Oracle Hospitality is best known for providing full-service hotels with operational software. But this fall it has begun to go after the limited-service segment, too. Its surprise for next year will involve hotel distribution.
Travel Tech Briefing
Editor’s Note: Exclusive reporting on technology’s impact on the travel industry, delivered every Thursday. The briefing will guide executives as they decide if their companies should “build, buy, or partner” to stay ahead.
Welcome to the third Travel Tech Briefing. This week, I’ve enjoyed meeting several readers in Dallas at HITEC, the Hospitality Industry Technology Exposition, and Conference and technology leaders. Here are some takeaways.
- Perhaps the biggest company at the event was Oracle Hospitality — whose property management software is used by more hotels than any other provider worldwide.
- Between 2015 and 2019, Oracle Hospitality was complacent. It all but invited its competitive set to try and take its customers. Some rivals got good traction with customer wins.
- But Oracle Hospitality more recently switched from defense to offense under the leadership of Alex Alt. Shortly before the pandemic hit, Alt joined Oracle Hospitality as senior vice president and general manager.
- Oracle’s biggest public win in years came in May when Wyndham agreed to debut the cloud-based version of Oracle Hospitality’s flagship property management system at thousands of its full-service hotels worldwide.
In an unexpected move, Oracle Hospitality has begun to compete up and down the chain scale rather than focus on full-service hotel groups.
- Until now, full-service hotels mainly used Oracle’s products. Oracle could’ve doubled down on serving that top-tier segment.
- But it instead has just launched a “foundation” module that aims at the limited-service market with a cloud-based offering.
- “If you’re going to remember one word from today, make it ‘foundation,'” Alt said. “It’s cloud-native with the brand new opera Cloud UI [user-interface]. It’s got a feature set that we know applies to the limited-service segment, which is largely greenfield for us.”
- At more limited-service properties, competition is rife. Players include Yanolja, which Softbank backed in July and which is heading to an IPO next year. Yanolja aspires to overtake Oracle Hospitality in the number of properties served within a few years.
- Other players include Treebo, which Accor backed a few months ago; Cloudbeds, which raised $82 million right before the pandemic and saw revenue growth in 2020 over 2019 levels and in the first half of 2021 over the first half of 2020 levels; MCR’s StayNTouch property management system; and Mews — among many others.
- “For Foundation, we can get a user proficient on it with a couple of hours training, and the price point is attractive,” Alt said.
The next surprise from Oracle Hospitality may be in helping hotels with distribution, an area it has essentially avoided until now.
- Oracle Hospitality representatives didn’t want to talk at HITEC about the distribution tools rumored to be in the market. But Alt acknowledged the project in an interview.
- To be sure, Oracle Hospitality has had a legacy MyFidelio product that offers distribution. Several thousand properties use it out of Oracle’s 40,000 property customer base. If you look at MyFidelio’s marketing site, you can see the lackluster investment.
- “We have multiple hotels live on our next-gen distribution platform,” Alt said. “I’d call them early adopters. Now we’re largely facilitating connectivity to Booking.com, Expedia, etc.. But the project would obviously be a bridge to something much more significant.”
- “By the end of the first quarter next year, we will have migrated thousands of properties from MyFidelio to our new distribution platform,” Alt said. “Now, these are relatively lightweight properties. So it’s not the industrialized version of the solution. But it’s nice to be able to prove it out with these adopters before the big rollout.”
Oracle Hospitality still has work to do to sustain its comeback overall.
- According to hotel customers we spoke with, it has improvements to make, particularly on the operations support side.
- Alt said his team added “60 new support resources in the past three months.”
- Some hoteliers have gotten confused. On the one hand, Oracle Hospitality simultaneously launched a new version (5) of its classic property management system, which can be used by hotels with installations on-premise or hosted. At the same time, Oracle has been pushing a cloud-based product that is a brand new product with somewhat broader capabilities. Trying to serve customers who want what they’ve always had and ones that want what’s next-gen has been tricky.
Oracle faces competition up and down the chain scale.
- At the higher end, rivals include Infor’s InforHMS suite, which serves about 800,000 rooms; Sabre’s SynXis Property Hub; and Amadeus, which may be about to have a significant win for its new property management system.
- Tech vendors have become more positive toward Oracle Hospitality thanks to the company’s changed commercial and technical approach to third-party integrations. About 400 vendors have integrated, Alt said.
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Photo credit: Wyndham Hotels & Resorts' Grand Residences Riviera Cancun. The hotel company uses software from Oracle Hospitality for its full service brands such as the one shown here. Source: Wyndham.