Hotel Tech Insider

SPEAKER_00:
Well, in 2023, they got to a point that today it's a 1 second 23 to do a pit stop. So in about 30 years, they actually were able to get to an impressive aggregated marginal gain.

SPEAKER_02:
From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them.

SPEAKER_01:
Today we speak with Patrick Apostolo, the Director of Corporate Operations and Business Transformation for EMEA at Radisson Hotels. With a lifelong passion for hospitality, Patrick made a career pivot after working in digital events and F&B spaces for 10 years, going back to school to earn his Master's at La Roche, and completing Starwood's Management Training Program. In addition, we look to the future of hospitality and how to navigate today's unique environment where we see three very different generations of people both working at and staying at hotels. Well, let's get into it. I like to start the conversation by getting a better understanding of your background. So if you could walk me through your career so far, how you got into the industry, how you got to your current role and what you're doing today at Radisson.

SPEAKER_00:
Absolutely. So I will start sharing that my father is Italian and my mom is American. So I've lived and was grown up between two cultures and two countries, which gave me always this, I would say, I've lived by the age of 18 in nine different countries. I came back to Italy to Bologna to do my university studies in business management. And at the time I actually started to work as an entrepreneur, as a start-up entrepreneur, putting up in Italy in 2006 one of the first e-commerce platforms that we had. It was called Concrete.dj, and we were actually selling most of event equipment, studio recording, AV, and also audio. small big events and so on. From that I start to actually get acquainted with big events up to 5,000 people with big agencies like Clear Channel and artists like Fatboy Slim or the big names. 2012 met my wife and said okay I've always loved hospitality but I don't know a clue about it so what about if I actually go back to school and try to study something about hospitality I have a good knowledge now about 10 years of experience so digital, food and beverage, event organization, but no knowing. So I went back to Laroche to do a master's degree in hospitality management and marketing. And that's where then I was approached by Starwood at the time with the Vita Futura program, which was one of the management programs that Starwood was offering. worked in Starwood for three years, first in the Sheraton Brussels Hotel, then helped and supported the ARIA office for Benelux and the Nordics, taking part also to different innovation platform. And that's where I think the methodology towards digital transformation innovation came from. I was part as a greenbelt of the operational innovation team and Starwood, which then allowed me to also be exposed to different transformation. activities that have to happen. And while I was working for Starwood, one of the biggest achievement has been actually turned the Sheraton Brussels at the time to a positive EBITDA result. And that happened with the severe transformation that had digital components, but also structural components. the organizational model that we were putting in place. After that to Brussels in 2016 was hit from some of the big attacks. So with my former company, we decided to start moving around the task force. 2016 was also the year that Radisson approached me actually for one of the most beautiful hotels was the Radisson Blue. Royal Hotel in Brussels is famous because we have this beautiful and gorgeous dome and the plan was actually to bring the transformation in the hotel, so again bringing the profitability of the hotel to the right state and to a black number instead of being a red number, and at the same time with the vision of a leading repositioning project, so elevating the property from a reddish and blue 20 million euros invested in the overall redesign of back of house, front of house, look and feel, brand positioning, infrastructure from an IT perspective and looking at with a more holistic way of connecting the guest journey together with the employee journey to really try to find synergies and opportunity to cost optimization, meaning as a consequence as well of profitability. From that in 2019, I joined the corporate office of Radisson. And then now I'm there since five years, two years ago, I started also take this role as business transformation, where I'm really horizontal across the organization, putting in contact many initiatives of the many verticals coming from the above property environment to the hotel environment. So I know I've been probably a little bit long in my intro, but just in a nutshell, what I've been through in the past 42 years.

SPEAKER_01:
One thing I'd like to dig in a little deeper on, you mentioned in a couple of your hotels that you've worked at, digital transformation has been a vehicle to drive profitability. I think there's a misconception out there that investing in technology has to be expensive. And you have to have this big budget to spend on software and you have to move money around from one line item to another. In reality, it sounds like that's not the case. And you can actually turn a hotel into a more profitable business by leveraging technology. So tell me a little bit about how you've been able to do that.

