Every year, Hospitality Technology asks its Advisory Board members to pull back the curtain on their respective companies’ strategic goals for IT, insights into broader innovation trends impacting the industry and finally for thoughts on the traits that make successful technology leaders. Once again, they did not disappoint with their candid responses. The role of the IT department has evolved tremendously in recent years and the amount of responsibility and the scope of innovation that today’s tech leaders are now expected to master has grown exponentially.
“Enlightened business leaders recognize that the ‘IT Shop’ in any organization is nothing less than the central nervous system,” notes Brian Pearson, CIO, Stacked. “It can enable or hinder growth, revenue opportunities, and an understanding of the mechanics of the business.”
With this great power comes great responsibility and HT’s advisors are quick to call out technology that is not living up to its potential, while they also don’t pull any punches when it comes to IT leaders’ short-comings to leverage the full potential of available innovation. This was particularly well illustrated by David Starmer, CIO, Sonesta Hotels, in his thoughts on artificial intelligence (AI), but which could easily apply to technology in a broader sense.
“As leaders in our organizations, our opportunity is to find ways to apply AI to the right pieces of our business — whether that be internal decision support or in a touchpoint in the middle of the guest journey,” Starmer says. “We will know that we have found the right application when AI is used to successfully drive the key metrics of our business forward.”
PEARSON: Too many solutions today offer only data. Without employing highly experienced data analysts, the existing toolsets rarely give guidance. The static reports we’ve all been looking at have been slightly varied flavors of the same stale information. Over the last 10 years the management pool has become younger and less experienced, with 98% having no formal education and beginning in the industry as dishwashers or hosts. BI and back-office have not kept pace with our workforce’s needs. Similar to the way third-party services completely disrupted the POS segment of our industry, predictive analytics engines are rocking the way we look at the traditional back-office players.
Considering today’s “on-demand” culture, what will drive competitive edge?
GARAVUSO: Our customers need the ability to easily and quickly transact with us via online and mobile devices. We will continue to ensure that customers have full functionality via mobile devices. The processes need to be straight-forward and easy. All of the necessary information about their accounts needs to be readily available. In addition, we are continuing to deploy functionality in our mobile application allowing members and guests to request services via their devices while on property. Instant two-way message via the app is also a focus. We continue to look at self-service capabilities focusing on convenience.
KLINE: The number of forums or channels through which guests can engage with restaurants is increasing. Embracing this expansion creates significant growth opportunities for restaurants. As our core digital ordering and engagement platforms have matured, it has become incrementally easier to expand the associated partnerships. We cannot chase guests to the detriment of our team members and their ability to provide superior service to every guest, every time. It has been a continued focus for our organization to preserve a single experience for restaurant operators even as we expand both ordering and consumption options.
STARMER: Guests used to visit retail and hospitality venues seeking experiences they could not find elsewhere. While that remains the case, there is a new dynamic at play. Guests visit these places with a new baseline expectation of how they interact with technology. The new baseline is the in-home experience. If a retailer’s public WiFi isn’t as fast as the customer’s 1GB home connection, they may consider that a less than satisfactory experience. If a hotel’s streaming solution is tedious to authenticate to, guests will compare it to the seamless sign-in experience they get at home. If an in-room voice assistant cannot respond to common requests that it may face in a residential setting, the user may see this as a failure on the part of the property. Before enabling tech to drive a sustainable competitive edge, remember that the goalposts for table stakes have moved.
WASDIN: Companies will really need to lean on a robust data strategy to stay ahead of this curve. If you can gather the right data and predict what guests want and make suggestions in a seamless way, you gain an advantage. We implemented many new systems that are collecting data about the fan experience. We are now focused on integrating that data to our data warehouse and working with the different business units inside our organization on new capabilities that help them do better business. We focus on guest experience areas and using new data streams to predict guest behavior and make suggestions that will resonate with them and amplify personalized experience. A Hawks game or a concert is the same content for everyone. Using technology, we can tailor the experience so that guests can add unique elements and become an audience of one, the “Audience of You.”
HT talks with advisory board members to find out where the hospitality industry is heading.
What challenges face your segment of the industry?
BROOKS: Having technology that stands out among our competitors, but still has an immediate ROI. It would be nice to be able to buy every mobile tool to serve the guest, but our company cannot afford them all. We want to be a leader in tech, but we must be responsible. It’s a fine balance.
GARRIDO: Cyber security keeps me up at night. Although we as owners don’t manage the hotels, we worry about inconsistent management of cyber security. I believe that in our industry we have taken this too lightly because of its expense.
HASSEL: Always PCI compliance and now GDPR, then sprinkle in a lil’ ADA website compliance. PCI has been around for some time now so making sure that we are keeping our systems and practices updated is becoming routine. Now we get to learn about GDPR aka PCI on steroids. My biggest frustration dealing with GDPR is that depending on which “expert” we ask for guidance or clarification, we receive differing information.
