Navigating Together at HT-NEXT: Day 1

Research Super Session: Insights from HT’s 2022 Lodging Technology Study

HT’s editor-in-chief, Robert Firpo-Cappiello, led a lively panel discussion diving into our brand new 2022 Lodging Technology Study: Redefining the Guest Experience. Brian Kirkland of Choice Hotels, Jerri Traflet of Verizon, and Daniel Connolly of Drake University took a look at tight hotel IT budgets and what they mean for future innovation. Despite shrinking budgets and enduring pain points, the panel noted that emerging technologies still remain a priority for both operational efficiencies and guest experience.

In particular, self-service technologies seem to be gaining in popularity both among guests and hoteliers.

“Millennials and digital natives are now the largest demographic that hotels are servicing,” Jerri noted. “They generally don’t want to interact with other people. They prefer to use their phone to interact with a business, and the pandemic has only created even more desire for self-service options among people of all generations.”

Brian agreed, noting that one silver lining to the pandemic was that customer needs and wants quickly evolved which then forced hoteliers to evolve quickly too.

“We were able to fast forward our technology rollouts by as much as a decade due to the pandemic,” Brian noted.

Additionally, with the shortage of labor affecting the hospitality industry, contactless and self-service technologies are in high demand as they allow hoteliers to service the same amount of people with fewer staff members, Daniel added.

RMS, PMS Are Getting an Upgrade

Data from the Lodging Technology Study revealed that 45 percent of hoteliers are planning to upgrade or change their revenue management system and 41 percent are planning to upgrade or change their property management system in 2022.

“This isn’t surprising to me,” Daniel said. “The PMS and RMS have been the heart of a hotel’s tech infrastructure for decades, but the algorithms have changed significantly and our industry is recognizing that it’s time to upgrade.”

Jerri agreed, noting that the industry’s increased use of microservices and cloud tech is also helping to move the industry forward. Both of these technologies combined allow hoteliers and vendors to build solutions faster.

Emerging Technologies

Another interesting data point shared with HT-NEXT attendees from the Lodging Technology Study was that 71 percent of hoteliers ranked 5G as a top emerging technology. The group agreed that there were quite a few specific opportunities for 5G in hospitality to improve the guest experience, drive efficiencies on property, and more.

For example, Choice Hotels provides free Wi-Fi to hotel guests, but for hotels that can’t run fiber to the room 5G might be a way to provide guests with the high-speed internet they want, Brian noted.

5G also makes it possible for hoteliers to offer guests an extraordinary experience on property that they can’t get elsewhere. Plus, it provides hoteliers with access to data and insights into their guests that make personalization of the guest experience easier, and faster, Jerri added.

In addition to 5G, artificial intelligence was also highly ranked by hoteliers as an emerging technology. The panelists discussed the potential of AI with Brian noting that AI and its capabilities has become so advanced that hoteliers are only limited by their own abilities.

“We can all drive profitability by rolling out new systems using AI and predictive intelligence, but it won’t do it on its own for you. You need to look for the opportunities to put it in place, to understand the data, to create value, and to feed the data it provides back into the system so that it can learn from the data and transform itself into something even better!” Brian added.

Predictions for the Future

During the audience Q&A, one attendee asked the panelists to put their best predictions forward for how the hotel of the future will operate. Brian discussed how the work-from-home experience has completely changed the way consumers travel and will likely create a totally new business model for hotels within five years.

Daniel focused on the front desk and predicted that within five years the front desk will be completely eliminated from most hotels.

“Technology today allows you to identify yourself, check-in and access a mobile key without ever having to visit a front desk agent,” Daniel said. “If I were to open a hotel hotel today, I would not hire front desk agents. Instead, I would hire the most extroverted people I could find to chat with guests, guide them to on-property experiences such as the restaurant or spa, and provide more of a concierge type service that really improves the guest experience.”