SPEAKER_00:
I personally believe that there are different levels of maturity. And again, also a component that is important in digital transformation is size matters. That means that there are out there a great opportunity of sourcing or even scouting many times the right partners. And especially in the digital startup environment, there are so many talented products, softwares, which have, I think, one USP compared to the many big elephants that we have in the digital environment. That is, they're hungry. They're hungry to be your partner. They're hungry to integrate and do give-ups, listening to the voice of the customer, to also enhance their product, and leverage on the collaboration, becoming a principle that I'm a big ambassador about, and that is competition. We need to understand between players that the innovation comes many times not only from two different partners, but may come also from two, three, four, five different partners that in some cases can be competitors in certain areas, in certain niche of that market or segment, but at the same can cooperate to bring value to the final guest that in that case was Radisson. Some of the examples that happened and one of them more practical has been our planning tool. We started actually with a company that is probably known, it's called HotelKit. This was an example of something that we started to use in a hotel base. We saw at the time doing also RFPs and analyzing this environment. One important factor of the digital transformation, and here probably I'm going to get some of them against me when I say this, is don't trust what they sell. One of the biggest experience I've done in digital transformation is we should change the mentality of RFPs and RFI in a pilot-driven RFP. And that's what happened for us as well with the Total Kit, by the way. We started from one hotel. It was one of our hotels. we implemented the tool, showed the benefit and brought the value mainly for all the engineering tasks that may be preventive or reactive maintenance, for the housekeeping, overall management of the tasks or operations, but as well for the big general collaboration and exchange of information, of reports that have process related to it. So once we had set this foundation with AutoKit, we said, okay, we want to still have this continuous improvement mentality, and challenge not only our partner, and that's I think another good advice of digital transformation, always challenge the status quo. So always challenge what there is on the other side. Yes, it's a partner, but you always need to work with that partner to push to the next limit, because the improvements will never stop, in my opinion, from that perspective. And that's where we actually also said, okay, we know Hotel Kit is on property, what about if we don't test in other properties, other tools, to challenge, to learn, and to grow all together. That's where the principle of competition actually happened, in our case, between the companies that we have tested, because they were competitors. But actually, we brought them all three around the table and said, guys, we are testing all three of you. We're seeing what are the opportunities. We're learning from each other. And then we will have a strategy that is choosing one. What is important on the question that you asked me before, Adrienne, is what is the tipping point? Because when you start a digital transformation, You will start with the needs and probably as you described before, with no capex available to do such big investment to actually have and bring a digital transformation. So you actually need to start by facts and by walking the talk, demonstrating the value that your business case or your digital transformation initiative has for the business. And that's why partnering with somebody is absolutely fundamental to start this journey together. you will get to a point, like happened to us as well, for many of our tools that now have been in implementation or in adoption for more than two, three years, that we start thinking to ourselves, as a big company as well, well, you know, at the moment we're paying half a million euros to that company to provide us this tool. What about if we would think of starting insourcing this tool? And make it become as well for a business model like ours in the hotel industry, something that can be a fee generator for the company. In the traditional environment of hospitality business, we always worked focusing on those four or five kind of fee structures that you have in any management agreement or franchise agreement with the operator, that may be an HMM, so a hotel management agreement or IAM, an international management agreement, but still You're in a situation where you can always leverage, bringing a benefit and value for your partners, in that case are the hotel operators, and creating a new value and revenue generation stream for the corporate, which contributes then to our beta results. So start small, start crawling, start walking, and then when you see that is the moment, start running. because we cannot stop it, we can only kind of ride the wave and understand at one moment we need to move from one side to the other to actually achieve the ultimate objective. So, and again, this is never gonna end. I personally suspect or believe that... I have presented some of my... I'm gonna go speak around one of the beautiful videos that I've seen, and this is talking about the Formula One. In 1990, when I was 8 years old, the Formula 1 pitstop used to take about 7 seconds to change the 4 wheels, refill the gas and so on. Well, in 2023, they got to a point that today it's a 1 second point 3. to do a pit stop. So in about 30 years, they actually were able to get to an impressive aggregated marginal gain across the 10 years. Now the continuous improvement will be there is the scale that will change. So if before you're talking about seconds, now you will start talking with milliseconds. So you're talking about engineering, you're talking about digital predictions or transformation or models of innovation that can increase in some way deficiencies in that sense. So There are possibilities and this is the example. The message here is be brave to fail, be brave to learn, and be brave to try again. Because sometimes you might have the good idea, but you're just too ahead of time for that good idea.

