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Data-Driven Innovation

When data is valued as a corporate asset, innovation follows. Such is the case with Choice Hotels. Known for being at the forefront of many “hotel industry firsts,” chief among them first to market with a mobile app and first to offer online booking, the company continues to be a technology leader. Choice has made its name as a leader in innovation by embracing disruption and placing a high value on data, all while developing solutions in-house that become industry standards. 

choiceADVANTAGE, the company’s proprietary web-based property management system, was born of wanting to enable holistic reporting across the company’s disparate systems. Created in 2003, the platform was built in response to not being able to find anything on the market to help alleviate the complexity and cost of its on-premise servers. Now installed at approximately 6,000 locations worldwide, other hotel companies utilize the Choice platform, necessitating a technology division, SkyTouch Technology, that markets the cloud-based software. 

Innovation is not an end-point for Choice however, rather it is infinite and once again, Choice finds itself in the final phases of a rollout of proprietary technology. In 2014, the company embarked on a three-year transformation project, the largest in its 78-year history, to replace the company’s 27-year-old central reservation system and related ecosystem of applications. 
In an exclusive interview, HT spoke to Todd Davis, CIO, to get insight into the status and strategy of the new choiceEDGE platform. In addition, Davis shares his perspective on what has made Choice Hotels an innovation leader, including how data is not a byproduct of technology, but rather is driving it.

HT: You said that while choiceEDGE can be described in simple terms as a central reservation system, it really is more of a distribution platform. What are you looking to achieve with choiceEDGE that will make it stand out from a standard CRS? 

DAVIS: choiceEDGE will manage all distribution for Choice Hotels International including rate, inventory, shopping, booking and reservations for our website, mobile site and mobile apps and hotel systems all in one system. In addition, the choiceEDGE distribution platform provides all necessary information to our meta partners, GDSs and OTAs. But the EDGE platform is more than that. One of the core tenants was to be architected for the cloud. Leveraging Amazon AWS platform and using multiple Availability Zones across multiple global regions we can deploy choiceEDGE to the region that matters most for our partners and support multi-tenancy as a feature. It also enables us to eliminate traditional disaster recovery sites. Integrations to new systems are always challenging and costly. At the start we focused on a micro-services based platform surrounding the core and it has paid off in the reduction of complexity and increased reuse. Integration with new and existing partners, including choice ADVANTAGE, is streamlined, less complex. 
HT: Once again, you have opted to build versus buy. Can you talk a little about the decision-making process when evaluating potential technology partners and choosing instead to bring in-house?

We always carefully consider whether to build or buy. Our technology strategy centers on the fact that we view data as a corporate asset and it drives our decision process. We also realize that technology will continue to advance rapidly. We had to abide by a ubiquitous computing model, mobile first and loosely coupled ensuring we were not tied to a very specific technology foundation in order to support future business models.

Several years ago, our existing reservation system was over 27-years-old and based on an architecture we had outgrown. Existing limitations would have required rewriting significant portions of the system, so we decided to start from scratch. When we looked at what was available on the market, nothing matched our requirements or business model while enabling future opportunities. We needed to move at a pace that aligned with our business partners, avoid a flash-cut rollout and keep up with industry and technology trends. From a talent perspective, our staff is a combination of hospitality industry and technology engineering experts. The combination positioned us well to build the right solution. 
HT: You have admitted that you have scaled up your IT department tremendously during the last 10 years, so that you now have 600 people in IT alone! Do you think a lack of IT talent is what holds other companies back from building their own systems more often?

Talent is hard to find. There are 500,000+ IT jobs open around the United States that cannot be filled and a 22% growth expected through 2020. In some cases, when implementing new technology, finding a trusted vendor partner can be a good strategy. For us, however, being able to control our own destiny is key. Some companies use multiple different PMS – how can you create a consistent experience for guests and franchisees from an operational standpoint? Integrations are always key. You can build a new system, but having the knowledge and understanding of systems and handing that to a partner has not always been successful. Choice can turn on a dime. Something can occur tomorrow where there is a business opportunity and we can make that shift immediately.   
HT: Let’s talk about flexibility and nimbleness. What do you focus on to achieve this? 
We focused on the need for extensibility of the system both from the technology perspective as well as the business capabilities it enables. One major component of the platform is that it was built agnostic to hotel, meaning a hotel room is only one product a hotel sells. Think about the Amazon-ization of the world we are witnessing.  Just like an online retailer, the system needs to sell many other things — bottles of champagne, tee times, spa treatments. choiceEDGE has been architected from the ground up to give the business capabilities to do much more beyond selling rooms. Having a platform to support expanded functionalities is critical as Choice moves into upscale with Cambria, vacation rentals and other alternative growth opportunities in the future. On the technology front, our micro-services architecture allows us to make small changes or enhancements without impacting the entire platform. Running in the cloud, we can scale to any volume of demand. Because we built it ourselves, we retain the necessary skillset and knowledge to make choiceEDGE meet exactly the needs of our customers.
HT: Hotels are least confident in how they rate against competitors when it comes to analytics and customer-facing technologies. These are both strategic technology goals in 2017. How do you view the importance of data and its ability to help hotels make smarter decisions?  

Data-backed decisions should be a core staple and bare minimum requirement of every business outcome given how far this space has evolved in recent years. At Choice, we recognize the value of data in making good decisions. To that end, we’ve implemented a new platform in conjunction with choiceEDGE – a data analytics platform in Amazon Web Services. It includes a data lake where the raw data lives, as well as intelligence capabilities that can be built on top of it. We leverage these analytics on a regular basis to drive business performance. The analytics platform is integrated with a myriad of applications including the CRS, PMS, and our loyalty program, Choice Privileges. All of that data is fed into our analytics platform which is in turn used in a variety of ways to drive business.
We have reinforced the importance of this perspective by empowering our business analytics group with tools that plug into our data platform for decision making. We made a conscious decision to buy tools in this case to use on top of the data lake platform to manipulate data in any way we want, such as helping hotels price correctly or understanding how to make the booking path easier from a user standpoint. As we gather more data we continue to gain insights which enable us to be more predictive and better serve our customers.  
HT: Justifying ROI continues to be a challenge impeding tech investments. How do you balance the bottom line while moving the innovation needle? 

I go back to thinking of data as a corporate asset. Our business intelligence organization has created models around identifying return on investment and our platforms are built in a way to enable data gathering. Our true goal is to use technology investments to help identify and build sustainable business opportunities. We set aside time and dollars to put “a toe in the water” and see if there are potential returns. We make decisions with data to back them up. Sometimes it is a gamble; some work, some don’t. It is important to take certain opportunities, knowing there may not be a return. We try to pilot things rapidly so we can fail or succeed quickly. Any investment has to add to the company’s overall profit proposition. You may not be able to put a finger on it immediately, but it is important to look at the bigger picture.
HT: Creating frictionless experiences is top of mind for hoteliers. How are you addressing this? 

For Choice, it is all about creating a consistent, familiar experience that is completely intuitive. Driving this with data, using our analytics platform and advanced tracking on our website and mobile apps, we have mapped out our entire consumer experience, from before to during and post stay. We focus on truly knowing our guests and how they decide on travel needs. Understanding the guest and franchisee behavior is something we’ve been focused on and are testing solutions so all customers can have that frictionless experience.

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