Nothing is certain but death and taxes. Technology, on the other hand, is constantly changing. In the hospitality industry, that means keeping up to date on the latest and greatest, understanding cost to owner and how the addition—or subtraction—of a tech touch point will affect the guest experience. It was under that backdrop that Hotel Management gathered technology professionals in the lodging segment to discuss technology trends: the rise in mobile, data security, social media, CRM, PMS—a range of topics. The second annual Hotel Management Technology Roundtable brought together executives from branded hotel operators and third-party managers, giving the proceedings a multi-faceted and multi-dimensional feel.
One of the more pressing areas hotels and hospitality companies face is the balancing act between adding further technology into hotels and the costs associated with it. Getting the perspective from both the brands and management companies helps.
HM: There are many different ways to look at leveraging technology in the hotel for improving the guest experience. So how do you go about balancing and integrating these different needs within your organization?
D’Alessandro: We have brand requirements that are of course our primary spend. But then we always evaluate all IT that’s non-required and identify what is the return to our investors, but it’s not all about just the bottom line from a tangible perspective. Our guests are just as important, and if it adds value from a guest experience perspective, we’ll evaluate it and know that it will come to the bottom line as well. We start with ROI, but then we take in other factors because a balanced scorecard is critical.
Shefsky: At Hilton, we’ve got a really structured and rigid methodology process, and we go through a prioritization process at the beginning of the year as well as at different touch points throughout the year. It’s about managing and setting the priorities for both small and large projects and bringing in stakeholders from across the company to help us with that. We make sure that each one of those projects, small or large, are really realizing a return on their investment, on the brands and on the part of owners and operators.
Brown: We look at technology as an enabler of strategy and we start there. I think the ROI piece is important, it has to hit the profitability mark, but in addition we try to accomplish the brand promise. So for us it could be anything, we don’t define it in terms of required or not required. It has to fulfill this brand promise and meet strategic objectives.
O’Keefe: At Hyatt, one of our key areas of focus is simplification. We’re in the process of defining a set of technology standards and building critical mass in terms of subject matter expertise, reducing the number of vendors, consolidating to drive down costs, and also we’re starting to insource development and some key strategic areas such as e-commerce and marketing, and also guest-facing and hotel associate technologies.
With technology an ever-changing carousel of newfangled products, keeping customer data private is one of the highest priorities for companies—whether hospitality or anything else. The Target data breach was a prime cautionary example of what can go wrong when data security is compromised. So, how are hoteliers dealing?
HM: Increasingly it’s both possible and profitable to collect guest data and use it to personalize the guest experience. How do you balance this opportunity with consumer concerns for guest privacy and data security? How are you dealing with protecting guest data, but also using it to help your companies?
Shefsky: Privacy is sacred in any industry, but especially hotels whose guests are not only entrusting their privacy with us, but also their physical security. From our standpoint, we don’t collect and form data just for the sake of having data. We use data that guests proactively give us to personalize and customize the experience. We’re very careful about that.
D’Alessandro: There’s privacy data and there’s personal data. The privacy data, such as social security numbers, birthdays and so forth—we don’t want that as a management company, we want their preferences.
Seidel: It’s defined a lot by age group, too. At our age, we’re going through a metamorphosis where we go to Google to do a search, and there’s information that pops on our screen that reminds us: somebody’s been tracking where we searched before. That kind of takes you aback.
Zaccario: We’re actually focusing on the personal identifiable idea now more than PCI [personal card information], because there’s more of a spotlight on that. It also has to do with assembling profiles. It’s the same dataset that if the guest checks
in at a certain time and a certain hotel, goes to the bar, orders drinks and room service, and then says do not disturb, that’s a good dataset for somebody to know. If you do PMS/POS integration and can look at the profile and realize, he’s actually ordering four drinks…we’re getting this profile that in a way we’re trying to enhance the customer experience. But at the other hand, we really have to look at that data and where it could lead and the disclosure of that.
O’Keefe: The two key issues with Target were, number one, their security providers were actually warning the company that there were issues and they ignored them. The second issue is that the breach occurred because of a lack of network segmentation. There was actually a HVAC vendor or someone of that nature that was hacked and that allowed access to the POS. Which is really far away from best practice. One of the ways we’re addressing that is moving to more Cloud-based services where we can have our central IT team manage that data and ensure the security across the board, rather than relying on each property needing to deal with those types of concerns. The second issue is around communication. Having one consolidated IT team now makes that easier to communicate policies and things like that.
Brown: We talk about what we can do to the customer and what we can give to the customer—how we can use their data. We’re trying to think about it more in terms of how the customer wants you to use their data. Turn the tables: let them control it on their profile. Let them turn it on and off if they choose through the experience.
Enhancing the experience
Technology is only useful if it makes the guest experience better. It also helps if it can make staff lives easier in the process. With cutting-edge technology coming our way seemingly daily, and the likes of Google and Apple shaping how we live in this world, we wanted to know what hotels are doing on this front.
HM: Technology is supposed to enhance the guests’ experience, and there are so many things out there that are being done toward that. What are you doing?
Shefsky: The digital guest experience is absolutely part of the landscape going forward. For us, it’s about giving guests comfort and control over those creature comforts that allow them to enjoy their stay and enjoy the best of the products and services our hotels have to offer. We created a few test beds for this. One of our hotels put an iPad in every room that was highly interfaced with all the property systems and allowed guests to digitally transact for services throughout their stay. That went really well and that kind of informed our next test bed, which is our Conrad Concierge app, which is introducing that digital experience to the smart luxury traveler. We’re using all that to inform the broader strategy.