SPEAKER_01:
I think that's great advice to really see the relationship as a partnership. So if something is not working well for you, you share that feedback, you work with the vendor to see if they can build the feature you need or make the change you need. Tell me a bit about how that relationship works in real time. Do you have a quarterly business review with the partner? Are you constantly exchanging emails? How do you get to the point where you feel like you can have an impact on their business?

SPEAKER_00:
Well, I think we go in different layers and different ways. We have a product owner in our case for each of the systems. and my team. The product owner is the one holding the roadmap, but in particular playing this functional and pivotal role of connecting the voice of the customer, the business, what the hotel need, what the hotel want to use, what the hotel have an urgency and priority. And then based on that, we apply more and more the Agile Scrum methodology. So approaching and gathering in a small cycle the right requirements that can be developed and test them having as well possibilities today to have quality assurance. Softwares or digital tools that allow us also to measure what is the user experience, because in our case, the user can be two, it can be the employee of the hotel, and it can be the final guest. So we might need to think of the journey for both of them. Because think many times as as international company or corporate, we think a lot on the consumer facing one, which is right, because that's where we're generating our revenue and our bread and butter. but at the same time, we're not focusing enough on our employees that are actually then delivering the experience. For hospitality, this is fundamental as well. In the case of this product owner, he's the private role in getting voice of the customer to the developer. At that moment, we sit with the developer and we have a continuous roadmap. In the case of AutoKit, that we review almost on a weekly basis, to be honest, to add small, medium, and big advancement or enhancements that may happen. At the same time, we have at the leadership level, also quarterly business review. And many times I try to bring also the CEO of the startups to meet with our leadership team, because that is absolutely important to bring the partner to make them feel part of your family, to make them a far part of your vision, to bring them in a line and understanding the priorities that you're bringing. to the table are priorities that are not probably only for Radisson, are priorities that are for the industry. And that is also an interesting point to leverage on this relationship, which then also allows this continuous exchange, because that's the same thing I always ask to our partners, like Hotel Kit, I say, guys, you should come also to us. telling us what is the market of what other clients are bringing to you because we need to leverage always on the principle of competition something that is good for me might be good also for you and we can actually keep on improving and by sharing and moving to the next one keeping always a certain competitive advantage where we have an intellectual proprietary activity that is done with the partner. What I mean by that, we have an innovation, I would request to the partner, we have contributed with the know-how, so we would like to be the one in exclusivity for one year before you go out to the market and say to all your partners, unless we need to approve it. To do a practical example and to go in detail, at one moment during our finance transformation, we were faced with a discussion regarding FF&E Reserve. So FF&E is the furniture and fixture that you have around the hotel. In a normal contract, the hotel should put from their P&L on the side every year, part of it on the balance sheet to actually then reinvest it in the following year. What happened with that is that we didn't have a clue. In most of our lease hotels, what was the asset registry that we had? How many chairs did we have? How many beds did we have? How many lamps did we have? And that was also connected to the preventive