Word on the street is that hospitality has payment brain, and location-based tech is looking good. By “word” we mean the collective wisdom of HT’s advisory board, and by “the street” we mean these here pages of HT. Through its annual Industry Outlook, HT’s advisory board shares a sneak peek into the projects they’ll be working on at their respective companies in the year ahead, and the challenges they’re up against. They also give us something to be excited about with their pick for most-promising technology.
In short, payment is both a buzzword and a bad word for 2015. Whether it’s frustration (with PCI), enthusiasm (for Apple Pay), or concern (over EMV), nearly all of our board members had something to say about payments. They’re also buzzing about the potential of location-based technology, the latest example of mobile’s wide-spread impact. On the flip side, however, hotels continue to grapple with the bandwidth strain brought about by mobile devices, while restaurants look for ways to better engage guest via mobile.
HT thanks the members of its advisory board for their candid input and guidance, and in particular their insight into how tech leaders can hone their skills to meet the challenges ahead.
HT: What IT projects are on your company’s priority list in 2015?
Mike Uwe Dickersbach
VP of IT, Thayer Lodging,
Brookfield Hotel Properties
For Thayer Lodging, the largest project will be getting chip-and-PIN capable devices deployed to our front desks and POS outlets. With October 2015 around the corner, we have a responsibly to get these devices deployed. Unfortunately in many cases we have to wait for the brands to certify certain items; in cases where we have full control we are moving forward with implementations.
EVP & CIO, Diamond Resorts International
Some of our focus at Diamond Resorts will be on: improving our website and core system usability; business intelligence dashboards; and mobilization of sales and support systems. We added links throughout our website to receive real-time feedback about the usability of specific features such as payment processing and reservations. This allows us to refine the screen designs and features; we’re able to quickly prioritize, develop, and apply A/B testing to the requested enhancements.
In terms of business intelligence, we’re moving from scheduled and on-demand reports to real-time and interactive dashboards. These graphical, executive-level summaries will compare to budgets and allow quick analysis of successes as well as areas of improvement. We’re also enabling our sales force with mobile sales tools to streamline sales presentations. They can now gather real-time information about our members for our CRM. These tools will also put more information about our customers at their fingertips with improved security and data projection. Sales will also have mobile tools that will eliminate manual processes and reduce customer wait times. Also we will mobilize many programs utilized by our support staff such as SharePoint.
Sr. VP of IT, Interstate Hotels & Resorts
Interstate Hotels is implementing a multi-discipline SharePoint site globally, which will become the hub of our internal communications and collaboration; we’re moving our storage to this platform as well. We also have several upgrades planned: moving our human capital management system to the Workday (www.workday.com) cloud-hosted solution with integrated workflow for our 28,000 employees worldwide; migrating our in-house payroll system to ADP enterprise; and migrating time keeping from an in-house solution to the Timesaver hosted platform.
Dir. of IT, The ONE Group
In 2015, The ONE Group is focusing on improving communication throughout the organization. We will be rolling out an updated intranet and other applications that will allow our line staff to better communicate with our management team and each other. We expect communication and access to shared data between teams to greatly increase as well.
Ted Hopcroft, Dir. IT, Starwood Hotels & Resorts
Starwood Hotels will work aggressively to ensure that our wireless infrastructure meets the changing needs of our guests and our business. Our primary focus will be on addressing networks that are more than five years old and do not meet guests’ needs, or the more recently deployed networks that were value engineered such that the service reflects badly on the overall brand experience. In addition, we will begin to address back-of-house coverage that is going to be required to support our new associate mobilization and enablement strategy.
Another major focus will be standardization and solution consolidation. The traditional thought process has been to have a single server for each individual application or solution. While we continue to work towards moving those applications to the cloud where it makes sense, we are going to also consolidate functionality on hardware platforms with three main goals: first, to improve our properties’ compliance postures; second, to simplify capital churn for non-value add hardware refresh requirements; and third, to reduce our overall carbon footprint by reducing power consumption and equipment.
