Cloud or on-site hosting: which strategy should hoteliers adopt?
The cloud has revolutionized data management in many industries, and hospitality is no exception. The flexibility, accessibility, and real-time updates have appealed to hotels large and small, allowing them to manage their reservations, guest data, and CRM more efficiently. However, a recent post reveals a surprising trend: 42% of US companies have moved at least 50% of their data from the cloud to on-premises hosting. This figure, while striking, illustrates a growing reality — that of the questioning of the benefits of the cloud in the face of sometimes hidden (and growing) costs and concerns about dependency and security.
For hoteliers, the question is: what is the best solution for managing their property’s data? Between the undeniable advantages of the cloud and the promise of control and cost reduction offered by on-premises hosting, choosing an appropriate strategy is not easy.
That is why Medialog, an expert in technological solutions for the hotel industry, offers hybrid services combining the advantages of the cloud and on-site hosting to meet the specific needs of establishments.
The Evolution of Cloud in the Hospitality Industry
In recent years, the cloud has become a must-have solution in the hospitality industry. Both independent and global properties have embraced this technology for its ability to transform operations and data management. One of the main reasons for this rapid adoption is the flexibility offered by the cloud. Hoteliers can manage their reservations in real time, coordinate channel management systems (Channel Manager) and store guest information without having to invest in expensive infrastructure.
Additionally, the cloud allows for continuous software and system updates, reducing service interruptions and ensuring optimal operations. For example, a cloud-based customer relationship management (CRM) system allows hotels to access guest information from anywhere and personalize the guest experience with every interaction.
Another strength: the cloud helps hoteliers respond to seasonal fluctuations in demand. During peak periods, they can increase data processing capacity without having to overhaul their infrastructure. This scalability is a major asset in an industry where bookings can explode during peak seasons.
However, despite these benefits, using the cloud also presents challenges, particularly in terms of security and long-term costs. It is this evolution that is now pushing some industry players to re-evaluate their reliance on the cloud and to consider alternatives, such as on-premises hosting.
The return to on-site hosting: trend or necessity?
While the cloud seemed to be an essential solution for businesses, a counter movement is emerging: more and more companies are considering or implementing a return to on-premises hosting. A recent study found that 42% of U.S. businesses have migrated at least 50% of their data out of the cloud. This statistic may come as a surprise, but it reflects a growing trend to rethink the use of cloud services, particularly in the face of rising costs and security concerns.
The main factor driving this return is financial. While the cloud initially offers savings in terms of investment, recurring costs (OPEX) can add up and become higher than expected, especially as storage and bandwidth requirements increase. This situation is exacerbated by the near-monopolistic dominance of a few major players: Amazon Web Services (31% market share), Microsoft Azure (25%) and Google Cloud (11%). The pricing power of these giants makes it difficult for companies, including hotels, with tight margins, to control costs in the long term.
Another key factor is security. While cloud providers invest heavily in data protection, trusting sensitive information to a third party can be a concern. Hoteliers handle a massive amount of personal and financial data (credit card details, guest preferences, etc.), making security a top priority. Some prefer to reduce risk by hosting their data themselves, where they have complete control over access and management.
However, for many hotels, this option may seem complex, especially due to infrastructure costs and the need for qualified staff. This movement back to on-site accommodation, although growing, therefore raises many questions about its feasibility in the hotel industry.
The cloud: advantages and limitations for a hotelier
The cloud has transformed hospitality operations management by offering unprecedented flexibility and accessibility. One of the main advantages of the cloud is its scalability: it allows hoteliers to cope with seasonal fluctuations and peaks in activity without having to invest in heavy infrastructure. For example, during peak tourist periods, hotels can quickly increase their data processing capacity and hosting applications, such as online booking systems or channel managers. This allows for better reservation management without fear of overload.
Another important benefit is remote accessibility. With the cloud, hotel data, reservation management systems (CRS), and customer relationship management (CRM) tools can be accessed from any location. This is particularly relevant for hotel chains where geographically distributed teams need to collaborate on a centralized database. The cloud also facilitates automatic software updates, reducing interruptions and costs related to IT maintenance.
However, using the cloud is not without its limitations. The first major drawback is the long term cost. While cloud OPEX (operational expenses) is easier to absorb upfront than CAPEX (capital investment for on-premises hardware), these recurring costs can add up significantly over time, especially for hotels that rely on a large number of cloud services.