maintenance. So we went to Hotel Kit, and he said, guys, you have an inventory that you're using for housekeeping. you have a way to input certain calculations or even to automatize it with certain bluetooth or beacon sensors for the metric calculations of hlp so heating lighting and power so what about if we start combining and taking pieces of your product to build what could be for us, first of all, an asset registry, automated where we can complete it with the sensor. Example, in Hamburg airport, we have one of the case a couple of years ago with the renovation. And we were faced with the fact that due to HHCCP, we had to place or replace all the emergency structure of the fridges and freezers that we had for F&B. You know that when the door stays open for 30 seconds or one minute or two minutes, get the alarm out. We were faced with a bill that could go up to 70,000 100,000 K to do all of this. And then we said, Okay, guys, what do you have a sensors because we have the fridges. The only thing we're missing is the technology. So what about they were actually able to bring to the table cool zone, one of their suppliers as well as partners in that sense. which has these sensors that are connected with the Bluetooth and the beacon, which then was sending through HotelKit the message to the chef that his fridge was open. That's where then we said, okay, then the asset registry can give me emergency signals or notification, can start to keep track of what is the number and value of the assets with the residual value and the lifecycle. Why? Because what we started to do, no matter what system we had, HVAC, furniture, whatever, we started to apply either RFID tags or QR codes on the material, on the chair, on the table. So we could track every time what is the value that we have in the balance sheet, we can know exactly where that PC is in the logistics of the hotel, or if there is a renovation, where those furniture and fixtures are going by having a trackability. We can always measure and have full visibility of what our consumptions are. This is fundamental because the moment you start to set the base of historical data, then everything you need to do, and that's what we stress a lot, our teams, and we work a lot with models of prediction. And to have a good model of prediction, you actually need to have a good, clean historical data. So HotelKit is now contributing to give us all the historical data of consumptions per season, per day, per different characteristic or parameters. And we can use that data to provide it to our prediction model, which will tell us then beforehand, an eight weeks window in front of us, what's going to be our theoretical consumption of heat, lighting and power on a certain day, which then by consequences open what our vision is and what we're using us, what you're using today of having a daily PNL with GOP and down to the beta. So if I'm a GM, I can start actually to know exactly on which day in the next two months in front of me, I need to pay attention or I may need to improve quality because maybe the ADR is high or there are characteristics to enhance the guest experience. So this is one of the examples. The way depends a lot. And I'm reading a beautiful book at the moment that is called adaptive intelligence. Now we all start from the IQ, beginning of the 20th century. Great. We're all intelligent. We do a test that UNICEF wanted at the time to state the intelligence of human beings. We then move with Goldman in 96 with emotional intelligence, empathy, the five areas of self-awareness and so on. Great. But now we need to actually think that we need to have both. We cannot survive either with one or the other. And what is the combination of that is putting together the prefrontal part of your head with the amygdala. So putting your emotional intelligence to connect with your rational intelligence to bring the adaptive intelligence and a relationship with a supplier, with a player like this, the context plays an important role. So that context needs to allow you to adapt your relationship strategies with the vendor based on what the environment around you is.

