SaaS (Software as a Service)

The use of SaaS in the travel industry is a fundamental shift in finances.

• Legacy Model (CAPEX): In the past, a hotel or airline would have to make a huge Capital Expenditure (CAPEX) to purchase servers and perpetual software licenses in advance. This had to be a massive initial cash investment and an additional IT team to operate the hardware.
• SaaS Model (OPEX): In the case of SaaS, the cost is an Operating Expense (OPEX). The company pays a predictable monthly or yearly subscription fee. This lowers the barrier to entry so that a small boutique hotel can use the same powerful Revenue Management System (RMS) as a global chain without the million-dollar price tag.

SaaS is based on multi-tenant architecture.

Imagine an apartment house. In the old model, all tenants were responsible for building their own water treatment plant (server). In the SaaS model, we all live in the same building and have the same water supply (infrastructure), but we have our own private key to our apartment (data).

Because the infrastructure costs are shared across thousands of clients, it means that the vendor can force the updates, security patches, and new features on everyone at the same time. When a SaaS provider works on their booking engine to accept Apple Pay, every travel agency that uses the platform receives the feature instantly.

SaaS has touched every vertical of the industry:

• Hospitality: Cloud PMSs (like Mews or Cloudbeds) give your front desk staff a check-in/check-out with a tablet from anywhere in the lobby.
• Corporate Travel: Expense management tools (such as Expensify) let travelers take a picture of receipts on their phone so that information will be synced with the finance team immediately.
• Aviation: Imagine crew management software for shifting pilots through a mobile app.