Cendyn’s Merger With Data Rival Is Latest Private Equity Rollup in Hotel Tech

Cendyn has acquired NextGuest, its long-time rival. The combined company, using the Cendyn name, claims to be the largest provider based in North America that provides customer relationship management and digital marketing tools to hotels worldwide.

Accel-KKR supported the deal. The private equity firm based in Silicon Valley became a majority owner of Cendyn, based in Boca Raton, Florida, in 2019.

NextGuest itself was a roll-up formed in 2017 by New York-based private equity firm PPC, which merged Hebs Digital with Serenata.

The companies represent data plays.

“As a hotelier, if you know your guest, and you can have data on the guest available and pushed to the front lines of the business at every touchpoint that you interact with the guest, you’re going to beat the competition as we come out of this crisis,” said Cendyn president and CEO Tim Sullivan.

Cendyn and NextGuest together serve hotel brands that include Jumeirah Resorts, Hyatt, Marriott, Minor Hotels, IHG, Hilton, Rosewood Hotels & Resorts, and Virgin Hotels.

Pause and Effect

Cendyn’s Sullivan dismissed the notion that this new merger looks like a distress flare from NextGuest. Cendyn had talked about a possible merger with NextGuest four years ago and then again two years ago.

“Once Covid hit the industry, that unlocked the opportunity that now’s the time,” Sullivan said. “If we’re going to make it happen, let’s make it happen now. But nobody was distressed.”

One factor that made the merger more appetizing was Cendyn’s development of Starling, a customer data platform (CDP). This data lake promises to pull together, clean up, and intuitively present data points from across a hotel’s various software systems. Cendyn is testing the platform now with 13 hotel group customers and expects to have it available broadly by June.

“The idea of Starling is to centrally connect through an iPaaS solution to any major hotel system,” Sullivan said. “We bring the data in, cleanse it, merge it, de-dupe it, and transform it. Then we have micro-services that can run for audience segmentation, pricing, and other analysis. Hoteliers get that golden guest profile, which is then portable across your entire enterprise.”

Developers will bring Cendyn’s and NextGuest’s applications, which are running in monolithic tech stacks today, onto the same platform — which aims to be an open platform that other software providers can plug into. In the meantime, customers using Serenata or Hebs Digital applications can continue using them until Cendyn has upgraded all applications to work on the new Starling platform.

“This year, we did a belt-tightening like everybody else, but we were lucky to have strong financial partners backing us,” Sullivan said about Cendyn. “As painful as this year has been, there are some silver linings in what has happened as well. The crisis has forced the world and our industry, in particular, to accelerate digital transformation.”

“The hospitality industry has some real legacy tech,” Sullivan said. “Everybody’s aware of that. There are industries like retail and banking that are ahead of hospitality in e-commerce and converting customers online. The pandemic has accelerated the hospitality sector’s embrace of digital transformation.”

Hotels Seek to Outsource Repetitive Data Work

Cendyn isn’t the only company attempting to build platforms that offer easier and more modern connections with the industry’s wide array of software systems. But its story illustrates a trend being repeated with several vendors worldwide.

“Every company we talk to, or we look at partnering with, or consider acquiring, everybody’s doing the same thing, right?” Sullivan said. “We’re all building Oracle connections and Sabre connections and Avvio connections and so on. If you multiply that work across the industry, there are hundreds of teams reinventing the wheel every day.”

Subscribers to Skift Research can read our series of reports late last year on hospitality distribution and the hotel tech stack.

Other competitors in the digital marketing and analysis space with somewhat overlapping functionality include Revinate, Remarkety, Navis, and the Guest Management product from Amadeus’s TravelClick. Indirect competitors include Silverpop by IBM, Salesforce, Adobe Marketing Cloud, Oracle Responsys, Booking.com’s BookingSuite, Accor’s D-Edge, Duetto, Avvio, Delivra, and MountLytics.

“Our idea, which is similar to what some other innovators are doing in the space, is to provide hoteliers with one connection to any system,” Sullivan said. “We pull all the data we can get into the platform, and then each application doesn’t have to repeat that work. Each application only usees the data that it needs. So that’s a great efficiency that the hospitality sector gains there.”

A case in point: Late last year, Cendyn created an integration with Avvio, a hotel booking engine and digital marketing provider based in Ireland, which hospitality groups have begun to use.

“Hospitality partners tell us they want to get out of the integration business,” Sullivan said. “If you guys are doing that heavy lifting already, why don’t we just connect to you? Then we can focus on innovating with the data instead of spending all these cycles keeping the data updated.”

As the industry recovers, many markets will continue to see reduced volumes, especially properties relying on long-haul business travelers or international inbound leisure travelers. The ultimate goal of new tech is to help hoteliers be more effective at extracting the most yield from the customers that do arrive.

“You can take a guest profile or an audience, run data science from our revenue management products against it ,and come up with a scoring model,” Sullivan said of the company’s vision.

“Based on your history of what we know about you, this is your price sensitivity,” Sullivan said. “So when I, as a travel shopper, show up in the booking engine or in the loyalty portal on the hotel’s own website, the platform will recognize that’s Tim Sullivan. We can pull that score and put a personalized price that I am going to respond to that is more profitable to the hotel in front of me, as well as some upgrade and upsell offers on top of it.”