SPEAKER_01:
Tell me a bit about your exploration process when considering a new vendor. Is it a very cross-functional group of people who do that demo or sort of vet the tool? And how do you make sure that it truly is a right fit for daily operations?

SPEAKER_00:
So what we do usually is, first of all, we look out in the market and we think in Radisson that innovation is not a department, it's actually something that is horizontal to the organization. So we have a committee, if you want, with stakeholders from many departments, the most fundamental, which are actually gathering and bring the requirements to the table. Based on that, we start to look out in the market, what are the options? And we start to also look inside the company. What are the options? Case for AutoKit has been exactly that. It was already inside the company. And then we brought the external market analysis to the table to complete and generate this product. That moment, there is a first evaluation. Usually, we try to be as agile as possible in that first evaluation. We try to avoid getting all those big RFPs with 300 question or requirements and so on, because we're also humble enough many times to think that we may not know everything about the business, especially if we're calling a partner, we probably want to have the expertise of that partner that is also helping us. So please don't pay too much attention in this phase of scouting or understanding the requirements or the traditional waterfall methodology for some project manager and IT project. Try to be as agile as possible because you will discover a lot during the process. Then be clear on what are the goals that you're trying to achieve. And everything has to be measurable with clear KPIs. In our case, what we do with most of the pilots, we always try to select three layers of the organization that are actually assessing the potential of a tool. that happened for AutoKit, happened for RevuPro, happened for many of our partners, where we actually say, okay, we need total level assessment. Keep it simple. Quiz straight to the point. Correlate to your objectives. Try to get a KPI that the property can also support to justify the result of the assessment. Second layer is usually, in our case, the area offices. So we might have area offices for Central-Southern Europe, for Asia-Pacific, for Southeast-Pacific area and so on. So that is important for us to get many times a first filter of compliance and understanding if we are aligned with many country requirements because we do not have all the expertise centrally, so we need to rely on the area office expertise. And then last but not least is the corporate. And again, I would always say that many times we were there in the process to start from 100 requirements or 30 requirements to be agile and then end up with 300 requirements at the end of assigning actually because we are learning across the journey. The pilot usually we always try to make it last for between three and six months to have a least valuable data, having continuous check-in with the property, having the vendor always on the call with you because the accountability and ownership needs to be in you as corporate representative but also in the vendor and the hotel needs to feel that they have the right hyper-carrying support from the vendor to fix their problem. Because let's remember that the hotels have the guests in front. So every minute of delay is a minute of the guests in front. So it's important that this synergies, especially when you're running a pilot. And what is fundamental when you run a pilot as well is straight away find the right change agents. So don't go and run a pilot in a property that you have a GM that is not welcoming technology with open arms. That would probably be your last priority. Try to get a GM that is more keen for these activities, somebody in case of housekeeping that is stronger in housekeeping because there is a big component of housekeeping or engineering. So find well who are your change agents, who are the pilot will run because that pilot phase will be as well a development phase of the tool. That's where we're going to set the scene to understand what we need to give back to the appointed vendor or a player or partner to actually become our preferred partner or our unique partner. So this is fundamental in choosing the people, understanding where are the critical moments of truth in your internal organization processes and by that then keep it as a developing plan because you will see across the road and as you were saying, as you were mentioning Adriana as well, I always say that it's particular, insistent and softer. We have the ability to sell the sky and deliver you the back. That is the reality. So only the test can actually tell you if that sky is really the sky or it's just a painting in the roof.

SPEAKER_01:
And thinking like full circle in the life cycle of a technology vendor, At some point, there may be a point where the system is no longer serving its purpose, or maybe operations have changed and you don't need that system anymore. How do you think about re-evaluating your tech stack and making changes whenever needed?

SPEAKER_00:
