Technology feeds innovation boom for hospitality at HITEC

CHARLOTTE, North Carolina – With temperatures soaring at the HITEC conference in North Carolina, perhaps it was natural that thoughts would turn to ice cream.

But Dan Blanchard, chief technology officer for IHG Hotels & Resorts, had a larger point when he shared a tale from early in his career about he and his colleagues complaining how by the time their “rocky road ice cream ideas” were rolled out, the production had turned so bland “you’d be lucky if you got flecks of vanilla bean.”

The experience stifled creativity, Blanchard recalled, even as it fueled an appetite to pursue more innovation when he had the opportunity – and the technology to help pull it off.

You’ve got to have people who have ideas. You have to have that culture of innovation.

Dan Blanchard

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That time has come. Blanchard’s presentation, though necessarily limited to the lessons gleaned by one company, captured an unspoken theme for the conference: As travel companies shift from marveling at the surging potential of artificial intelligence, a walk across the Charlotte Convention Center’s massive exhibit hall showed countless examples of how companies are applying those advances.

“Technology today gives us a lot more flexibility and a lot more capabilities that can be packaged together differently than we’ve ever had the capability to do in the past,” said Klaus Kohlmayr, the chief evangelist at IDeaS, a provider of hospitality revenue management software. “Everyone is moving away from these monolithic software systems to something that’s much more nimble and much more flexible.”

For IDeaS, the shift has helped open opportunities for smaller hospitality properties to access revenue-driving strategies once available only to larger hotels, while at cloud-based property management system provider Mews, tech is opening doors – literally – to a more human approach to hospitality.

A recipe for travel innovation

Blanchard’s presentation, entitled “Embrace Cloud, Digital and Innovative Technologies to Increase Booking and Loyalty for the Next Gen Traveler,” provided something of a recipe for achieving the success he felt stymied from earlier in his career: Start with a foundation built upon a cloud-based infrastructure. Stir in a product funding model that allows for fast – and cheap – failure. Then season the mixture with a culture of innovation.

Blanchard calls IHG’s modern, cloud-based environment “Gen 2” because the company had been working without a reliance on local servers for years. With 18 hosting locations around the world, they now can provide an infrastructure that’s fully automated for critical, guest-facing systems.

The result is a high degree of speed to market.

“Most of the applications that we now deploy have zero time associated with building their environments,” he said. Instead of the company’s other departments waiting on the tech division to roll out new products, Blanchard’s team now waits on approvals from finance or governance. “We were exceeding their ability to make those decisions,” he said.

But the flexibility enabled by that speed would mean nothing without an environment that reduced the fear of failure. While singling out members of finance teams in the audience, Blanchard spoke of developing a product funding model less results-focused over the near term.

“We don’t know what they’re going to do. I know that makes you nervous,” he said amid laughter. “We don’t know what they’re going to do beyond the next quarter. But we know we need those capabilities. That allows us to have a lot of flexibility, and that’s going to be really important when we start talking about meeting the needs of the next generation.”

We don’t know what they’re going to do beyond the next quarter. But we know we need those capabilities. That allows us to have a lot of flexibility, and that’s going to be really important when we start talking about meeting the needs of the next generation.

Dan Blanchard

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That type of approach removes barriers to innovation — “those things that prevent you from doing quick work, those things that prevent you from doing work that might not be successful.”

Blanchard said his team doesn’t work on “projects” because when projects don’t reach completion, people get fired – or worry they will be. The team undertakes “explorations” instead.

“You have to let those folks be successful, even if it just became [about] learning something that you didn’t do… It creates a culture of being willing to try new things,” he said, adding, “You’ve got to have people who have ideas. You have to have that culture of innovation.”

While describing an effort that reduced the number of clicks it took to book a room on mobile from 18 to three, Blanchard offered examples of the innovations that can occur along the way. Among those: a wish list loyalty members could create on the site. Even though the product didn’t reduce clicks or immediately drive more revenue, the team developed it.

