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Bad Online Hotel Reviews Could Lead to Dynamic Pricing Models

Nothing sparks a bad PR storm for a hotel brand than fining hotel guests for posting negative reviews online. On the surface, it may seem shocking that a hospitality brand would employ this tactic, but it actually happens.

Last month, a hotel in the UK, did precisely this: it fined a couple $180.00 for posting a bad review on TripAdvisor. The result was that more than 300 negative articles appeared online, which made the hotel owners ultimately back down in its effort to charge extra for the negative review.

Of course, hoteliers are dealing with a special challenge in today’s transparent online world. This new frontier causes brands to relinquish control to its guests, and creates a need for doing more to please travelers.

But something else could happen as a result of this movement: the rise of dynamic pricing models. Rather than fining guests, hotel brands can quietly raise their prices – especially for more affluent guests.

Thanks to advances in revenue management systems, as well as online cookies and other data sets, hoteliers can tell which guests can actually pay more and charge accordingly.

This approach will most likely be done quietly with guests not even knowing that they are being charged more than others. Though there is a risk that a former hotel employee could spread the word, and let the world know about the pricing model.

As a result, there could be a movement where hotels hold guests hostage under the guise of, “give me more positive reviews and everyone will get discounted prices.”

Of course, this is all speculation at this point, and we have not seen any proof that this pricing model is currently happening.

But, we would wager a healthy bet that someone in the finance department of a major hotel brand is working on it as we speak.



Should Hospitality Providers Replace Front Desk Staff with Mobile Solutions?

There’s been plenty of news about the hospitality sector embracing new innovations in the area of mobile solutions.  From the development of new mobile applications for guests to manage their experience to providing iPads in every guest room, this new horizon will play a major role in allowing hoteliers to offer enhanced services.

One area of advanced mobile solutions recently caught my attention: niche hotels actually replacing their front desk staff with mobile and communications solutions that allow guests to pay in advance, as well as receive correspondence with the security codes to access their rooms.

While this seems like an innovative and cost-saving idea, the reality is that mobile solutions should be used to augment current service offerings.  I don’t believe that larger hoteliers should or ever will fully abandon having staff at the front desk because a guest’s need needs must continually be met and human interaction must always to be an option for a hotelier to assist with unforeseen challenges.  In some cases, a hand-held device could never replace the convenience and personal touch of highly trained front desk staff.

In the past, we have seen similar situations where organizations have tried to supplant people with technology, only to learn the lesson that they instead should have supplemented them.  Some examples that come to mind are automated phone attendants and websites, where some organizations believed they could cut off communication with their customers only to find that they wanted the option of both means to improve their interaction and experience.  The use of mobile technology by hospitality providers will be no different: there will be times when guests will want to do things on their own via the technology and other times when they want to interact with someone.  What hoteliers need to provide is guest-friendly technology that guests want, as well as staff available to assist.

The use of mobile technology to manage a guest’s experience holds great promise, but it brings with it some potential challenges.  For example, does this new frictionless check-in method help these niche hoteliers retain guests?  Without having any measurable goals – or even testing this concept out in one or two properties in advance of a full-scale roll out – hospitality providers can actually run the risk of driving these guests away.  They will need to tread cautiously to ensure they strike the right balance between technology and human interaction that their guests ultimately desire.

The concept of service is the driving differentiator for any hospitality provider.  Many of the largest hoteliers can trace back their overall business success to providing the best services on the market.  And, in today’s competitive landscape, hospitality providers cannot risk losing guests due to service issues.  Information technology should be used to improve the guest experience and the reality is that it will always supplement, and not supplant, the people that ultimately provide service to guests.

NetLink Resource Group Sponsors Adoptions Together Golf Tournament

At NetLink Resource Group, we are involved in a number of organizations for both professional and personal reasons. From one employee’s involvement in the Washington Master Chorale to our support of organizations like the Northern Virginia Tech Council, the Chesapeake Regional Tech Council and the Maryland Chamber of Commerce, we are a very diverse group of individuals who believe in the value of community.