In terms of security, While major cloud providers are investing heavily in cybersecurity, storing sensitive data on an outsourced platform increases the number of access points and therefore the potential risks. Hoteliers manage critical information, and a security breach could have catastrophic consequences, both financially and for the property’s reputation.
So, while the cloud offers clear benefits in terms of flexibility and management, hoteliers need to be aware of the increasing costs and security challenges associated with its long-term use.
On-site accommodation: is it viable for hoteliers?
While some businesses are choosing to migrate their data from the cloud to on-premises servers, is this really a viable option for the hospitality industry? On-premises hosting has several advantages, including a Total control on data. By having their own servers, hoteliers can manage security and access to sensitive information, such as payment data and guest preferences, themselves. This reduces reliance on third parties, including large cloud providers, and helps better address privacy concerns and compliance with regulations (such as GDPR).
In terms of costs, on-premises hosting can also be advantageous in the long term. Indeed, although the initial investment costs (CAPEX) are high, particularly for the purchase of hardware and the installation of a secure infrastructure, these expenses are often amortized over several years. For example, a hotel group that chooses to centralize its data on-premises can realize substantial savings by reducing the monthly costs (OPEX) associated with cloud subscriptions.
However, this solution is not without challenges, especially for independent hotels or small. The first obstacle is the financial investment: in addition to purchasing servers, it is necessary to have a extremely reliable internet connection and redundant, as well as skilled technical staff to manage and maintain the infrastructure. These requirements can be a major barrier, as managing on-site systems requires skills and resources that many hotels do not have in-house.
In addition, some critical applications in the sector, such as PMS (Property Management Systems) or Channel Managers, must be hosted online to function optimally. This means that a hotel cannot completely disconnect from the cloud, which limits the interest of on-premise hosting for certain operational aspects.
In conclusion, while on-premise hosting offers advantages in terms of control and potential cost reduction, it is particularly suited to large hotel structures with sufficient resources. For independent hotels, technical and financial constraints make this option more difficult to implement, hence the interest in hybrid or outsourced solutions adapted to their specific needs.
Finding the right balance: hybrid cloud and other solutions
Faced with the respective advantages and disadvantages of cloud and on-premise hosting, many companies, including those in the hotel industry, are exploring an intermediate solution: the hybrid cloud. This approach allows you to take advantage of both systems by combining the strengths of the cloud and on-premises storage. In concrete terms, the most sensitive or critical data (such as financial or customer information) can be stored on internal servers, while other more general or highly scalable applications, such as online booking tools or channel management systems (Channel Manager), can continue to be hosted in the cloud.
Medialog, a pioneer in the field, has been offering a hybrid solution perfectly suited to the needs of hoteliers, allowing both the flexibility of the cloud and the control offered by on-premises hosting. To learn more about this solution, visit our hybrid offer here.
Hybrid cloud also helps to better control costs. By optimizing data storage and reducing reliance on cloud solutions for less critical services, hotels can strike a balance between CAPEX and OPEX. This allows for long-term flexibility while benefiting from a robust and adaptable infrastructure. This solution is particularly relevant for medium to large hotels that can afford to manage an on-premises infrastructure, but wish to retain the flexibility and scalability of the cloud.
Another key factor in this thinking is the importance of engaging a independent advice to guide these technological choices. It is essential that the expertise be neutral and detached from the commercial interests of cloud or on-premise solution resellers. Medialog can support you in this process with complete transparency. Discover How our experts can help you implement a tailor-made hybrid solution
Conclusion
The cloud versus on-premises debate is taking on a new dimension in the hospitality industry, where data and application management are critical to delivering a quality guest experience and maintaining competitiveness. While the cloud has won over hoteliers with its flexibility, scalability, and ease of use, growing concerns over costs and security are forcing many players to reevaluate their strategy.
On-premises hosting offers complete control over data and can be more cost-effective in the long run, but it remains a technical and financial challenge, especially for independent hotels. That’s why, for many properties, the solution may lie in a hybrid model, which combines the best of both worlds: the security and autonomy of on-premises storage, with the flexibility of the cloud for critical applications. For hoteliers looking for this balanced solution, Medialog offers a complete hybrid solution adapted to the specific needs of each establishment.