“There was no business case. They just built it. Very cheap,” he said. “It turns out this is massive. People love creating wish lists and places they want to go, and it’s very sticky… People create the wish list, and then they book these things later.

“We did not create a program that said, ‘Hey, let’s go create wish list.’ It was an idea from somebody. Now it’s a huge hit for our customers.”

Using tech to make hospitality more human

Among the motivations for Valtr to found Mews 12 years ago was the idea that hotels should contribute more to a guest’s journey than just a place to sleep. A big obstacle, in his mind, has always been a first impression that leaves him cold.

“A check-in is basically… a process. You give me the [credit] card. You give me your ID, and I give you a key card so that you can access the room,” he said. “One of the things we’ve thought very, very passionately about was that we wanted the experience of coming to a hotel not to be a check-in but a welcoming – because that’s what’s human and natural."

That’s why he’s excited the technology has advanced so hotels can offer digital keys that allows guests to bypass the front desk on arrival and go directly to their rooms. Valtr’s less excited about the technology than the opportunity to replace exchanges about passports and credit cards with genuine conversations — at the guest’s convenience — about things like the best restaurants and activities in the area or other services the property offer its guests.

“It’s elevating hospitality to a trusted resource. And right now it feels that that’s something that is missing in hospitality,” he said. “These very standard processes are not trust-forming. It’s a precious five minutes that I have to actually tell them how I’m going to do my utmost to make sure they have the best experience.”

Democratizing revenue management

Evidence of tech-driven shifts in hotel revenue management are all around – even at the hotel where the IDeaS team stayed in Charlotte. On seeing that the property sold day passes for non-guests to use the pool deck, Vice President of Global Marketing Mike Chuma couldn’t resist investigating.

My message to you is build that foundation. Build that environment [that’s] fully automated, that’s fully cloud, that can react quickly. Get yourself in a position where you can have some of that flexibility of your funding model. Create an innovation environment that says it’s OK to do explorations, it’s OK to try things through an innovation program.

Dan Blanchard

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“They said they look at booking patterns,” he said. “Saturday and Sunday are typically going to be their shoulder nights because they’re a business hotel. So, they can open up the pool deck, and residents around Charlotte can come swim in the pool.”

The data-driven approach is something IDeaS has been preaching for decades — and one that’s become easier with AI-boosted analysis. Tech advances have also helped put more sophisticated revenue management software into the hands of even the smallest properties.

A few years ago, most of IDeaS’ business came from larger hotels with more complicated needs – and bigger budgets. Now, more than a third of the 30,000 hotels they serve use a product launched three years ago to target smaller hotels with simpler needs.

“We call it democratizing revenue management, enabling the smaller budget hotels to tap into the same AI that before only the biggest hotels could benefit off of,” Kohlmayr said. “We can now have this segmentation of technology because the technology capability is there.

“You want something on your mobile phone that has the same power in the back end as our flagship product? We can give you an app that prices your 100-room motel,” he said. “It’s built for the general manager or owner who runs around and has 100 other things to do, and it does everything in the background that it’s supposed to do.”

Giving life to travel’s big ideas

As Blanchard closed his presentation, he listed metrics that help prove the value of innovation. Half of IHG’s digital bookings are on mobile now, he said. Downloads, revenue, loyalty enrollment — all are pointing in the right direction to meet the expectations of modern travelers.

“My message to you is build that foundation,” he said. “Build that environment [that’s] fully automated, that’s fully cloud, that can react quickly. Get yourself in a position where you can have some of that flexibility of your funding model. Create an innovation environment that says it’s OK to do explorations, it’s OK to try things through an innovation program.

“And then let the team work. Let them make it happen. Because they will find the things that will work. They’ll try a bunch of stuff and some of it won’t work… But a lot of it will. And that’s where you’ll get that value, and that’s where you’ll get those customers who are really sticky.”