November 25, 2024 • 32 mins
Are your hotel’s technology systems holding you back from achieving growth? In this episode, Howard Phung, Group Director of Digital at Australia's Pro-invest Group, reveals how a strategic tech stack can transform your hotel operations and drive significant growth.
Key Takeaways:
- Discover the critical importance of selecting the right Property Management System (PMS) and how ProInvest successfully reduced their PMS from eight to three, with plans to consolidate further.
- Learn about the role of AI in enhancing guest experiences and operational efficiency, and why it’s essential for hoteliers to prioritize AI in their tech strategies.
- Understand the significance of cybersecurity in the hotel industry, including key features to look for in PMS vendors to protect sensitive guest data.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I'm really concerned by a lot of hotel groups. Do you
mandate 2 factor authentication?Do you have geodensing for your
PMS? 90% of the PMS don't havethat capability. So if the
hacker knew how to get into aPMS and they knew the product,
we would have 90% data breacheseverywhere.
Speaker 2 (00:18):
From Hotel Tech Report, it's Hotel Tech Insider.
A show about the future ofhotels and the technology that
powers them. Today on the show,we have Howard Fung, the group
director of digital at ProInvestGroup. In this episode, we go
deep into what makes a greattech stack, how to build your
hotels culture for the futureand for growth, and how to
(00:38):
select the right partners andoptimize them for the future. It
doesn't matter whether you're ina technology role or not.
You will learn from Howard, andyou will improve your business
after this episode. I'm reallyexcited that we're about to dive
in.
Speaker 3 (00:54):
Howard, thank you so much for coming on the show.
We're excited to have an Aussiehotel here. I think you might be
our first.
Speaker 1 (00:59):
Oh, that's great. Really excited to be here.
Speaker 3 (01:01):
Can you start by telling us a little bit about
your background in the hotelindustry? You've obviously led
technology at some pretty majorhotel groups. Talk us through
your journey and quick 32ndbackground.
Speaker 1 (01:11):
Sure. So I've got about 2 decades of experience
Pacificland Hotel Technology. Myvery first gig was at one of the
largest telco providers. Soafter a few years there, I
pivoted into my very first hotelrole, which it was the Acura's
head office running the servicedesk across the group. At the
time, there was 99 hotels.
I believe they are 300 plus now.So that journey kind of set me
(01:35):
kind of the the benchmark aroundwhat my career transpired to be.
Then I pivoted into my regionand Accor. I looked up New
Zealand for a sport perspective.And then then I got my very
first management role at 25,which is a really young Sofitel,
an IT manager for a large, theWentworth, which is a flagship
luxury hotel.
And that's where I get to reallybring technology and drive a
(01:59):
strategy that was reallyspecific to a product. So at
that time, I led, full PMStransformation, Wi Fi, all the
way to guest experience. One ofthe very first hotels to be a
first off in a lot of technologyat that time, like paper
paperless housekeeping and soon. And then I got my very first
kind of quite a big gig where interms of working for Fraser
Property at the time, which isFraser Hospitality. I went from
(02:22):
60 hotels over a 100 plus for alot of acquisition and had a lot
of influence.
I led kind of a team thatselected the PMS, our cloud PMS
for the group. So we chose Inferat the time. We have the vision
to deliver full sustainability.So we achieved 80% paperless
across the group of thatplatform. So we did paperless
(02:42):
check-in all the way topaperless housekeeping to
paperless ops.
So it was great then all theaccolades started winning a few
awards. EBT came and knocked onmy door and said, hey. We need
to take that big shift intransformation. So I was first
down the job was to shift theentire on prem stack onto hosted
so that we shifted 55 hotels,took the pause into cloud. So
(03:05):
really it enabled that group toscale very quickly.
After that, I was asked to kindof reengineer the booking
engine. It was a bespoke bookingengine, so I brought an IREC and
you CDP at the time because Ineeded to recognize guests quite
in real time for a single signon, for matching, diamond
matching, and for loyalty codes.And so the booking engine now
(03:26):
infused one of the very firstbooking engines of the world
that's bespoke, and and itactually matches your data in
real time with payments,tokenization paired to your
account. So that was very andthen kiosk then kiosk came where
it was really successful. I wasone of the very first Hoda
groups to really drive kioskadoption.
We did a lot of integration withloyalty, with customer
recognition to room selection.The pilot, I'll give you some
(03:49):
context. The pilot started offwith 20% utilization. After at
the end of a year, we startedachieving average 90% adoption
for kiosk. So that's reallygreat.
And then I met Proinvest andthen knocked on my door, and
then I eventually decided totake on a role where they wanted
me to rebuild the team, rebuildthe tech stack from scratch. And
(04:10):
it was a very interestingchallenge. So I took it on
board. Now I'm here. I'veshifted from 8 PMS down to we're
free at the moment.
Like, ideally, 2. We've shiftedthe entire landscape into cloud
from cloud HR system to ERP toPMS. So we're run pretty light
And enable us during thatperiod, we grew 300% in growth
(04:33):
in terms of hotels as a resultof having a very agile tech
stack.
Speaker 3 (04:37):
So it sounds like the first thing a hotel company does
when they know they need to stepon the gas from a digital
transformation perspective isthat they call you or someone
like you. My question is, whatare your deal breakers? Like, if
a hotel company called you,obviously, you're very happy
with where you are and you'rekicking ass right now and
growing the business. But as adigital transformation expert, a
(04:59):
hotel company calls you andyou're kind of vetting them as
an expert, what are the thingsthat you look at where you're
like, absolutely not. I will notwork at that place.
