The Hidden Complexity of Hotel Technology: What Every Owner Should Know
- GAS
- Dec 23, 2025
- 6 min read
At Global Asset Solutions (GAS), we are hotel asset managers, not technology specialists. Our role is to protect and enhance asset value, optimise NOI, and preserve long-term flexibility for owners and investors. Yet, in today’s hotel environment, technology has become too material a driver of performance and risk to be treated as a purely operational matter.
Technology decisions increasingly shape operating costs, management complexity, and exit optionality. However, they are still largely driven by operator convenience and brand standardisation rather than owner-led value creation. Operators naturally favour uniform systems that simplify portfolio management, while brands seek consistency across flags. The financial burden, integration risk, and long-term consequences, however, sit squarely with the owner.
This is precisely why we believe owners must be supported by independent, specialist expertise when evaluating technology investments. While GAS does not position itself as a technology advisory firm, we strongly advocate bringing the right experts to the table early — professionals who understand hotel operations, vendor economics, and the true flexibility within brand standards. Advisors like Martin Bookallil play a critical role in this process.
Martin’s perspective is particularly valuable because it sits at the intersection of owner, operator, and vendor interests. His experience highlights how technology can quietly erode NOI, introduce unnecessary cost and complexity, and reduce asset portability when decisions are not governed with the same discipline applied to physical CAPEX. Conversely, informed and early intervention can materially improve economics while remaining fully brand-compliant.
At GAS, our responsibility is to ensure that every major decision affecting an asset — including technology — is aligned with ownership objectives. Recommending specialist advisors such as Martin is part of that discipline. Technology governance is not about selecting systems; it is about maintaining control, protecting value, and preserving optionality across the full investment lifecycle.
The article below sets out, with clarity and authority, why hotel technology is fundamentally a governance issue — and why owners who approach it with independent insight consistently outperform those who do not.
The Hidden Complexity of Hotel Technology: What Every Owner Should Know
By Martin Bookallil 18 December, 2025
Executive Summary
In the owner-operator-brand triangle, technology has become a quiet lever of control rather than a disciplined driver of value. Operators favour standardisation to simplify portfolio operations. Brands impose technology mandates to protect consistency and brand equity. Owners - who fund the investment and carry the risk - are often excluded from the decisions.
This misalignment is structural, not accidental. Technology choices are frequently optimised for operational convenience rather than owner ROI, leading to systematic overpayment, unnecessary complexity, and reduced asset flexibility. Independent benchmarking consistently shows 15-25% excess technology spend, while poorly governed digital initiatives erode NOI and complicate exits.
For institutional owners, technology governance is not a technology issue. It directly impacts three fundamentals: net operating income, portfolio scalability, and exit optionality. Owners who reclaim their seat at the decision-making table - early, informed, and with independent insight - can materially improve outcomes and unlock value that would otherwise be lost.
1. The Financial Reality: What the Data Shows
Industry research highlights consistent patterns rather than isolated failures:
NOI erosion: 3-8% decrease as a result of suboptimal technology decisions
CAPEX / OPEX overpayment: 15-25% without independent benchmarking
Digital transformation failure rate: ~70% for major initiatives
For a $100M portfolio, a 5% NOI impact equals $5M in annual value leakage. Yet technology decisions are often treated with far less rigour than physical capital investments, despite comparable long-term financial consequences.
2. The Structural Problem: Misaligned Incentives
2.1 Operators: Efficiency Paid for by Owners
Operators are incentivised to standardise. One PMS, one vendor stack, one training model simplifies portfolio management. However, technology decisions negotiated by operators are fully recharged to owners - including vendor costs and operator labour - regardless of performance outcomes.
The operator bears little financial downside if a decision underperforms yet captures operational efficiency. Owners absorb the cost and the risk. Pricing for identical systems frequently varies by 25-40% depending on who negotiates, largely because vendors know that switching costs and inertia favour renewal over competition.
2.2 Franchise vs. Managed: A Critical Distinction
Franchise owners typically control roughly half of their technology stack, including financial systems, local POS, and reporting. Managed owners often do not. This difference materially affects negotiating leverage, cost control, and long-term flexibility.
For franchise portfolios, independent technology decisions can meaningfully improve economics and preserve optionality - particularly at exit, where operator-agnostic systems reduce transition friction and protect valuation. A franchise owner who controls their financial systems and local POS can negotiate independently, avoid operator lock-in, and preserve flexibility for future transitions.
2.3 Brands: Standards vs. Reality
Brand requirements generally fall into three tiers:
Mandatory: Core systems such as PMS, payments, and cybersecurity. Non-negotiable globally.