VP of IT, Noodles & Company
At Noodles & Company, we are instituting a fixed refresh cycle for key POS equipment, which will also include a software version upgrade. We expect this platform to better host our current and future business objectives, as well as reduce the volume of support issues since the environment will be more reliable and robust. We are also making these foundational investments to support emerging payment and guest engagement technologies, as well as to strengthen our security position and risk mitigation endeavors. We are aggressively looking to employ end-to-end encryption to outfit our restaurant teams with the most robust and secure payment processing environment. This will allow us to assure guests that we are as committed to safeguarding their payment information as we are to delivering a memorable and tasty dining experience.
VP, Marketing and R&D, Which Wich
We’re focusing on a new online ordering platform for Which Wich, and consolidation of our databases. The objective is to provide a better guest experience, both inside and outside of our stores. Which Wich has a unique ordering system, and our current digital ordering falls short of where we are headed. Since digital allows us to form an ongoing relationship, we want to better position ourselves to use our guests’ data to provide them with customized experiences. For example, if you only order vegetarian items, we want to be certain we are suggesting something highly relevant and pinpoint accurate. We want to see how close can we get to the Amazon one-click ordering experience, because we know our guests have limited time for lunch and we want them to enjoy their Which Wich experience, not spend their time in queues to order and pay.
SVP of IT, Sage
While it may not be sexy, a big initiative for Sage Hospitality in 2015 is to continue to evolve our security program to incorporate PCI v3.0, mobile security, and updated PII requirements. We will also be looking to roll out improvements to the company intranet site that will enable it to move beyond being a document repository. We expect the big win in this project to come from the introduction of identity management, which will limit the number of unique logins and passwords a user must remember.
VP, Information & Technology/
CIO, Sonny’s BBQ
2015 is the year of executing against a “2020 vision” for Sonny’s BBQ. We spent most of 2014 planning and designing what would become our technology future and we are now able to put the design into motion. We reassessed the entire restaurant technology stack. Customer expectations and technology advancements have put pressure on companies to consider starting over. I am lucky enough to have the opportunity to do just that. We’re opening a new restaurant from the ground up in Gainesville, Fla., in late Q1. Along with a fresh, modern look, it will have a mobile-based service model, enabled by new POS and back-of-house systems that were designed from the start to work together, even though they come from separate companies. Because of the inherent similarities in the chosen solutions’ core architecture and the collaborative design process, we will do our best to ensure our stores are future-proofed and able to take advantage of whatever the next business-changing innovation will be.
VP & CIO, Church’s Chicken
We’ll be focusing on a few things at Church’s Chicken. Church’s traditionally didn’t provide technology guidance to the franchise community, so we will be publishing a global standards guide that will provide a roadmap over the next five years to migrate everyone from disparate systems. In the payment arena, we are working through the hardware implications to be Chip-and-PIN compliant. We’re also focused on a digital media strategy that includes a mobile app, social, email, text, SMS, website and mobile website. We’re also working through a number of business analytics projects to make better decisions moving forward, and are standardizing on a subscription-based back office (SaaS) at company-owned restaurants. Finally, in preparation for the Affordable Care Act and wage pressure we are rolling out a new human capital management system.
CEO, Scottys Brew House
We are working on a mobile app and mobile payment system that integrate with social media, allowing our guests to order items at the table, pay their tab, and leave a review on social media, all from the same platform on their smartphone or tablet. This will allow faster table turns, higher tip averages, and greater insight into our guests’ feelings regarding their visit. The back-end of the social integration piece will help in our marketing efforts as well. We will also be integrating our current loyalty program into this app and adding some upgrades to it.
HT: What emerging technology has you excited for its potential to be useful to the hospitality industry?
VP of IT, Luby’s
With iOS8, Apple randomized iPhone mac addresses used by WiFi hotspots, effectively ending the tracking and logging of guests by restaurants and retailers. WiFi tracking could be replaced by beacons, which will allow the restaurant or retailer to send proximity-based contextual information to a customer who has opted-in to the service. In that case, the restaurant will be able to customize and personalize the information being pushed to the smartphone, which should provide a higher level of satisfaction with the guest.
