Future of Technology: full interviews3 Sep, 2010 By: Jason Q. Freed Hotel and Motel Management
Technology advancements in the lodging industry have moved forward with blistering speed. Brand chief information officers and hotel technology experts told Hotel and Motel Management the next five years will move even faster. Hoteliers can choose to look at rapidly advancing technologies as a constant challenge or embracing technology as a new way to engage the guest. Full interviews below:
SW: Steve Woodward, CHTP, president, Centrada Solutions
DK: Dan Kornick, Chief Information Officer, Wyndham Hotel Group
TD: Todd Davis, Chief Technology Officer, Choice Hotels
TC: Tom Conophy, Chief Information Officer, InterContinental Hotels Group
MN: Monika Nerger, VP of Technology, The Americas, Mandarin Oriental
DH: David Heckaman, VP of Technology, Hotel Development, Mandarin Oriental
H&MM: Of the technologies used in day-to-day operations at a hotel (PMS, CRM, revenue management, etc.), which is the most critical to operating a hotel and why? Which function or service do you see as lacking, where a significantly better product would increase business significantly?
SW: I see the PMS as the most critical technology in conducting the day-to-day operations of a hotel. The PMS can be thought of as the “brain” of the hotel. It is constantly taking in information from all of the other systems, analyzing it, and simultaneously pushing back out what it has received. In my opinion, the most significant shortfall with today’s PMS’ is that they lack the ability to allow guests to directly interact with them more. The PMS has a wealth of information available that would be of interest to the guest if they had access to it (remote check in, room availability, selection of a specific room, etc.). Guests today are used to having much more visibility and control over their experiences.
DK: Our property management and central reservation systems are the most critical technologies used in the daily operations of Wyndham Hotel Group hotels, primarily because they enable our customers to book rooms.
Because of this, we regularly make significant investments to improve these systems, allowing us to deliver information to our customers in a more cost effective and speedy manner.
It’s interesting to look at the evolution of social networking and how it plays in to customer relationship management. Historically, we’ve been able to look at guest history and use that information to draw insights about guest preferences and needs. Today, there is a never-ending source of customers online who are volunteering this same type of information in ways that we’ve never seen before. The opportunity lies in finding a way to effectively and efficiently manage this influx of information and using it to make informed business decisions.
TD: These technology solutions all play a critical role in the overall operational and global distribution platform each hotel needs for success in today’s world. We cannot think in terms of PMS, CRS, CRM, revenue management anymore. Each plays a part in a business process and they don’t need to be separate systems any longer. Hotels are leveraging each component and the advantage comes from how they work together. As systems move above property, you will see the lines blur further.
Achieving the single 360-degree view of guest experience requires these systems to interoperate and personalize the experience. An integrated CRM solution is a key element to building a relationship with the guest over the full guest cycle (before the stay, check-in, during, check-out and after the stay). As an industry I think we have barely tapped the capabilities in this area. Leveraging interactions beyond email, maintaining a consistent message with each interaction and one building on the next is key. A guest’s likelihood to recommend and a return stay is driven by many factors however customer service is at the forefront. Technologies that enable fast, personalized customer service are critical in today’s market.
Each of these technologies plays a role in the customer experience and having a platform, taking advantage of each will drive satisfaction and revenue for hoteliers. Looking ahead these technologies need to be dynamically rule driven by real-time data analytics to optimize the user and consumer experience.
TC: The PMS and revenue management are very critical. Sometimes they might be done off premise if you’re revenue management isn’t done well. You do have to get that right. The technology around revenue management is getting more and more sophisticated. It used to be OK to focus on your rates and adjust for seasonality. You now have better perspective on what your competition is doing.
As consumers are more sophisticated, rates are more transparent. Kayaks and others are aggregating the online experience. What’s happening is consumers are much more educated. We need to get that right. You’re going to be shopping at that time and time is valuable.
The PMS has evolved from an accounting system. That’s also where I think there’s room for significant improvement: how the PMS integrates with other systems running in the hotel, such as the in-room technology. Historically the PMS has been the hub, but that might need to change over time. If data, video and voice are coming down the pipe, does it make sense that it has to go through the PMS for billing? CRM for most hotels is probably better off served centrally.
MN: From a pure operating perspective, we use the system of HotSOS to track guest preference. The industry has historically used CRM, but it’s really the execution. The execution has to be happen real time. We need to have real-time information and communicate that throughout the entire operations.
