I just met Gillian Lennox – who since 2006 has been the product manager for Backpack Online which is Hostelworld’s hostel management application. Fascinating hour – she has a wealth of experience and advice relating to moving businesses from standalone software to a web based application – and it was not an easy ride!
In 2006 when she joined they had 280 Hostels using their PMS (Property management software) which was an standalone application like Memento 5 in delphi. (They had 10,000 other hostels who just uploaded free beds)
This PMS used to sync every 4 hours with Hostelworld.com.
They wanted to move to a web based application for 2 reasons.
1. If the hostel used a web based application – they could get access to all their free slots in real time
2. Support etc would be much easier.
(BTW they did get a huge increase in bookings once they had moved over)
From 2006 once the new software was ready all new clients got the web based software but they met massive resistance from existing clients who were very afraid of going web based only. Many of them did not trust the internet etc.
In face as of today – they still have 17 hostels on the old application who are still refusing to come over. Thats out of 1450 hostels in total who use backpack online. (There are 26,000 hostels on hostelworld.com but most still just upload free capacity). In the end it took them until 2008 to get most of the old hostels upgraded.
The 3 major issues she said they faced were:
1. Internet – people were afraid to go web based
2. People were afraid of double bookings (even thought they are web based – its based in php so there is a 60 second refresh where things can be double booked
3. Data – clients were concerned that the company data would now be out of their hands especially as there was data about bookings coming from other sources like Hostelworld competitors like Expedia.
1. For the first issue, they had to have a minimum standard of broadband – 1MB. And for the big sites they recommended they have a cheap backup broadband from a different supplier (e.g. our 3G dongle idea)
They had to spend a long time coaxing customers to try it out and see that it was better. With new clients it was much easier as they had no other expectations. Also the online software initially was not as feature rich as the standalone version – took 18 months to catch up.
Every morning they send the hostels an text based email with all their bookings for next 14 days in case the hostel can’t get online.
2. With Overbooking – she explained that overbookings have always happened in any reservation taking business – its a fact of life in a restaurant or in a salon or in a hotel. However in the past the business would accept the responsibility of this themselves but now with software they have someone to pin the blame on. For them it is a rare occurrence but it does happen and they explain up front during training that it may occur and mistakes do happen so not to get frustrated when it does – just deal with it as normal (They did try to build features in to the system that reserved beds just in case there was a double booking but it became too complicated and error prone so they ditched it.)
3. Regarding Data Protection – the main issue here was in Germany who have very strict privacy laws. As they were hosting people’s data they had to get a written contract from each hostel in germany. Also every person internally who works on backpack online has to sign a special contract/NDA regarding all the data that is hosted.
Gillian also summed up 3 pieces of advice:
1. Moving online has to be less hassle than what they are currently doing – you must re-assure them of this.
2. Continue to offer the standalone based software if you have to but make it much more expensive (this is something they couldn’t do because backpack online is free as they make a lot from all the bookings)
3. Be really clear and upfront with what can go wrong and how to avoid/deal with it – this way customers expectations will fall into line.