Issue Statement

Inexplicably, as we approach the end of the 20th century, there are no widely agreed upon standards that exist for the interconnection of computerized systems and subsystems within the hospitality industry. As a consequence, vendors and operators are required to develop and implement specific and costly interfaces as changes are introduced to existing technology infrastructures. A single minor change in one system can unleash a flood of problems within a number of related systems which need to communicate with one another. This problem exists within all departments of lodging properties and foodservice units, as well as between and among individual operations and their headquarters offices.

Background

The average cost to a vendor to develop a new interface is between $10,000 - $15,000. Often, end-users are charged between $1,000 to $1,500, if not more, per interface. Multiple systems and subsystems need to communicate, such as property management systems, phone switches, inventory control and point-of-sale terminals, among others. As more automation is introduced, and existing systems are upgraded, the interfacing problem grows exponentially. The existing state of affairs often inhibits new technology evolution, and keeps competitive barriers artificially high, as "what's new" often becomes "it's not worth it."

Federal public policy defines the primary purpose of not-for-profit "business leagues," such as the AH&MA and the National Restaurant Association, as the promotion of the common business interest of its members. The establishment of industry standards is an activity which is widely accepted, and even lauded, by the courts, the Federal Trade Commission, and the IRS as promoting common business interests. Clearly the creation of interfacing standards promotes the common interests of the entire industry.

In April of 1993, at the behest of Lodging Magazine, an open forum of vendors on this issue was held at the 82nd Annual Convention of AH&MA in Kansas City. While much enthusiasm was generated at this meeting, and several activities consequently took place, the effort was not brought to a conclusion. Since that time the topic has appeared repeatedly at meetings of the AH&MA Technology Committee, in numerous articles in the trade press, and recently at the Educational Foundation of the National Restaurant association. Further, in a development that can be linked to the 1993 meeting, a separate research consortium was founded by several technology vendors called the Integrating Technologies Consortium ("ITC"). This body is still active, and to its credit has developed a hardware-based solution using a communications "router."

Solution

It is both essential and compelling that AH&MA and the National Restaurant Association lead an open consensus-based process to develop voluntary performance standards for the interoperability of computerized hospitality systems such as property management systems, security systems and point-of-sale terminals. Adoption of such standards by both vendors and industry will greatly simplify the interfacing

problem, which continues to grow as the industry embraces increasing level of automation. These standards will foster greater competition, drive down costs to lodging operators, and enable faster technology adoption and evolution within the industry.

Action Required

While this issue is not new, there are many reasons why action is needed immediately. Since profitability has returned to lodging, the industry has entered a new cycle of technology investment. Even more so than in lodging, microcomputer-based systems have become pervasive in foodservice. Concurrently, the broad acceptance of client-server technology, microcomputer-based systems, and graphical user interfaces (GUIs) such as Microsoft Windows, has brought about a revolution in open computer systems (versus closed proprietary systems). These trends have placed tremendous competitive pressures on technology vendors, with the advantage of ever diminishing price/performance ratios for any business deploying these open systems. The widely-acknowledged hospitality industry position of being "behind the technology curve" isn't

going to last as long these systems are being rapidly introduced to (and purchased by) the industry.

This confluence of events presents an historic opportunity for the industry to work collectively through its trade associations to be on the leading edge of this curve. This standardization effort represents a primary strategy in achieving Direction 3 of the AH&MA five year strategic plan. This is now! Thank you for your support.