ROI in hotel technology: How to know if your investment is worth it.
- Elena Mateos
- 5 hours ago
- 4 min read
If you're thinking about investing in technology for your hotel, you've probably asked yourself the big question: Is it really worth it? I'd ask myself that question too if I were you. And the key to the answer lies in three magic letters: ROI (return on investment).
So, what is ROI? How is it calculated? And, above all, how do you know if a technological investment will really help you increase revenue or save costs? Today I want to explain all of this in a simple way and, of course, based on our experience at HotelSAAS , where we work with dozens of providers that help hotels make better decisions.
Throughout this post, we will cover various points that we consider essential to understanding the ROI of hotel technology.
What is ROI and why is it so important?
What should you consider before investing in technology?
Define your clear objectives
Evaluate the total cost of investment (TCI)
Profit projection
Recovery time
The importance of a free trial or POC
Startups, scaleups, and unicorns: Which one to choose?
Price vs. Return on Investment: What Should You Focus On?
Technology as a driver of guest experience and loyalty
Conclusion: How do you know if it's worth it?
What is ROI and why is it so important?
ROI, or Return on Investment , is a metric that helps you know if the money you're investing is actually generating benefits. In other words: for every euro you invest, how much are you earning back?
The formula is simple:
ROI = (Profit obtained - Initial investment) / Initial investment x 100
For example, if you invest €10,000 in a reservation management system and, thanks to that technology, your hotel generates an additional €15,000 in revenue, the calculation would be:
ROI = (€15,000 - €10,000) / €10,000 x 100 = 50%
This means your investment has generated a 50% return. Not bad, right?
What should you consider before investing in technology?
Define your clear objectives
Before looking at prices or features, think about what you want to achieve. Reduce operating costs? Improve customer experience? Increase occupancy? ROI isn't just measured in euros; it can also be reflected in efficiency or customer satisfaction.
Evaluate the total cost of investment (TCI)
Don't just think about the initial price. Consider all associated costs:
Facility
Staff training
Maintenance
Updates
Profit projection
What revenue or savings can you expect? Talk to technology providers, like those we have at HotelSAAS . Many will offer you data based on real-life cases from other hotels similar to yours.
Recovery time
How long will it take to recover your investment? Do you need a short-, medium-, or long-term recovery?
The importance of a free trial or POC
Before committing, look for vendors that offer a free trial or a POC (Proof of Concept) . What is this? Basically, a proof of concept allows you to see how the technology would work in your hotel before jumping into a full investment.
At HotelSAAS , many of our providers offer this option. It's the best way to ensure the tool truly fits your needs and to have real data to calculate ROI.
Startups, scaleups, and unicorns: Which one to choose?
When searching for suppliers, you've probably come across terms like startup , scaleup , or unicorn . Here's a quick explanation:
Startups : Young, innovative companies with great potential. Their advantage is flexibility and personalized service. The disadvantage may be their lack of experience or stability.
Scaleup : Companies that have already passed the initial phase and are in full growth. They usually have more robust products and robust support.
Unicorn : Companies valued at more than $1 billion. They have a well-established infrastructure and guaranteed stability, but may be less flexible.
At HotelSAAS, we work with all types of providers. The important thing is to analyze who best suits your hotel's specific needs, not only in terms of size, but also in terms of the real value they can provide. We will soon publish a post detailing the advantages and disadvantages of each.
Price vs. Return on Investment: What Should You Focus On?
It's tempting to go for the cheapest option, but when it comes to hotel technology, the approach should be different. Sometimes, investing a little more upfront can translate into a much higher return.
Imagine investing in a more expensive revenue management system, but it allows you to increase your rates by 10% during peak season. Wouldn't it be worth paying a little more for technology that truly boosts your revenue?
If you've read more of our posts, you'll have surely seen that we always say "cheap is expensive" or "we don't have enough money to buy cheap."
Technology as a driver of guest experience and loyalty
Technology not only improves operational efficiency, but also transforms the guest experience . Today, having innovative solutions can make a huge difference in your guests' perception of your hotel.
An exceptional experience translates into greater loyalty . Guests who feel well cared for and valued are more likely to return and recommend your hotel, which translates into long-term revenue growth . Additionally, personalized, technological support facilitates communication before, during, and after the stay, generating positive reviews and a better online reputation. At HotelSAAS , we work with providers who not only optimize processes but also elevate the level of service and customer service, creating unforgettable experiences.
Conclusion: How do you know if it's worth it?
Investing in technology for your hotel isn't just a matter of spending for the sake of spending , but rather investing wisely. ROI helps you make data-driven decisions, while an improved guest experience translates into loyalty and increased revenue.
At HotelSAAS , we partner with providers that offer real, proven solutions designed to improve both operational efficiency and customer satisfaction. If you're considering taking the plunge, be sure to evaluate every aspect: cost, benefits, payback time, and, of course, the impact on your guests' experience.
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