So we have decided in Radisson to have our strategy since the beginning of the transformation was in 2018 with a clear vision of having a backbone that was solid to support the growth. In our case, we went with a system that is probably known not only for our industry, actually less known for our industry compared to the other that is SAP. SAP really known in manufacturing, really known in logistics, really known in many other industries besides hospitality. is the reality. Oracle has always played an important role. So we decided to actually place our central and backbone stack on SAP with the components that are more sensible to our business and are less tendency to move or to change over a decade. So in our case, our ERP system is SAP. Our business planning system and budgeting is in the BPC 11 in our case, another SAP product. We have our CRM that is SAP. We have our TMS that is our alternative to PMS that is SAP. So this is our backbone, solid. It's connect all in one database, which then allows us to work with the data lake strategy in a lot easier way. for also getting analytics or looking at opportunities. And then we created satellite players or partners that we work with, we develop with, and we then get to an opportunity or a difficult decision to actually separate from this relationship. And this happens. So we usually drive it by three main components. The first component is, is this software become a core system for Addison? Yes or no? Is there a convenience from a cost-benefit perspective to source or to change it? Or otherwise, we need to actually strengthen the relationship, reassessing and redirecting what is the strategy that the relationship wants to get to. We had cases of that. We had cases when COVID actually exploded. We were not ready with our in-house online checking system. But COVID brought us an acceleration that we were planning. So we sat with Shishi Group, which was also a RevuPro provider for quality measurements, and we said, we have this problem. We know that you have a company that is called MyCheck that is actually one of the most innovative from payment perspective for everything that is online check-in. Can we partner together? Well, I think we were crazy or stupid enough to deliver an online check-in with payment product. The only thing that was missing is the mobile key that they requested at the end. But not only develop it and integrate it in about three, six months, we were able then to roll it out to 220 properties globally. In another six months, so in one year, we were able with a task force, of course, enormous heavy lifting that we had to do because it was two PMS system to integrate with. We had OPERA on one side and TMS on the other side. We had international requirements because the beauty and the beast of check-in is that every country has international requirements that are different from the other one. And then we had the language barrier on the other side, meaning that we as Radice have the localization strategy. So we wanted to have our online check-in for 27 languages that we're serving on our website. And that's where they're at. Another level, layer of complexity. Then we got to a point where after COVID, we said, guys, the number of check-in tools and software that we're doing is quite important, is becoming a factor that is interesting, both become a product, we need to enforce it. So unfortunately, we have to go back to our preferred rate. I still thank Kevin King as CEO of Shiju for the help and continuous mentorship that he gave us to actually say, guys, we are in a moment. This doesn't mean that we need to end up all relationship. This means that we are, we know that we can count on you. We have relationships that are going maybe in other fields, In the case of Shizhi, we work with the Ice Portal, we work with the RevuPro. So, I'm sorry, we decided to insource it. And I think you need to have also, at times, a clear and transparent conversation on telling where you stand and what is your plan, and to be fair and polite with them, because let's remember, they have been there for you when you were starting to crawl in or walk in. So you always need to be there for them in the moment they need to prepare the exit strategy. You cannot go to them three months and telling them, my friend, thank you for what you have done. We're going to close the contract for that family. Now, I would personally, and I think that this ring sometimes also risks attached to it, but informed with the right timing. what is the plan that you have, counting on then the solidity of your partner that is then delivering the service and the product until the last day. And that's not found in our partners, because we found partners that when we told them that six months before we were disconnecting them, they actually start to cancel all SLA and even thinking of going in arbitrage or in different legal actions while we had others that understood the case, were humble enough and open enough to actually leave always an open door, because that is the important part. Let's remember that this business is so small that probably most of us know each other. And so if your reputation is then getting to you that you're not fair and that you're not walking the talk, that's what will last across the board. So be fair and be honest with the vendors in front of you, whatever the exit strategy will be.

