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London hotel wins compensation after IT failure

10 May 2010

A prestigious London hotel whose new computerised booking system turned out to be a costly nightmare has won six-figure compensation from the software firm that provided it.

Covent Garden's Kingsway Hall Hotel in 2006 paid almost £50,000 for the "Entirety" package which it hoped would streamline its sales, bookings, catering and marketing systems.

But the system proved a bitter disappointment and, within a month, the 170-bed hotel - part of the Cola Group, which also owns the Kensington Close and The Westbury hotels - had lost all confidence in it, Judge Stephen Toulmin QC told London's High Court.

And, when the system's supplier - Red Sky IT (Hounslow) - failed to resolve the problems before a March 2007 deadline, the whole front office software package was scrapped.

Amongst other things, the hotel argued it lost heavily due to the system's misreporting of bedroom vacancies, resulting in substantially fewer bookings than there should have been.

Judge Toulmin awarded the hotel total damages of £110,997 against the software firm, to cover its lost profits, the money it wasted on the package and more than £38,000 for the staff time thrown away in trying to put matters right.

The judge said Entirety was "not a bespoke system", but had been "recommended" by Red Sky as being suitable for the hotel's needs and better than its existing system.

Demonstrations of the system laid on by Red Sky were "intended to persuade Kingsway" that the system offered a more up-to-date booking system and the judge said "they did not show the potential problems or limitations and how to deal with them".

Judge Toulmin added that Entirety was never able to cope with group bookings at a busy, central London, four star hotel, and Kingsway Hall's woes were due to "fundamental problems" with the system, rather than any lack of staff training.

The system, he ruled, "was not of satisfactory quality and was not fit for its purpose".

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