Meanwhile Robert predicted that voice technologies will evolve significantly to the point where a consumer could say: Hey Alexa, I want to go on vacation to Point Pleasant, New Jersey in March. Alexa would reply with which hotels were available, noting the ones the consumer had stayed at previously and the rating the consumer had given that hotel, the price the hotels will be on average for each weekend in March, and any other pertinent information necessary to create a positive and informed booking decision.

Cryptocurrency & Hospitality: The Future Is Now

For years, cryptocurrencies have been met with skepticism. How could a digital currency created by a company replace America’s gold standard? But the rise of Bitcoin, Ethereum and other major players in this space indicate that the American people are ready for and interested in this digital currency. So, what does that mean for the hospitality industry? To find out, HT brought on stage a panel of experts to discuss this topic including: Bo Friddell, President of Sunrise Salvador, Craig Nazzaro, Partner, Nelson Mullins, David Khalif, Head of Operations, Viridi Funds and Ron Tarro, Managing Director, SalientVoice Ventures.

During their discussion, Friddell explained how his hotel in El Salvador has been accepting payments for quite some time in Bitcoin. Just recently, El Salvador turned Bitcoin into an official currency meaning that the government has mandated that all vendors must accept bitcoin payments. This has created a very interesting test environment for much of the world to see how Bitcoin can function as an official currency.

For Friddell, Bitcoin has many positive use cases but one that may be of especial interest to hoteliers is the complete transparency of transactions that accompanies bitcoin payments.

“When someone pays me in bitcoin, I can see all of the transactions from his wallet. This means, if I see if a customer is brand new to our hotel and brand. I can also see if they’ve stopped using our brand and have begun using our competitor’s brand. This gives me the ability to then market to that customer aggressively to try and win back their loyalty,” Friddell added.

Another positive to accepting Bitcoin at the hotel is that most guests who prefer to pay with Bitcoin also tend to spend significantly more on property.

What About in the USA?

While it certainly is a wonderful technology working well for Friddell in El Salvador, can this form of payment work for hoteliers here in the U.S.? According to Nazzaro, the answer is complicated.

“To do what Bo is doing in El Salvador in the U.S. is possible and already being done,” he explained, “But the regulatory burden on the hospitality industry is quite large.”

For example, regulators in the U.S. view cryptocurrencies in a myriad of different ways. The IRS views it as a property and taxes it as such, the SEC as a security, and the CFTC as a commodity. This can make it extremely difficult for companies in the U.S. to want to do business in cryptocurrency.

Plus, unlike in El Salvador, there are some strict regulations that vary state to state in how companies can pay employees in cryptocurrency. In many states, companies are not allowed to pay more than 25 percent of a staff member’s wages in cryptocurrency. And in many other states, you can’t pay a staff’s wages in cryptocurrency at all, Nazzaro added. This adds an additional level of difficulty to companies who might want to accept cryptocurrency as a form of payment.

Cybersecurity: A 21st Century Franchise Differentiator

Cybersecurity is a major issue facing the entire hotel industry. In this session, Jason Stead, Senior Vice President, Chief Information Security Officer for Choice Hotels International sat down with Patrick Dunphy, VP, Technology & Information Management at AHLA to discuss cybersecurity issues facing Choice Hotels and the hospitality industry as a whole.

“The hospitality industry is being attacked at an alarming rate, and it’s only accelerating,” Stead explained.

Stead shared an alarming statistic with HT-NEXT attendees: There are more threats to hospitality than tweets in an entire year! (FYI HT looked up how many tweets were sent in 2020: 700 million!) This is because every type of threat actor out there – hacktivists, ransomware operators, nation states, etc. – target the hospitality industry.

“What’s worse, if your organization is breached, there is an 80 percent chance it will be breached again in rapid succession. Why? Hackers willingly tell their friends when a company has been compromised so that their friends can gain access to the company also.”

What to Look Out For

According to Stead, there are a few key ways that hotel brands are becoming compromised. The first is email phishing scams that contain malicious attachments or links.

“Just last week we saw a brand new version of this, where hackers are actually breaking into a vendor’s email system, finding an email chain to a hotel that discusses payment for some service or product, and sending a follow up email that contains some type of fake invoice or a malicious link to compromise the hotel’s systems,” Stead explained.

