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Cvent Delivers $3.4 Billion in Meetings Business to Hotels through First Half of 2012 |... - 0 views

  • Cvent operates the number one marketplace for group meetings business in the world and has driven $3.4 billion in meetings spend through the Cvent Supplier Network through the first half of 2012 – a 50% increase over 2011.
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    Cvent, the world's largest cloud-based provider of event management, venue selection and web survey solutions, operates the number one marketplace for group meeting business in the works and has driven $3.4 billion in meeting spend through the Cvent Supplier Network through the first half of 2012. The strong network provided by Cvent gather the international booking outside of North America and increase 42% meeting volume based on its strong network. Vice President of Sales for the Cvent said the network bring all market participants together and to improve the sourcing process and deliver value for everyone invloved. The value includes more than 200,000 hotels and special event venues worldwide, providing one-stop shopping for meetings buyers and sourcing professionals. The network also extends suppliers' reach to new customers helping hoes maximize their existing Sales & marking resources and increasing their opportunities overall. Cvent also developed a platform hotels can use to help hotels develop response templates to provide faster answers to planners, allowing hotels to pre-populate RFPs with basic information and clone responses to common requests. It also proactively guides planners, helping them create better RFPs by, for example, sending a warning prompt when a venue cannot satisfy a request such as number of sleeping rooms.
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Understanding and Maximizing a Hotel's Electronic Distribution Options / by John Burns ... - 0 views

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    The number of customers making reservation on the webpage of the hotel become more and more in nowadays. And the reservations flowing to hotels through the channels of the global distribution systems and the Internet. The electronic outlets become the biggest challenge for the director of sales and marketing. They should face the challenge of understanding and managing the system and using it to make profit for the property. The hotel electronic distribution network association plays an important role in the hotel operation. It contains ads, mails, public relations and sales calls which can help the ptoperty increase profit. So understanding and maximizing a hotel's electronic dutribution is very important.
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Integrating e-commerce into a hotel's overall business strategy - 0 views

  • commerce should be a compliment to every part of a hotel's operations. All staff members need to be briefed on the advantages of taking a collaborative approach to e-commerce
  • needs to understand the correlation of stellar customer service on online guest reviews and the ability of a hotel to sell its products online.
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  • understand the advantages of using e-distribution channels to aid travel agents and offline sales and get involved in the process
  • But hotels are trying to use e-marketing more effectively as well as focusing on social media outlets to lure prospective customers to their direct channels
  • At the end of the day, the channels that provide the most conducive environments to consumers (i.e. price, ease of use, accessibility) will win the business.
  • What do you think is the most critical aspect of integrating e-commerce into a hotel's overall business strategy?
  • Maximising direct business is most critical as it is the most profitable strategy for a hotel.
  • Ratings and reviews are a trend that is becoming more and more important. I've read that nearly 50% of consumers won't choose a hotel until they read a review. Hotels and brands need to consider this.
  • Earlier this year, an e-commerce professional mentioned that customers do not like pre-made packages, they love to package themselves by cherry picking on different sites.
  • The packaging site of tomorrow could just be a travel shopping cart that lets you add different components from different sites then price it for you when you are ready and even finding the lowest price and you are ready to book.
  • Price and quality are now more transparent than ever and sites that are more transparent will enjoy more conversions
  • Online travel shopping is still in its infancy. What we need to do is facilitate what consumers really want.
  • As an industry, we are not very sophisticated regarding our need for and requirement of intermediaries. In dire times, we are very aggressive with them
  • we must understand the true cost of bookings through each channel.
  • We need to understand when we need them and when we don't so we can minimise cannibalisation.
  • We need balance. There should be a partnership. It's unfortunate that intermediaries feel they need to cannibalise. Margin and share of business needs to be fair for both entities.
  • Which according to you is going to be biggest development in the travel distribution space this year?
  • Mobile. There has been quite a bit of traction, and we have plans of our own for this space.
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    This interview talks to Gareth Gaston, senior VP of Global E-comerse in the Wyndham Hotel Group, about recent trends in E-comerse.He believes that E-comerse should be apart of every department in the hotel, Front Office, Sales, Marketing, and the departments should help the Online Travel Agencies to draw more guest. Mr. Gaston believes that hotels need to start to create a partnership with online travel agencys(OTA) and begin to create a better system for price consolidations online rather than fight them at every turn for overbooking or under-pricing.
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Do the Math | Past Issues | Lodging Magazine - 0 views