Garavuso: We are continuing to explore facial recognition as well as the use of iBeacon. With more than 500,000 vacation ownership club members in our system, we are constantly striving to globally recognize them, greet them by name, and provide additional services by anticipating their needs. iBeacon technology can also provide us this type of capability as well as allow specialized two-way messaging with our guests, which can drive utilization of resort facilities and improve service.
Pa: Beacons are interesting. As we learn more about our guests’ preferences via digital, how do we take that to our in-store experience with as little friction to the guest as possible? Foursquare was groundbreaking at the time as a way to let friends know where you were eating. Geo-fencing has been great for getting a message in front of a guest at the right place and time. I think beacons will help deliver a better experience without requiring the guest to take an action or even be looking at their phone. Can we hold an order until the guest approaches so that the food is hot when they arrive? Can our host run a large catering order out to a guest’s car as soon as they pull up? Use of this technology is still in its infancy, but it is something that I think can be fun and provide value to our guests if tied to our other systems and implemented properly.
CTO, Highgate Hotels
The guest’s mobile phone is now their guest room key. I think this opens up a world of options. If integrated with your existing mobile app platform, it can create a seamless experience which allows the guest to get real-time updates on their room’s availability prior to arriving at the hotel and, with geo-tagging and fences, when they are near the property. It also opens up revenue opportunities by providing room upgrade offers, if for example a guest arrives early and their reserved room type isn’t yet available. These offers create impulse buying decisions, with mobile access and full guest control. One-to-one text messaging can allow us to market to the guest during their stay about any special offers, exciting happenings in or around the hotel, or service enhancements, all made possible via location services that can interact with a guest mobile app platform.
Raman (R.P.) Rama
EVP & CIO/CTO,
I’d like to see connectivity of guest devices to our in-room television sets. This is in high demand as customers bring their own devices and content, and want to be able to enjoy that content using our televisions. I think there are a few companies providing this capability at the present time, but solutions are cost prohibitive because they impact operational costs and there is no additional revenue generation, particularly in select service hotels with no F&B operations.
Tenczar: At CES this year I was encouraged to see many types of alternative payment technologies, indicating an increased consumer appetite for a switch from traditional payment cards. At least somewhat responsible for this new “openness to alternatives” is ApplePay. Like it or not, Apple has a way of converting the cainotophobes — those afraid of anything new — because of the company’s brand reputation for being cool and easy to use. Represented at CES were companies ranging from already-deployed payment technologies like LoopPay (www.looppay.com) and Bitcoin to soon-to-be-released biometric payment gateways and wallets from HyprKey (www.hyprkey.com), Biyo (www.biyowallet.com, formerly PulseWallet), and Wocket (www.wocketwallet.com). The availability of the multitude of new payment choices indicates that consumers want more secure and convenient payment options and merchants should open their ears.
HT: What challenges are facing your segment of the hospitality industry?
VP of IT, Store Systems,
Starmer: In the increasingly competitive QSR space, companies are adding new channels, markets, and customer segments which can introduce significant technological complexity. Our challenge is to simplify, but only in the right places. While certain complexities in guest facing solutions are expected, unmanaged complexity in organizations and processes hinders the nimbleness necessary for hospitality technologists.
Changing consumer expectations could also be considered a challenge for hospitality. Many guests have an always-on mentality and waning patience for issues that disrupt their expectations. Our challenge is to understand and exceed those shifting expectations by providing enhanced experiences regardless of how, when and where consumers chose to interact or transact with us.
Garrido: We have more and more devices per guest coming into our hotels, trying to get onto networks that were not designed to handle that volume. The biggest challenge is how to upgrade-proof our networks so that we don’t have to completely overhaul them every few years, an effort for which it’s tough to get capital approval.
Furthermore, as we become more dependent on mobile devices, and connectivity to the Internet is essential to their functionality, coverage in hotels is increasingly an issue. There are technologies out there to solve this, but they’re not at a price point that make them easily deployed to most hotels. Most of these networks are only financially viable in large convention hotels.