DH: It’s actually the combination of the system. Communication between the systems is critically important. The HotSOS part is very important to the delivery to different depositories. But it’s really the interfaces that Mandarin Oriental has led the way on; the time we’ve spent with HTNG, which is really all about the systems talking together. Instead of having five different messages being sent, it’s one message. If I had to take a look from a big view down, we’d look for continued advancement on those interfaces to make them more reactive.
H&MM: Is there a near-term technology trend that you see as crucial to the hospitality industry on the horizon for 2011? Maybe a product to replicate what the guest has at home or a tool to better market and distribute roomnights?
SW: Availability of Internet bandwidth. The requirements of bandwidth by guests is exploding! Guests now have a variety of different devices (laptops, netbooks, iPads, PDA’s) and web based applications (social networking, media streaming, corporate web sites, etc.), which are driving the need for more bandwidth. It is not uncommon for today’s travelers to have 10-20 mbps download speeds available to them at home when they use their devices and applications. They expect the same when they go outside of the home.
DK: Free guest Wi-Fi continues to be expected by most guests and not just in the room, but also throughout the hotel and its facilities. People have more and more devices that make use of the Internet and as such, expect to be able to use them as they wish, regardless of whether they’re at home or in a hotel.
In addition, as digital flat-panel televisions continue to become more commonplace in homes, so does the expectation that they will be available in hotels. This is certainly not a new trend but continues to be one that if left unaddressed, becomes more important every day.
TD: Technologies consumers use will enable our industry to understand more about guests and what they demand most. Mobile is growing and mobile is not just apps for new phone technology. Mobile will be ubiquitous access and each device needs to be treated as a new distinct opportunity to leverage. Architecturally we cannot treat each mobile interface as use another web page. The opportunities to gather more information for personalization, building an interactive relationship with the consumer and utilizing the device capabilities will change by device.
Bookings tend to be made last minute (the day of or just before arrival) and are opportunistic. Leveraging geolocation, mapping, Google, BingTravel, Mashups, Augmented Reality will enable you to persuade the end user. This channel will drive true incremental stays.
Also, mobile goes beyond the guest and into hotel operations. The number of possibilities to enhance hotel operations with mobile device capabilities is significant.
TC: Revisiting how a hotel is marketed online is clearly an obvious thing hotels need to do. Getting all the way down to the photography and video. Richer media is something that needs thought through because the infrastructure will allow it. We have videos of InterContinental concierges and guests can hear the concierges talk about their love of the city.
I think that magic wand thing would be some magic tool that intuitively ables hotel to maintain their online presence. Context, text, maps, as well as property description as well as social networking mediums. How do I maintain my presence? How do I look at how people are yelping me? In one kind of dashboard. That I can go to this magical tool and it gives me my hotel’s presence.
We tend not to have tech savvy folks in the hotels; some don’t know even what their presence looks like. We need a meter that tells them how their data is. If you happen to have a landmark hotel, you don’t need to do jack. If you’re hotel in Pennsylvania along the road, how do get your hotel marketed?
DH: One of the things in the near term, if you look at CityCenter, Mandarin was a pioneer in the amount of in-room control and automation. The fact that the guest can interact with room, from when they check in and the lights come on. Some of that is very cost prohibitive and it’s not for every hotel. Groups and meeting planners want green as a requirement. That stuff is going to continue to expand and one of the nice things about it is five years ago you had to spend a lot of money up front installing wires. Now, you can do these things over phases. Integrated TV can add some lighting without gutting the room. That’s one of the things that will continue to expand.
H&MM: What about five years down the road? With your crystal ball in place, how do you see technology shaping the hospitality industry in the long term?
SW: I think within 5 years, guests will have the ability to carry with them devices that will connect with them directly to their personal and professional lives easily while traveling. Most travelers can already connect relatively easily to their offices. This new connectivity will allow them to also connect to their homes and even to the hotel systems wherever and whenever they want. For example: I pay my local satellite provider to deliver television programming to my home. As it is delivered, I have DVRs that capture programs that I am interested in and store them for later viewing. Why can’t I access that information from my room instead of being forced to watch the content that the hotel delivers and pays for on my behalf?
DK: Mobile technology will continue to become more prevalent and in turn provide inventive ways for hotels to interact with and market their services to guests. We are already beginning to see this to some extent, particularly with tablet devices like the Apple iPad, which have been adopted by select higher-end hotels as a way to enhance the guest experience, whether that be through custom applications or electronically providing the guest with the day’s newspaper.
