Magazine Article | September 15, 2016

How To Conquer The Hospitality Market

By Matt Pillar, chief editor

StayNTouch is new on the scene, but its timely blend of mobile and cloud is taking the hospitality PMS (property management system) market by storm.

Jos Schaap, founder of StayNTouch, says most of the RFPs his company sees today require web or cloud-based options as opposed to costly up-front license fees.

Photo By Carl Caruso

Jos Schaap didn’t have to leave MICROS. He’d been working his way up the management chain there for more than 17 years. By 2012 he was SVP in charge of global product development and strategy for the Lodging and E-Commerce divisions of the hospitality software industry’s 800-pound gorilla. It was on Schaap’s watch that MICROS’ hospitality products attained that status, becoming the undisputed global market leader with more than 25,000 properties in its portfolio and revenue of more than $1.1 billion.

Schaap could have stayed on, maintained his role on the mother ship, continued to enjoy the comfort zone that is executive corporate leadership. There was just one problem, and for Schaap, it was a big one. He was in charge of product development and strategy, but for years his vision for the delivery of hospitality management software — and the way hospitality associates execute the tasks that software guides — had been diverging significantly from the MICROS road map.

“Back in 2008 and 2009, cloud and mobile were just warming up,” he explains. “The iPad took off, and people were discovering new ways to execute work-related tasks on mobile devices.” Recognizing these trends early on, Schaap pushed to build them into the MICROS offering. He had a vision for the enabling power of mobile at many levels of the hotel organization — from the head office to housekeeping. As cloud and mobile technologies grew stronger, so did his vision for them as the future for PMS (property management system) technology.

But it wasn’t just the advance of technology that fueled Schaap’s drive. Prior to his tenure at MICROS, he was a hotel guy himself, having worked in various capacities of the hospitality industry before serving firsthand as a hotel manager. Schaap understands the day-to-day inner workings of hotel operations. He could see the use cases for mobile, down to the minutiae.

As they often do, Schaap’s turning point came at an unlikely time and from an unlikely source. During the summer of 2012, he took a few weeks of paid time off from MICROS to bike the Pacific coast with his dad. At one stop on the trip, he was served breakfast at a small restaurant by an associate wielding a simple, cloud-based iPad POS system. It was a simple, yet cathartic, moment for Schaap. “When you’re pedaling a bicycle for days on end, you have a lot of time to think,” says Schaap. “I kept thinking about that tableside experience at the restaurant, how pleasant it was, and how it was enabled by mobile and by the cloud.” That’s what he’d been wanting to build for the hospitality space for the past five years. By the time his bike adventure drew to an end, he had convinced himself to do just that, but he knew he’d have to do it on his own. Schaap quit MICROS. In September 2012, he and former MICROS associate Gopkumar “Gop” Sarangdharan co-founded StayNTouch.

Taking On The PMS Giant
Schaap found some investors, closed a round of funding, and assembled a team of developers to help bring his vision to fruition, but he faced an inherent go-to-market challenge. Finding an “in” for a PMS platform in a market that’s veritably owned by MICROS is akin to launching a new, little-known alternative to the iPhone, with little more than a handful of designers and developers, a small office, and a couple million dollars in funding. Team StayNTouch knew that a stand-alone PMS — no matter how good — would be a tough sell and result in a long and arduous growth curve. To spur the near-term sales it would need to kickstart its growth, the company made a strategic decision. In addition to its stand-alone, 100 percent cloud-based and mobile PMS product offering, the company would take the “coopetition” route. On the same platform that supports its own Rover mobile PMS, StayNTouch built a mobile-enabling overlay for the MICROS Opera PMS product. Its Rover Tablet Mobility Solution was almost immediately adopted by such hospitality industry heavyweights as Fontainbleu Miami Beach, Great Wolf Lodge New England, MGM Resorts International’s Aria Las Vegas, and Yotel Times Square. The overlay arms front desk agents with touch-optimized mobile tablets that serve as an extension of the hotels’ PMS, allowing staff to offer guests the full service functionality of the PMS — including check in and check out — anywhere in the hotel and at any time via live, two-way integration with the hotel PMS.

“Because so many of our developers and leaders here at StayNTouch have a long-standing relationship with hotel property managers, and because we made the decision to extend existing PMS systems to mobile devices, we’ve been able to enjoy an early growth trajectory that resembles a hockey stick,” says Schaap.

