2017 INDUSTRY OUTLOOK
At the start of the new year, Hospitality Technology reaches out to its Advisory Board for industry insights and predictions on what the year ahead may hold. This diverse crew of technology executives offers candid thoughts on the current state of the industry as well as what has potential to effect change.
“Operators have more to manage than ever before, so with predictive analytics, we’re looking to offload some of the critical decision making to algorithms that can look back over thousands of transactions to predict the trajectory of any given team member, or restaurant,” Brian Pearson of Stacked Restaurants says.
On the customer-facing side for both hotels and restaurants, voice activation is buzzworthy and budget-worthy, as many board members believe it will have transformative practicality for guest experience. The Internet of Things will also continue to have evolving applications as connected systems will play a role in bringing the smart home experience to restaurants and hotels. Enabling IoT initiatives, however, will require vigilance in existing infrastructures.
“When it comes to making it easier to be a guest, I believe that many of our organizations can still benefit from polishing some of the systems and platforms that we’ve implemented over the past few years,” Corey Kline, VP of IT, Noodles & Co. states. “I foresee a growing number of ways that we can use location-based technologies in conjunction with our digital presence, but we still have only a fraction of guests currently using our app. Constantly refining the core elements of our app, to ensure that they are appealing and benefit our guests, is a top-priority in 2017.”
What technology projects are on your company’s priority list for 2017?
BROOKS: At Tumbleweed Southwest Grill, our top project for 2017 is online ordering. We have limited online ordering with a take-out delivery company and a catering company, but we would like to have online ordering at all stores in 2017. We hope to grow sales with new avenues of sales and delivery. A second project is onboarding. Our objective is to streamline all the paperwork and eliminate the need to scan it.
DICKERSBACH: Most of our projects at Highgate Hotels are focused on the business and business improvement. Having just launched a new ERP platform, we are committed to streamlining the operations and working with finance to make sure the transition continues to be smooth.
ENG: We have a mix of older properties that are under significant renovation and new builds, so the focus there is on infrastructure. This includes significant fiber to the guest room deployments as well as traditional Cat6 and coax within the rooms to accommodate service delivery and personal networks.
While we continue to deploy certain third-party applications through the cloud, we are maintaining — and in some cases expanding — our internal virtualization platforms. There have been many successes in the cloud, but we have seen some spectacular failures as well, so we continue to use our own platforms in order to maintain a high level of availability of mission critical applications.
GARAVUSO: A few of our priority projects for 2017 at Diamond Resorts will focus on redesigning and enhancing our member’s website, streamlining sales contracting systems, and continued mobilization of sales and support systems. We will use feedback gathered from members to continue to enhance the usability of the member’s area of our website. We will deliver significantly faster availability searches for a much broader range of selection criteria. In addition, the display of results will be presented with many options for refining reservations requests to maximize the use of ownership points. Another focus for 2017 is digitizing our sales contracts process to make it fully automated from sales proposal through contract signing. This will also fully digitize the contract storage and retrieval process. This will be facilitated by the continued deployment of mobile devices for enhancing the sales process.
GARRIDO: Enhancing the guest entertainment offerings at Thayer Lodging hotels will be a top priority for 2017. We are also making improvements on mobility access at most of our hotels with WiFi and cellular. We see guests demanding more options in guestrooms. They want to bring their own content so we are focusing on implementing solutions that allow guests to use casting technology or Smart TVs to access their own content via apps.
Mobility is also in high demand. We are pushing our hotels to invest in infrastructure to have robust wireless solutions to support the uptick in demand and the content that guests want to access over wireless. We are also looking into solutions to easily expand cellular coverage with either DAS solutions or repeater technology so that mobile devices are always connected.
HOPCROFT: Our number one priority at Starwood Hotels is readying our legacy Starwood hotels for systems solution integration with the Marriott ecosystem. We will spend much of the year in rapid cycles of innovating, testing and deploying procedures and processes; this way, hotels can migrate as simply as possible and integrate with minimal disruption, as we build and sustain momentum. The second priority is to drive additional value to our owners, leveraging the combined purchasing power of the newly-integrated companies. Moving to new technology contracts and platforms has the potential to provide not only immediate and tangible cost savings, but also improved business processes and innovation-fostering workflows to our hotels.
KLINE: At Noodles & Co. in 2017, digital signage, continuing to expand the features of our apps and online presence along with offering more payment options will be receiving the most attention from the technology team.
LUCIA: Virtualizing our last few in-house servers will take precedence in2017 at Fireman Hospitality Group. We are virtualizing anything that’s not hosted in the cloud to cut down on servers and increase efficiency. We are also exploring how we can use technology to make restaurants more efficient and reduce the amount of hours it takes employees to do their jobs. This will be very important with the minimum wage increase and rising costs.