What are the kind of red flagsthat you see in those
organizations? Whereas theopposite obviously was true for
ProInvest and EBT where you sawthe potential there?
Speaker 1 (05:17):
There's a few things that I look for in a group.
Generally, owner operator iskind of what I like to work
with. The reason being is thatyou can make a decision on the
day around tech strategy. Ifyou're a hotel management
company, you still need tosocialize your roadmap with
owners, which it's a process. Soit takes 2 years sometimes just
to get that roadmap signed off.
(05:38):
Owner operator is one of thebest set up. You see a lot of
groups that have that mix. Theycan scale quick with technology.
You've got large auto managementrights. They're still trying to
select a cloud PMS.
There's a few groups that workwith. They're they're still
confused where they wanna be,and their play, their
priorities, the CRS piece.Right. That's where they make
their money. And I get it for anoperator.
(06:00):
We're all about end to end techstack. We look at the whole
ecosystem and ultimatelydelivering a bottom line that
makes sense for the investors.Another area that I see is
probably a key red flag isaround the maturity,
understanding of technology. Iwouldn't work for a CEO that
just didn't prioritizetechnology, and they need to
really fundamentally understandin order to scale, to drive
(06:22):
efficiency, there's certainlevel of foundational knowledge
that look for in executives.Like, basically, there's quite a
few questions I ask them quicklyin terms of technology.
How do you see it assisting withthe growth, you know, of the
company? So some CEOs that I'vespoken to in the past, they just
think technology is just areactive element of the
(06:43):
business. They have to have it,and it's quite a reactive
mindset. CEOs that kind ofresonate with me is how I wanna
grow. I wanna grow 300% in ashort amount of time.
I have the funding. I have thebacking of the investors. Those
are the types of things I liketo see. Also, autonomy around
structuring your team. One thingyou don't want, a red flag is we
(07:03):
need to stick.
It's too risky, Howard. Youknow, we don't wanna go with a
different structure. It mightcost too much money. If you're
too focused on costs, that's asignificant red flag. You know,
we should be focusing on theupside.
We should be focusing on thegrowth of growth opportunities.
One other thing is I look attheir track record around their
brand. So you might see it's notthat hard to Google a brand and
(07:25):
see where they're at in theirjourney. And if they're not
investing their PR, their brandequity, that's a red flag to me.
They're effectively a dying, butthey're the codec, and there's a
codec moment.
Right?
Speaker 3 (07:36):
You mentioned that you guys started from 8 PMSs
across the portfolio down to 3or 2 and then hopefully one
soon. Was that something thatyou looked at during the
interview process and were like,this has to change before I can
work on the rest?
Speaker 1 (07:51):
100%. During the interview process, it was an
open book discussion, so theyweren't hiding anything. If they
were restrictive around what wasgoing on in the business,
wouldn't have jumped on. So theywere very transparent. They were
frustrated at the currentleadership around the PMS
situation.
They needed direction. They needa very clear roadmap on how to
(08:12):
get there and the costs. So theywanted a plan. And that's what I
love about the leadership hereis they know what they want, and
they just want someone that putsin a plan that makes sense and
then execute.
Speaker 3 (08:23):
How did you think about whittling down 8 to 3 to 2
to 1 on the PMS side? And wereall 8 of those contenders, or
you kind of, like, knewimmediately, like, 4 were out
and they weren't working, but,like, 4 were contenders and had
a right to come in and pitch youfor that business?
Speaker 1 (08:38):
It's a good question. Initially, I wanted to take away
the bias on particularly myselfworking for certain PMS. So I
hired a leader in terms ofproperty management systems
space, and I got them to go outand interview every single PMS
provider. And we had a matrix.We had we knew what we wanted,
and we wanted to see how hungryeach PMS vendor was.
(09:00):
And it's quite interesting.During that process, we saw some
PMS vendors. They were too busygrowing with another hotel
group. They weren't interestedin developing any features. They
said their r and d's, itstopped.
They're not gonna put a centinto the platform. The others
were we saw is we shouldn't needto tell a PMS vendor how to
develop their product. We wantedto see vision, road map,
(09:20):
capability. Most importantly isAI as part of their strategy.
That's a key, Ryan.
And so we saw a lot of PMSvendors that didn't have AI in
their strategy, which was highlyconcerning. And that kinda
dropped l 8 down to, like, 2 onthat regard. It was quite an
easy process. We took about 6months, then we looked at the
commercial side. We looked forthe most cost effective.
(09:41):
Generally, when you work with apartner, initial approach, a lot
of vendors take us, let's ripthem off. You know, let's let's
charge them a lot of money. Sowe saw partners that were really
hungry to work with us, so theygave us significant discount
that was equivalent to a globalbrand. So we saw, like, okay,
this partnership's gonna work.And then in return, we will also
will be, like, a representativefor their product across the
(10:02):
region.
Speaker 3 (10:03):
So when you joined Proinvest, how would you
characterize the state ofdigital transformation at the
company? And where are you guystoday? And where do you see the
company in 5 years?
Speaker 1 (10:15):
When I first joined ProInvest, it was in a, I would
say, a startup phase. They grewso so quickly. They went from 3
hotels at the time to 8 at thetime. They didn't have a tech
stack. They were budgeting theirIT costs based on one counting
code, yellow code, you'd say,and you had no visibility.
So it was one of those big bangmoments that they realized we
(10:38):
can't operate, we can't scale inthis current state. We didn't
have a vision around technology.We had a reactive leadership
that just responded to therequirements. They weren't
looking ahead on what theyneeded, so everyone was
frustrated. Everything wasmanual.
It was the most basic things Iwould say, and technology wasn't
(10:58):
right. And, effectively, it wasa house on fire, I would say.
