It was a little over two years ago when Gustaaf Schrils accepted the role of senior vice president & CIO of White Lodging Services (www.whitelodging.com), officially taking the IT reins in January of 2016. The company was still licking fresh wounds from two high-profile breaches and Schrils was naturally going to be tasked with addressing the security and compliance issues plaguing the hotel management organization.
At the time of his appointment, Schrils acknowledged that from a strategic perspective, his focus was “the implementation and design of technological solutions that fiscally protect the assets of White Lodging and the owners that contract us to manage their hotels.”
Do not assume however, that Schrils was selected for, nor did he accept, the job with a singular goal or focus in mind. With past roles that included 20 years at Intercontinental Hotel Group (IHG) in multiple senior technology positions with global responsibility and managing technology services for a consulting group prior to that, Schrils was well-armed to solve complex technology issues at both the hotel and corporate levels.
The bigger picture was establishing technology strategies that would essentially help to set the foundation for growth. It had to start, however, with bringing the company to PCI compliance. In an exclusive interview with HT, Schrils draws back the curtains on how the management company, representing 28 different brands with 17 projects in development, 30 independent restaurants and employing more than 12,000 associates, did just that. Battling back from being breach headline fodder, the company achieved complete PCI compliance in record time and was even named one of the best hospitality companies in the world from a security perspective by a renowned insurance company. Part of this correction process was to implement sophisticated monitoring services that used machine learning to identify suspicious network activity and to compare that activity with historical trends to determine traffic validity.
Schrils looks beyond this achievement however and shares how security, while an end-goal, was only one piece of a complicated IT overhaul designed to stabilize a system of disparate technologies. He also reveals the strategic goals behind the company’s recent divestment of 82 property contracts to Interstate Hotels & Resorts to focus and reinvest in strategic assets mainly in growing urban markets.
Schrils admits that when he joined White Lodging, one of the immediate hurdles was a $1.5 billion company not maximizing automation capabilities to improve operations and provide real time intelligence for immediate action. His first order of business was to assess the entire environment, upon which he recognized the biggest issue at hand was stabilizing systems in need of replacement or upgrades, while simultaneously working on the long term technology architecture and implementation plan.
“There was a multitude of simultaneous projects essentially to get us to compliance and on track with our long-term plan,” Schrils states.
With an initial imposed unrealistic deadline by the Merchant banks, Schrils asked for 18 months and met the deadline in September of 2017. He successfully completed the Report on Compliance and secured cyber liability insurance at a very favorable rate. “We went from being completely unsecure to being one of the best,” Schrils acknowledges.
Running parallel to the company’s focus on security was a project to implement a human capital management system. The intent of the system was to bring all the enterprise-needed modules of the entire talent management lifecycle from hire to retire of an associate into one comprehensive platform.
“The success of a management company is not only in the product that we represent to our guests but more so in the overall experience we create that requires a unique talent pool that we need to cultivate,” Schrils says. “An engaged workforce that consistently delivers exceptional service will be our strategic differentiation.”
With that sentiment, Schrils and his team have been hyper-focused on enabling the enterprise with 12,000 employees to provide automation and flexibility to simplify associates’ interactions in the back office, which allows more time for them to interact with guest-facing matters. The intent was to enable properties with smarter technology strategies to attract, retain and develop talent and become the employer of choice.
In partnership with Infor (www.infor.com), the human capital management system implementation is in progress. The learning module allows White Lodging to deploy a comprehensive training program to all White Lodging associates with the goal of delivering a consistent customer experience while enabling the associate to grow their talent and career. Any associate promoted to a manager or managers hired from the outside will attend a week-long training at the corporate headquarters when hired. There are roughly 50 different customized curriculums by positions in the hotel that are required over a period of time to deliver the amazing results seen at the hotel level. While more work remains, Schrils is confident that the centralized platform is now in place to build upon.
Anchoring Initiatives with a Strong Network
Strong networks will be key to driving technology goals as more initiatives for both guests and operations will require robust connectivity. Schrils believes that fiber will provide the competitive advantage to hotels of the future and is backing that up with investment. All of the new hotels White Lodging is building are generally over 250 rooms and will be outfitted with fiber, which according to Schrils will make bandwidth essentially “limitless.” This expands other technology capabilities for those properties as Schrils says they plan to run things like door locking, energy management, beacons, cable TV, alarm, security cameras, telephone systems and Wi-Fi both wired and wireless over the fiber. Cell carriers with their future 5G networks, which require more antennas, will look for every opportunity to offload cellular traffic onto WiFi; ultra-high definition (4K) TVs will use significantly more bandwidth than traditional TVs; and, Internet of Things (IoT) adoption will skyrocket over the next few years, all of which will further bolster our decision to move towards fiber infrastructures for our hotels.”