    • Diana Sardina
       
      Upgrading is a marketing strategy that has been used for years and it has always been an effective way to maximize profits. We need to train our front desk employees the same way we train our sales staff. They are an important sales team to hotels
  • Creating upgrades and offers for guests to take advantage of is a simple solution that can turn into big profits for hotels.
  • Upselling refers to revenue potential that goes above and beyond a traditional guest booking
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  • all at a cost to the guest
  • The current trend in upselling is not only about presenting a guest with an upgrade or an offer, but also finding the offer that is right for that particular guest
    • Diana Sardina
       
      We can utilize information stored in property management systems to upsale rooms and services in the hotel
  • It’s about determining what that guest is interested in at that particular moment.”
  • “It’s about doing it in such a way that it doesn’t feel like an upsell,” McGuire says. “It’s a balancing act between keeping the guest happy and driving revenue and profits
  • It’s one of those channels that we know is creating incremental sales for hotels.”
    • Diana Sardina
       
      If guests are checking their reservations in their smart phones, hotels can use that technology to upgrade and increase profits.
  • iPods and iPads has really changed the opportunity to effectively communicate with a guest at any given moment.”
  • FrontDesk Upsell, which is part of the Nor1 platform, prompts front desk personnel with a sales script and a personalized offer through the hotel’s property management system (PMS) when a guest checks in. This scripted approach takes some of the guesswork out of the upselling equation and gives the staff more confidence when offering an upgrade.“For front desk personnel, this isn’t like a hard sell—it’s not like a used car salesman,” Buckhiester says. “This is about providing options. Those options may or may not be of interest to a guest, but in many cases they are.
  • There is that customer experience element, if you’re using the analytics in the right way, to make sure the offer is not only profitable to you but relevant to the customer.”
    • Diana Sardina
       
      Exceeding guest expectations is the key of sucess. If the information stored in the pms about the guest provides clues, then the front desk can upsale, and the guest will leave the hotel happier, will return and will recommend it to his or her friends.
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    This articles is a wake up call to many hotels that are looking for ways to increase profit. The concept of upsale has been around for a very long time. It is time for hoteliers to go back to basic marketing concepts but utilizing the latest technologies. Property management systems contain so much valuable information about the guests. Hotels need to utilize this information to offer unique experiences.
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Straw Hat Pizza's Switch to Digital Menu Boards Results in Sales Spike | Case Studies |... - 1 views

  • . We used picture-in-picture to run commercials promoting our newest items. We took advantage of high-resolution photography to whet appetites for appetizers while customers were standing in line waiting to order.
  • When the menu boards need to be updated due to a change in calorie count or other issues, the changes can be made on the console at headquarters, and then updated everywhere with a few mouse click
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    This article is a case about how digital menu helps the restaurant increase sales. There are several benefits by using digital menu. The most important one is that digital menu enable customers to better know the dishes. The restaurant could use full-motion video to show more details. Another advantage is the easier way to control the updating and changing of the menu. 
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Point of Sale Technology: New Developments - 0 views

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    This article provides a brief overview of the emerging trends for hotel management information systems. The trends focus on easy mobile access, unattended point of sale, radio frequency identification and near field communications. An increasing number of hotel are using the the cloud for on the go mobile connectivity to their POS systems and revenue management software SaaS. You can manage your hotel from anywhere and be up to date instantly. This trend and the next eliminates the need for desk or office time. Lilipad has created an I-product that allows guests to perform their own transactions at I-Pad kiosk which eliminates time at the front desk. The other large emerging trend is tracking devices that can be implanted in phones or even loyalty cards that link to bank and credit card accounts replacing the traditional wallet. While other articles say there is no rush to cellphones replacing wallets just yet, hotels like Aloft are using RFID's in there loyalty cards eliminating the issue of room keys. Notice in all these trends that the face to face contact with guests that we hospitality students enjoy and train for is decreasing with every new technology.
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Guest-Centric Maestro PMS Selected by 3 Multi-Property Groups and 6 Independent Operato... - 0 views