Everything was burning downbecause you couldn't see your
data, and it wasn't accurate. SoI looked for certain qualities
for startup mindset, agile,flexible, hardworking, and we
needed to bring in innovation. Icould have brought in someone
(11:19):
that had a lot of experiencethat worked for a large hotel
group, but they didn't quiteunderstand how to decouple, you
know, a small start up.
So I look for hunger andattitude and really intelligent
problem solving skills. So thoseare the people I brought
together, and we were at thewhiteboard trying to solve every
single problem. Like, we hadbetter discrepancy issues with
standards issues. So in thiscurrent state now, we have a
(11:41):
unified PMS, one standard onedata strategy, and we're on the
roadmap to consolidate intoeventually one PMS. Today, we
can any executive can get areport, a daily revenue report,
fully automated, fully mapped,ingested with the right market
segmentation, very strategic,And we ingest that into our data
(12:02):
warehouse and powering which,some of the elements of generate
AI to help match the datatraditionally would require 2 to
3 people trying to figure outovernight, how should I code
this data?
We need to map that. It'slearning quite quickly. And so
we're getting near real timeanalytics pretty quick. As soon
as the data is available, we'reingesting it into our platform
(12:22):
and using our core. We've we'vehad some data scientists to help
us add value to that data.
So give an example. We now canas soon as the revenue data is
ready, we're ingesting payrolldata, we're ingesting revenue
data, we're ingesting pausedata. So we can now drill down
by mail periods based on aparticular role on how much it
(12:44):
would cost you to run that percheck. We use the predictive
element of Power BI to to have alook at, okay, you've rostered 5
FTEs or 5 full time roles, freecasuals, but we're predicting
you're only gonna make $10. Weneed you to scale down by free
FTEs to be profitable.
Right? So those are types ofautomation. So we've stabilized,
we've centralized, and now we'rekinda seeing the fruits of their
(13:07):
automation elements today.
Speaker 3 (13:10):
I'd love to go through from pre stay to instay
to post day, like the tech stackat ProInvest, and where it was
when you guys started and wherewe are today. And then maybe
we'll go into the areas ofinterest for the future where
you feel like, you know,obviously, there's always more
work and optimization to bedone. So let's start with
presale. How are you guysacquiring guests? What are the
(13:32):
big focuses from a technologyperspective, whether it's CRM,
revenue management system?
How do you bring guests in thedoor?
Speaker 1 (13:40):
There's a few. Prior to starting, there wasn't a
strategy. It was just bang outemail marketing, try to get them
to book. So that was thestrategy. Now in this current
state, we've got AI poweredrecommendation engines.
So particularly luxury brandscame in. We effectively the
marketing aspect needs a bit ofwork. So we're in the process of
(14:00):
trying to bring in Revinate toreally feed the different
personalization element of it.But what we do is we have a
unified hotel website, and we'veinvested quite heavily on
digital marketing agency that'soptimizing the search engine
optimization, keywords,particular brand pages,
promotional opportunities. Sothat's our bread and butter for
(14:21):
customer acquisition.
We are investing, we'reidentifying them quite early in
the journey, and we're trying tomarket to them where possible
for those indirect means. Sowe've brought in this agency
that really helps us elevateidentifying them early, and we
use a variety of tools wherewe're experimenting constantly.
You know, the great thing aboutbeing early stages, we tried
(14:41):
Hotel Network. You know, we'vetried many different tools to
help to bring that marketing. Iwould say it's a devolving
process.
I don't think we've got it rightyet, but we'll eventually get to
a point where when we have acentralized CDP unified across
the entire group, that's when westart seeing the real fruits of
upselling. So let's say thatwe've transferred with they've
(15:02):
booked with we've got a
Speaker 3 (15:03):
pre
Speaker 1 (15:03):
arrival email, just just the general PRM. Some of
the groups, we use guest foliofor the upsell element, but some
use naught 1 with a variety oftools.
Speaker 3 (15:12):
Which booking engine do you guys use? Is that unified
across all the properties also?
Speaker 1 (15:16):
No. We use variety. So independents, we use, the
Sabre CRS solution. That'sgreat. It's a great solution.
That's been around for a longtime in terms of I didn't feel
the need to change that profile.I put delivered what we need.
It's quite easy to plug and playand scale that particular
platform. But the others is weuse the edge for their core
brand, and then IHG's got itsown proprietary booking engine,
(15:37):
so we don't have a choice. So,effectively, we just hand off
the booking straight to IHG oncewe've converted the customer
from a digital perspective.
Speaker 3 (15:46):
What is your guys' meetings and events tech stack
look like today?
Speaker 1 (15:50):
So we use Delphi FTC, similarly because of our
relationship with IHG. It doesthe job. But if we looked
objectively around the productitself on what other players are
doing, there are far moreinnovative solutions out there
that I've used. And wepreviously, I used Ivy, which is
a great it was a startup at thetime. It was if you look at into
(16:11):
quite an end to end tech stack,and then you I'm liking what
like, meeting temple.
We try to put meeting temple in,but they didn't have Oracle at
the time. It wasn't ready to dointegration, so that was a no go
for us. But they're doing somepretty interesting stuff around
the digital space and howthey're booking into an
elements. Delphi FTC, itoperates on a Salesforce, so you
(16:33):
need a in house developer thathas Salesforce skills to really
enhance the product. It's quiteexpensive to aggregate theirs
out of that into your Power BI.
So there is a true enterprisesystem, but I think this space
will get disrupted over the nextfew years with General AI. Like,
whoever has a General AI CRMwill win a lot of customers.