Hopcroft: Business continues to hope for the magic bullet to make the hurdles associated with PCI compliance go away. The reality will be that this will continue to be an evolving standard, with new requirements every two to three years that will mandate us to improve our overall IT security posture. There will never be a magic bullet and I say this for three reasons. First, there is a significant amount of money that continues to be made by criminal enterprise.
While some might argue that end-to-end encryption and chip-and-PIN will put a stop to breaches, it is in the criminal enterprises’ best interests to defeat these new security measures to ensure that their source of income continues to flow. While adoption of these technologies will be key to future compliance, they will not be the “be all and end all” of compliance efforts.
Second, the security vendor community has seen explosive growth in revenues over the last five years. These vendors will not want to see their income streams decrease, so they will likely work to educate and lobby to the PCI Council and the credit card companies to continue to strengthen PCI compliance requirements.
Finally, a large part of our community continues to try to avoid its PCI compliance responsibility. It is completely understandable that smaller segments of our industry have to be extremely cost conscious, but continuing to claim ignorance in face of overwhelming evidence that most breaches could have been avoided by basic security practices will force the card companies to mandate more extensive measures.
Rama: It comes down to connectivity. Guests want to use their own devices as they do at home. It will be tough to find cost-effective solutions to accommodate bandwidth-hungry customers. Millennials wants to be always connected. They are not interested in the cookies or welcome drinks — they want to connect. Bandwidth is going to become just like other standards we provide to our guests like water, towels and sheets. The focus is going to be on these B’s: bed, breakfast and bandwidth, which will produce revenue because they’re what our customer wants. I anticipate that free basic service of 512Kbps service, with pay-to-use upgraded service, will be the trend going forward.
Seim: A challenge currently facing hotel and restaurant management is mobile security. Through the proliferation of applications available for the business, it is increasingly difficult to ensure that the applications in use in the field have the necessary security in place to protect sensitive data.
Another challenge faced by hotel operators is in designing in-room entertainment that rivals the home experience. Guests have grown accustomed to on-demand program streaming through the likes of Netflix, Hulu, etc., and the industry still lacks the technology to replicate this for the guest in their hotel room.
Wasdin: The Affordable Care Act/wage pressure will have a significant impact on labor costs. That means that we have to have much better labor management systems that are proactive in alerting our managers to potentially high cost labor situations. In addition, the cost of goods for protein is up significantly this year, so we need to have better processes and systems in place to manage costs. And as many others have voiced, it’s increasingly costly and time intensive to maintain PCI compliance.
HT: What skills do you think will be most important for technology leaders to possess, moving forward?
Hassell: The one skill would be the ability to remember where we came from and those who helped us get to where we are today. Remember the countless cold calls we received on a Monday morning from the eager sales rep trying to sell us something we don’t want or will never need. Remember the desperate call to our vendor for that last minute order we forgot to place for the item. Remember that the guy on the other side of the table or the phone has a family, too. The more technologically advanced we become, the less human we tend to be with each other. Have a heart.
Hopcroft: As the pace of technology evolution continues to increase and as our managers and associates get more tech-savvy, the requests for new technology integration grow exponentially. Our business-unit leaders are being engaged like never before, and in many cases they see the latest product offerings before we do. Some are concerned that, without immediately adopting some new technology, the competition might get an advantage. This can create a cycle that chews up valuable resources already assigned to support other strategic initiatives, which then further delays these projects, making them more costly. Now more than ever, IT leaders need to be able to help the business focus on those core requirements and system integrations that support the organization’s strategic vision.
Lehn: Working effectively with your vendor partners is certainly nothing new, but as we continue to adopt hosted, cloud-based solutions I have seen the nature and details of these relationships shift. For example, core infrastructure and security-related items had previously been our sole responsibility and generally weren’t present in most of our contracts. Over the last several years we have spent a considerable amount of time including very detailed provisions around the areas of disaster recovery, SLAs, upgrades, maintenance windows, data protection and other security-minded items. In some instances our vendors are effectively an extension of our internal team, and so we’ve needed to take great care to clearly define the handoff points and division of responsibility.