PEARSON: At Stacked we will be focusing on the evolution of two areas: mobile apps for both customers and operators and payments with EMV and NFC technologies. We will also be turning to predictive analytics to identify the best team members and the behaviors that lead to operational success. We have chosen to focus on these areas in order to enhance the guest experience, and improve profitability. Operators have more to manage than ever before, so with predictive analytics, we’re looking to offload some of the critical decision making to algorithms that can look back over thousands of transactions to predict the trajectory of any given team member, or restaurant.
RAMA: At JHM Hotels we are focusing on guest-facing technologies that will allow guests to use their own devices and content to stream video on in-room televisions. In addition we are investigating ways for the in-room television to help hotels facilitate up-selling within room dining services and resolve guest issues.
STARMER: Dunkin’ Brands will continue to focus innovation towards points of engagement with our guests. We continually build upon successful consumer facing initiatives such as On-the-Go Ordering, our mobile order and pay platform, and DDPerks, our loyalty program. This digital strategy presents opportunities to leverage innovative technology in both our digital and physical presence. Additionally, we’re engaged in work to refresh our POS and back office platforms to provide more agile foundations to support today’s digital marketplace and support franchisees in the profitable operation of restaurants.
TENCZAR: Sonny’s BBQ spent the last 2+ years architecting and implementing new technology in our restaurants. We are now making use of the newly-available information in the following ways: First, operator dashboards that will focus on the things that drive value. We have enhanced our back-office reporting tools offering a quick indication of the health of restaurant operations without having to dig through or interpret reports. Second, the BBQHQ Business Intelligence that will allow us to tell a more complete story of the success of a particular franchisee. We then use this information to design growth plans for those toward the bottom and we seek out/share the success factors of those near the top. Finally, site selection tools. Sonny’s is gearing up to expand in its current markets and beyond. Utilizing the informational tools at our disposal to explain investment value to prospective franchisees is the first step. Once we get to site selection, magic begins. We are an early adopter for a system that does a new type of predictive location intelligence and we are now collecting the right information to make this happen.
WASDIN: In 2017, Church’s Chicken will prioritize expansion of its guest engagement and digital platforms to better listen to and serve guests. In addition, we will focus on franchise infrastructure and developing common platforms.
WISE: Beacons and geofencing will be top investment priorities for Scotty’s Brewhouse. We plan to install this technology in 2017 to change the user experience for the guest. Guests will be able to place their order before coming to the restaurant using our mobile app. Once they arrive, the beacon will trigger the kitchen to prepare the order and the server can bring the food to the table shortly after the guest is seated.
What emerging technology are you excited about for the hospitality industry?
ENG: The one emerging technology that truly has some real potential in the guestroom is voice assistants. There are considerable hurdles to overcome, specifically related to privacy and basic hotel system integration. If and when those issues are addressed we could have a device that acts as a single communications bridge between the guest and staff and a single control interface between the guest and the guestroom. We might even be able to get rid of the guestroom telephone once and for all! A close second but farther off on the horizon, LTE-U and LWA are competing technologies that are still in their infancy, but they have enormous potential to vastly improve the guest cell phone experience by providing combined WiFi and cellular functionality over a shared and lower cost infrastructure.
GARAVUSO: We are very interested in cognitive systems and data. In particular, we want to explore deeper customer insights through their declared, observed, and inferred data points and interactions. We believe we can enhance service by true and actionable 1:1 personalization through continued improvements to our CRM.
GARRIDO: Voice commands for in-room controls have real future potential. I predict more hotels will begin using devices like Amazon Echo or Google home devices to control lighting and temperature.
HOPCROFT: Converged infrastructure is becoming more and more appealing in the hospitality space, especially in the luxury and full-service segment. These unified platforms afford operators a simplified environment that combines storage and networking; offers intelligent redundancy and recovery; and affords operational intelligence through one holistic management tool. This slashes the number of physical servers and appliances a medium- to large-sized hotel requires to run its business and replaces those bulky, hot, power-hungry machines with a streamlined and efficient virtualized environment.
LUCIA: The evolution of mobile apps and smartphones into the point-of-sale. You can already make a reservation, manage wait lists, place orders, etc. via smartphone, but soon the big players like Amazon, Facebook and Google will all have voice recognition items like ordering through an Echo or Dot device to trigger orders. Guests will eventually be ordering through their smartphones, self-serve kiosks and other mobile devices.
STARMER: The Internet of Things provides a remarkable opportunity for us to gain efficiencies, serve our guests in new and better ways and gain insights into new ways of doing business. It’s admittedly a broad and fuzzy term for many. For retail, this is a real blurring of the line between online and physical space and can help us create a truly seamless experience between the two. In the supply chain, warehouse automation and inventory tracking can benefit by IoT. As Dunkin’ builds more DD Green stores, the IoT provides an opportunity for efficiency in energy and equipment management. As IoT matures, it could be as revolutionary for retail as the barcode.
WISE: We believe Alexa by Amazon and Home by Google will transform the way people order food for delivery and check wait times before visiting a particular location. Developing technologies that will allow guests to place orders through these services before arriving at the restaurant will be crucial as we move forward.