Speaker 3 (16:53):
Could you talk about the role of the data warehouse?
What are the data sources it'singesting? And what does it
allow you to do that youcouldn't do without it?
Speaker 1 (17:01):
I think the first purpose of a data warehouse for
us is, you know, we needed adata map to a consistent
standard. We look at ROI revenuebased on market segmentation,
and we're working with IAG, Aquaand Independent Brands. It was
quite difficult to really getsomeone manually to map some
spreadsheets and some macro to,you know, to to make sense of
the data. So, you know, when Ifirst started, 1 third of the
(17:24):
office were somehow doing someform of mapping data, like 1
third, if you live with the headoffice, they're just sitting in
the Onyxel spreadsheets tryingto clean the data before they
could use it. So what InTouchdoes is it it's got our
standard.
It's ingesting data whateverform from whatever hotel. So
we're taking pause data. We'retaking payments data. We're
taking every single data pointin there so we can really drill
(17:47):
down to really to thetransaction level. You know?
This credit card surcharge onthis particular booking, we can
drill down quite rich. Right?And then we brought in demand
data, we brought in STR data tosee where we're calling ranking.
We're bringing in a lot ofbudget forecast that are into
the platform. And the beauty ofthis platform is we can now see
(18:07):
on a particular head of aparticular month on a particular
market segment, how we'reperforming over the last few
years.
So that's the beauty of thisplatform. For me, the fruits of
it is pulling that data out intoa a generative platform. The
jury's still out around whatplatform handles that data the
best. I'm using Microsoft, butI've seen some great tools out
there that has some IP logic inthere that's moving quite quick,
(18:29):
so we can pivot quite quickly.That's the beauty of having it
that your data centralized.
You can pivot the data streamquite quickly. And that's the
purpose. It's to clean our data.It's to make sure it's
consistent, reliable. And theETL element, you know, they're
doing it generally, you need aquite a proprietary tool like
Matillion to pull it and costmore than a probably 4 PMS's
(18:49):
just to deploy it.
InTouch has got its own scripts,its own proprietary code that
can ingest out of Oracle, youknow, or out of certain
platforms. And that gives us theprobably the most cost effective
data warehouse tool out there onthe market today. So that's the
main endpoint of that platformis to fire data in a standard
that we want so we can do somecrazy stuff with it.
Speaker 3 (19:11):
So a guest gets the property. Can we talk through
the guest experience tech stackof, like, what goes into
powering that at yourproperties, and how much leeway
did you have with the brandswhere they're like, oh, you have
to use this solution versus,like, what could you actually
bring on yourself, and how'sthat going?
Speaker 1 (19:27):
So I'll look into the brand where we're kind of
innovating quite heavily. Weoperate for a franchise model,
so there's certain flexibilityyou can operate and put a tech
stack. So, like, for Kimpton,we're all about that customer
gets experience. So we don'twanna put too much technology in
front of your face, but it's allabout understanding
personalizing. So we're we'refocused quite heavily on what
(19:49):
they like, what have beveragethey like.
So we leverage QR code orderingat the rooftop balm, for
example. We use that for tap andorder. But equally, it's not in
your face. It's only there whenthe queue's long. So we try to
balance that technology.
We have tablet, orderingsolution, post to calling down
the phone, just nice simple menuclick in straight ins. It's just
(20:12):
we try to make it free clicks,and then you can get your
burger.
Speaker 3 (20:15):
And is that something you guys built in house, that
tablet solution?
Speaker 1 (20:18):
No. We chose a local partner, Australian partner
called Tapendium to do that. Sowe looked at many solutions out
there, like global brands, buteveryone's trying to make a buck
and try to answer othercapability. We just wanted it to
do a very simple thing. Alright?
We don't wanna replace thephones. A lot of people try to
replace the phones, but thetechnology does play up quite
(20:38):
consistently in the room. So wejust wanna make sure if they're
unhappy about something, theycan just pick up a phone and
call reception. So the bit of atablet, a nice tablet size is we
work with a celebrity chef, LukeMannigan, and it's very
appetizing. There's famousburgers and certain steaks.
We've seen, like, 20 to 30%revenue uplift just by kinda
(20:58):
showcasing his products I mean,their products. So it's all
about right fit. Then we at theHolly Express, you know, the
clientele, they don't wannaspend a lot of money. So it's a
simple QR code in every room. Wedon't provide actually room
service, so so once they order,they have to walk down and grab
the meal.
The benefit of that is thesystem will give them a text,
your food is ready or youritem's ready, and they'll come
(21:19):
and get it. So we've had tosimply just innovate in that
area because we're staffing wasa big issue in Australia. It was
for ex we have one of thehighest minimum wage in the
world. So it's crazy how much wepay just for entry level role.
So naturally, we to ensure wemaximize returns, we had to
provide a cost effective way todeliver a similar service.
(21:41):
So QR code was was a naturalorganic evolution. And then we
started doubling into webchecking, tell them to select
the room, allow them to prepaythe room. The issue with that
technology with web check-in istraditionally, we have a Shirley
has a high concentrate of OTAs,which comes with a virtual
credit card. That's a big issuebecause, like, your virtual
(22:02):
credit, you only can charge oncheckout. So we only can capture
certain elements.
So web check-in, it's great.It's a value add. You can just
collect your key or when AppleWallet comes, you can go
straight to your room. So itcovers about 20% of our market
segment. Generally, corporateguests, return guests, loyalty
guests, they love the solution.
But there's no ROI. Like, theamount of money we spend on that
(22:24):
solution, there isn't a payback,but we focus on more of the
guest experience piece.
