How SaaS is a game-changer for hospitality

Two years after the pandemic hit the hospitality industry like an asteroid, the recovery continues to chug along nicely. Good news stories abound, with travel industry site Skift reporting that “the return of post-pandemic travel has been so robust that airlines and hotels are selling more seats and more rooms for times once designated as off-peak.” Hospitality companies like Hilton are pushing ahead with grand plans, with the iconic brand opening 100 new hotels in Asia in 2021 and aiming to open 760 more in the near future.

At Hampleton, we’ve also noted another sign of resurgence. Following a marked slowdown in 2020, there’s been an uptick in M&A activity involving firms specialising in hospitality vertical software. A notable example was the purchase of the ALICE hotel operations management platform from Expedia Group in August 2021. Acquired by portfolio company ASG, ALICE is an all-in-one online interface for hotel operations. Using this single platform, hotel staff can manage virtually all aspects of business operations, with communications across departments going through the ALICE system.

Flourishing since the advent of cloud computing, SaaS (software as a service) providers like ALICE allow their clients to make use of digital tools by logging in through a browser or app. Clients generally pay for such tools on demand, or via a subscription. Thanks in part to evolving corporate practices and the rise of remote working, demand for SaaS services has soared around the world, with the global market projected to reach over $715 billion by 2028. But why is SaaS becoming so integral to hospitality in particular? What benefits can these platforms bring?

A major selling point of SaaS platforms is that they’re a relatively low effort solution for an industry that’s not been traditionally tech-centric. Thanks to the SaaS model, businesses – whether they’re small independent hotels or giant chains – won’t have to recruit IT specialists to implement complex hardware and software systems in-house. A broadband connection is all that’s required to access a suite of tools and set up a digital hub of hotel operations which can be seamlessly scaled in proportion to customer demand. Top SaaS systems are designed with laypeople in mind, so even the least tech savvy hotel worker should be able to find their way around the interface.

What’s more, installing the latest patches and updates, looking out for bugs and generally maintaining the software infrastructure is one form of housekeeping that hotel staff won’t have to worry about. All of this is handled by the SaaS vendor.

As for what the platforms actually do, basic essentials like managing online bookings and other front-of-house tasks are just the tip of the iceberg. Cloud-based systems can also be leveraged to strengthen interactions with customers. This is a crucial perk, since providing a truly personalised service has never been more important. In a time of limitless options, when travellers can quickly compare myriad hotel options and leave reviews online for millions to see, there is unprecedented pressure on hospitality businesses to meet the needs of guests in an attentive and bespoke manner. SaaS lets a hotel to quickly upgrade the level of service they provide.

The ALICE platform, for example, has a guest services management component, allowing hotel staff to keep track of guest requests and itineraries, shunt queries and complaints to the right team members, and even keep an eye on the delivery status of any packages being sent to guests. The interface can also be used to craft and send text messages to guests, keep a record every interaction and thereby minimise the risk of forgetting any specific demands they may make.

The coordination of housekeeping tasks can also be streamlined through SaaS platforms. It’s instructive here to look at another recent acquisition target: Optii Solutions, which in December 2021 was bought by MCR, one of the biggest hotel operators in the United States.

Optii’s predictive AI technology allows its client hotels to manage housekeeping in a highly intuitive way. Room attendant routes can be assigned in real time, and operations are fully centralised so team members always know exactly where their colleagues are. The status of each room is kept up to date on the system, and staff can instantly see if there are changes to the schedule – for example, if a stayover’s time frame has been changed, or if a guest has opted for late checkout. As a manager at one New Zealand hotel using Optii put it, “We saw an immediate ROI with 30% faster cleaning times and almost 60% faster turnaround times year-over-year.”

SaaS platforms can empower hotels to manage direct bookings more effectively and bypass third-party hotel reservation sites. Take Amenitiz, a Barcelona-based firm which closed a $30 million series A round in April 2022. Its tools include a sophisticated property management system and, importantly, a direct booking engine. According to Amenitiz, 50% of potential guests who browse third party-listings sites will navigate to the hotel’s own website afterwards. The direct booking engine is designed to make it as simple as possible to capture such customers, with straightforward tools for setting booking parameters, adding room photos, and upselling extra services during the reservation process (think breakfasts, or flowers and champagne on arrival).

Amenitiz was founded in 2018 and already serves more than 4,000 properties in 37 countries, with the stated aim of expanding beyond Europe to the US and South America. Lucile Cornet of venture capital firm Eight Roads, which led the series A round, said that “Amenitiz has shown impressive momentum despite the pandemic. This shows how a 10x better product, which is intuitive and easy to use, can quickly achieve product-market fit in a sector that has seen very little innovation in the past few decades.”

Cornet’s statement underscores how the tangible ROI offered by hospitality SaaS firms has made them valuable players within the Enterprise Software sector. Having weathered the storm of Covid-19, they are helping hospitality companies to come back and prosper in what should hopefully be far, far better times ahead.

Hampleton’s Enterprise Software M&A Report analyses transactions, trends and activity across the Business Intelligence & Customer Analytics; Design, Testing & Simulation; Enterprise Applications; Information Management; Infrastructure Management and Vertical Applications segments of the sector. 

Download the full Hampleton Partners Enterprise Software M&A Market Report 1H2022: 
https://www.hampletonpartners.com/reports/enterprise-software-report/

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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