Investing in Technology Innovation - How Much is Enough?
In the first viewpoint of this panel, several experts weighed in that the Hospitality Industry does not properly invest in technology innovation. Apple spent about $15 billion in research last year alone… or 5.5% of its annual gross revenue. We ask ourselves these questions: Is this level of investment purely in R&D also necessary in our industry, and is it possible to get that kind of money? What's your take?
Technology Executive and Consultant & Past President of HFTP Global
I think looking at how much you should invest as a percentage of gross is the wrong approach. You should invest the right amount at the right time and on the right things. A big problem I see often is that people in this industry tend to spend money on what's perceived as cool and innovative tech, rather than investing in tech that's fundamental to the success of the hotel/hotel chain.
We can't move forward if we don't solidify the base. We rushed to mobile key without solidifying our Wi-Fi, rushed to “the cloud” while our applications weren't ready for it, and rushed to “big data” without really having our data figured out. Even tasks like financial reporting and the flow of money are still done manually.
We shouldn't chase the next shiny thing without first fixing the present, and that requires investing quite a bit more up front. So you should invest as much as is necessary to get the foundation right, and then build the cool innovative things on top of it.