Speaker 3 (22:29):
Obviously, 2 things that are really top of mind for
hoteliers are sustainability andcybersecurity. I love to talk
through your beliefs on both,like, where are we from a
sustainability perspective.Obviously, there's some camps
who say that we kind of, like,overshot on sustainability, and
now, like, the ESG initiative isjust like there's a lot of fluff
there and that some of thethings aren't as economical as
(22:50):
we thought they would be. Butthen, obviously, you have, like,
you know, Maliha announcing thatthey're getting a couple of
their Thai and Vietnamese hotelsto, like, 10 to 30% solar power.
So where do you seesustainability?
Where are you guys at from arenewable energy sustainability
initiative at Proinvest?
Speaker 1 (23:04):
It's a great question. Very relevant for
Proinvest. Proinvest brand isactually built around ESG. So we
have a one countless experiencebrand that's logo. And the
company's vision is that wepartner with financiers,
investors that wants to achievea certain ESG rating.
In Australia, we work withNeighbours, which is effectively
(23:25):
measures your water wastage andyour energy consumption. Across
every new build that we've done,we're achieving 4 and a half to
5, which is near 5 is, like,kinda like near the maximum,
right, of the rating. So ourparticular portfolio, Holly
Express, we're achieving,clearly a lot of them are fives
in the portfolio. As a result,we hold one of the biggest green
financing loans with Ariel Bank,which is a very large bank
(23:47):
overseas. And so there areactually financial benefits to
be sustainable.
We see it as a founderscorrespond we see as a
responsibility to be in aresponsible investor. So we kind
of drive that in the market.Every single conference we're
in, we're talking about ESG. Sowe're a leader in this space.
And it's not just energy andwaste.
It's just like we there's an sin ESG that a lot of people
(24:10):
don't focus on, the socialelements. So we launched, like,
a sponsorship program for peoplethat that's doing it tough. So
we're sponsoring universities.We're sponsoring certain courses
to help hoteliers or help peopleget into hotels. So some across
universities, one of ourbusinesses that we partner with.
And the funny thing is what wewould do is we actually recycle
(24:31):
all the cans. You know, you get5¢ back or 10¢ back per can. And
we actually put that entirerecycle process and the money we
get back into the sponsorshipprogram. So those are the type
of things that we we alsolaunched quite an extensive
graduate program. We'recommitted for 2 years to groom
an individual to be very matureleader out of that program.
(24:52):
So 1 third of our head office isgraduates at this stage. So, you
know, that's one thing we'rereally, really proud of. If we
take a step back, we look at,okay, like IG, Accor, you know,
they're all saying ESG ESG, butwhat can they really do to push
the boundaries? It's not aboutjust, you know, eliminating
plastics. Right?
It's about looking at I thinkthe number one area that we need
(25:16):
to address is the energyconsumption is, I think there's
a lot of buildings out there,legacy buildings, old buildings.
They're just chewing upprobably, I would say, 80% more
power than in any othertraditional new building that we
you build. So I think there's aresponsibility we're starting to
see, like, banks not allowingrefinancing if you don't hold a
(25:38):
certain ESG rating. So it's aresponsibility to do with, you
know, the initial cycle ofinvestors. And I think the big
brands should only partner withresponsible owners.
You know, we need to startcreating that boundary. If
you're not committed on thislevel, it's very CapEx
intensive. So we haven't seen aframework out there for a large
(25:59):
brand to say, this is what youneed to do to comply with our
ESG rating. It's very greenwashy at the moment. They
eliminated plastic.
They do a few things veryoptically, and I think they've
ticked the box. Right? But youdon't see anyone holding the
neighbors rating, you know,like, it should be something the
hotel brands being, you know,they're the one who's is driving
(26:20):
this demand. They should bekinda mandating this. It's a big
problem for our environment.
Speaker 3 (26:27):
And from a cybersecurity perspective, where
do you feel like the state ofcybersecurity is for Australian
hotels? Obviously, Australia maynot be a big target, but hotels
always are because of thetransaction volumes. Where are
you guys in that journey? Whatdo your vendors look like?
Speaker 1 (26:41):
You are correct. You know, like, cybersecurity is
probably 20% of my remit. Youknow, that's what keeps me up at
night. And, you know, there wasa period where during the
Russian Ukraine war, Australiawas a target because of the
influence in certain aspects ofinvolvement with some donations.
So I saw probably 200% growth inDDoS attacks from Russia.
(27:05):
And so that's a big issue. Sowe've had some major breaches.
Medibank, one of the largestbreaches, like everyone that was
affected in the country. I thinkthey had 80% of the country on
their database that's beenaffected. But it's true.
I've worked for so many hotelgroups. We're very lucky that
our footprint's so small. It isnot even worth the time and
(27:27):
effort to hack such a smallhotel group. Hackers only really
target people in the billions,you know, and the 200,000,000
plus ransomware. So I'm reallyconcerned by a lot of hotel
groups, you know, a lot of PMSstoo.
During the due diligence ofPMSs, I asked them, do you
mandate 2 factor authentication?Do you have geo, fencing for
(27:49):
your PMS? 90% of the PMS don'thave that capability. So if you
get key logged, if the hackerknew how to get into a PMS and
they knew the product, we wouldhave probably 90% data breaches
everywhere. And we've got somany weak solutions out there
that don't mandate 2FA.
One thing I like about Oraclesolution is it's mandatory. It's
(28:10):
not negotiable. Right? Theyapply that minimum framework
compliance framework on theirplatform, so you can't breach
the platform.
Speaker 3 (28:18):
Anything else other than 2FA that you look for in a
PMS that differentiates betweenthe good and the bad ones?
