Innovators tackle technology pain points
06 FEBRUARY 2014 8:37 AM
During the Thayer Ventures annual meeting, a portfolio of startup travel technology companies discussed how they aim to disrupt painful processes.
LOS ANGELES—A portfolio of startup travel technology companies gathered last week at the Westin Bonaventure in Los Angeles to discuss travel industry challenges and how they aim to alleviate them.
During the Thayer Ventures annual meeting, entrepreneurs who have founded metasearch sites, back-end revenue management systems, social media aggregation systems and more presented ways travel companies can employ cutting-edge technology to boost business.
After the event, Hotel News Now led a roundtable discussion on technology innovation.
It’s about the people
First and foremost, hoteliers said implementing new back-end technology is more than simply plugging in the hardware. Disruptive technologies often require new philosophies as well, said Tom Botts, executive VP and chief customer officer at Denihan Hospitality Group.
“It has been a learning process,” Botts said. “As we’ve been implementing (new revenue management software), it is as much implementing a piece of technology as it is a way of managing and strategizing about revenue.
“That’s a complicated process in that you’re training people on new technology but also asking them to think very differently about the way in which they’ve typically managed revenue, processes and relationships with not only internal parties but external parties, whether it’s an (online travel agency) or whatever,” he continued. “That’s been a challenge, actually a bigger challenge than implementing the software.”
The revenue manager role continues to evolve, and today innovation requires a hotel’s revenue management team to work closely with sales and marketing and e-commerce teams.
“There’s an intersection between how the consumer is changing and suppliers’ capacity to deal with that kind of pressure,” said Chris Hemmeter, co-founder and managing director of Thayer Ventures, a venture capital firm investing in emerging technology companies in the hospitality and travel space. “People can’t think about revenue management in this independent stack and say, ‘Oh, it’s a new technology solution for me to price better.’ The reality is it’s a discipline and a way of doing business that you better get on because the consumer is going to force you into a corner if you don’t figure it out.”
If not the consumer then traditional third-party partners, added Marco Benvenuti, co-founder, chief analytics and product officer at Duetto.
“That’s typically the way our industry has worked, right?” Botts said. “We don’t figure it out and somebody else builds a better mousetrap, whether that’s Hotels.com or HotelTonight or the list goes on.”
OTAs might be working faster than suppliers to capture mobile demand, but they are confined to a transactions focus while hoteliers are using the mobile device to walk the guest through the whole process.
“We’ve just rolled out new websites for the James Hotels and will be rolling out three new sites in next few months. We have taken an approach that is much more than transactional,” Botts said. “We think of it in three sets: explore, book and then experience. What we’re doing is enabling the customer at the onset of the process to say, ‘What do I want to do on this phone?’ That’s been an exciting process for us.”
Roger Bloss, co-founder, CEO and president of Vantage Hospitality, said Vantage is taking the next step in mobile and analyzing mapping capabilities.
“We have to make sure we give (travelers) the visuals and amenities to suit their needs,” he said. “Not unlike a lot of companies, we’ve now integrated TripAdvisor right onto our websites because the whole objective is to keep the consumer on your site.”
Hemmeter said property-management system providers lack mobile innovation.
“If you think about it, the PMS is the foundation of what should be a hotel (enterprise resource planning) platform, yet they’re doing nothing,” he said. “So let’s hope they at least open up and allow for innovative startups to integrate with their data because ultimately you have to have some integration with the PMS for a mobile solution to become sticky and become a super value add.
“We’re watching the space closely,” he continued. “It’s a great tool but I haven’t yet seen a great company.”
With new distribution channels coming onboard at a rapid pace, it’s difficult for hoteliers to get their arms around which to partner with, according to panelists.
Benvenuti said his advice is if the OTA doesn’t connect in a reliable manner through the hotel’s PMS or central reservation system, “let’s not bother.”
“The cost of managing that business where you have to update that price manually can be extremely costly,” he said. “If the new OTA has a pretty decent two-way connectivity where rates can be pushed and reservations can go in, why not? It’s always another channel you can open up.”
Bloss disagreed, saying driving revenue through Vantage’s own channels are more important because that’s the value a franchisor brings to the table.
“People rely on brands to bring them business,” he said. “At the end of the day, they say, ‘What are you going to bring me? What’s my return on investment?’ So as brands go we have to be very careful that we don’t dilute the power of the brand.
“What goes through brand.com is ultimately what our customers look like.”