One month ago, it went into effect: the much-discussed and dreaded GDPR. The hectic pace of the last few months has led to a flood of consent emails, the shutdown of entire systems and the loss of millions of advertising contacts. So far, however, there has been no big bang and no major legal issues. The warnings of an upcoming doomsday have not come true. But is this just the calm before the storm? Time will only tell.
For me, however, the GDPR is not a monster at all, as it is so often described. I see it as an opportunity for the hotel industry to make up for lost ground. It has, by law, forced every company to deal with its own digitization and IT strategy.
This is because, among other things, all people (including hotel guests, if we look at the hospitality industry specifically) in the EU have comprehensive rights to their personal data, including the right to request their data, correct it, delete it, and transfer it to another provider. All this must have been guaranteed by the 25th of May.
It is a sometimes overlooked secret that hardly any hotels are actually able to abide by these regulations! This is because hotels work with a proliferation of systems that can no longer be controlled. How should a guest's right to his or her data possibly be managed when the data is scattered across the PMS, POS, WLAN, newsletter system, Outlook, booking engine, channel manager, questionnaire system, website etc.? This is simply impossible! Hotel companies are therefore wading treacherous waters.
The fact that hotels work with so many systems is not only a nightmare for hotels that want to focus on the new GDPR regulations. It also leaves the hotel industry behind when it comes to digitalization. With data scattered in so many sources, hotels can't properly understand or use it in any meaningful way.
But some companies did it right. Enter the winners from last decade: the Online Travel Agents (OTAs). They did something fundamentally different from the beginning. They understood the value of data and pursued a central storage of their customer data, aptly called central data management (CDM). Simply put, all data about the customer comes together in one central location, a kind of parent database that combines everything.
This central database is the standard for hotels that want to move into the digital era. Only those who know their customers down to the smallest detail and use this knowledge for a comprehensive individualization of guest interaction can benefit from data. Even if it is unpleasant, hotels today generally have no idea who their guests are. This is unacceptable. All decision-makers should be aware of this.
So how can hotels move forward? They need a central system in which everything comes together. In the past, this system was the property management system (PMS). But PMSs are inflexible, with expensive interfaces, and poor data cleansing functionalities. Today's dominant PMSs are not designed to handle the increasing amounts of data and data sources, and the upcoming cloud-based generation of systems is too lean and focus only the key functionalities like check-in and check-out.
The hotel industry therefore needs a new central system, a mothership that takes over the former role of the PMS. An #abovePMS system is required to finally be able to work at eye level with the OTA's again.
If you look at the GDPR from this perspective, it is ultimately a measure initiated by politicians to force companies to make themselves fit for the future. All those who do not do so run the risk of violating applicable law and drifting further down the competitive spiral in the coming years.
In this sense, perhaps some hoteliers will thank the politicians in a few years for making them fit for the future through the GDPR. It has forcibly given those that comply with a competitive advantage.
PS - Looking to see how your hotel can manage its data in compliance with GDPR regulations? Register for our webinar on July 13!
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Operating at the intersection of business and technology, Dr. Michael Toedt helps hoteliers with the software dailypoint™ to use the tremendous increase of data in order to become data-centric. Dr. Michael Toedt has over 25 years of experience in operations, technology and marketing. He is the author of several books – among others the German version “Big Data – Herausforderung und Chance für die Hotellerie (ISBN: 978-3-8751-5305-7) and “Data Revolution – How Big Data Will Change the Way of Doing Business” (ISBN:978-3–7375-1688-4) and his articles are published by journals on a regular basis. Dr. Toedt holds a doctoral degree in management science. He is lecturer at several universities and assistant lecturer at the University of Applied Sciences of Munich for the subject “Customer Relationship Management in Tourism”. Apart from this he speaks at various hospitality events and fairs such as ITB, HITEC, Internorga, Austrian Hotel Society ÖHV or Cornell Hotel Society.
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