What top challenges face your segment of the hospitality industry?
BROOKS: Challenges for 2017 include speed of service, staffing and the shrinking bottom line with new laws. The cost of keeping up with the ever-changing landscape of complex laws like nutrition guidelines, overtime and medical insurance continues to eat away at a smaller bottom line. Finally, credit card security laws have been an expensive challenge that change every couple of years. Overall, technology is keeping up with these changes once they occur, but if they are passed and take effect in six months or less there can be a lag for vendors to keep up.
DICKERSBACH: It seems that the number one challenge is still in and around security of our networks. It’s clear for any management company to understand that a lot of these breaches are due to what money ownership may or may not be spending to upgrade systems and put proper best practices in place. Hand in hand with the former is the continued delay of chip and pin with various brands and partners.
HOPCOFT: The technology generation gap convolutes the delivery of associate support solutions. As technology has invaded the consumer space, many of our associates have grown remarkably tech-savvy. We rely on a valuable populace of non-knowledge worker associates who have been with our operations for many years, and in some cases decades, that may not yet be comfortable with technology and the self-service approach that is becoming more pervasive. This dichotomy shapes resource allocation to multiple priorities: We now find ourselves having to deploy, maintain and support heart-of-house systems. Additional user accounts (and the critical security implications that they have) also grow administrative overhead. The largest consideration, though, is how we help our associates of all skill bases ease into the new processes quickly; in some cases, hotels find themselves having to run dedicated training sessions on the use of these applications.
RAMA: The Airbnbs and OTAs continue to be disruptive and present challenges for brands that are now moving at a fast pace to encourage and promote booking via brand websites. The issue now is the cost of guest acquisition, which seems to be a challenge because hotels feel doing so through the brand will cost hotels more than OTA fees, due to the cost of perks hotels have to pay for points and special services.
TENCZAR: The casual dining segment has had a tough year in general. The decline indicates a change in guest preference. Whether that be a preference to cook at home more, to grab food and eat in the car, or something else, it makes us constantly re-evaluate our service model. We are ramping up our online ordering and catering this year to help provide more dining options.
WASDIN: External forces to our business like compliance challenges, food and labor costs are the greatest challenges. We need to continue to improve the tools that our restaurant managers have to run their business as efficiently as possible.
WISE: At home delivery services have emerged as a challenge. Guests want to stay home and have food delivered to them. We must create an experience in the restaurant that motivates the guest to get off the couch, drive to our location and wait for food to be served to them.
What skills should tech leaders possess moving forward?
DICKERSBACH: One thing I have been focused on within my organization is the “Business of IT.” That is, managing the people, departments, stakeholders, and leaders within the company to understand how IT is helping to move the business forward. As leaders in our space, we need to have the skillset to properly articulate what we do within IT, for the business. To do so, requires a holistic understanding of the business, where you are going, where you want to be, and understand how IT can help the business get there.
HOPCROFT: Technology leaders need to be experts in tuning out the noise while positioning themselves, their departments and their hotels to import change rapidly; the rate of change on the technology landscape isn’t slowing, and what unknowns lurk beyond its horizon aren’t diminishing. Leaders must focus on the core requirements of the business but not get distracted by every single flashy new product offering. They need to guide teams to successful delivery of the fundamentals, while not miring their staff in the paradox of “analysis paralysis” or stagnating their organizations’ innovation. It is an executive’s burden to provide the balance between new tech for new tech’s sake, and real innovation.
KLINE: The ability to develop and maintain partnerships with all disciplines within an organization is imperative to being a technology leader. Similarly, understanding how technology can enhance the most significant components that make the organization successful is the only way for technology to play a role that is other than simply supporting day-to-day operations.
STARMER: Successful technology leaders today must be business generalists. This doesn’t mean high-level knowledge of other pieces of the business; to me, it’s both depth and breadth of understanding of all facets of the organization. Aligning IT strategy to corporate strategy is clearly imperative. Technology leaders are in a unique position to add a voice to the broader business with the perspective of someone who views the business and its strategy holistically, in many ways a view seen most commonly in the C-suite. Bring that perspective to the table and be a collaborator and consultant.
TENCZAR: Technology leaders have to be incredibly well-versed in all areas of the business in order to make the best choices for the company. Sherlock Holmes said, “theorizing without evidence is a capital mistake.” That’s what happens when a technology solution is chosen without first knowing how it will affect business areas in achieving individual goals. After (or perhaps before) learning technology, the tech leader has to learn about how others use technology. The CIO has morphed into a generalist position over the last 10 years; the conduit to connect all others. The recognition of that change has led to the CIO being one of the most influential positions in the company.
WISE: Technology leaders have to be quick to react while always looking for the next big thing. If implementing a new technology takes a year, you are already behind in the industry. Leaders will be able to recognize the big trends and implement them before the “rest of the pack.”