Checking Into The Hotel Market

The last time you traveled, for business or for pleasure, where did you stay? Was it in one of those large, chain hotels with a mini-bar in the room and two swimming pools? Maybe it was in a rustic lodge in the middle of nowhere. Or, perhaps you picked an economy-class establishment as a brief stop on your way to someplace else. Wherever you stayed, did you notice what, if any, point of sale (POS) system the hotel/motel used? (If you're like me, being in the POS industry forces you to notice these things wherever you shop, dine, or travel.) Have you ever thought of making the chain hotel, the rustic lodge, or the economy motel your customer? Execu/Tech Systems, Inc. (Panama City, FL) has thought about – and made – these types of businesses its customers. A software development and systems integration company, Execu/Tech has specialized in selling its own POS software with POS hardware to hotels and restaurants for almost 20 years. The company, with 20 employees, has more than 300 installations across the United States.

Tourism As A Retail Industry
The tourism industry is the third largest retail industry in the U.S., exceeded only by the automotive and food store industries, according to the American Hotel & Motel Association's (AHMA) 1999 Lodging Industry Profile. There are more than 52,000 hotel/motel properties with a total of 3.9 million rooms. The industry generated more than $99 billion in sales with an average occupancy rate of 63.2%. In fact, the 1999 market was nearly 6% more profitable than the previous year. The lodging industry is a big employer, supporting more than 7.8 million jobs. (Figures for the year 2000 will not be available until mid-2001.) If you are considering moving into this market, think outside of the box for possible POS sales. The tourism industry includes more than 15 related businesses, including airlines, cruise lines, car rental agencies, travel agents, and tour operators.

Keys To Success In The Hotel/Motel Market
So what does it take to succeed in the hotel/motel market? According to Rich Hartzer, POS marketing manager for Execu/Tech, his company has been successful with two approaches. "The company started out in the hotel/motel market. That's what our software was initially designed for," he says. "We approach the small operators and the large chain managers directly." Having a restaurant POS software product works as well. "Sometimes we are contracted to supply only the restaurant software and hardware," explains Hartzer. "We'll integrate that with the property management system the hotel is using." The upside to this scenario is that Execu/Tech often benefits when the hotel decides to upgrade or change its property management system.

Hartzer says his company does not have a standard sales pitch it makes to each customer, since every hotel operates a bit differently, even within a chain. "Some chains mandate a certain type of hardware and software be used, while others offer operators a short list to choose from," Hartzer explains. Execu/Tech sells to hotels of any size. An average sale runs approximately $8,000. Small hotels often have budgets of less than $1,000 to spend for POS hardware and software.

Most of Execu/Tech's sales come from referrals. The company networks through its membership in the American Hotel & Motel Association. "We've generated many leads from our Web site," notes Hartzer. "Potential customers can download a demo of our software. Ninety-five percent of the people who sign our Web site guestbook prequalify themselves. We follow up with a sales call."

Selling Software Features
It's not difficult to identify potential customers in the hotel market. A quick drive past a nearby tourist attraction or major highway would probably help you get started. But what does a Hilton, Marriott, or Motel 6 need a POS system to do? Just about everything, according to Hartzer. His company's software manages front desk functions, reservations, sales, housekeeping, and back office accounting. It also manages gift shops, restaurants, and food and beverage inventory. In-room movies and meeting room scheduling also run from the same system.

Among the system components, Execu/Tech regularly integrates touch screens and credit card readers, and plans to offer online reservations in the very near future. To differentiate themselves in the market, many hotels take advantage of graphical folio (bill) printing, incorporating their logos on customers' statements. Others personalize the customer experience by tracking guest notes and comments. In fact, the AHMA points out a trend in customer personalization, similar to what luxury hotels have been doing for years. Personalization, accomplished through sophisticated hotel management software, means your room will have your favorites stocked in the mini-bar, the preferred type of pillow on your bed, and a beloved print hanging on the wall.

Other business opportunities include wiring hotel rooms for Internet connectivity and supplying in-room printers. Business travelers are pushing for these necessities, and hotels are charging up to $20 a day extra for these types of services.

Consider expanding POS opportunities to include kiosks. The AHMA suggests an increase in the use of virtual check-in kiosks in hotel lobbies or even on airport shuttle buses and at airports. Some hotels are using wireless technology to accelerate express check-in and to program electronic card keys outside of the hotel.

24/7 Service, Because Hotels Never Close
One disadvantage to working in the hotel/motel market is providing 24/7 support. Execu/Tech offers round-the-clock support as part of its Execu/Care program. "Customers are charged a monthly service fee," explains Hartzer. "This prevents the service fee from fluctuating from month to month and helps our customers to set realistic budgets." Execu/Tech guarantees a one-hour response time via phone. Most POS system problems are solved over the phone by trained technicians or through a dial-in connection.

There Is Room In The Market
Hartzer says, believe it or not, many hotel and restaurant owners still operate using a paper-based system. Once these customers automate their POS systems, they are amazed. "We recently installed a POS system for a restaurant in a college town," notes Hartzer. "The lunch rush was a particularly busy time. The waitresses scribbled orders onto paper checks and gave them to the cooks. The cooks complained they couldn't make out the handwriting. Orders were prepared incorrectly as a result." The cooks have stopped complaining and the restaurant is operating much more smoothly.

So the next time you check in to a hotel, check out the POS system. Who knows? Traveling for pleasure could turn out to be business.