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Realizing A Return

BITAC® Session Highlights Tech Strategies That Can Boost Bottom Line

Thursday, May 19, 2016
Dennis Nessler
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The recently concluded BITAC®: Tech, Sales and Operations conference played host to a couple of technology-focused panels with the most recent discussion centered on an increased technology spend for owners, the ability to integrate new technology systems and how to find new solutions.

Held at the Fairmont Southampton Princess in Bermuda, the session, entitled “Realizing A Return On Your Technology Investments,” included from both owner/operator executives as well as technology suppliers.

Several executives started by acknowledging their spend for technology has risen significantly over the last several years. According to Mike Hines, Chairman/CEO, HP Hotels, “There’s no way for it not to go up as it has. We’ve been in business since ’02 and our capital spend on the technology side has gone from less than 2 percent of our total capital spend probably to the neighborhood of 15 or 20 [percent] overall between bringing fiber optics into the hotel, more bandwidth coming in, and new televisions. And that’s just all from the guest perspective. Internally from a hotel operations standpoint it’s just as much.”

“I think everybody’s costs have gone up and spend in technology. We’re focused on two things: the next generation of WiFi systems from some of the brands, and the other is security,” said Jason Shane, Sr. director of information technology, Hersha Hospitality.

Michael Scott, VP, information technology, Waterford Hotel Group, added, “I think the PCI effort for us last year really opened ownership’s eyes to spending dollars on IT. It was infrastructure and working with security vendors. But then the guestroom Internet piece as well. We put a lot of spend on bandwidth last year,” he said.

When it comes to realizing a return on that technology spend, Kerry Brock, chief revenue officer, tracNcare, stressed it’s essential to ensure compatibility among the various systems. “I always give hotels, or whoever’s making the technology decision, this advice and that is making sure that whatever you’re buying also works with what you currently have. Because if you’re buying pieces of software and then you realize that they don’t speak to each other or they don’t integrate with each other, and you run into those glitches you will impact not only your employee experience but potentially your guest experience. And that’s where I think people go wrong,” she maintained.

Karina Nina, director of sales, Caribbean, TravelClick, weighed in as well. “From our end, it’s more to do with the business intelligence portion of it. We help our hoteliers to understand where the opportunities lie. If they only have present or historical data to work with I don’t think they can see what they can do and how much they can increment,” she said, adding of one of the company’s core offerings, “it’s basically to help them to forecast in the future.”
The panelists also detailed some of the ways they go about finding new technology products. According to Hines, “The best resource that we have for new technology and different things coming into the hotels are our general managers. You’d really be surprised from a supplier standpoint how quickly it does percolate up to the top when a GM can come to us and say ‘hey we found this product and we’d like to implement it. Here’s going to be your cost and your return on investment.’ We have a lot more interest in looking at that product than somebody knocking on our front door,” he said.

Shane added, “I think through peers and as we get out to conferences. You do that enough times and you find the answers.”

Meanwhile, a couple of panelists drew a line of distinction between the types of properties and implementing new solutions. “I think our independent general managers have a lot more input saying ‘hey can we do this or can we do that?’ Our branded general managers they don’t really seek innovation as much,” said Scott.

Brock added, “I would agree with that on the independent side, from selling on both sides. Absolutely the independent hotels are looking for that something they can leverage to combat the brands in their competitive set and their region, so they are far more open to that but that’s probably because the restrictions that the brands apply…If you’re looking to put your products in front of people, independents or smaller regional brands are going to be much more open to that for sure.”

The panelists concluded by outlining what they see as the top challenges for the industry going forward from a technology standpoint. “I think just getting the fundamentals right. I think we have to keep the user experience and the guest experience very simple and intuitive, and spend the money where there are gaps. There’s a lot of opportunity to overspend in areas where there probably isn’t an ROI,” said Shane.

“For me its security, not just credit cards, but security in general. Putting an ROI on that is kind of tough; it’s going to be a big spend for us. I think that’s going to be our primary focus,” said Scott.

Nina added, “Basically what we were saying about the systems talking to each other. I think it’s very important when you can have a platform that can interface with all of your distribution channels, and be able to, at the end of the day, have a great guest experience with that.”

Hines offered his perspective. “Change. Technology changes every 18 months. What I buy today is outdated tomorrow, so the biggest fear I have over technology is not knowing what you don’t know,” he said.

“Make the investment, although there are a lot of shiny things out there and people think ‘oh this is going to be great’ it turns out it’s gone in 6 to 18 months and nobody wants it anymore. So really understand who is actually going to use this,” concluded Brock.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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