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    3 Multi- Property Goup and 6 Independent operators select Guest-Centric PMS. This PMS help hotels increase revenue by cross-selling from single database. By using this system, the hoteliers can operate two hotels through one system to increase more business for both. It also provide more personalized service to the guests by integrated PMS and Spa and Activities Management System. Moreover, Maestro was the only vendor offering the total integration which maximize sales and efficiency of the hotels.
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    here is the highlight part: Maestro True Multi-Property PMS increases revenue by cross-selling from single database. 'No other system was able to provide the flexibility and functionality we needed' Total integration and the best multi-property tools to maximize sales and efficiency
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Travel Agent Increase Use of GDS to Book Hotel Room - 0 views

  • travel
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  • Travel Agents Increase Use of GDS to Book Hotel Rooms
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  • "Travel agents are increasing GDS hotel use, and have once again confirmed their confidence in GDS Shopping and Booking Displays," remarked John Hach, Senior Vice President, Global Product Management at TravelClick. "As the GDS channel produces one of the highest average daily rates of any booking channel, there is a huge opportunity for hoteliers to influence travel agents through the GDS at the point-of-sale."
  • "This survey definitively shows that promotional messages are not only an excellent way to reach travel agents, but also a valuable sales catalyst,"
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    This article is a good one that demonstrates how GDS are now more often used than times before. The article states that the 2011 Global Travel Agent GDS study demonstrates how important GDS platform and shopping Displays are to the travel agents. They stated the 84 percent of those who took the survey stated that they are using the GDS just as much or even more than they did in the pass and 35 % of these stated that they were using it more than they did in the pass. The article explained how these numbers have greatly increased since 2009 where only 26% agents admitted that they used the GDS systems more than before. This study is 2011 reaffirmed Travel Click's projection, which was that GDS hotel bookings would surpass %50 million in the year 2011. This was far more than that of 2010. The article goes on to explain how the GDS will improve the booking and services of the industry all around. Furthermore, the article went on to explain a worldwide survey conducted for agents who were among the largest GDS in the world and some 495 responses were collected. The survey was conducted by Phoenix Marketing International, which is and independent marketing research firm Travel agents were indicated that promotional messages were effective and prompt during bookings and 66% of these agents request additional information about it. While, 68% of these agents looked into the GDS for more information. After this survey was complete the agents who were aware of promotional messages, 46% of them made North American bookings within 3 months as a result of the promotional messaging and 44% made non- North American bookings. The survey itself shows that promotional messages were and excellent way to get the agents interested. In the article it is quoted how the promotional messages acts in a chain reaction to reach the agent and then the customer, which allows sales all over the world.
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    GDS provides a perfect virtual marketplace for travel inventory sellers such as hotels, airlines, and car rental systems to showcase their wares to a global Internet travel audience. The GDS is a natural outlet for hotels, resorts, and even smaller inns that want to increase revenue and online marketing exposure. As the GDS channel produces one of the highest average daily rates of any booking channel, there is a huge opportunity for hoteliers to influence travel agents through the GDS at the point-of-sale.
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    Yes, GDS is of great importance for tourism development. It provides such a huge market of tourism information for customers, airlines, hotels, travel agents and any parts included in the tourism. Someone said that GDS will end travel agent, however, in my opinion; they have their own advantages and will supplement each other in the future.
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Travelport agent survey finds support for GDS ancillary sales - Travolution.co.uk - 0 views

