Inside the 2011 Hotel Visionaries
By Abigail A. Lorden, Editor-in-Chief
Hospitality is about people, not technology. It’s about creating a place for the sun worshipers, the road warriors, and the urban explorers to make for themselves a temporary home. Good hotels (and cruise lines), be they rooted in best value or most stars, rely, too, on people. Empowering those people, both the guests that book the stay and the employees that deliver hospitable service, is the job of technology.
Each year, Hospitality Technology
reviews nominations and chooses a select
group of hospitality operators to receive its Hotel Visionary Awards. This year, awards were given in two categories: the back-office innovators, who are empowering from behind the scenes, and the customer-facing innovators who have forged ahead on the front lines. The awards seek to honor hotel companies for their outstanding vision and execution. Consideration is given to size, resources and individual market segment benchmarks to ensure that companies from across the industry are recognized for their efforts.
It’s our pleasure to honor Choice Hotels International, Galt House Hotel, Morgans Hotel Group and Royal Caribbean International for their efforts. Here are their stories.
Back Office Innovator: Choice Hotels International
Any hotel brand with a large base of franchisees understands the challenge of innovating with other people’s money. For Choice Hotels International (www.choicehotels.com
), a franchisor of more than 6,000 hotels across 35 countries, reducing the tech-spend burden on its owners was a top priority. Hotel owners could spend upwards of thousands of dollars on hardware to support its distributed property management system (PMS).
Adding to the complexity, Choice has brands across several market segments, from limited service through up-scale, and many of its limited-service operators don’t have dedicated IT personnel. “Costs associated with implementing and supporting distributed solutions weren’t effective for some of our mid-scale and economy solutions,” explains Todd Davis, chief technology officer for Choice Hotels International. “We wanted to go above property with a web-based solution and at the time there wasn’t anything available on the market” that was web-based, available at single price point, and offered a strong ROI for its brands across the board.
Choice made an investment to develop a proprietary system that franchisees could access via the web, with a low total cost of ownership but all of the functionality of a traditional on-property PMS. The new system, choiceADVANTAGE, is replacing Profit Manager, its client-server based PMS that requires a dedicated database on site. Today, 4,100 of Choice’s 6,000 hotels run choiceADVANTAGE and the company anticipates system-wide implementation by Q2 of 2012. The new PMS leverages Microsoft’s SQL Server database (www.microsoft.com
) and EMC Solutions (www.emc.com
) for data storage. Dell (www.dell.com
) provides the application and database servers and Oracle (www.oracle.com
) provides the Web- Logic application server.
Creating choiceADVANTAGE took thousands of man hours and included interface development for all of the company’s third-party vendor solutions, including PBX, POS and locking. “The core team started out with eight people and a 15-month development schedule from inception until the first hotel was installed,” Davis recalls. “At first we sent trainers into the hotels to install the system and then we learned that we didn’t have to do that; we could do the training remotely. We also created some online learning capabilities…and because the system was so easy to use we could roll it out fairly quickly.”
Despite the easy implementation, initial adoption from owners was a bit of a challenge. Since the data doesn’t exist at the hotel level, it was necessary to provide some education on a cloud-based application. “There were concerns initially around reliable Internet speeds and capabilities, but we’ve put monitoring in place to mitigate that,” Davis explains.
The benefits of choiceADVANTAGE are significant. “We now have a single image of inventory with true last-room availability,” explains Larry Gorman, Choice’s senior director of property systems development. Hotels now manage one set of inventory through all channels, and owners have global access. “If you’re an owner and you’re traveling, you can keep tabs with what’s going on with your front desk; and we have robust security in place so that if you want to control who has that access, you can. That’s been a tremendous benefit with a lot of positive feedback,” Gorman adds. Also earning positive feedback is the system’s ability to save owners money. “Savings are phenomenal so far,” says Davis, though official numbers aren’t yet available for release.
Davis says Choice is already headed down the path of “what’s next,” pointing to efforts to fully integrate property management and central reservations systems. “There is no more concept of CRS and PMS. It’s all one solution, sharing data across the business needs…and making you very nimble in the long run.” Davis says Choice also wants to avoid proprietary installations at the hotel level. “I don’t want to have a have a browser that has plug-ins that requires a specific operating system. We want to reach that point of ubiquitous computing where any device at any time can access our systems, whether it’s a mobile device, a tablet, or a PC, with any type of browser that’s out there; that’s the direction we’re headed.”
