The merger of Hotelogix, a property management system, with AxisRooms, a provider of revenue management and distribution services, and RepUp, an online reputation management tool, is probably one of many mergers likely in hotel tech in response to the crisis.
The companies didn’t disclose the terms of the merger announced Wednesday morning. Hotelogix has raised more than $8 million to date. Vertex Ventures (the venture capital arm of Singapore’s sovereign wealth fund Temasek), Accel Partners, Saama Capital, and other Hotelogix investors backed the merger. The new holding company, Hotelogix, is based in Singapore.
The three brands together serve more than 10,000 hospitality businesses, such as hotels, hostels, and vacation rentals. The combined organization will become one of the largest software-as-a-service providers for the hospitality sector in Asia Pacific, with more than 200 workers, mostly in Bangalore and Noida, India.
Skeptics might argue that the merger might have been the only way the three companies could all survive the revenue downturn due to the pandemic’s hit to travel.
The merger highlights a trend in hospitality technology of greater integration between software systems that vendors used to build and sell separately. Hotelogix will now offer a menu of tools that will cover operations, distribution, online reviews, and social reputation management, email marketing automation, and customer service communications with guests.
But hotels who prefer to use only one service, such as AxisRooms’s revenue management tools to help set rates, still can. That’s not a minor point. Many larger hospitality companies currently prefer a patchwork of systems to one-stop shops.
“The philosophy of our three brands is that half the benefit of going to the cloud is flexibility,” said Hotelogix CEO Aditya Sanghi. “You’ll lose that if you don’t have a spirit of compromise and let customers mix-and-match which services they want a la carte.”
The three brands will continue to have third-party integrations with outside providers. What’s changing is that hotels that opt to use all the Hotelogix group services will gain extra benefits.
“What we plan to do is add a data layer and apply machine learning to do a lot more business intelligence,” Sanghi said. “We’ll go from being an integrated system to an integral system.
One example: The group’s revenue management software from AxisRooms will be able to take data from Repup’s reputation management about how well travelers praise a property in online reviews as a new factor in assessing what rates to charge.
Another example: If a hotel is checking in a guest using Hotelogix’s property management system, it might be able to recognize information about the guest based on our reputation management tool and make the check-in process more personalized.
Suppose you divide the hotel market into two groups, with the large players like hotel chains on the one side and small players like independently owned properties on the other. Many small players may increasingly want to simplify their technology systems by buying a one-size-fits-all solution. Or at least that’s a bet some investors are making.
Hotelogix’s primary offering has been a property management system, which stores critical records on guest profiles, transactions, and room inventory.
“Integrations to the PMS is one area that has seen anything from despair to anger among hoteliers and integration partners,” said Wouter Geerts, senior research analyst at Skift Research. “Many tech companies need information stored in the PMS, requiring to connect with the PMS for access. This has long been an arduous process and still has many shortcomings today.”
Cloud-based companies aim to simplify the integration. Hotelogix’s cloud-based rivals for property management systems include Apaleo, Cloudbeds, Clock Software, Frontdesk Anywhere, GuestLine, Mews, and Yanolja via its recent acquisition of eZee Technosys. They compete with companies such as Oracle Hospitality, Infor, Protel, and SHR (Sceptre Hospitality Resources) that grew up with on-premise systems but have been shifting to cloud-based offerings.
The integration trend is partly driven by the rise of cloud-based services but vertical integration is also a common business model in Asia Pacific. Yanolja, for example, is a South Korea-based booking agency for accommodations that in September 2019 acquired eZee Technosys, a property management system and a channel manager.
Hotelogix believes the merger will let it gain more share of wallet from its current customers and gain more market share from rivals.
“We sat together as leaders of the three companies and acknowledged that none of us had grown big on our own but if we merged we could become a leader,” Sanghi said.
For more analysis, subscribers to Skift Research can read the report The Hotel Property Management Systems Landscape 2020.
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Photo credit: The Oberoi Rajvilas in Jaipur. India based companies focusing on hotel tech, Hotelogix, AxisRooms, and RepUp, have merged. Oberoi Hotels & Resorts