By 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
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
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
“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.”