Speaker 1 (28:24):
So geofencing is one of the number one, probably,
things I look for. So Oracle,for example, you can go
geofencing you can turn on,like, IP white listing. So what
that means is, on your network,your office can access that
Cloud PMS. Being a Cloud PMS,you don't want people in Russia
logging into your platform.Like, it's scary.
Right? You know, it's soaccessible. So that's the number
(28:47):
2 feature I look into. Number 3is I look at their whether
they've achieved certaincompliance, you know, ISO
2027001 compliance for dataprotection laws. So what that
means effectively is they purgetheir data, they purge their
credit cards, they follow such arigor compliance.
Even if you breach, it's notgonna be a mass breach. It's a
bit of very limited containedbreach.
Speaker 3 (29:08):
And probably lower probability of a breach because
the hackers know there's lessloot when they get in.
Speaker 1 (29:12):
Exactly. And then tokenization, you know, till
this day, there are some vendorsthat some PMS's don't mandate
tokenization for credit cards,which is concerning. But then
the fraud protection of creditcards are so great now that it's
pretty hard to know. Like,hackers probably don't look for
credit cards anymore. What theyare looking for, if you look at
the behavior of a hacker,they're looking for your
(29:33):
information, looking for yourdate of birth so they can steal
your identity and empty yourbank account, steal your mobile.
They're they're looking forenough information so they can
take your mobile from you, andthen they can eventually
probably reset your 2FA and thenget into your bank account.
Speaker 3 (29:48):
So in that rubric, there's ISO certification,
there's 2FA, and then what werethe other ones that would be
those check boxes?
Speaker 1 (29:56):
SOC compliance, we look for. Just make sure that if
you're holding credit card, whatPCI level you're holding. So we
look at all those type ofthings. More certification, the
better, I would say.
Speaker 3 (30:07):
And so it's just those certifications for
anything that contains bookingor payment information,
basically?
Speaker 1 (30:13):
Any type of, like, guest data. Anything, like,
considered as PI data, they'vegot to have that minimum level
of compliance. So when weonboard a supplier, everyone
needs to make sure they completea privacy impact assessment. A
lot of people don't do that.Like, it's quite scary.
Like, they're getting non ITpeople approving cloud products,
you know, for HR systems oreven, like, storage platforms.
(30:35):
There was a big hotel group,independent operator, that got
hacked because they put theentire employee filing system in
a cloud, you know, a cloudsoftware storage provider.
Right? It only took 1 HR personto get keylogged and hacked, and
they had the entire employeedatabase. So isolating sense
information is so critical inthis day and age, and
(30:56):
encrypting, very important.
Speaker 3 (30:58):
Awesome. Well, Howard, I know you have a busy
day ahead of you. Is thereanything else that you feel like
hoteliers need to be aware oftoday that we haven't covered?
Speaker 1 (31:05):
I think the most prominent point I would probably
make is your tech strategies,it's gotta be layered with AI,
Genov AI, not just AI, but GenovAI. And more we push as an
industry, the more innovationthat will occur. There's only a
handful providers that arelooking into the space and
invest in the space. So we don'twanna be behind the 8 ball with
(31:26):
technology, and we all have acollective responsibility to
push our vendors to to innovate.You know, if we're putting in
crap solutions because it's socheap, like, we don't have
ourselves to blame.
So I think I would reallyrecommend everyone to spend
their time to make sure they'relooking through the road map for
every every solution putting in.
Speaker 3 (31:45):
Howard, thanks so much for coming on the show
today. This has been awesome,and we're absolutely gonna have
to have you back soon because Iknow there's a ton more to
cover.
Speaker 1 (31:51):
Sounds Sounds great, Jordan. It's a pleasure.
Speaker 2 (31:55):
That's all for today's episode. Thanks for
listening to Hotel Tech Insiderproduced by hotel tech
report.com. Our goal with thispodcast is to show you how the
best in the business areleveraging technology to grow
their properties and outperformthe concept by using innovative
digital tools and strategies. Iencourage all of our listeners
to go try at least one of thesestrategies or tools that you
(32:16):
learned from today's episode.Successful digital
transformation is all aboutconsistent small experiments
over a long period of time, sodon't wait until tomorrow to try
something new.
Do you know a hotelier who wouldbe great to feature on this
show, or do you think that yourstory would bring a lot of value
to our audience? Reach out to medirectly on LinkedIn by
searching for Jordan Hollander.For more episodes like this,
(32:41):
follow Hotel Tech Insider on allmajor streaming platforms like
Spotify and Apple Music.
I'm really concerned by a lot of hotel groups. Do you
mandate 2 factor authentication?Do you have geodensing for your
PMS? 90% of the PMS don't havethat capability. So if the
hacker knew how to get into aPMS and they knew the product,
we would have 90% data breacheseverywhere.
Speaker 2 (00:18):
From Hotel Tech Report, it's Hotel Tech Insider.
A show about the future ofhotels and the technology that
powers them. Today on the show,we have Howard Fung, the group
director of digital at ProInvestGroup. In this episode, we go
deep into what makes a greattech stack, how to build your
hotels culture for the futureand for growth, and how to
(00:38):
select the right partners andoptimize them for the future. It
doesn't matter whether you're ina technology role or not.
You will learn from Howard, andyou will improve your business
after this episode. I'm reallyexcited that we're about to dive
in.
Speaker 3 (00:54):
Howard, thank you so much for coming on the show.
We're excited to have an Aussiehotel here. I think you might be
our first.
Speaker 1 (00:59):
Oh, that's great. Really excited to be here.
Speaker 3 (01:01):
Can you start by telling us a little bit about
your background in the hotelindustry? You've obviously led
technology at some pretty majorhotel groups. Talk us through
your journey and quick 32ndbackground.
