurity & internet access.
Property Management System Migration
Property management systems are the core software controlling and managing the hotel property. Every hotel franchise has its own technology benchmarks that primarily begin with the PMS deployed.
In the event of a takeover, the PMS is the first to get an upgrade. In April 2018, when Wyndham Group completed their La Quinta acquisition their priority & major milestone was the replacement of the latter’s legacy PMS and central reservation system.
Hotel technology solutions are few and far anyway, with only a handful of technology giants investing & researching solutions for hospitality businesses. Oracle’s OPERA and Dax Dasilva’s Lightspeed are two of the most popular PMS that hotel owners choose to go with.
Network Security & PCI Compliance
Taking lessons from the Trump hotels and Starwood cases, upgrading the network infrastructure of acquired hotels is necessary to ensure complete compliance with technology benchmarks. Integration of ideal threat detection & protection tools, network monitoring, GAP analysis, network mapping, and the compliance of network hardware is essential when taking over a hotel franchise.
The compliance of payment POS systems has been a major part of hotel security since the threats of credit card arose at the beginning of the millennium. The PCI council establishes 12 rigorous rules for the compliance of payment systems at hotels. It is the express responsibility of hotel brands to conduct comprehensive compliance checks on all POS systems of acquired properties.
Security Systems & Room Security Systems
Renovating & upgrading the security systems at acquired properties is one of the first steps every franchise should undertake. Placement, monitoring, and management of CCTV and other security systems must be analyzed to comply with prevalent legislation & rules.
Room security and locking systems also matter a lot when it comes to hotel benchmarks. Electronic locks, plastic card systems, Bluetooth mobile keys, and wireless entry are some of the most pursued technologies today. Hotel acquisitions can lead to a massive decrease in costs.
Conclusion
Takeovers can be a superb opportunity for hotel franchises to comprehensively revamp their various technology systems. Namely, hotel owners should put great emphasis on security, network design, property management systems, and compliance of payment systems.
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