Approved alternatives: Pre-vetted options that still offer flexibility.
Recommended: Often presented as mandatory but not strictly required.
The gap between perceived and actual requirements frequently accounts for 15-25% of avoidable spend. Owners who understand approval pathways, waivers, and equivalency processes consistently achieve better outcomes.
2.3 Owners: Paying Without Governing
Owners fund technology investment and carry operational risk, yet are often brought into decisions after requirements are defined and contracts locked. At that point, leverage is minimal, and change is costly.
3. Where Value Is Lost
3.1 Opaque Vendor Pricing
Hotel technology pricing is deliberately non-transparent. Without market benchmarks, owners struggle to assess whether proposals are competitive or aligned to portfolio scale. Independent benchmarking before negotiation consistently improves pricing and contract terms.
3.2 Fragmentation and Integration Drag:
Fragmented technology stacks create hidden OPEX through manual workarounds, duplicated functionality, and complex integrations. Integration effort is routinely underestimated, leading to cost overruns and delayed benefits realisation.
3.3 Transformation Risk:
Most digital initiatives fail not because of technology, but because of unclear objectives, poor change management, and underestimated soft costs. Training, process redesign, and management attention frequently exceed technology spend itself.
Case Study: A 200-room luxury resort in Southeast Asia was presented with a $1.2M PMS upgrade mandate by its operator. Independent benchmarking revealed that 40% of the "mandatory" requirements were optional. By engaging early with the brand, the owner negotiated equivalency approvals for three systems and selected a lower-cost alternative PMS. Final cost: $680K. Savings: $520K. The asset remained fully brand-compliant and operator-agnostic.
4. Reclaiming Owner Leverage
4.1 Separate Essentials from Enhancements
Core systems –PMS, POS, payments, cybersecurity - are typically non-negotiable. Many adjacent tools are not. Applying a disciplined ROI lens to discretionary technology often eliminates 10-15% of planned spend.
4.2 Use Portfolio Scale Intelligently
Multi-property commitments materially strengthen negotiating position. Vendors will trade on price, terms, and flexibility for scale - provided requirements are defined by owners, not defaulted to operator convenience.
4.3 Engage Early
Owner leverage is highest before designs are finalised and contracts signed. Early engagement allows requirements to be shaped around asset strategy rather than retrofitted after decisions are made.
4.4 Navigate the Operator Relationship
If using a managed operator, insist on independent technology benchmarking before contract renewal. The operator's incentive to standardise is not aligned with your ROI. If you are a franchise owner, leverage your 50% control advantage to make independent decisions on financial systems and local POS - this preserves flexibility and protects exit value.
4.5 Preserve Exit Optionality
Deep technology lock-in to a specific operator increases transition cost, operational risk, and buyer friction at exit. Operator-agnostic systems preserve flexibility, improve liquidity, and protect valuation.
5. A Practical Owner Framework
The key steps for an owner are as follows:
a. Start with business objective, not technology
b. Clarify mandatory vs. optional brand requirements
c. Model total cost of ownership over 5-10 years
d. Benchmark pricing against comparable assets
e. Evaluate integration and operational impact
f. Protect portability and future flexibility
Conclusion: Technology Governance Is a Power Issue
Excess technology spend of 15-25% is common, persistent, and avoidable. For institutional portfolios, even modest improvements in governance translate into material NOI uplift and improved exit outcomes.
The owners who outperform will not abdicate technology decisions. They will engage early, challenge assumptions, understand where standards are flexible, and apply the same investment discipline to technology that they apply to bricks and mortar.
Technology governance is not a technical problem. It is a question of control - and owners who reclaim it consistently outperform those who do not.
About the Author
Martin Bookallil is Founder and Principal of Bookallil Advisory. Over 26 years at Marriott International, he served as VP Technology for the $20B APAC business, overseeing $250M in annual CAPEX across 1,100+ properties and leading the integration of Starwood and Ritz-Carlton acquisitions.
Beyond his operator experience, Martin has worked extensively on the vendor side and led two major technology acquisitions totalling $30M in Asia. This tri-perspective view - owner, operator, and vendor - gives him unique insight into how technology decisions create and destroy value across the entire investment lifecycle. He understands the economics from all three vantage points, allowing him to identify where value is captured and where it is lost.
Since 2024, he has advised leading hotel owners, operators, and investors globally on technology governance, digital transformation, and value optimisation. He brings strategic insight into how technology decisions impact NOI, portfolio scalability, and exit optionality.