SPEAKER_01:
So I want to switch gears a little bit. We've mentioned some vendors that you use at Radisson. I would love for you to give me the overview of your tech stack.

SPEAKER_00:
Absolutely. So we started for sure from TMS for Hotel, which brought great things and also great learnings from that sense. Why? Because the beauty and the beast of SAP is there's such a complex system or such a wide system that allows you so many things that you might need an engineer in front of it. So from that side, we actually worked then with SAP with the Fiori application, which is nothing else than a mask that you put on the SAP backbone, which then brought us conclusion that the strategy and the correct strategy for us was to repack as a product. We call our PMS internally EMA. EMA stands for every moment's matter application, which is exactly that. And we came out a little bit. So first of all, we create this as a product and we start to sell it as well to our operators. As I was mentioning before, it became also as a fee and revenue generator for Radisson in that sense. Said that, we then looked at the opportunity in the business sector. We need to simplify the operations and we need an application like Fiori that allows us, and that became like an iPhone strategy. And then we're working on MFV3, and then we're working on MFV4. So that is, for example, something that is totally custom-made for Renison. So we took a TMS for hotels that was, if you want, a semi-prepared product on the market from SAP for hotels, because that's what it was. We applied it with our app to make it simple, and in particular, to give to the hotel the shell. So I want to give a closed environment where I'm minimizing the number of errors. I'm minimizing the possibility actually to do crazy changes, which is then SAP doing in that direction. Okay. So to explain also our stack, we start from the middle that is SAP with all the system connected. We go probably what is important for us as hoteliers to explain some of our in-house product. That is the top line. So we started with a product that we have built and created in-house that is called Pulse. Pulse Analytics is nothing else than an application that is supporting different verticals of the company, meaning mainly distribution, sales and marketing, revenue, operations, and quality. So I call it an aggregator. It's an app that finally is putting together all different information coming from the SAP stack, but also coming from external vendors. Example, one of our biggest partner is Lighthouse, the former OTA Insight. Okay, so we get the data from OTA Insight in Pulse. We get the data from STR in Pulse. We get the data from HostApp. we get the data from RevenuePro in Pulse, because Pulse became for us what we see as a GM, the cockpit of the GM. And that is the first product that is also helping us to take strategic decision on revenue, looking at what is our overall pipeline of business that is coming both from a B2B and from a B2C side, allows us to look efficient, allows us to look at quality, and even start to looking at cross-checking. This can actually And also to become, what I would define in some way, a continuous drawing canvas. Because the system, as I was saying before, is just a system. So we can give you all the beautiful dashboards that you want with this product. Then is adopting it. And adopting it means as well that you need to have a structure that is actually leveraging on those tools to improve your top line. Because you're there for them. And that's then where we, in parallel to Pulse as a product, that is a system, we created the club. The club is led by my colleague Gianni Di Fede, who's the global SVP for revenue, who actually said, okay, we need to go to a centralized revenue. We need to go to a centralized M&E to cope in particular with all these problems. So we will have the revenue methodologies, you know, the one of changing the rates at least a couple of times per day or relying on RMCs to actually do that for you in the background and keep the dynamic pricing going. If we do that for the rates, if we do that for the top line, why cannot we do that for the bottom line? and for the GOP. That's where we ended up then with our product. We have been working for years now with a partner like D2O PMI, which is Profit Management Intelligence. They have this prediction capability that allows us as well the daily P&L from that side. Now, we have again another tool or we have been now with this tool for five years, which is actually helping us improve the productivity. But we want to bring down the methodology to govern this system and this product. and in some cases like that we have them. with this architecture of satellites. We also go with many of these players. When we see that the tipping point of the cost benefit is not there yet, I'm going on a white label commission strategy. So we say to the vendor, and we're talking with some of them today, okay, you want to penetrate our portfolio as Radisson. We would like to propose you as part of our tech stack to our operators. So instead of coming to us and you doing all the heavy lifting of sales, connecting and so on, You sell us the licenses or the product and so on. We apply the look and feel of Redis, rebranding it as a Redis tool, and then we are the one taking and supporting you in the sales activity, in the support activity, and in maintenance activity of the system. This is now becoming quite successful because we are now representing three buckets of partners that we have, partners that are in-house and are in-house built softwares and products that we sell, mainly the SAP, environment. We also have now a new POS, for example, that was built on React as a coding structure, but it's always connected with SAP. So we create with React a mask that is a mobile app that is connected with SAP for all the transaction codes, for all the accounting matters and so on. And that is our new MAP POS. And that is what is fully built in-house. Then we have a second bucket that is the products that we started to work with as an external player. and then actually became something that we wanted to insource. And then we have a third bucket that is exactly what I was mentioning two minutes ago, meaning products there where we said that the tipping point of the cost benefit of insourcing or even thinking of bringing them in was not there, and we would prefer to work with a white label. Commission strategy, which is also good. So this is pretty much the overall I hope has been clear that I always think about it like a body, you know, you have your Invertible column that is actually the SAP part that is keeping everything together Then we have a head that many times is giving you the strategy and is giving the top line is giving the revenue Capability and then you have the arms that are the operations together with the legs They're the ones that need to have a planning system or a productivity system to pass the message that if I have two covers arriving tomorrow, my F&B team needs to serve breakfast and my housekeeping team needs to prepare the rooms. And those are where the hotel kit and other systems stand.

SPEAKER_01:
I know we have just a couple minutes left. I do want to get one more question in. Curious to hear your take on this question, which is always a good one. What is one thing that you believe about hotel technology that your peers or competitors might disagree with?