HOPCROFT: The thing that scares me the most is around secondary apps that startups are introducing. These applications are primarily new IoT technologies that are easy to deploy without engagement or support from corporate IT teams. They get deployed quickly by uneducated operators or owners. Unfortunately, many of the vendors providing these applications, either because of ignorance or because they are in a hurry to get a “win,” deploy solutions without ensuring security and privacy.
KLINE: Over the past two years, Noodles has experienced a rapid expansion in available data. We have created a corresponding capability to not just consume, but also connect, the data from these varying and growing sources. We have seen a lack of capability, especially amongst providers of restaurant technology and analytics solutions, to draw substantive insights from this data. We are tempted by claims to effectively model opportunities and identify trends — all which are conceivable. Restaurants are not lacking for data, but rather lacking the ability to understand data to the same degree we see elsewhere.
LUCIA: Labor costs, rent increases and utilities have been challenging. We need to continue to dig deep and be creative in the way we deliver systems to help mitigate rising costs. There are so many ways to combat costs whether it be self-service technology to help labor, big data to identify trends and to drive top-line revenue as well as IoT to control devices to save money similar to an energy management system in a home or hotel room.
TENCZAR: This isn’t segment-specific, but encompasses all of hospitality and retail; it is the ever-growing, precarious balance between personalization and security. A very high-level of personalization is required to stay competitive. We have the ability to collect an amazing amount of data. The traditional CRM is filled with data from “account profiles” that we volunteer to fill out, omni-channel transactional engines we use, IoT devices that we interact with, and third-party tools that create a psychographic profile. Because these systems are now starting to understand us better than our spouses, regulations that protect our personal data are getting more teeth. GDPR was huge in 2018 and these regulations are coming to the U.S. soon. Just when we figured out how to deal with SOX and PCI…here comes PII regulations.
What is the greatest disruptor for your business?
DICKERSBACH: Extreme customization of the guest experience and mobility. As platforms figure out privacy in an online world, we will continue to see breaches, but more importantly, we will see security taken a little more seriously, even at the inconvenience of an end user.
HOPCROFT: People attend public video game competitions in large venues, and we are starting to see video game outlets open in airports (DFW to be specific) where travelers can play Black Ops IV while waiting for a flight on 55” flat panels. I wonder if this is going to drive the demand for deployment of additional in-room equipment and infrastructure.
TENCZAR: The biggest impact to our industry is not technology, but the rising prices to dine out (+3% year), while cost to eat at home remains flat. Many restaurants have raised menu prices in an effort to combat shrinking traffic counts. This pricing gap will ultimately push consumers into two categories. The first category is less-frequent, highly memorable, experiential dining. The second category is lower cost and more convenient transactional dining. As tech leaders, we need to make decisions that support one of these two dining categories.
What skills must tech leaders possess?
DICKERSBACH: Today’s leaders need to be able to understand their team, what makes them tick, what they enjoy, and what motivates them. Leaders need to be more empathetic, more passionate, and able to relate to people that look to them for guidance.
GARRIDO: Innovation, people management, and cyber security are going to be important for leaders to have in the IT space moving forward. As guests want more experiences the challenge will be how to provide these in an integrated seamless environment. Cyber security needs to be on the minds of every IT leader in the hospitality business.
GARAVUSO: There seems to be a returning trend that IT is a cost center not a strategic business enabler. IT leaders must understand all aspects of the business and be a strong partner to key department leaders. The focus must be on delivering technology that enhances their ability to drive revenue and/or be more efficient.
HOPCROFT: The ability to simplify complex issues and challenges so that stakeholders can understand, is a trait lacking in many technology leaders today.
KLINE: It is critical for IT leaders to have the complex skillset to guide multiple disciplines within an organization in assessing these ideas rapidly, efficiently and objectively.
PEARSON: Technology leaders must implement solutions that are extensible and can see around corners. If the leader does not leverage machine learning or predictive analytics to drive decision-making, they could be handicapping the business relative to their competitors.
WASDIN: Ability to collaborate. Technology platforms continue to become easier to procure. Individual business units are able to purchase technology themselves. Tech leaders must collaborate with other business leaders to make sure they are in the loop on the needs of the business and able to influence decisions on tech purchases or they will find themselves with a shadow IT function happening.
HYPE METER: OVER OR UNDER?
TED HOPCROFT: Virtual reality. I think there is a play for that technology in our environment, but I do not believe it is going to be the next big thing. People multi-task far too much be fully immersed in a VR experience in hotels.
DAVID STARMER: Blockchain. While it has the potential for novel use in the future, it is not ready for broad application. Most CIOs are struggling to find a sound match between blockchain and business imperatives. For many of us, it is a solution in search of a problem and many issues we face can still be best solved by deploying more traditional technologies.
HOPCROFT: The phone. Why are people okay with 30 emails instead of picking up the phone and addressing an issue? The communication method is also much
STARMER: Augmented reality. There are many opportunities for immersive technologies to improve the customer experience. The platforms from which this can be built are already present in the form of existing apps and digital experiences. Our guests are already used to the technologies in the form of social media filters, existing features in retail apps, and 3D and 360-degree photo apps.