Interact Systems, Inc. located in Boston, USA, has developed software tools that help hotel chains solve application integration problems. Interacts Application Integration Server (AIS) provides a two-way interface between central reservations systems (CRS) and property management systems (PMS). At least two important trends in the hotel industry are relevant. First, hotels are shifting away from the manual booking of room reservations and electronic bookings will continue to increase as more bookings are made over the Internet. Second, competitive pressures are forcing hotels to implement yield management programs and to improve customer service. By integrating the CRS and PMS through Interacts AIS, inventories can be better managed, yields improved, and customer service enhanced. All reservation traffic is routed from the CRS to individual hotel properties. This allows Interact Systems to create a database that can be used to track customers and to facilitate marketing programs, such as frequent stay or VIP programs, as a way of increasing customer satisfaction. Interact forecasts application integration expenditures in the hospitality industry to exceed $1 billion by 2018. Greg Thomas founded Interact Systems in 2012 and developed the firms middleware software and hospitality applications. He has twelve years of systems applications experience and currently is Interacts Chief Technology Officer. Eric Westskow joined Interact in early 2015 as President and CEO. Prior to that time, he worked in sales and marketing in the software industry for over twenty years.

Q. Could Interact Systems qualify for S corporation status with the IRS? Why or why not?