  • Corporate and leisure travel agencies can expect more technology to help them sell airline ancillaries after a global survey found high levels of support for this service through GDSs.
  • Agents understand that as the airline product continues to evolve and ancillaries form an increasingly significant role in the purchase decision and buying process, travel customers continue to look to agents to support them in purchasing itinerary solutions.
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    This article discusses what travel agents think about the enhanced ability of both corporate and leisure based travel agencies to sell airline ancillaries because of improved Global Distribution Systems' technologies. Ancillaries are products and services that airlines sell to gain additional revenue on top of your ticket price. Ancillaries have become increasingly popular in the airline industry because of the sky rocketing price of jet fuel. To keep ticket prices down airlines are "unbundling" items from the overall experience. This presents them with an opportunity to turn a profit by charging fees for bags (carry on, checked, additional), on board food and drink, credit card purchases, headphones. It seems like everything you encounter from when you arrive at the airport to when you disembark the plane has a fee. This phenomenon is especially present in Low cost carriers such as Spirit, Air Tran, Jet Blue, etc. However there are consumers who disagree with this additional costs as is apparent in Southwest's continuous marketing campaign. I'm sure everyone has seen the commercials with Southwest representatives 'flagging' down unnecessary fees in order to promote their 'bags fly free' campaign. Anyhow the reason I am explaining ancillary revenue is because travel agents are now starting to sell more ancillary products such as hotel accommodations, travel insurance, rental cars because of GDS technologies. They can track the sale of fees through EMD (Electronic miscellaneous Documents) which is the current industry standard. In the article some agents state that the EMDs are hard to understand and use. I believe until the EMDs become "seamless and easy to use" there will exist some hesitation to sell airline ancillaries. However on the other hand the article states that Travelport is working towards a simple and uniform platform called Travelport Universal API/Desktop. Once this comeplete perhaps more agents will feel comfortable selling ancillaries. This is a goo
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    Diigo keeps cutting off my descriptions... This is a good start to acknowledge the opinions of travel agents using GDS to sell airline ancillaries but the arguments were confusing and hard to follow. From reading the article I would address ethical concerns that airline agents may have in selling ancillary revenue for commission since 44% of those polled did not impose fees for attaining the additional products and services. I understand the airlines need to stay in business with the increase of jet fuel prices but there must be some way to avoid imposing the fees besides raising ticket prices and laying off employees (American Airlines announcing 13,000 layoffs).
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    I still remember when most airlines used to include breakfast or dinner for their passengers including alcoholic beverages well that doesn't happen any more. I believe when Travelport Universal Desktop becomes available it would become more clear to travel agencies the transaction process and for the consumers what products and services they are ofering.
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    I too miss the days of free sodas and peanuts. "Sigh-" sometimes its the little things in life that bring the most joy. I agree I think the new Travelport Universal Desktop will be a valuable tool if utilized correctly.
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Point of Sale Energising the Hotel Service Cycle | Technology - 0 views

  • POS systems are not new to the industry but have come a long way from simple billing machines to delivering greater value to their users.
  • Hotels should choose a POS that is easily adaptable and fully customisable to suit their specific business needs.
  • The heart of a hospitality business is in its service and delivery of guest experience. A POS enhances both of these.
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    POS can energize the hotel service cycle. POS system offers an ideal opportunity to move from a manual system to technology that stores customer data, which can be mined for business intelligence and thus facilitates improvement and efficiency at customer touch points. POS system can be fully integrated with room service and front office to ensure accurate and faster billing. It is fairly easy to use, getting staff acquainted with the application and interface will help to ensure faster ROI on installation. Using POS software, hotel staff can spend less time on formalities and more on delivering better customer service. It is integral for both order generation and tracking inventory shrinkage. Proper implementation of POS functions increases business profitability by providing management with details on fast moving products, time of sale and profitability. Now apps with Android market enhanced the use of POS. In the future, POS systems are going to get smarter, faster and better.
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Compeat Pioneers Cloud-based Back Office Accounting - 1 views

