The Peninsula Hotels is the latest international hotel brand to implement new platform capabilities to manage its core operations. Last week, the company inked a deal with Shiji Group, an Alibaba-backed Chinese conglomerate that operates more 70 subsidiaries and brands offering technology platforms and solutions for the hotel, retail, food service, and entertainment industries, to provide the Shanghai-based hotel group with its hospitality technology platform.
Shiji Group’s Enterprise Platform has been in design and pilot phases since 2015 under the name AC Project. The platform is designed to provide enterprise hotel companies with scalable, state-of-the-art technology and architecture, security compliance and business continuity, and allow connectivity between systems to facilitate strategic business success. Three unnamed European hotel groups have reportedly been test-driving Shiji Group’s Enterprise Platform, but no formal announcements regarding its deployment had been made previously. The Peninsula Hotels is the first brand to formally announce its implementation.
Owned and operated by The Hongkong and Shanghai Hotels, Limited, The Peninsula Hotels is comprised of a collection of ten luxury properties in major cities in Asia, the United States and Europe, with three additional hotels under development in London, Istanbul and Yangon. As of June, the company employed 7,198 full-time staff (down 3.4% from six months earlier due to the pandemic). Prior to the switch to Shiji, the hotel group reportedly used Oracle Hospitality, which continues to rank as the largest technology provider for major hotel brands, for its property management and central reservation (rates and inventory distribution) systems.
For its part, a large number of upscale hospitality brands have recently switched to Oracle Hospitality’s OPERA Cloud services. These include B Hotel Brasília, Banff Park Lodge, Centara Hotels & Resorts, Guy Harvey Resort, Iconic Hotels, Manquehue Hotels, Post Hotel Weggis, Albana Hotel & Suites, Hotel Graziella, Hotel Mesikämmen, Mӧvenpick Resort and SantaPark Arctic World.
Over the past two years, Shiji Group’s platform capabilities have grown in functionality. The core hotel management solution, which is deployed on the Amazon Web Services (AWS) global cloud platform, has added features and functionality focused on Restaurant Management, Table Management, Data Intelligence, Recreation and Spa solutions. These enhancements have come, in part, through the acquisition of other technology solution providers.
Notably, in 2018, Shiji Group acquired StayNTouch, a popular cloud-based hotel property management system and contactless solutions provider. There it operated for two years as a wholly-owned subsidiary. Then, in March of this year, President Donald Trump intervened, issuing an executive order to reverse Shiji Group’s ownership of the company on the basis of national security. The executive order required that Shiji Group divest of its interests in StayNTouch and “any operations developed, held, or controlled, whether directly or indirectly, by StayNTouch at the time of, or since, its acquisition” within a period of four months.
The White House’s stated concern was that Shiji Group “might take action that threatens to impair the national security of the United States.” The intervention was an unprecedented government action in the world of hotel technology acquisitions. For its part, Shiji Group explained, to no avail, that the company, which serves over 60,000 hotels, does not access guest data and vehemently denied that its ownership of StayNTouch posed a threat in any way to United States security.
Last month, MCR, which ranks as the fifth-largest hotel owner-operator in the United States, with a $3.0 billion portfolio of 92 premium-branded hotels, acquired StayNTouch.
The Peninsula Beijing will reportedly be the first property to switch to Shiji Group’s Enterprise Platform, with others scheduled to follow suit over the next several months. “As a luxury hotel brand, it is critical for us to provide a high level of personalization for our customers, while keeping their data secure. Shiji’s Enterprise Platform is providing that for us, and we are looking forward to deploying it into our hotels to offer an elevated guest experience for our guests,” said Shane Izaks, Group Director, Information Technology of The Hongkong and Shanghai Hotels, Limited.
The Peninsula Hotels is not the first global brand this year to implement new platform capabilities to manage its core operations. In January, for example, Accor, which ranks as the single largest hospitality company in Europe, announced that it would partner with global travel software and technology company Sabre Corporation to create “the first unified central reservation and property management platform for the global hospitality industry.”
In collaboration with Accor, Sabre would develop a new full service property management capability and enrich its existing central reservation and limited service property management systems. The capabilities would be designed to combine within a new unified cloud-native platform built for and available to hoteliers across all property classes and geographic regions. More recently, Accor has expanded its strategic partnership with travel and hospitality technology solution provider Amadeus.
The switch to new platform capabilities to manage its core operations comes at a precarious time for the luxury hotel chain due to the global pandemic. RevPAR between April and June for its flagship Peninsula Hong Kong fell 89% from a year earlier while total revenue for the first half of the year dropped 52%. The company recorded a net loss of HK$1.2 billion as of June and is expected to post a loss for the full year, which would be its first net loss since 1998.