What’s more exciting is the idea of additional devices becoming available, not just from Apple but other manufactures as well, at lower price points. This will pave the way for the devices to no longer be exclusive to high-end hotels but available to midscale and economy properties as well. In turn, hotel owners and guests across all segments will have new technological opportunities to explore, ranging from how a guest checks in to the type of entertainment available at the hotel.
The challenge for hotels will be managing guest expectations in a way that’s cost effective and feasible.
TD: The advancement of technologies, consumer adoption rates, how the technology changes consumer lifestyles will help shape the future technology needs for guests. Correctly positioning the use of the consumer technologies is important. The industry put PCs in guest rooms before laptops became mainstream and Internet access was widely available in hotels. Offering iPods and putting iPads is guest rooms are an example of failed positioning.
More interactive communication and entertainment will be a winner. The integration of multiple forms of communication (twitter, Facebook) into one device is a kind of communication mashup. Google TV, expansion of augmented reality through any device and recognition technologies (xBox project Natal) will make video more interactive.
These are all technologies that we will be able to leverage by using analytics from them enabling our industry to personalize more and move away from “on-demand”, past “near-real time” to “predictive” service delivery.
TC: Mobile computing. How to do we endear our brands to the guest? We used to focus on three Bs: bed, breakfast and bath. Today there’s a fourth B, which we call bandwidth. Our guests are being expected to be connected to their home world and work world. With the advent of streaming audio and video, how much do you invest in putting out the appropriate pipes when in the next few years people may be using their phones? It’s no different than the mad rush the hotels had in the ’90s to do two-channel trunk lines. Today it’s all about wired and wireless.
I remember when 1200-baud modems were slick. We built programs around that. Its possible, looking at the future and what guests expect, that bandwidth will continue to improve and stabilize. What people are consuming on the web will in fact become feasible.
DH: The advent of the cloud and what it brings to the hotel environment. A lot of people are throwing out the word “cloud.” Mandarin’s view of the cloud is that it’s a truly a global presence, with data being distributed across multiple points. Sitting in the same cloud we have our CRM vendor with our data mining, at least the core piece of it is in the cloud. The actual operation data has been removed offsite and is much more robust in this cloud environment. It’s one of the thing’s Mandarin has been working on—putting all their stuff in a common database.
MN: We believe that our guests will be driving us. We’re already seeing that with the introduction of the iPad. Now guests are bringing them into the room. Were going to be much more focused on security and safety.
H&MM: Are there guest demands that just aren’t financially feasible?
SW: That is an interesting question. I believe hotels could deliver just about anything the guest demanded if the guest was willing to pay a price that made it profitable for the hotel. While guests will generally pay a reasonable price for items they demand, Internet access seems to be the exception to that rule. Most consumers believe that connectivity to the Internet should be “free” (even though they pay for it at home). I don’t believe delivering unrestricted Internet access today for free is realistic due to the hotel’s cost of providing it. This is changing, however! We are already beginning to see prices for bandwidth fall dramatically. For example: I recently received a quote for upgrading a hotel’s bandwidth where the cost of the new circuit was less than $35/month/mbps. Just two years ago, that same hotel was very happy when we were able to find them bandwidth for just under $350/month/mbps. If that trend continues, unlimited bandwidth could be here very soon.
DK: The need for additional Internet bandwidth will be a challenge for some hotels but they will need to find a way to manage guest expectations.
TD: The constant advancements in technology drive a “keep up with the Joneses” mentality that comes at a cost and not necessarily and ROI. Unfortunately, in the current economy, capital is not easy to come by. However, now is a good time to make investments in infrastructure and upgrade so you can take advantage when things turn around in your market. The industry will deliver alternatives to fit the demands at various pricing levels. You need to clearly understand your market, the guest demands specific to it and where your level of service fits in that market. There are many disruptive technologies in the market (more coming this fall). The guest demands are going to be in flux. Using the information you have about your guests, demands and being more predictive on how to meet their needs will be critical.
TC: I think the answer is yes. If we’re trying to predict again, we can look at the cost of the mobile platform. All you have to do is look at the Droid X that just came out. The power of what you have in your pocket will increase and the cost structure will be such that you can give them to your staff. You can eliminate things like the walkie-talkie. Staff management is more efficient; you’ll know where you’re people are. Who knows how this could be used, but we will certainly take advantage of mobile computing.
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