Unlocking business potential: Building the right tech architecture in hospitality - HITEC Europe Preview
Interview with Michael Levie, Chief Operations Officer at citizenM Hotels and member of the HITEC Europe Advisory Council
By Stuart Pallister, Contributor to Hospitality Net
Hoteliers are missing out on business opportunities as they fail to gather guest data properly. Michael Levie, Chief Operations Officer at citizenM Hotels and member of the HITEC Europe Advisory Council, says that given the rapid pace of business today, consumers are "not going to wait for us".
"If we don't get our act together and react, we'll become more and more dependent (on vendors and online travel agencies). And data basically sits at the base of all that."
Tech firms and others such as airlines are using data more efficiently, he says, adding that if the hospitality industry does not begin to handle reliable data better, and keep it "clean and ready for use, then I think we'll miss out on a lot of business opportunities."
To date, hoteliers have relied heavily on property management systems. "But because we've hung so many interfaces on to it for point-of-sales, door lock systems or any other technology, the PMS looked as all those connections as transactional or for its functionality."
Radio-frequency identification (RFID) door cards allow guests to access their rooms during the reservation period but beyond the functionality, hoteliers are failing to access "the micro detail that travels in those interfaces" about the guest's behavior.
"There's a richness of information about our guests and their habits in the systems, yet there's no way for us ever to bring that data to bear."
By using dashboards, instead, hoteliers could gain a great deal of micro detail in addition to functionality. "Through a service bus or that one pipe that all the data travels through, we can start generating dashboards to understand a lot more information about our guests as it becomes available."
"All of a sudden we get that richness of data of guest behavior." It also allows hoteliers, Levie says, to have an overview of how savings can be made and how profits can be increased.
"Unfortunately, data only unlocks when we've got our architecture right. And I think the biggest issue facing our industry is the systems architecture."
Hotels in large chains probably have to - or have been 'advised' to - use a specific PMS but then the "knowledge that sits there basically gets sucked into the chain and doesn't necessarily sit at the hotel level. So, at the hotel level, there's very little they're allowed to do or can do."
"If you think of contemporary successful organizations, they're all data driven. Take an Amazon or a Google, take what they do with data and the anticipation (of customer behavior) they're able to generate out of the data and you see that unlocks a lot of new business potential."
"We, as hoteliers, are still focused on a PMS or a specific device, but unfortunately insufficiently look at what data really represents and, in order to capture that data, what type of architecture we need within our systems to be able to do better."
For tech firms coming into this space, it represents an ideal opportunity. Certainly, tech issues have become highly specialized, so much so that hoteliers can no longer count on their limited tech ability to devise systems architecture and understand data flows, says Levie. "But many hotels should realize that if they become dependent on advisors - whether consultants in the broadest sense or tech firms - there's always a sales component in their advice. And what concerns me most is that hoteliers, who are not generally tech savvy and don't know what questions to ask, aren't able to steer their own destiny."
Hoteliers, he says, need to understand the whole structure rather than taking a piecemeal approach by adopting, say, accounting software to generate expense reports or using a distribution tool to do rate comparisons. "On and on through the entire food chain there are all kinds of devices being glued on to old stagnant technology that sits in the PMS, whereby the data doesn't flow but gets stuck."
"If you have the right architecture, you can start to organize that data: how it comes in, how it gets collated, where it gets stored and how it gets cleansed. And if you'd like to mine that data and learn from it, or have specialists work with it, then that data starts to tell the story."
Investment though is a major challenge facing the industry. "If you keep on spending little by little, without looking at the big picture, you're missing an opportunity."
"We are investing in technology and every day we're being asked if we want to add technology to what we have already and we readily add it if it has value and is easy to understand. But if it doesn't fit into a broader strategy, it doesn't sit in a broader architecture that enriches our own path."
Vendors may be selling hoteliers another piece of software or a system that may be functional and produce a return, he says, but "in its totality, we need to be smarter."
"Will that require investment? Yes. Will that require the appropriate intelligence? Yes. Will it take time for us to get better at it? Yes. But if we don't understand why we're being overtaken and we don't understand what data is all about, then we'll never get it right."
"Although it's expensive to put your own house in order - and it doesn't come free - by not doing it, you pay the bill somewhere and you become totally dependent."
Up to now, the industry has, with a few notable exceptions such as citizenM, glued digital solutions on to analogue processes and systems. As an industry, Levie says, "we stay on very legacy-based systems and are trying to keep up with people who've figured it out in a much more pragmatic and deep way and have started with a clean slate."
"We're already behind the eight ball and need to catch up," so hoteliers need to be smarter and more pragmatic, "otherwise we'll never get there."
Using the analogy of an architect designing a building to make sure it's efficient and flows well, Levie says a poorly-designed structure would be "more expensive and less intriguing." However, when it comes to IT or systems architecture, this is not viewed as a necessity. "So I would say, start with an architect who can translate what you desire and need in systems. That will reveal also the need to understand your customer and the associated data. Then, if we get that organized, we can make better overall decisions to get to the Promised Land."
In search of 'a different trade wind' at HITEC Europe
For Levie, because of the rich variety of vendors and visitors taking part in HITEC Europe, "a different trade wind starts to blow." There are opportunities to learn from participants and meet hotels, organizations or individuals that "battle the same thing that you do."
"As such, we can grow and set up a network of people who can help us."
Levie, who has been attending HITEC Europe for many years, says it has been "an enriching path. Through that, I've built up the knowledge I have today and the ability to be focused and get what we need."
"I started citizenM and have a good understanding of technology but it's insufficient to be a CIO of the size of a company that we are today. If we hadn't invested in the right structure and architecture, we'd be as dependent as many others are in the industry on PMS releases and on what vendors are going to dish up next."