Back-Office Innovator: Galt House Hotel
The “before” picture of back-office technology at Galt House Hotel (www.galthouse.com
) included very little automation. At 1,300 rooms, it’s Kentucky’s largest hotel and in fact the official host hotel of the Kentucky Derby. With 70 percent group business, the hotel competes against many national brands. Despite this status, its technology sophistication was “extremely user un-friendly... and woefully short of industry norms,” recalls Mary Mohlenkamp, the property’s revenue manager. Its website inhibited maximum SEO, the online reservations portal only worked with Internet Explorer’s English language browser, and nearly 90 percent of reservations were entered manually. Social media was non-existent and rate strategies had to be maintained in separate consoles: one for property-based reservations and one for the online distribution channel.
The leadership team set out to completely overhaul its back-end systems and transform its revenue management, sales and CRM capabilities. “Our overall approach was to look at what would help us generate sales, but our largest constituent was meeting planners and that was absolutely lacking,” explains Ron Strecker, CFO for The Al J. Schneider Company (www.aljsco.com
), Kentucky’s largest hotel owner/operator whose holdings include Galt House.
Over the months that followed, the team at Galt House collaborated with multiple technology vendors to plan, engineer and implement an integrated solution. “Some of the vendors that we were engaging had relationships with each other, but what was novel about this was we said, ‘no, we need all of you guys working together,’” recalls Rita Reedy, director of marketing, The Al J. Schneider Company. Galt House looked for vendors who were committed to HTNG standards. “If they were involved with HTNG, then we knew they understood the importance of the standards,” says Strecker, which would help facilitate integration between systems without Galt House having to shoulder the cost of interface development.
“I’ve been working with these vendors since we launched the project,” says Mohlenkamp. “I said to them, ‘I want you all to work together and understand each others’ products very well, but I don’t want a train wreck. They don’t point fingers…if they have a problem they say, ‘Let us work it out and get back to you.’”
“It was a collaboration and I think that the Galt team was the nucleus to bring all of these tentacles together to fulfill an idea,” agrees Terry Jenks, general manager of the Galt House. Walter Zalewski was IT director during the project and now provides outsourced IT services. He credits Galt House’s internal team for their dedication and pushing the needle forward on vendor integration: “It was three months collectively of hard labor from this team.”
The project has allowed Galt House to eliminate manual processes for updating rates and availability both online and in its PMS, develop targeted group e-mail campaigns, and streamline the reservation process. Reservations are up by 31%, the average revenue per reservation has increased by 76%, and ADR is up by 58%. “This project has already shown an improvement in higher revenues and lower costs that have paid for the initial investment many times over,” says Strecker.
What’s more, the technology partnerships that were formed on this project resulted in the development of Passkey’s Availability, Rates and Inventory tool, a solution jointly designed by EZYield and Passkey that was publically released in October 2010. “We’re proud of the fact that an idea we had was embraced by two vendors and has become a marketing advantage for them,” Strecker says.
Customer-Facing Innovator: Morgans Hotel Group
In New York City’s highly competitive market, boutique hoteliers are constantly looking for ways to stand out from the pack and offer guests a little something special. Morgans Hotel Group (www.morganshotelgroup.com
) had a vision for “something special” for its Royalton property that may well be a precursor to the next big guestroom tech trend: iPads.
When Morgans began its project to put iPads in every Royalton guestroom, the technology was already capturing consumer headlines and the team anticipated other hoteliers were considering its amenity potential. But Morgans Hotel Group has experience in setting itself apart; the 12-property company is widely credited with opening the first boutique hotel in 1984, Morgans on Madison Avenue. The goal at Morgans was to create the most engaging, best looking and thoughtful iPad application for guest use. Yes, they wanted to inspire guests; but the primary goal was to enhance service and comfort. “We wanted to make the technology an enabler for the service culture,” says Jim Zito, VP of interactive marketing for Morgans Hotel Group. Success would require collaboration. “This was not an IT program, marketing program, or even an operations program,” he explains. “We included all operations in order to make it an effective and relevant program for the customer.”
With a plan to offer highly customized applications, Morgans chose a technology partner that could allow for creative freedom, while still having a strong operational backbone to fully integrate such functionality as in-room dining and guest folio access. The application was launched in September 2010 and leverages the Intelity ICE (www.intelitycorp.com
) guest services application, with a heap of Morgans-specific custom apps, including the ability to access the hotel’s music playlists, explore local arts and cultural events via “The List” (Morgans’ trend-spotting virtual concierge), set sleep sounds and wake-up settings, and engage in the hotels’ rich social media culture. Partnerships with FeedMagnet (www.feedmagnet.com
) and RCRD LBL (www.rcrdlbl.com
) enabled the music and social functionality, including building out HTML5 music files. The iPad apps are also fully integrated into the hotel’s website. To ensure that the solution reflected Morgans’ brand identity, both the application concepts and the design of the iPad buttons were created by its marketing and creative teams.