Internet facing remote desktops that are not protected via a firewall and companies that rely too heavily on VPNs – many of which have major flaws – are two more ways that companies can easily become compromised.

“A lack of multifactor authentication is another major issue facing many brands today,” Stead added. “If you aren’t using that across the board today, you need to start now. Once we added MFA, we were able to solve a lot of security problems within our organization.”

Become a Part of the Retail & Hospitality ISAC

In 2018 HTNG created the Travel & Hospitality Information Sharing Analysis Center where CISOs at hotels could talk to each other about the threats they were facing on a daily basis.

“Remember, threats are not a competitive advantage,” Stead said. “The Travel & Hospitality ISAC evolved into a fantastic opportunity for us to work together to help protect each other from bad actors. Then in 2020 we merged with the Retail & Hospitality because it’s the same bad actors targeting all of our companies.”

Access to this type of community is extremely beneficial. For example, just over this weekend, there was announcement that a common piece of software used by many programmers to write code was found to have a major flaw. This flaw is being called the Log4j flaw and is so serious that the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) released a statement to address it. The vulnerability allows a hacker full access to any device running software that used Log4j programming. This is especially problematic as this program is so widely used by so many companies – including Choice Hotels.

“I was on the phone all weekend talking not only to my own people about our vulnerabilities but also to my vendors, and asking them what their vulnerabilities were,” Stead explained.

But Stead also found support, help and answers from the RH ISAC.

“The information sharing among this group has been just phenomenal!” he added.

Attribute-Based Selling: Is It a Win-Win?

As hoteliers become familiar with and begin to implement attribute-based selling techniques, consumers are beginning to take note. While the ABS-based system has made airlines millions of dollars, it has left a sour taste in some consumers’ mouths. Those same consumers are now using social media and local news outlets to tarnish its reputation. So what’s a hotelier to do? During this firechat, April Key, Director, Distribution Products (Connectivity) – Omnichannel Commerce, IHG Hotels & Resorts chatted with Fred Bean, Founder & CEO, HotelPORT to provide some guidance to attendees.

To begin with, April reminded attendees that attribute based shopping is everywhere.

“It’s in everything we do from buying a car to buying a pizza. Sure, you can buy a pre-packaged item if you like but you can also build your own product and pay for specific attributes that are important to you. Consumers are used to it in other industries, so why not ours?”

Of course, the concern with ABS is consumer perception. While consumers have accepted paying per topping on their pizza, they weren’t as happy with airlines when they asked them to start paying separately for seat location, baggage, snacks, and other attributes. Why? They feel like they’re being nickel and dimed. This then becomes an important lesson for the hospitality industry, Key says. 

“Depending on your brand and your audience, how you tackle ABS will be different. The technology and messaging we use needs to be flexible,” she explained. 

For instance, hotels need to ensure that customers know that purchasing specific attributes ensures they can build the curated experience that they’re specifically looking for. The purpose behind ABS is to improve the guest experience and can even help with creating the personalized experience that so many guests are looking for.

But ABS isn’t something that can happen in a vacuum.

“Everyone in the ecosystem will have to change – the channels, the intermediaries, pass throughs, etc. The entire industry will need to change. There is a lot of conversation that needs to happen around ABS – it can’t happen in a silo of just one hotel. We all have to come to the table,” Key iterated.

For that to happen, both Bean and Key asked for more individuals to join the HTNG Attribute Based Selling workgroup.

“We need more people to be interested in and participating in this workgroup. More people and their different perspectives will shed light on the problems we’re facing and help us create the solutions we need,” Key added.

ForWard @ HT-NEXT: Women at the Top

ForWard: Women Advancing Hospitality is AHLA’s platform for engagement and a vehicle to highlight female leaders in the hospitality industry. It was launched in 2018, and helps offer practical strategies for women to benefit from on a day to day basis. AHLA also recently launched a new ForWard ambassador program. This volunteer driven program is open to all AHLA members at all levels. 