SPEAKER_00:
I think that digital transformation comes with three big elements. It's, of course, the system that is the overlaying arch, so the system. Then you have the people and the spaces. OK, so one thing that but I'm probably not the emulator there because we have some colleagues like Michael Levy that actually did it. So a hotel without a lobby, that would be something that I'm looking, that we still find a lot of resistance, let's put it, not so many from owners today, but many times from hoteliers. So that is something that as a traditional hotelier, we cannot get out of the idea that the hotel needs to have a reception desk. Even if it's a kiosk, I don't care because what I think about, for example, the model of kiosk that we are implementing as well, is that we are unfortunately a little bit too late. We're a little bit like the airlines. By the time they have put the kiosk in the airport, online check-in came. So now you pass by the kiosk in the airport and most of them are either shut off or nobody's using it. So even the front desk or the communal desk in the citizen and model for me is already obsolete. If you think about it for a little, they were innovative 10 years ago. Now we did, we need the no reception or no desk arrival XP. And then another thing that I strongly believer of is the full personalization with artificial intelligence. Again, going back on the point I was mentioning before demographics, I need to start looking that may be with my CRM, that may be also with other systems and innovations on what can be found on the guests that I'm getting in and with the biometrics anticipate that guest and answer with a personalized approach whatever the need of the guest has in that direction. And last but not least, I also want to focus on one point is that we are a little bit shy as hoteliers on finding alternative ways of making a square meter profitable. So we think that the hotel bringing a profitability of 70% from rooms or a conversion of 70% from rooms, this is actually our core business. Well, let's remember that that's a real estate asset and every square meter that you're not using might have a different destination that can be optimized for. So don't be shy in the sense in thinking the most out of the box things, even rooms in a cellar. Why I cannot put a no window room? And I think we actually had the first case of standard hotel that opened in London with a no window room. So what I should say to many hoteliers again, be hungry, be brave, and always try to challenge the status quo. because otherwise we will not change the industry. If you think about it, our industry has been, and is still, one of the less digitalized industries. And this is coming out from a Harvard Business Review study in 2016 that is published and is actually public, where we are only, we're as bad as construction and hunting and fishing. And we were doing, until COVID, most of our hotels and most of our hotels, they check in in the same way they used to do during the Western. I come to the desk, I give you my document, you pay me the room, I give you the key. This is a transaction that in 2020, before COVID, we were most of the places doing. We had some online check-ins, some kiosks coming out, but this is how the experience was. So challenge that experience because you will have a segment of your consumer that would like to see it different.

SPEAKER_01:
Well, I am so grateful for your time. I know we're right up at the top of the hour now. Are there any final thoughts or any last topics you want to talk through?

SPEAKER_00:
The only thing I would emphasize on is don't plan your technology starting from the budget, but start planning your innovation based on the business opportunity and the need that you have. Be agile in your roadmap when you develop a product. because you might need to change it along the way. So try to have a long-term goal, but be ready to continuously change your short-term objectives. And that will then might have also changed your final objective because the environment and the context around you is going so fast that you actually need to adapt in that sense. And you cannot design in 2024 what is going to be the hospitality of 2035. you will need to adapt along the way 10 years from now. So having also more visibility, that's something that I found also coming from other industries. In the hospitality, I see personally that the planning many times doesn't meet the same timeframe that other industry did. In manufacturing, you have a plan for 10 and sometimes even up to 25 years. In hospitality, the planning is a lot shorter. So we should leverage on this capability that we have to embrace technology in a lot better way. And last but not least, don't stop taking decisions about digital transformation based on what you think that the guest wants. You have enough data to go out and look really what the guest data or what the guest wants. So don't be stubborn in closing yourself. Be open to embrace all the data points that we have, the immense opportunities.

SPEAKER_01:
Yeah, and I think some hoteliers may fall into the trap of collecting all this data, but maybe not using it. Well, so good talking with you, and we'll be in touch about the publication date of this interview.

SPEAKER_00:
Thank you so much for the opportunity.

SPEAKER_01:
Thank you. Have a good day.

SPEAKER_02:
That's all for today's episode. Thanks for listening to Hotel Tech Insider produced by Hoteltechreport.com. Our goal with this podcast is to show you how the best in the business are leveraging technology to grow their properties and outperform the comp set by using innovative digital tools and strategies. I encourage all of our listeners to go try at least one of these strategies or tools that you learned from today's episode. Successful digital transformation is all about consistent small experiments over a long period of time. So don't wait until tomorrow to try something new. Do you know a hotelier who would be great to feature on this show? Or do you think that your story would bring a lot of value to our audience? Reach out to me directly on LinkedIn by searching for Jordan Hollander. For more episodes like this, follow Hotel Tech Insider on all major streaming platforms like Spotify and Apple Music.