Speaker 1 (01:11):
Sure. So I've got about 2 decades of experience
Pacificland Hotel Technology. Myvery first gig was at one of the
largest telco providers. Soafter a few years there, I
pivoted into my very first hotelrole, which it was the Acura's
head office running the servicedesk across the group. At the
time, there was 99 hotels.
I believe they are 300 plus now.So that journey kind of set me
(01:35):
kind of the the benchmark aroundwhat my career transpired to be.
Then I pivoted into my regionand Accor. I looked up New
Zealand for a sport perspective.And then then I got my very
first management role at 25,which is a really young Sofitel,
an IT manager for a large, theWentworth, which is a flagship
luxury hotel.
And that's where I get to reallybring technology and drive a
(01:59):
strategy that was reallyspecific to a product. So at
that time, I led, full PMStransformation, Wi Fi, all the
way to guest experience. One ofthe very first hotels to be a
first off in a lot of technologyat that time, like paper
paperless housekeeping and soon. And then I got my very first
kind of quite a big gig where interms of working for Fraser
Property at the time, which isFraser Hospitality. I went from
(02:22):
60 hotels over a 100 plus for alot of acquisition and had a lot
of influence.
I led kind of a team thatselected the PMS, our cloud PMS
for the group. So we chose Inferat the time. We have the vision
to deliver full sustainability.So we achieved 80% paperless
across the group of thatplatform. So we did paperless
(02:42):
check-in all the way topaperless housekeeping to
paperless ops.
So it was great then all theaccolades started winning a few
awards. EBT came and knocked onmy door and said, hey. We need
to take that big shift intransformation. So I was first
down the job was to shift theentire on prem stack onto hosted
so that we shifted 55 hotels,took the pause into cloud. So
(03:05):
really it enabled that group toscale very quickly.
After that, I was asked to kindof reengineer the booking
engine. It was a bespoke bookingengine, so I brought an IREC and
you CDP at the time because Ineeded to recognize guests quite
in real time for a single signon, for matching, diamond
matching, and for loyalty codes.And so the booking engine now
(03:26):
infused one of the very firstbooking engines of the world
that's bespoke, and and itactually matches your data in
real time with payments,tokenization paired to your
account. So that was very andthen kiosk then kiosk came where
it was really successful. I wasone of the very first Hoda
groups to really drive kioskadoption.
We did a lot of integration withloyalty, with customer
recognition to room selection.The pilot, I'll give you some
(03:49):
context. The pilot started offwith 20% utilization. After at
the end of a year, we startedachieving average 90% adoption
for kiosk. So that's reallygreat.
And then I met Proinvest andthen knocked on my door, and
then I eventually decided totake on a role where they wanted
me to rebuild the team, rebuildthe tech stack from scratch. And
(04:10):
it was a very interestingchallenge. So I took it on
board. Now I'm here. I'veshifted from 8 PMS down to we're
free at the moment.
Like, ideally, 2. We've shiftedthe entire landscape into cloud
from cloud HR system to ERP toPMS. So we're run pretty light
And enable us during thatperiod, we grew 300% in growth
(04:33):
in terms of hotels as a resultof having a very agile tech
stack.
Speaker 3 (04:37):
So it sounds like the first thing a hotel company does
when they know they need to stepon the gas from a digital
transformation perspective isthat they call you or someone
like you. My question is, whatare your deal breakers? Like, if
a hotel company called you,obviously, you're very happy
with where you are and you'rekicking ass right now and
growing the business. But as adigital transformation expert, a
(04:59):
hotel company calls you andyou're kind of vetting them as
an expert, what are the thingsthat you look at where you're
like, absolutely not. I will notwork at that place.
What are the kind of red flagsthat you see in those
organizations? Whereas theopposite obviously was true for
ProInvest and EBT where you sawthe potential there?
Speaker 1 (05:17):
There's a few things that I look for in a group.
Generally, owner operator iskind of what I like to work
with. The reason being is thatyou can make a decision on the
day around tech strategy. Ifyou're a hotel management
company, you still need tosocialize your roadmap with
owners, which it's a process. Soit takes 2 years sometimes just
to get that roadmap signed off.
(05:38):
Owner operator is one of thebest set up. You see a lot of
groups that have that mix. Theycan scale quick with technology.
You've got large auto managementrights. They're still trying to
select a cloud PMS.
There's a few groups that workwith. They're they're still
confused where they wanna be,and their play, their
priorities, the CRS piece.Right. That's where they make
their money. And I get it for anoperator.
(06:00):
We're all about end to end techstack. We look at the whole
ecosystem and ultimatelydelivering a bottom line that
makes sense for the investors.Another area that I see is
probably a key red flag isaround the maturity,
understanding of technology. Iwouldn't work for a CEO that
just didn't prioritizetechnology, and they need to
really fundamentally understandin order to scale, to drive
(06:22):
efficiency, there's certainlevel of foundational knowledge
that look for in executives.Like, basically, there's quite a
few questions I ask them quicklyin terms of technology.
How do you see it assisting withthe growth, you know, of the
company? So some CEOs that I'vespoken to in the past, they just
think technology is just areactive element of the
(06:43):
business. They have to have it,and it's quite a reactive
mindset. CEOs that kind ofresonate with me is how I wanna
grow. I wanna grow 300% in ashort amount of time.
I have the funding. I have thebacking of the investors. Those
are the types of things I liketo see. Also, autonomy around
structuring your team. One thingyou don't want, a red flag is we
(07:03):
need to stick.