  • Compeat Enterprise will provide chain restaurants with inventory control, food cost analysis, cash and sales management, forecasting, time & attendance and labor scheduling.
  • Enterprise includes real-time “Dashboards” and “Alerts” for managers in the restaurants as well as executives above the restaurants.
  • Enterprise also includes a Portal (myWorkforce) that employees access via the Internet (desktop or mobile) to view their schedules, pick up shifts, request schedule changes, and communicate with their manager.
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    The compeat restaurant management system is a cloud based highly configurable system which is developed by Compeat and the founder of ReMACS. By utilized this system, the restaurant managers can operate the business more effectively than before. It provides real-time "Deshboards" and "Alerts". The employees can simply access the internet through "myworkforce" to view the work schedules even pick up or change the schedule which save the time of the manager to communicate with each of the employees to comfire the scehdule. Meanwhile it provide a new channel for the employee to communicate to the managers. Especially for the chain restaurants, this system offers inventory control, food cost analysis, cash and sales management, forecasting, time& attendance.
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    According to the article,  Compeat Enterprise is a targeted solution for restaurant chains looking for a highly configurable system that can be tailored to their specific operations and easily integrated with their existing systems. Compeat Enterprise is centrally hosted (a cloud based application) requiring only Internet connectivity and a browser in the restaurant. Compeat Enterprise will provide chain restaurants with inventory control, food cost analysis, cash and sales management, forecasting, time & attendance and labor scheduling. Enterprise includes real-time "Dashboards" and "Alerts" for managers in the restaurants as well as executives above the restaurants. Enterprise also includes a Portal (myWorkforce) that employees access via the Internet (desktop or mobile) to view their schedules, pick up shifts, request schedule changes, and communicate with their manager.
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7 reasons to switch to a point-of-sale system - 0 views

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    This writer Jeff Wuorio elucidates the many reasons as to why the point of sale system is so significant and important to any business. The article explains that it might be best to just step away from these old cash registers and step up to POS; such as, the Microsoft Dynamic Retail Management System. It is a computer software and hardware network that helps record sales as they are occurring, that way you can keep track of your inventory and pay more attention to your customers. The seven reasons are one your loss of inventory doesn't go undetected, You can keep track of which items that have been marked down, Promotions are easily tracked, it can automate host of functions when the boss is not present, your prices are consistent from one location to the next, you can get ma many tools from this single package such as payroll time clocks and a customer data preference data base, and lastly the best advantage to the POS system is the freedom, because it can now allow your employees to devote more of their time for better customer service.
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Hospitality Staffing Solutions, LLC Completes Asset Sale to Private Investment Firm -- ... - 0 views

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    A leader provider of outsourced staffing solutions for the hospitality industry, Hospitality Staffing Solutions, announced that it has completed the sale of its assets to HS Solutions Corporation. HS Solutions Corporation is an entity formed by LJC Investments 1, LLC and a group of investors including Littlejohn Opportunities Master Fund,LP, Caymus Equity Partners and Management. This transaction allows HSS to reduce its outstanding debt and responsibilities. It also gives the opportunity to emerge with strong financial backing of a new owner.
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Delphi Unveils One-On-One Sales Tool For the Drive Thru - Restaurant News - QSR magazine - 0 views

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    This article is about a new revolution software in the Quick service industry especially in the Drive-thru area to increase speed of service and customer satisfaction. The new technology called Emprise allows the digital menu board to become a one-on-one sales tool for the quick service provider. Also Emprise has the ability to recognize guests' preferences, personal information and based on that, recommend menu items for customers.
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Research Center POS Article - 0 views

  • Rempel the owner of Just Pizza in Lacombe, Alberta, Canada, used paper slips to track orders until about a year ago, when he installed a POS system from Lynden, Wash.-based Speedline Solutions Inc. Once he began exploring the intricacies of the system he noticed a disturbing trend.
  • Rempel estimates the employee took in excess of $1,500 before he was caught.
  • whose system now requires fingerprint I.D.
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  • "I never would have known any of this if I didn't have the POS," Rempel said. "That definitely was what alerted me to it."
  • Employees can't clock in before their scheduled time, and with fingerprint I.D. systems, other employees can't swipe I.D. cards for coworkers.
  • "I'm the one guy that for seven years said I didn't need a POS system," Rempel said. "Now, I'm the guy that says if you don't have one you are crazy."
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    This article gives a few examples of how POS systems can help to prevent theft from employees and even from customers. By implementing POS systems in restaurants owners are able to track orders, how much is paid, how much was comp'ed and so on. This helps owners to keep track of products and sales whereas with a paper system, receipts can be lost, written incorrectly and maybe all sales aren't logged.
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BlueBird transforms the UK Point-Of-Sale industry by distributing Revel Syste... - 0 views

