On AWS, Meliá Saves 58% and Builds Organizational Resilience During Unexpected Downturn
Based in Majorca, Spain, Meliá Hotels International (Meliá) is the third-largest hotel chain in Europe and the largest leisure hotel company in the world. Using cloud services such as Amazon Web Services (AWS) has been a growth tactic since the start of what Christian Palomino, Meliá’s global IT vice president, calls its “digital transformation” six years ago: “AWS provided a fast way of testing and piloting new things with modern technologies while lowering costs for infrastructure by linking our demand to the cost,” says Palomino. One key workload Meliá migrated to the cloud was its central reservation system, which handles all online bookings.
Meliá has been able to scale up and down with demand and save on costs with a pay-for-use AWS-supported infrastructure. The company has also been able to use AWS to quickly modify its traditional call center model to respond to global challenges by pivoting to a work-at-home model with Amazon WorkSpaces and to experiment with an expedited, contact-free check-in process for its hotels.
AWS provided a fast way of testing and piloting new things with modern technologies while lowering costs for infrastructure by linking our demand to the cost."
Global IT Vice President, Meliá
Linking Infrastructure Cost to Varying Demand
The hospitality industry was hit especially hard by the COVID-19 pandemic, as social distancing, travel restrictions, and economic hardships forced the cancellation or alteration of millions of travel plans around the world. Meliá found AWS to be an invaluable resource in responding and effectively adapting to those challenges. With its already nimble cloud-based IT architecture, Meliá was more prepared than most when the COVID-19 pandemic caused a 95 percent decrease in reservations virtually overnight. “The way the AWS infrastructure is built, you pay per use, and you pay for computing power,” says Palomino. “The less you use, the less you pay.” If Meliá had retained its on-premises architecture, it would have had to pay for servers regardless of the drop in reservations. Meliá, which was already saving 40 percent yearly by switching to the cloud before the crisis, saved an additional 58 percent by scaling down during the erratic period of dry spells.
Meliá tested the elasticity of its cloud architecture again when the company offered 20,000 free room nights to medical professionals as thanks for their service during the COVID-19 pandemic. The company released 2,000 rooms for booking every day at 9:00 a.m. over a 10-day period, and the rooms sold out in minutes each day. After weeks of relatively low activity, Meliá was able to efficiently scale its infrastructure up again to accommodate these spikes. “On AWS, you can be ready to absorb all that workload without dropping your performance,” says Palomino, “and then you can reduce your costs the rest of the day, when you have no activity.” The extreme swings in demand during this time underscored the value of the AWS pay-for-use model that had motivated Meliá to move to the cloud in the first place: creating cost savings for the company while setting it up to scale as needed in any situation.
Developing a Remote Working Platform
Meliá’s cloud infrastructure helped prepare it for the reservation fluctuation brought on by the global health crisis, but there were other areas where the company needed to adapt in real time. When a stay-at-home order left Meliá’s 500 call center agents without a place to work, the company turned to Amazon WorkSpaces—a managed, secure desktop-as-a-service solution—to effectively set up 500 home offices in just 10 days.
“Our technical staff said it was easy to understand how everything worked in AWS,” says Palomino. The team quickly adapted Meliá’s security architecture to a new cloud-based platform, testing call center applications and ensuring they met payment card industry compliance. When they were finished, the technical staff gave its 500 users access to the Amazon WorkSpaces platform, enabling the call center staff to answer the sudden influx of customer questions from the comfort and safety of their own homes in a secure and efficient manner.
Innovating the Check-In Process
Even before the COVID-19 pandemic, Meliá had been exploring new ways to perform essential processes with help from AWS. One idea the company gleaned from its AWS account team was a way to build a fast, sophisticated check-in system. Because many of Meliá’s hotels are located in resort destinations, large numbers of guests often arrive at once, which can create bottlenecks in hotel lobbies. “Many of our hotel guests arrive on the same plane and the same bus,” says Palomino. “Then there’s a front desk that needs to check in all of them, give them keys, and ensure everybody is who they are supposed to be for safety reasons.”
The new, more efficient system in development is contactless and combines the use of the Meliá mobile app with facial recognition software, ID document scanning, and terminals in the hotels that actually recognize the customer. Palomino describes this zero-contact system: “When the customer arrives at the hotel, if they are tech savvy enough, they will be able to go directly to the room. But if they prefer to have a physical key, they may go to one of our totems and check in with face recognition.”
Once the COVID-19 pandemic hit, the need to minimize social contact between guests and employees became even more critical. Suddenly, Meliá’s experimental zero-contact check-ins went from a convenience to a necessity. Building on its existing remote check-in system, Meliá was able to quickly and efficiently eliminate the need for physical contact between guests and hotel employees during check-in. The system is currently under development, and Meliá plans to begin rolling it out in late 2020.
What Comes Next for Meliá
AWS helps give Meliá the power to respond to unforeseen challenges and push new ideas even further while minimizing cost and maximizing customer safety and comfort. Meliá rose to the challenge that the COVID-19 pandemic presented in the hospitality industry by crafting sustainable business practices that are now poised to move the company forward. By linking its infrastructure cost to demand, Meliá is prepared not only for fluctuations from off-season to peak season but also to cost effectively manage extreme scaling shifts in either direction. At the same time, by quickly enabling secure remote work, Meliá has demonstrated that it can handle drastic staffing changes in response to changing requirements, and by enabling a contact-free check-in process, Meliá is poised to solve daily customer-management problems with innovative, modern solutions. This readiness is possible in part due to the shared vision of Meliá and AWS, explains Palomino: “The AWS Digital Innovation Program is very customer oriented. It has been amazing to find a technology company with so many similarities to us and our values.”
Meliá does everything it can to ensure its guests feel relaxed—but before guests can relax, they need to know they’re safe. In addition to its plan to streamline the check-in process, Meliá is developing new ways to improve guests’ stays. “We are working on technologies that help us manage the flows of people in the resort in real time so guests can safely book experiences in advance,” says Palomino. Meliá hotels are not just surviving but adapting: no matter what the future holds, the company will be better equipped than ever to provide guests the stress-free luxury they’re looking for.
About Meliá Hotels International
Founded in 1954, Meliá is an international chain of luxury hotels based in Spain. Operating 374 hotels in 40 countries and on 4 different continents, Meliá is one of the top-15 largest hotel chains in the world.
Benefits of AWS
- Saved 58% on infrastructure costs
- Moved 500 employees to remote work in 10 days
- Developed zero-contact check-in technology
AWS Services Used
Amazon WorkSpaces is a managed, secure Desktop-as-a-Service (DaaS) solution.
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