When Paula Felsted, who started her career in payments, heard a few years ago that HotelBed was still receiving confirmations for some reservations by fax, her chief technology officer and executive officer said, I wasn’t used to traveling yet.
“I was so shocked that I actually asked to do it again,” she recalled recently. She imagined the message coming from a hotel in the steppes of Outer Mongolia or some similarly exotic place where Wi-Fi sounded more like a question than a technology to her solution.
She was even more shocked to learn that one of the hotels that had faxed her confirmation was in Barcelona.
“My idea that their reliance on faxes was due to dodgy internet connections was completely blown away,” she says. “It really opened my eyes to how some of the processes in the travel industry haven’t changed in decades.”
This also highlights the technology gap in the travel industry. In the case of Hotelbed, now part of the HBX Group, the gap widened even further after Felsted oversaw the completion in December of a year-long effort to migrate multiple platforms to the cloud.
If you want your business to be around in five years, you need the technology to make it possible.
Klaus Kohlmeyer – IDeaS
The investment of time and resources (not to mention anxiety) required for Hotel Beds to pull off a complete overhaul of its technology is something more travel companies should consider, according to experts in the field. says the house. Given the growing importance and availability of data, it’s more important than ever for businesses to keep their technology up to date.
“It’s a fact of life: If you want your business to be around in five years, you need the technology to make it possible,” says Klaus, “chief evangelist” and head of development at IDeaS, a provider of hospitality revenue management software.・Mr. Kohlmeyer says:
Adam Harris, CEO and co-founder of cloud-based hotel management platform Cloudbeds, agrees. He is surprised by the low adoption rate of revenue management services in the hospitality industry, as too many companies are hampered by technical debt.
“These companies aren’t innovative. They’re just surviving,” Harris said. “They just know what’s going on.”
“It doesn’t matter if you’re a small business or a large company, you need to change and adapt,” added Richard Castle, co-founder and chief operating officer of Cloudbeds. “If you don’t, one day you’ll become irrelevant.”
That was the fate Hotel Bed sought to avoid when it was reborn as HBX Group, with a new technology stack that Felsted hoped would keep it ahead of customer needs.
“Tolerance for poor performance is rapidly disappearing as if it doesn’t exist,” she says. “Everyone wants to get products to market faster, faster responses, faster and more complete data, and I think that applies to every segment of the travel industry. That’s why we took such an initiative. The real choice was whether we would experience a year of major disruption or we would not reach our goals at all for 10 years.”
The cost of bridging the travel technology gap
To explain the technology gap in travel, Cloudbeds’ Harris cited the Digital Adoption Index he looked at a while ago. It found that while the travel industry ranks fifth among global industries in terms of size, it only ranks 20th in terms of digital adoption.th.
“It’s a big gap, and we’re not going to close it. In fact, it’s widening now,” Harris said. “If we’re in a business where consumers are in the driver’s seat, this doesn’t bode well. We are doing [can offer]”
We need to change and adapt. If you don’t, you’ll become irrelevant someday.
Richard Castle – Cloud Layer
IDeaS’s Kohlmeyer said the importance of data will increase the impact on companies that are falling behind, now and especially in the future.
“We all recognize that the amount of data being collected is staggering and continues to grow,” he said. “The challenge is how to make it actually useful and how to translate it into something that can be applied.”
answer? It’s not an old technology stack.
“We can’t afford to work with old technology or old data warehouses. We have to be in the cloud because that’s the only way to scale up,” Kohlmeyer said. I did. “Data guarantees the security and safety we need, so we need to use a modern environment. That’s why every day, we They need to have confidence that the decisions they make are reflected automatically, seamlessly, accurately and reliably, which drives all investments in technology and people.”
Investments like this aren’t cheap.
After Amadeus partnered with Microsoft in 2021 to announce a three- to five-year plan to transition away from private cloud infrastructure, the following year the company announced that its total investment in research and development exceeded €1 billion for the first time. This figure increased by a further 20% in 2023.
Of course, Amadeus’ larger size means its numbers are larger. Hotelbed has made a phased strategic investment of €11 million in its technology stack, which Felsted said represents about 30% of the company’s annual capital expenditure on technology. She believes the alternative would have been more expensive in the long run.
“If you don’t invest and solve technical debt and limitations, you’re going to lose customers,” she says. “You’re going to lose loyalty, and it doesn’t matter how good your pricing is or how good your product is. If you’re not awake, you’re not available, you’re not responding on the timescale that your customers and partners expect.” If you don’t, your customers and partners will go elsewhere because no one is going to wait those extra seconds or those extra minutes. They’ll go somewhere else.”