The iPads have since been installed in Morgans’ Mondrain SoHo, NYC property, where an additional “minibar” app has been added. Not your typical minibar, however, this app lets guests browse and order everything from a Flip camera to a bicycle.
Despite their status as a hot commodity, iPad theft has been a non-issue. “The vendor’s suggestion was to lock them down to the desk or mount them on some sort of a portfolio,” recalls Jason Harper, VP of interactive technology for Morgans Hotel Group. “But the magic of the iPad is to hold it in your hand and walk around with it.” The hotel applies the same logic it would to any in-room item such as a lamp or hair dryer. “We have a warning that says, ‘if you take it, we’ll charge you’ and we haven’t had one stolen yet,” says Harper. The devices work across the property, but the core app will only work within the designated hotel network. “The perception is that the device is useless if you steal it,” he adds.
It helps, too, that the iPads aren’t a Morgans asset. The monthly fee paid to Intelity for the software also includes an iPad rental. So far, none have broken. “The most traumatic thing that has happened is a dead battery. We have back ups in case that happens,” says Harper.
While the devices are providing an additional up-tick to the bottom line (by suggesting a wine paring with a room service order, for example, or the cost saved by not printing paper menus), the return on investment for Morgans Hotel Group is less about the financial aspects and more about the guest experience.
“We’re not so concerned with, ‘Did we make enough money in incremental revenue to cover the cost?’” explains Harper. “It’s part of the Morgans experience and being ahead of the curve,” adds Zito.
Customer-Facing Innovator: Royal Caribbean International
When a ship is so massive that it includes seven “neighborhoods,” one could image why a map would come in handy for guests. The newest members of Royal Caribbean International’s (www.royalcaribbean.com
) fleet are also the world’s largest: Oasis of the Seas and Allure of the Seas displace 100,000 tons, a piece. The cruise line wanted to provide guests with a highly interactive and intuitive way of navigating the ships. The solution also needed to provide back-end efficiencies that would help staff manage the 5,400 passengers that could be on board.
“Given the size of the vessel, Oasis is unlike any other ship that we’ve ever built or has been built for the industry,” says Bill Martin, chief information office for Royal Caribbean International. “There are a number of activities on board. The ship itself is a destination. As a result, people need to know what’s going on. We thought the cleanest way to do that would be with interactive signs,” he explains.
Royal Caribbean worked with Four Winds Interactive
) to develop a digital signage network that, on its Oasis ship, includes 55 interactive touch screens and 156 passive displays. Applications include the expected, such as wayfinding and events schedules, and the unexpected, such as real-time restaurant seating availability shown through a color-coded thermometer. Passengers can access information in their native language, whether it’s English, Spanish, French, Italian, German or Portuguese.
An extensive interview process was conducted with key team members from across the business, including marketing and revenue, guest services, food & beverage, luggage handling, safety and casino, to make sure that the new signs would help reduce congestion during specific times. From that, the company found that the main points of congestion included guest services and restaurants. As such, adding applications for boarding pass printing, travel information, and restaurant availability became key components. “Overall the main points of the functionality are to enhance guest communication and reduce some of the need for verbal or manual communication,” explains Jose Machado, director of IT software engineering for Royal Caribbean International.
The team also took care to design the system for speedy use, in particular because one goal was to eliminate areas of congestion. “It does a lot of different things, but we’ve found that the interactions tend to be very quick,” says Martin. “The number pad is large, for example. A user can find what they need on the map and move on.”
The hard work on application development has paid off in terms of guest satisfaction: “Effectively communicating the diverse choice of entertainment and activities available to our guests and guiding them…all the while making the process highly intuitive, is quite a challenge. Thanks to our partnership with Four Winds, we’ve really hit this one out of the park; it’s been a great success with our guests,” explains Santiago Abraham, VP of IT, global business solutions for Royal Caribbean International.
The technology is also helping to maximize the ship’s revenue-earning potential. “If there’s a demand for additional shows, for example, we can add another one or change times and update guests instantly,” says Martin.
Behind the scenes, the network allows Royal Caribbean to create a number of cost-saving efficiencies, ranging from minimizing demand for guest services and concierge staff, to streamlining restaurant operations. Sophisticated data integration between Royal Caribbean’s back-end systems and its digital displays has resulted in reduced lines and wait times. “With both guests and crew it’s wildly popular,” says Martin. “Crews love them because they answer a lot of the mundane, every day questions, and since we turn the ships every week, those questions come up a lot.”
As to an ROI calculation, Martin admits that there could be one, but “on the surface, it’s obvious what it does.”