  • BlueBird has revolutionised the UK hospitality and retail industries with their innovative Point-Of-Sale system.
  • have established a large base of hospitality customers including multi-establishment and fast-paced businesses such as Honest Burgers, Pizza Pilgrims and Taylor St. Baristas, as well as inspiring independent businesses such as The Clove Club, All Press and Shoreditch Grind.
  • “BlueBird wanted to bring the most advanced point-of-sale technology available to the UK” says Christophe Delacroix. “We found this technology in Silicon Valley, set up the UK operation and we now help our clients to take advantage of the cloud environment and increase their profits through mobile technologies”.
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  • Revel Systems™ has developed a heavy-duty and fully functional POS solution that is mobile, cloud-based, scalable and secure.
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    According to the article, Bluebird Global has introduced one of the most advanced iPad-based POSs, known as the Revel System, to its base of multi-establishment and fast-paced businesses. Running this many business called for an advanced upgrade from its former POSs. Studies show that software unreliability and lack of accurate data are obstacles to market growth for operators. Introducing the Revel System provided a feature-rich package including inventory management, intelligent reporting, and payroll management. This POS is the only native iPad based app with True Offline and full PCI compliance, also allowing for access and storage to it's cloud system.
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Restaurant Saves Thousands in Overtime and Cuts Wait Times in Half with Mobile POS Upgr... - 0 views

  • wanted to upgrade the point-of-sale system (POS) as part of a larger renovation project.
  • In September 2013, Smokey John’s installed NCR Silver Pro Restaurant Edition, an affordable, iPad-based POS system that makes it simple to manage table assignments and server flow; access sales and other key metrics from a mobile dashboard; and route orders directly to the kitchen, bar or any other station.
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    Smokey John's Bar-B-Que is a family-owned and operated restaurant. Current owners Brent and Juan recently installed a POS system to aid in the processing of day-to-day operations and data-gathering, including but not limited to table assignments, sales, orders, and server flow and timekeeping. The result has been savings in overtime by being able to track it more accurately; ability to track revenue streams between catering and in-dining; calculation of taxes; implementation and tracking of a loyalty program; and wireless credit card processing that has improved the overall customer experience.
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Point-of-sale malware has now infected over 1,000 companies in US | Ars Technica - 0 views

  • According to the US-CERT advisory, the group behind the Backoff malware operation scanned the Internet to find potential victims by detecting installations of the remote-desktop software frequently used by service providers to manage the point-of-sale systems of their retail clients. The attackers look for remote desktop solutions like Microsoft’s Remote Desktop, Apple's Remote Desktop, Chrome Remote Desktop, Splashtop 2, Pulseway, and LogMeIn, according to the advisory. Once a potential target is identified, the group uses the equivalent of a digital sledgehammer, attempting to break into the system using a list of common passwords.
  • Such techniques are a common threat to small retail businesses, according to Trustwave, who helped the government agencies in their analysis of and response to the 'Backoff' program. A third of cybercrime attacks on businesses focused on the point-of-sales systems in 2013, according to the company's 2013 Global Security Report. In 31 percent of incidents, attackers exploited weak passwords to gain access to targeted systems
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    It is hard to forget how thousands of Target customers financial information was compromised last year due to a breach in security of the company's POS. Target is not the only company that has been infected with this program that steals credit and debit card information. Actually, there have been more than a thousand businesses affected by this malware that has come to be called "Backoff." The malware targets POS systems and has stolen millions of credit card numbers as well as personal information on millions of customers. A large majority of cybercrime is focused on attacking business's POS systems. The malware attacks systems by going through a list of common passwords until it is able to hack the system. "Backoff" then disguises itself as a compatible Java component and collects credit card information. However, Apple has recently announced Apple Pay and many believe this can diminish a lot of cybercrime.
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    It is hard to forget how thousands of Target customers financial information was compromised last year due to a breach in security of the company's POS. Target is not the only company that has been infected with this program that steals credit and debit card information. Actually, there have been more than a thousand businesses affected by this malware that has come to be called "Backoff." The malware targets POS systems and has stolen millions of credit card numbers as well as personal information on millions of customers. A large majority of cybercrime is focused on attacking business's POS systems. The malware attacks systems by going through a list of common passwords until it is able to hack the system. "Backoff" then disguises itself as a compatible Java component and collects credit card information. However, Apple has recently announced Apple Pay and many believe this can diminish a lot of cybercrime.
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Skyware PMS Interfaces with ERevMax for Seamless Online Booking Connectivity - 2 views