“Clearly there are a lot of benefits to that,” Schrils notes. “You only need to run one cable versus today where most hotels are running at least two Cat5 and coax to every room and in some cases are running more than that to every room. So now we are running one fiber cable.”
He does admit that fiber is not without its complexities, such as that fiber connections require a DC low voltage current to power the end points. White Lodging is opting to combat this with a centralized power supply model that will convert AC to DC on every 3rd floor.
Schrils views fiber as a way to future-proof buildings and significantly enhance the technological capabilities that are coming down the pike. For example, White Lodging will be using fiber to deliver improved cellular coverage using Distributed Antenna Systems (DAS) as well as initiatives with predictive maintenance that will run on the wireless network.
Another pressing concern necessitating a robust, future-ready network is the increasing demands of guests. Schrils doesn’t think the days of everybody opening up rooms with a smartphone will arrive soon, but he admits there will be a growing segment of the population that will want that capability to bypass the front desk.
“One of the things that is key for us is to make sure we build flexibility in our architecture so that we can support options for guest to choose an RFID card or their phone to open their doors,” he says.
Schrils focuses on making strides in creating a robust infrastructure within the hotels, to support the ever increasing technologies requirements from the brands and guests.
“I compare Wi-Fi with hot water,” he states. “You may want it to be extremely hot. You want an unlimited quantity and you want to shower at any time, not when the hotel prefers you to. So essentially it is about how you provide great internet access experience at any time everywhere within the hotel.”
Monitoring bandwidth centrally, White Lodging is able to see where demand exceeds supply and allow for appropriate throttling mechanisms. Schrils advises the only variable should be how much bandwidth you terminate at the hotel and many carriers now have programs where they have a dedicated and variable amount. This enables hotels to throttle to a greater amount of bandwidth only when needed to meet guest demand.
Executing on Guest Preferences
An area where Schrils sees future opportunity is in efficiency and effectiveness of the overall travel booking and stay experience. He ponders that big brands still are challenged by empowering guests to make and get hyper-specific room reservations. You can’t today book a double bed, nonsmoking room a year out with a mountain view, in the northeast corner of the hotel that has an outdoor pool and golf.
The world is not standing still and the brands must further invest in their underlying technologies to enable a comprehensive travel experience. White Lodging is currently correlating data from multiple sources and utilizes Artificial Intelligence (AI) and their own prediction algorithms in areas of revenue and occupancy forecasting, F&B inventory purchasing and labor management to keep pace with technological advancements.
“I foresee a lot of flexibility built into the way future guests are going to make reservations,” Schrils says. “They will expect and demand to be able to select attributes and preferences that are important to them. Today these are all done separately and take a lot of time to coordinate them, but increasingly guests are going to expect to be able to book travel this way going forward.” They are looking for a total experience not a jump-to destination.
With competition for bookings growing ever fiercer – at press time Google announced enhancements to its search engine for travel and hotels and Airbnb announced a distribution partner – hotels must address their strategies for combatting their rivals for reservations.
“It’s a very important strategy because you either need to partner with an OTA or essentially create shopping capabilities within your central reservation system,” Schrils says. “You can get overwhelmed with having a mobile app for everything and so to really simplify the experience for guests – hotel brands must find a way to create a one-stop-shop as it relates to a destination experience.”
The threats now exist from not only a reservations perspective, but a brand value perspective as well. Schrils sees one weapon to effectively fight OTAs and new competitors in the space: incorporate some of their capabilities into hotel brands’ reservation systems, package them and then use loyalty programs to do the rest. Enabling guests to book other services, flights, airport transportation, car rental, excursions, etc. and earn rewards will create a valuable reason for guests to return and book direct.
Schrils reminds that missing out on points from the hotel’s loyalty program should deter guests from reserving a room through an OTA. The problem is often when guests buy a package deal with an OTA and then provide their loyalty number at check-in at the hotel. When this scenario arises, the hotel essentially carries the OTA and the Loyalty expense. This certainly is not what was intended and must be better policed by the brands.
Schrils looks to technology to solve some of these problems. While he understands most hotels will never be able to eliminate OTA partnerships, they do need to develop strategies to prevent them from being the ever growing, largest contributor to room nights.
For its part, White Lodging is strategically positioning itself to build a company that will last forever by being very selective in its choices and growing alone or with partners who are aligned with their growth strategy. “We are only interested in managing a hotel that will outperform their competitive set in a particular market segment, so we are very selective as to where and whom we partner with and also very selective on how we deploy our capital.”