Of course, as startups go, timing might not be everything, but it’s incredibly important. Schaap admits that when he left MICROS in 2012, acceptance of cloud computing was a barrier to adoption. “Just a few years ago, skepticism around the stability of the cloud led to many hotel operators maintaining their data on premise,” he conceded. “But today, the cloud is typically more stable than on-premise solutions, primarily because it’s better maintained.” Schaap says most of the RFPs his company sees today require web or cloud-based options, though some struggle to justify a monthly fee that, over the course of time, becomes more expensive than a software license. “We overcome that objection with the point about maintenance. On-premise solutions typically cost 30 to 40 percent more to maintain the system, while our subscription fee covers that cost and provides the value of the software immediately.”

“Because we made the decision to extend existing PMS systems to mobile devices, we’ve been able to enjoy an early growth trajectory that resembles a hockey stick.”

Jos Schaap, Founder, StayNTouch

By the beginning of this year, the startup’s early success had garnered the attention of some bigger sources of funding. In February, the company scored $9.5 million in an investment round led by Concur’s Perfect Trip Fund and Shiji, a Beijing-headquartered provider of IT and service tools. At press time, StayNTouch was already boasting 118 signed deals representing more than 63,000 rooms, and Schaap says the company is averaging 10 new deals per month. “This is affirmation that mobile relieves hoteliers’ customer service problems,” he says. “Meeting guests’ customer service expectations requires hotel staff to get out from behind the front desk.”

Extending Mobile To Housekeeping Staff, Guests
By January 2015, StayNTouch was offering Rover as a stand-alone mobile PMS, as well as Zest, a consumer-held mobile web or app-based check-in/check-out tool that also promotes upgrades and offers mobile phone-based room key services.

“Turnover is high in hotels, which makes staff training a signifi cant and often overlooked cost center. By delivering housekeeping tasks to staff via an intuitive, graphic mobile application, we’ve reduced training time by up to 80 percent.”

Jos Schaap, Founder, StayNTouch

 

Schaap says these will be the company’s focus through 2017. “It’s our intent to establish Rover as a viable alternative to MICROS [which was acquired by Oracle in 2014],” says Schaap. To do that, the company is touting features that extend the value of PMS data well beyond the front desk. Rover Housekeeping, for instance, allows hotels to digitize and mobilize the commonly manual tasks associated with the management of housekeeping. “In many traditional hotel environments, housekeeping management is completely separate from the PMS system,” he says. Combining PMS and housekeeping applications into a single platform eliminates software management and maintenance burdens on the back end while driving staff efficiencies throughout the hotel.

“Turnover is high in hotels, which makes staff training a significant and often overlooked cost center,” says Schaap. “By delivering housekeeping tasks to staff via an intuitive, graphic mobile application, we’ve reduced training time by up to 80 percent. Hotels can either furnish mobile devices or encourage staff to use their own.” In either case, he says, further efficiencies are realized by allowing associates — typically tech-savvy millennials — to engage their tasks on devices with which they’re intimately familiar.

The Zest application from StayNTouch leverages the growing trend toward customer self-service by putting check in, check out, upgrade, and room key control in the guests’ hands. “The challenge we faced with this product is knowing that consumers want more control, but they don’t necessarily want more apps,” says Schaap. Recognizing that consumers are wary of application overload on their mobile devices, StayNTouch has made the application available via mobile web as well. “This feature dovetails well with the concept of a mobile front desk staff, which can support the process with the customer anywhere on the premises, which is more convenient and efficient than limiting personal interaction to the front desk,” he says.

To further the self-service concept, StayNTouch has integrated with Checkmate, a vendor of SMS-based B2C solutions. “Guest can use this tool to text hotel staff for services or needs during their stay, from the need for fresh towels to ordering room service,” explains Schaap. “It’s a more efficient approach to guest services for both parties.”

While StayNTouch is focused on direct sales of its cloud-based PMS platform, Schaap says strategic partnerships such as the one with Checkmate and its payment processing partner, Merchant Link (see sidebar on page 28), are central to its growth plan. “We’re interested in exploring strategic partnerships that result in a collaborative, referral-based sales approach,” he says.

Taking inspiration from progressive retailers such as Nordstrom and Apple — as well as independent operators such as the Pacific Coast restaurant that helped inspire his push for mobile in hospitality — Schaap and company are challenging their customers to rethink property management and guest services. “Hoteliers are actively pursuing modern ways to conduct business, and the redefinition of the lobby area sits at the nucleus of that effort,” concludes Schaap. For StayNTouch, that means leveraging the cloud and mobile software to create an open, mobile-enabled guest experience that emanates from the front of the house to the far reaches of the hotel property.