O’Keefe: We have a whole portfolio of innovation projects. We have now a single team that’s incubating these ideas and testing them in our lab hotels. We want to test and learn and prove that it’s going to work before we roll it out across all the properties.
HM: What about social media?
Gutzler: I recently took a trip throughout Europe and stayed at a number of our properties, and it was really awesome to see that the hotels had a presence where I could follow them on Facebook or Twitter or both and start to anticipate what sort of experience I was going to have. That made it much more personal. When I arrived, I almost felt like I knew them already. In a broad sense, in terms of the brand, one of the things that we’ve implemented is a team of about 17 people worldwide who are part of the call center 24/7, who actually monitor the social media and address issues. They receive special training to understand how social media should be handled.
Brown: We’re at a similar place. We’re doing the monitoring and the responding and trying to aggregate all of the responses. Also, trying to incorporate reviews and things within the sites that are coming out on the social media side. We haven’t yet figured out the social commerce piece. The other nagging piece is how do you start to aggregate all of this disparate activity into something that makes sense to the customer as well. You can only chase so many endpoints.
Customers are increasingly going the mobile route to research and book hotels. According to eMarketer, $13.6 billion in travel bookings came via mobile in 2013. Obviously, hotels have to have a large presence in that space in order to effectively reach prospective customers.
HM: What is the frontier for mobile as it stands now?
Zaccario: Clearly the consumer wants to do it. We’re trying to make it easier, so to your point, we do have people book mobile quite a bit. Mobile defined as tablet, in particular. It’s migrating more toward mobile, but it’s not as easy as it could be. We’ve launched a program to build our sites from a responsive standpoint, so that you’ll see them flow in the same way, across all devices.
Davis: We’ve found some nuances depending on the device, and then
who knows what the next device is. There are other areas where we found booking flow doesn’t quite work the way you need it to. So you have to take a little bit different approach on certain devices. From a technology standpoint, if you can make the change in one place and have it be everywhere, great, right?
Shefsky: This is all about channel shift. We know that over 70 percent of our travelers said that they are more likely to book a hotel that has mobile capabilities, so taking that mobile and having it intersect with every touch point of the guest’s stay, ultimately the more that we do that the more we get people from OTAs and booking through our channels. We generate 25 percent of our business through our online channels so it is about pulling that channel shift.
HM: What about Wi-Fi? What’s the stance there?
Brown: Consumers just want it. They don’t want to pay for water or heat separately and they don’t want to pay for Wi-Fi separately. And I think there’s coming the day where it is water and heat, and I think it is unlimited.
Shefsky: It’s the most important amenity, and guests are willing to pay a premium for faster and stronger bandwidth.
D’Alessandro: We do have to be careful, though, because if we do charge, which we do, they will go down the street to Starbucks and get it for free. I just lost revenue.
Gutzler: Cost and efficiencies have jumped leaps and bounds. We’ve actually scheduled many of our refreshes, both our external and internal infrastructures, to meet what’s coming out right now. What we have found is that the guests are disappointed with a 2 or a 3 Meg. They want to see that 5. But we were surprised by how many of them were willing to pay for the 10, the 15 and the 20. With the prices where they’re now, we have found a revenue string developing finally, because we’ve always talked about tier pricing for so long. I think it’s finally going to come. As a matter of fact, I wouldn’t be surprised, in 10 years, if we saw that tier pricing in our TVs.
HM: Describe your perfect hotel stay or what you’d like it to be?
Gutzler: Outlets. Not just in the guestroom but all over the place. We’ve been focused at a lot of our properties in our portfolio in moving to that direction; we’ve got them under the seats in the restaurants, etc. Also, we are going to see some voice activation coming up soon.
Nipcon: It’s going to be about choices and customization. It’s going to be about bringing your own device and wanting to have that same experience that you have at home. These technologies are out there and the standards are going to develop. We are going to have to be able to give people the choice to interact through multiple channels and customize the experience for them.
Brown: I hope that technology doesn’t sanitize the guest experience. I’d also like to see the experience float outside of the actual property. So that, when you are staying somewhere, you’re not just inside a hotel or inside a room, but out in the community and connected to your stay in a kind of organic way.
Shefsky: My perfect stay begins at the time that I book. So, I have the opportunity to customize my stay, digitally, and I’ve got a certain amount of contact and services that were tailored for me. I’m not a millennial but trend that way. So, I don’t mind that when I land, the hotel knows I’m in proximity, they’re anticipating me. They’ve got that snack that I ordered and it’s ready and waiting for me. And when I walk into the hotel, it’s seamless. Everything just happens, and the lighting and air and all those in-room controls are set to the way that I like it. And when I leave, it’s seamless, and I just get a receipt in my email.
Seidel: I can tell you I work with our up-and-comers, and they don’t want to carry a license; they don’t want to carry a social security card; they don’t want to carry your loyalty card; they don’t want to carry cash. So, 20 years from now, you won’t have to charge anything. It will probably be implanted in you, as part of your being. Charged by your body. We’ll get away from glasses and watches real quick. And everything will be the way I want it, when I want it, which is going to be now. And whoever can’t offer that is going to lose.
O’Keefe: Technology’s going to become ubiquitous. My cup might have some sort of sensor in there and it’ll know when I’m ready for a refill. We’re going to have so many more data points that we can collect and tailor and personalize the guest experience. But at the same time, I see technology is going to sort of disappear in a sense. I think the hotel associate will have more free time to have an authentic experience with the guest because the things they do need to do with technology are going to be much more simple.