HITEC panel: Technology investment requires direction, clear goals

HOUSTON — It doesn't pay to invest in technology without a plan. However, a panel of hotel executives at the Hospitality Industry Technology Exhibition & Conference 2018 in Houston accused the industry of failing to look before it leaps into technology upgrades, charging ahead without a precise objective.

Ash Kapur, SVP of hotel asset management and chief revenue officer at Starwood Capital Group, said he is concerned by the number of legacy systems propping up the industry. He also is weary of the number of systems in a hotel’s “tech stack” (a combination of software products and programming languages used to create a web or mobile application) that have been temporarily repaired with “Band-Aids,” as he said. Furthermore, Kapur said that as the industry works to fix its growing list of tech limitations, organizations within hospitality continue to attempt to disrupt or reset aspects of the customer journey, creating more problems.

“The hotel space right now is very myopic. I think in some cases we have to press reset and ask what is a brand’s vision, what is the customer journey, and is there technology out there to help connect the dots,” Kapur said. “It’s important to have a vision, a sense of where you want to be three to five years down the line, and I don’t see that happen all the time.”

Cindy Estis Green, CEO and co-founder of Kalibri Labs, said the hotel industry once was tactical in its approach to technology spend and integration. Today, however, she sees and industry that is hungry to innovate while simultaneously lacking direction.

“Technology was very tactical in the early days,” Estis Green said. “If you couldn’t justify saving labor, then you couldn’t put new technology in. Accounting, point-of-sale and front-desk check-in took priority. Now we want the tech stack to deliver guest services, and we want technology to be front-and-center, which is a challenge because we have a lot of legacy systems.”

Divided Approach

Mark Carrier, president of B.F. Saul Company Hospitality Group, said the industry’s uneven application of technology stems from its disjointed application of technology in the past. According to Carrier, hotel companies began innovating around the time point-of-sale systems were introduced, but once these organizations reached critical mass, innovation decelerated. Now, the risks inherent in introducing change are immense because hotels are saddled with a vast install base.

“This leads us to the challenge we have, where rather than an integrated approach it ends up as assets being patched together and not fully integrated,” Carrier said. “This presents an opportunity for faster, innovative companies to find their slice of the pie and exploit it. The owners pay for everything, eventually.”

Many hotels are burdened with a technology stack supported by legacy systems and short-term fixes, and setting things right is going to take significant investment. Photo credit: Getty Images/MarianVejcik

Carrier was referring to companies such as Expedia and Airbnb. The question now turns to who the next disruptors are in the industry, and the answer lies in who owns the traveling customer. It’s easy to say that online travel agencies and data giants like Google and Amazon have command of their user’s data, and therefore they own these customers. But according to Kapur, it is hotels that have the final say on the guest experience, which is the ultimate deciding factor in terms of loyalty. Because of this, Kapur argued that technology must enable a property to offer a powerful stay experience every time, eventually delivering the guest to your brand.

Barry Goldstein, chief commercial officer at Wyndham Hotels & Resorts, agreed with Kapur, but said hotels have limited chances to win guests over because of the heavy levels of competition found in the market. Furthermore, with more guests providing personal information to hotels, they want to see a benefit to relinquishing their privacy.

“If the experience is poor, if the data you provide me as a guest is irrelevant, I’ll never interact with you again,” Goldstein said. “The challenge is that you don’t get a lot of chances. If you get it wrong a few times, you will lose that customer.”

Integrate With Me

It’s clear from speaking with HITEC attendees that the hotel industry is aware of where it went wrong. The word “integration” has been the refrain of the conference, with nearly every company discussing ways to work in tandem with others to smooth out hotel operations and create an exciting guest experience. It’s a cooperative mood for an industry that often is bent on secrecy, and it can’t help but give way to a feeling of optimism for the near future.

“I predict that technology will continue to evolve and brands will figure it out and personalize in meaningful ways over the next two to three years,” Estis Green said.

“The driving need for bigger brands to have technology platforms that work together and are integrated is a manifest issue,” Carrier said. “Market forces are realizing that. Many owners are far more engaged to develop that concept further. It’s mission critical to long-term effectiveness, and it’s a value proposition for owners.”

One part of this integrated mindset is that it will allow individual companies to stick with what they are best at, hotels included. Hoteliers were made for hospitality, not things like website management, and with tech manufacturers able to focus on their zone of genius, hotels are able to specialize.

“We owe it to our businesses and our partners to pick the things we do really well,” Kapur said. “Even if we excel at just five things to enhance the guest experience, we will be far more profitable if we focus on just those things, and having a more focused approach to connected technology is a part of that.”