How technology is transforming hotel point-of-sale systems

POS technology has improved the mobile and self-service habits of guests, therefore increasing guest satisfaction. Photo credit: Oracle Hospitality

Technology is allowing for an extreme and pronounced change in point-of-sale systems. What used to be about operational efficiency is now all about the guest experience. Technology has transformed point of sale into point of experience, said Mike Hinojosa, senior director of product management at Agilysys.

“Hotels can spend millions of dollars on a remodel but if they don’t have the right point of experience, it can still result in a one- or two-star rating,” he said. “Of all the POS technology, mobile is the most accessible, real and not futuristic. Mobile is now.”

Mobile POS provides several benefits for hotels and guests alike. With mobile POS, the speed of service is dramatically increased because the staff can bring mobile ordering directly to guests, anywhere on property. “Your staff are now your brand ambassadors—they are the face of the property and can give the best personal experience for those guests they are quickly serving,” Hinojosa said.

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Mobile in the hands of guests results in benefits as well—starting with the convenience that comes with self-ordering via their smartphone by the pool or wherever they happen to be and increased guest satisfaction with guest payment.

“Mobile POS gives luxury properties, especially, the ability to serve their guests more seamlessly and fluidly,” said Amanda Wisell, marketing manager for Springer-Miller Systems.

Mobile POS also lays the groundwork for future integration with artificial intelligence or customer-relationship-management systems. “Because the staff members have appropriate intelligence readily in their hands, personalization can happen,” Hinojosa said. “You can show [guests] that you recognize them and are honored they are here with you again.”

With mobile POS, service is faster and the total check size is larger. Photo credit: Agilysys

Call-for-service technology, deployed tableside and in under-serviced areas such as lobbies, coupled with mobile ordering apps, offer hotels an opportunity to increase sales by making it easy to summon service in “non-F&B” areas, said Greg Spicer, chief executive with Xn protel Systems Group.

“Whenever a guest is seated in the lobby and wants a take-away coffee, they can order one and not only when a staff member notices the guest in a restaurant,” he said. “This technology and associated mobile apps have the potential to increase top-line [food-and-beverage] sales in hotels by 5 [percent] to 10 percent without significant costs.”

While there is interest in the potential of AI and chatbots for roomservice and self-service ordering, these are not yet ready for a widespread rollout at this time, Wisell said.  

But data scientists in conjunction with POS client software may be the next big thing, said Nick Lowe, senior solution manager, food and beverage, Oracle Hospitality. Data scientists can be used to help optimize forecasting and inventory, potentially saving millions over time, Lowe continued. “Data scientists can be used in the back of the house on the kitchen side, too—optimizing the production line,” he said. “Looking at the analytics behind the performance will reduce the wait times in the front of the house.”

Biometric technology is appearing in the point-of-sale arena as well, but it has been more accepted on the employee side, Lowe said. “It’s been asked about but we’re not quite there yet,” he continued. “People are concerned, especially in the U.S. Just because we can deploy this technology with faces doesn’t mean we’re ready to and need to use it.”

Some guests may want these high-end, tailored experiences that biometrics and future technology can bring, but it is a fine line to walk—hotels don’t want to cross the line into creepy. “You don’t want to be so overt about how much you know about them,” Lowe concluded.

POS systems help boost F&B spending growth

The hotel F&B space continues to show growth, with overall consumer spending increasing 4.9 percent in 2017 and showing a robust 5.5-percent annual growth since 2011, according to Technomic. Total spending by consumers within hotels, which includes all restaurants, bars and lounges, banquets and catering, roomservice, in-room minibars and other areas, totaled $48.7 billion in 2017. For 2018, Technomic is forecasting continued growth of 5 percent in consumer spending.

While biometrics could make service better, there are privacy concerns,
especially among guests. Photo credit: Oracle Hospitality

Experts say POS mobility has helped with this F&B growth because mobile POS has given hotels the ability to complete sales quicker and in new areas of their properties. “There is untapped demand in many venues—if you can help me faster, I would have bought more and would be happier for it,” Hinojosa said. “POS mobility has provided the accessibility so hotels can get that lift.”

Mobile POS systems have created new opportunities and experiences simply by being mobile. Hinojosa described one Pennsylvania resort that hosted many sporting events. Some of the attendees of these events were not guests and wouldn’t necessarily come to the hotel to make purchases. By rolling out a cart and mobile POS to the fields and other property spaces, the hotel made the products convenient and created new revenue sources that previously were untapped.

According to STR, U.S. hotel food-and-beverage revenue per occupied room increased 1.6 percent during 2017. F&B RevPOR reached $105.56, up from $103.93 in 2016, according to STR. Among F&B department revenue centers, hotel venue operations experienced the most significant percent change from 2016 with a 4.7-percent increase in revenue per available seat.

Wisell said this growth spending is partially due to hotels not only investing in but also innovating their F&B concepts. “New lounges and restaurants and a focus on local cuisine have really helped with F&B growth last year,” she said.

Outside of operational changes, POS technology has been a great partner in these efforts by making POS systems easier than ever to use, and mobility plays a role in impacting the increase in consumer spending, Wisell said.  “With mobile POS, sales can be driven exterior to the hotel restaurants such as golf courses, beachfronts and lobby areas,” she continued.

But beyond the changes in the traditional restaurant landscape, the biggest impact on the F&B service model is the expansion of delivery services, such as Uber Eats and GrubHub, Lowe said. “With the evolution of off-premises ordering and delivering, hotels need to talk about bringing those partners into the ecosystem,” he said. “That could have a significant effect on the F&B sales. Hotels will need solutions that will help them manage the omni-channel problem.”

POS is becoming more secure

To help protect consumers’ credit-card information from data thieves, the Payment Card Industry Security Standards Council created data-security standards that businesses must follow. Because of the global introduction of PCI standards over the past few years, POS vendors have moved away from storing card data on their application and network. Many vendors no longer pass through or process any card data on their POS systems. Rather, they link and integrate to certified payment gateways. Payment devices are encrypted and secured, and client card data is always encrypted and totally separated from the POS terminal.

Recent POS technologies still remain in “early adopter” phases
but are gaining ground. Photo credit: Xn protel Systems Group 

“The card data is processed only by the payment gateway to/from the acquiring bank and only the final transaction approval code is passed to the POS, without the card data,” Spicer said.

Lowe said that working with payment providers allows the true experts to manage the process. “The best people securing payment are the ones doing it day in and day out,” he said. “It also gives our customers the ability to adopt payment practices faster—the payment providers roll those out on your devices while we manage the device.”

Tokenization has been widely adopted in recent years. Using technology to save a token instead of the actual card data helps security by reducing retention of sensitive data, Hinojosa said. “The token is only meaningful to the property and [its] specific payment gateway. In the hands of a criminal, it cannot be used with any other property or payment gateway,” he said. “You can still honor existing operational workflows like refunding with tokenization.”

Also helping improve POS security is the wider adoption of point-to-point encryption, Hinojosa said. “Theft occurs when malware is injected in the payment ecosystem,” he said. “Point-to-point encryption is eliminating many opportunities of exposure by immediately encrypting credit card data [upon swiping or dipping].”

The Europay, MasterCard and Visa chip and pin process gets a lot of press right now but that’s not as important as point-to-point encryption. Hinojosa said EMV prevents counterfeit card fraud, which is great, but it does nothing to secure the account number. In other words, EMV just protects one card as opposed to every card that is transacted through a terminal protected by point-to-point encryption.

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