Keeping the door open to innovation in travel technology
Even after finishing the major comprehensive, the demand for technology does not stop. Technical debt, or iterations of outdated technology that companies keep upgrading or working around rather than replacing, addresses this.
“Every time you write a line of code, you accumulate technical debt,” Harris says. “After a month, that’s technical debt, right? You’ll never write perfect code. Ever.”
So how can companies with the latest technology prevent technical debt from slowing down their performance, while at the same time reaching the stars with new innovations?
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CloudBeds’ founders say it’s a great balancing act, basing their approach on lessons learned from Amazon founder Jeff Bezos. Cloudbeds calls this a one-way or two-way door approach to decision-making.
One-way doors are decisions that are nearly impossible to undo, such as quitting your job or selling your company. Once you make that decision, there’s no going back. A two-way door is an action that can be reversed if it doesn’t work, such as offering a new service or rate plan. The trick is to differentiate between them so that you don’t get paralyzed by indecision about two-way doors while carefully considering one-way doors.
At Cloudbeds, our commitment to reliability and performance is a one-way street.
“That’s our biggest thing. We talk about it all the time,” Castle said. “The bigger you get, the more important performance and reliability becomes, because tens of thousands of customers trust you and you attract larger customers and enterprise accounts.”
But while that focus is essential, Harris said there is a danger of complacency.
“There’s always a balance between how much innovation and how much stability every technology company in the world faces,” he said. “Like Netflix, for example. Think about the load that consumers all over the world are putting on that ecosystem. Well, most of the infrastructure is stable and ensuring that consumers get the experience they want right now. But they’re not innovating, right? …The user experience hasn’t changed much in the last five years, because a lot of the engineering infrastructure is just simple. That’s why. [to] Keep doing it online. ”
That’s where Cloudbeds comes in with two-way doors. Castle added that when the company tries something new, it does so with the understanding that if it doesn’t work, the door remains open for exit.
“Risk-taking is important to building a growing business, and releasing new products and features at high speeds can sometimes be risky,” he said. “That’s why it’s important to be able to fail quickly.”
In other words, withdraw ideas that require further work.
The way they do it is also modeled after what they’ve seen large companies do successfully. While increasing investments in performance and reliability (from which there is no going back), enterprises are increasingly deploying innovations with the idea that if they don’t work, they can be shut down quickly, or they are deploying innovations in individual clusters or regions before deployment. You can test your changes. We offer it to all our customers.
“You don’t want an engineering team that doesn’t take risks to get the product out there,” Castle says. “So you want to limit your exposure and get things back quickly.” [if they don’t work]”
The rewards of rebuilding your technology stack
Without a complete technology overhaul, hotel beds would never have become HBX Group.
In October, the company announced the launch of group brands, which currently include Hotel Beds, to support the introduction of new product lines, including fintech products such as travel insurance, payments and multi-currency solutions that will be integrated into the company’s core business. . Without investment in technology, it wouldn’t have been easy, at least not.
If you don’t invest and resolve technical debt and limitations, you’ll lose customers.
Paula Felsted – HBX Group
HBX Group CEO Nicholas Huss said: “Our intention in rebuilding our technology stack was to make it easier to do business.” “We wanted faster response times. We wanted to reduce downtime. We wanted more accurate data, etc. We wanted to do it in a very modern way. We’ve built it in a way that allows us to do business in a fluid way, not just today, but probably for the next five to 10 years.”
The year-long process was not easy for those carrying it out. We needed to move not just one platform, but multiple platforms to the cloud. Some things were easier if you were already using another cloud provider. Other features had to be “redesigned, rewritten, and migrated” so seamlessly, according to Felsted, that he still didn’t see any large-scale customer migrations occur, including those using fax. It is said that
solution? HBX Group built his third system, allowing him to keep the old and new systems in sync over a 12-month period until the work was completed. “So it was like there was an old platform and a new platform, and then he built a third system to balance both,” Felsted says. “Not for the faint of heart.”
That courage was rewarded. Even with the process underway, Felsted said performance metrics showed the system was 30% faster and 50% more accurate than his. Improvements continued. And while the overhaul was expensive in terms of money and labor, she expects to see a three- to four-fold return in the future.
“If we didn’t make that investment, everything we talk about in terms of fintech products, ecosystem strategy, market expansion, and delivering the best performance and resiliency to our customers would not be possible. “It would have been,” she said. “It’s almost like a platform allows you to scale and deliver reach and performance. This is really the foundation of your business strategy.”