During this ForWard session at HT-NEXT, moderated by Dayna Kully, Co-Founder, 5thGenWireless, three panelists explained how they’re working to improve diversity and encourage females in hotel technology within their own organizations.

To start of the conversation, Kully asked panelists about the amount of females employed at their company. Kathy Hatala, Director of Sales, Blueprint RF discussed how her company has 40 employees and approximately eight of the 40 are women making the Blueprint RF workforce approximately 20 percent female. Blueprint RF is owned by Cox Communications which has approximately five thousand employees of which approximately 26 percent are women. On the other hand, Knowland is able to boast that nearly 60 percent of its overall team is female – however – Jeff Bzdawka, CEO, acknowledged that within its technology department, the company doesn’t have a single female on the team.

This led Kully to ask panelists for their thoughts on how the industry can encourage more women to choose the hospitality technology industry as a career choice.

According to Bzdawka, a recent study published by the National Science Foundation looked at college enrollment rates among women and computer science degrees. In 1997, 27 percent of females were enrolled in a computer science degree program. In 2016, that went down to 19 percent and in 2020 it’s down to 12 percent.

In response to these numbers, Hatala mentioned how with her previous company – the company made an effort specifically to do outreach with colleges in their area to get women interested in careers withing their industry and to explain the variety of career avenues available to them. Her previous company even created mentoring programs to match female college students up with executives which had dual benefits: mentees often had jobs waiting for them as soon as they graduated and executives were kept up to date on the most innovative technologies within their industry.

Page Petry, Principle, PD Petry Consulting, mentioned that we need to educate the youth even before they get to college, aiming to connect with students when they’re in high school. Petry also brought up that hoteliers could focus on pulling up General Managers into corporate IT jobs.

“Most hotel companies are focused on moving diverse candidates into GM jobs which makes them a great internal resource for recruiting to corporate,” Petry noted. “We need to let these GMs know that there are more opportunities within the company than just being a general manager.”

Kully then turned the conversation to the recruitment process itself, asking her panelists how hoteliers can recruit a more diverse group for IT careers.

Bzdawka spoke first, explaining a very real problem his company faced.

“Since joining the company as CEO we’ve hired 12 new people, but not a single female applied for any of our open positions. So we had to choose either to fill the role with a man or keep the position open. We ended up filling the roles, but it really has made us look at how we’re recruiting applicants to ensure we get a more diverse group,” Bzdawka said.

When Bzdawka took a look at their own recruiting firm, he found that it was a 100 percent white male firm.

“That’s a problem,” he noted. “Since discovering that, we added a female-led recruiting firm because we believe our recruiting partners need to have the same values as us.”

Hatala agreed, noting that it’s also highly important to make job descriptions that are inclusive.

And don’t forget to take a look at what your recruiting firm turned down, Petry added.

“You might have some diverse candidates apply for your position but they didn’t use the right buzz words or aren’t coming from a very specific background that the recruiting firm is expecting to hire from,” she explained. “We use recruiting companies because they speed up the hiring process and make things easier but there could be issues with them.”

Kully wrapped up the panel by asking panelists for their final thoughts.

Petry talked about how prospective employees should look at a company’s board of directors when considering employment at the company.

“Is it diverse? What about the executive committee? You can make good judgement calls based on a quick look at those two groups of executives,” she explained. “Then look at their culture and vision statements. Does it match up with what they’re saying and what you’re looking for? Remember, Millennials are very attuned to this information and looking specifically at it.”

Hatala agreed noting that in a recent training session on diversity and inclusion, she learned that our brains are wired to belong to something bigger than ourselves BUT they’re also wired to be lazy.

“We feel more comfortable being with people like us,” she explained. “That’s human nature. But we can push ourselves to be open minded and look for opportunities to be with and hire people that are not like us. Growth comes from putting ourselves out there.”

Bzdawka agreed noting that its not good for the company to hire people who look and think like me and “won’t challenge me.”

“Remember, diversity needs to be a daily conversation or else it gets forgotten,” Petry reminded the audience. “And when it’s forgotten, women and other groups get left behind.”

HT-NEXT Day 2 Recap