  • The partnership between the two leading hospitality software specialists will help hotels streamline their sales by using only one integrated platform for seamless distribution management.
  • The partnership between the two leading hospitality software specialists will help hotels streamline their sales by using only one integrated platform for seamless distribution management.
    • danalbert
       
      Though the idea of seamless online booking connectivity seems to be a good thing, it still appears to rely primarily on the hotels existing relationships with the major booking websites. Without those, the investment in the advanced technology may not provide the ROI that the hotels are looking for.
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    "The partnership between the two leading hospitality software specialists will help hotels streamline their sales by using only one integrated platform for seamless distribution management."
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Changes to Accounting Standards to Impact the Hotel Industry - 0 views

  • In order to determine if revenue should be recognized on a “gross” or “net” basis, one needs to understand what flexibility the OTA has to discount the room rate, charge additional fees to a guest, or combine the room night in a package with other goods or services (e.g. flight, rental car) under the Merchant Model.
  • One of the changes to the accounting standards is on revenue recognition, specifically how revenues from Online Travel Agents (“OTA”) should be recognized. Currently, there are two models for the treatment of OTA revenues in the hotel industry:
  • Retail ModelGuest makes the reservation via the OTA but pays the hotel upon stay. Hotel remits commission to the OTA. Currently, the hotel recognizes revenue at the gross amount of cash collected (i.e. the total room rate), offset by a commission expense to the OTA. Revenue recognized through this model is typically recorded on a “gross” basis.
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  • Merchant ModelGuest makes the reservation via the OTA and pays the OTA up-front. The OTA remits cash, net of their commission to hotel. Currently, hotel recognizes revenue at the net amount of cash received (i.e. the total room rate less the OTA commission), hence revenue recognized through this model is typically recorded on a “net” basis, which means a lower amount of revenue is recognized than under the “gross” basis.
  • he new standard requires the party who is the principal in the sales transaction to record the revenue on a “gross” basis. How is the principal determined? An entity is the principal in a transaction if it controls the good or service before that good or service is transferred to the customer.
  • Since the hotel is primarily responsible for providing the stay, the OTA does not take any inventory risk, and the price of the hotel room is largely determined by the hotel, the new accounting standard would indicate that revenue recognized from the Retail Model and Merchant Model should be both recorded on a “gross” basis, whereas previously, the revenue from the Merchant Model was paid on a “net” basis.
  • significant to hotels, as this will increase the amount of costs which are calculated as a percentage of revenues (e.g., credit card fees, management and franchise fees, sales taxes).
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    Beginning in 2018 the financial accounting standards for hotel business are changing. One of the changes is the way OTAs charge for the rooms. Typically the OTAs operate under two methods the retail model and merchant model. The retail model uses the OTA to reserve the room but the final payment is made to the hotel. The hotel then gives a commission back to the OTA. Under The merchant model the payment is made to the OTA. Then the OTA takes the commission off and sends the remaining payment to the hotel for the price of the room. This comes out as a net transaction. The new standard is saying that the company that controls the transaction for the room has to mark the transaction or sale as a gross transaction. The new model forces the hotels to record the transaction on a gross basis. This can be a big difference for hotels because now they will have to increase the amount of costs and reduce the hotels bottom line.
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