As such, I am excited to announce that we are part-sponsors for the “Swing Into Action for Kids Golf Tournament” fundraiser hosted by Adoptions Together. Adoptions Together is a non-profit organization that supports children and families formed through adoption, guardianship, foster care and kinship care. This is an amazing group of people that helps both adults and children realize the dream of having a stable and loving family environment.

Sponsoring this event carries special meaning for me because my wife and I adopted our two children through the domestic infant program at Adoptions Together. In addition, my oldest son is participating in the NetLink foursome at the tournament.

Whether you run a foundation or are an individual donor, I highly recommend you learn more about Adoptions Together and support this great organization that has had a tremendous impact on my life. Click here to learn more.

Posted by: Steve Short, President, NetLink Resource Group

So, What Exactly Is Cloud Computing?

While the term ‘cloud computing’ has been one of the most over-used IT catch-phrases of the past several years, there is a lot of merit in exploring these types of solutions for almost any business. Unfortunately, I hear a great deal of confusion and inconsistency in using the term “cloud” in both conversation and print. This confusion especially translates to business executives who know that the world is moving toward cloud computing but don’t always understand the basics of the terminology to be able to truly assess value and risk so they can lead their organizations in the right direction.

Well, I may be able to offer some assistance. I recently read an article in the Harvard Business Review entitled “What Every CEO Should Know About the Cloud”, written by Andrew McAfee, Principal Research Scientist at the Center for Digital Business in the MIT Sloan School of Management.

While this is an excellent article well worth the read, what I really liked about it was a brief sidebar called “What is the Cloud?” which provides the best, most concise description of cloud computing that I have seen to-date. This quick read should help anyone – especially business executives – understand the basic terminology of cloud computing. Here’s that sidebar:

What is the Cloud?

The cloud computing industry is growing and evolving rapidly—and also generating lots of jargon. As a result it can be difficult to understand exactly what the cloud is and how its offerings differ.

To oversimplify just a bit, those offerings can be divided into three categories: raw computing capacity, computers that are ready for software, and software itself.

The first of these, called Infrastructure-as-a-Service (IaaS), is the most basic; it’s a server or servers out there in the cloud, or a bunch of storage capacity or bandwidth. IaaS customers, which are often tech companies, typically have a lot of IT expertise; they want access to computing power but don’t want to be responsible for installing or maintaining it.

The second tier is called Platform-as-a-Service (PaaS). This is a cloud-based platform that companies can use to develop their custom applications or write software that integrates with existing applications. PaaS environments come equipped with software development technologies like Java,.NET, Python, and Ruby on Rails and allow customers to start writing code quickly. Once the code is ready, the vendor hosts it and makes it widely available. PaaS is currently the smallest segment of the cloud computing market and is often used by established companies looking to outsource a piece of their infrastructure.

Software-as-a-Service (SaaS), the third category, is the largest and most mature part of the cloud. It’s an application or suite of applications that resides in the cloud instead of on a user’s hard drive or in a data center. One of the earliest SaaS successes was Salesforce.com’s customer relationship management software, which provided an alternative to on-premise CRM systems when it was launched, in 2000. More recently, productivity and collaboration software—spreadsheets, word processing programs, and so on—has moved into the cloud with Google Apps, Microsoft Office 365, and other similar offerings.

Cloud offerings share a few similarities across these three categories. First, customers rent them instead of buying them, shifting IT from a capital expense to an operating expense. Second, vendors are responsible for everything “beneath the hood”—all the maintenance, administration, capacity planning, troubleshooting, and backups. And finally, it’s usually fast and easy to get more from the cloud—more storage from an IaaS vendor, the ability to handle more PaaS projects, or more seats for users of a SaaS application.

Some large organizations are planning to build “private clouds” that they will own and maintain. These are essentially data centers that use many of the cloud’s technologies. Private clouds hold the promise of offering all the advantages of the public cloud while addressing security and regulatory concerns. However, I’m skeptical. The scale economies of public cloud companies lead to great cost decreases over time, and because their environments are intensely competitive, those decreases will surely be reflected in their prices. I doubt that most private clouds will be able to keep up.

Be sure to check out the full Harvard Business Review article here.

Posted by: Steve Short, President, NetLink Resource Group