Pa: IT leaders will need to understand marketing and their role in supporting it. In order for an organization to be successful, the head of marketing and head of IT need to be on the same page. The future is about personalization and customization. How do we simplify our guests’ experience through technology? Marketers can no longer just focus on making a cool ad campaign — they need to understand data and be able to respond in real time. The IT department holds those keys by the decisions they make. If you cannot plug your marketing into the POS, you are out of luck.
Pinkham: Technology leaders need to understand exactly how business decisions impact technology, and look for solutions that: impact our guests’ experiences in more positive and effective ways; increase top-line revenues with system improvements and enhancements; and also control costs and expenses by whatever means are possible with any technology enhancement projects. The bottom line is that technology leaders must see into the future and be able to steer a company through any turbulent waves or rocky economic times, and navigate tough waters to get everyone there safely and still on board.
Seim: Moving forward, technology leaders will need to possess a deep understanding of the business, demonstrate strong communication and change-leadership skills, and display sound portfolio management skills. These skill set requirements have changed over time as IT has evolved into a department that spans across the entire business. In addition, the role of IT leader has transitioned from being an individual who understands how the technology is pieced together, to an individual that can talk to the business impact a new technology will bring.
Starmer: Today’s successful technology leaders must still possess the technical savvy, business acumen, and solid leadership skills which have always been required. In other ways, however, the needed skillset is rapidly evolving. There are a few areas in which I think this is particularly true. The first is that a successful IT leader serves as an architect for enterprise digital innovation. Increasing digitization throughout the organization, from internal strategy through to the customer experience, requires a unifying vision through the lens of a leader with a broad understanding of business imperatives. The effective IT leader has that view, but also gravitas within the business to coalesce competing visions. The second area for leadership is now an unfortunate, inevitable necessity: security. IT leaders are now the de facto sentry as the cybersecurity threats we all face only continue to grow in frequency and sophistication. Increasing knowledge in this area for you and your team is a must-do. Lastly, agility is the new core competency. For so long, we have been focused on solution stability; we have to be more comfortable working through and executing smartly, despite frequently changing conditions and common ambiguity.
Tenczar: In the restaurant segment as well as any other in the modern world, it is crucial that technology leaders possess a deep understanding of how “business” truly operates; beyond just how the island of technology provides an infrastructure or how technology enables a business to operate efficiently and effectively. If the head of technology is not well versed in business principles and how they are relevant to their company, they will not have as much to offer.
Keeping file servers backed up, email communicating, the network available, and store systems running smoothly are table stakes, commoditized with the expectations of modern businesses. Tech leaders differentiate themselves and are welcomed at the proverbial “table” when they demonstrate business acumen, constructively participate in conversations with the other business area leaders, and, as a result, offer solutions that help the company, whether technological or not.
HT: Where do you think technology innovation is lacking or under-served in the hospitality industry?
Barrow: Integrations and data standards still seem to be lacking in our industry. Independent systems remain difficult to integrate and many solution providers are selling systems that are not integrated as tightly as they should be. The move to cloud computing should ease this burden as APIs and XML can be leveraged to allow information to flow freely between systems. Payment systems remain locked down by financial institutions but these, too, can be opened up as alternative payments such as Apple Pay, PayPal and others are adopted.
Dickersbach: PMS and POS — we all know the major players, yet somehow what is available still isn’t spectacular. On the flip side, many new POS vendors have popped up servicing the SMB community and run quickly and solely off of tablets. I’d still like to see more competition in this space and hopefully someday see something really spectacular. The days of having to deal with multiple databases, fat clients, and other nuances need to come to an end.
Rama: The issue of how to clear room service trays from our corridors for cleanliness and odor control still remains a challenge. No one has yet come up with a solution to provide some kind of signaling when a tray is left in the corridor and ready to be cleared. This would improve efficiency and cleanliness in our hotel corridors.
Wise: The ability to have all of our technology interconnected continues to be a major hurdle for our industry. Having a fully integrated package that has a social aspect and loyalty program all together is something that is emerging but just not there yet. We have seen major improvements in this area over the last year — and we are starting to make some changes in our company as a result — but it is still very clunky for the guest and for the operators. We do believe with the use of mobile apps this will continue to get better and better and in 2015 we might finally see strides in this area.