It's too risky, Howard. Youknow, we don't wanna go with a
different structure. It mightcost too much money. If you're
too focused on costs, that's asignificant red flag. You know,
we should be focusing on theupside.
We should be focusing on thegrowth of growth opportunities.
One other thing is I look attheir track record around their
brand. So you might see it's notthat hard to Google a brand and
(07:25):
see where they're at in theirjourney. And if they're not
investing their PR, their brandequity, that's a red flag to me.
They're effectively a dying, butthey're the codec, and there's a
codec moment.
Right?
Speaker 3 (07:36):
You mentioned that you guys started from 8 PMSs
across the portfolio down to 3or 2 and then hopefully one
soon. Was that something thatyou looked at during the
interview process and were like,this has to change before I can
work on the rest?
Speaker 1 (07:51):
100%. During the interview process, it was an
open book discussion, so theyweren't hiding anything. If they
were restrictive around what wasgoing on in the business,
wouldn't have jumped on. So theywere very transparent. They were
frustrated at the currentleadership around the PMS
situation.
They needed direction. They needa very clear roadmap on how to
(08:12):
get there and the costs. So theywanted a plan. And that's what I
love about the leadership hereis they know what they want, and
they just want someone that putsin a plan that makes sense and
then execute.
Speaker 3 (08:23):
How did you think about whittling down 8 to 3 to 2
to 1 on the PMS side? And wereall 8 of those contenders, or
you kind of, like, knewimmediately, like, 4 were out
and they weren't working, but,like, 4 were contenders and had
a right to come in and pitch youfor that business?
Speaker 1 (08:38):
It's a good question. Initially, I wanted to take away
the bias on particularly myselfworking for certain PMS. So I
hired a leader in terms ofproperty management systems
space, and I got them to go outand interview every single PMS
provider. And we had a matrix.We had we knew what we wanted,
and we wanted to see how hungryeach PMS vendor was.
(09:00):
And it's quite interesting.During that process, we saw some
PMS vendors. They were too busygrowing with another hotel
group. They weren't interestedin developing any features. They
said their r and d's, itstopped.
They're not gonna put a centinto the platform. The others
were we saw is we shouldn't needto tell a PMS vendor how to
develop their product. We wantedto see vision, road map,
(09:20):
capability. Most importantly isAI as part of their strategy.
That's a key, Ryan.
And so we saw a lot of PMSvendors that didn't have AI in
their strategy, which was highlyconcerning. And that kinda
dropped l 8 down to, like, 2 onthat regard. It was quite an
easy process. We took about 6months, then we looked at the
commercial side. We looked forthe most cost effective.
(09:41):
Generally, when you work with apartner, initial approach, a lot
of vendors take us, let's ripthem off. You know, let's let's
charge them a lot of money. Sowe saw partners that were really
hungry to work with us, so theygave us significant discount
that was equivalent to a globalbrand. So we saw, like, okay,
this partnership's gonna work.And then in return, we will also
will be, like, a representativefor their product across the
(10:02):
region.
Speaker 3 (10:03):
So when you joined Proinvest, how would you
characterize the state ofdigital transformation at the
company? And where are you guystoday? And where do you see the
company in 5 years?
Speaker 1 (10:15):
When I first joined ProInvest, it was in a, I would
say, a startup phase. They grewso so quickly. They went from 3
hotels at the time to 8 at thetime. They didn't have a tech
stack. They were budgeting theirIT costs based on one counting
code, yellow code, you'd say,and you had no visibility.
So it was one of those big bangmoments that they realized we
(10:38):
can't operate, we can't scale inthis current state. We didn't
have a vision around technology.We had a reactive leadership
that just responded to therequirements. They weren't
looking ahead on what theyneeded, so everyone was
frustrated. Everything wasmanual.
It was the most basic things Iwould say, and technology wasn't
(10:58):
right. And, effectively, it wasa house on fire, I would say.
Everything was burning downbecause you couldn't see your
data, and it wasn't accurate. SoI looked for certain qualities
for startup mindset, agile,flexible, hardworking, and we
needed to bring in innovation. Icould have brought in someone
(11:19):
that had a lot of experiencethat worked for a large hotel
group, but they didn't quiteunderstand how to decouple, you
know, a small start up.
So I look for hunger andattitude and really intelligent
problem solving skills. So thoseare the people I brought
together, and we were at thewhiteboard trying to solve every
single problem. Like, we hadbetter discrepancy issues with
standards issues. So in thiscurrent state now, we have a
(11:41):
unified PMS, one standard onedata strategy, and we're on the
roadmap to consolidate intoeventually one PMS. Today, we
can any executive can get areport, a daily revenue report,
fully automated, fully mapped,ingested with the right market
segmentation, very strategic,And we ingest that into our data
(12:02):
warehouse and powering which,some of the elements of generate
AI to help match the datatraditionally would require 2 to
3 people trying to figure outovernight, how should I code
this data?
We need to map that. It'slearning quite quickly. And so
we're getting near real timeanalytics pretty quick. As soon
as the data is available, we'reingesting it into our platform
(12:22):
and using our core. We've we'vehad some data scientists to help
us add value to that data.
So give an example. We now canas soon as the revenue data is
ready, we're ingesting payrolldata, we're ingesting revenue
data, we're ingesting pausedata. So we can now drill down
by mail periods based on aparticular role on how much it
(12:44):
would cost you to run that percheck. We use the predictive
element of Power BI to to have alook at, okay, you've rostered 5
FTEs or 5 full time roles, freecasuals, but we're predicting
you're only gonna make $10. Weneed you to scale down by free
FTEs to be profitable.
Right? So those are types ofautomation. So we've stabilized,
we've centralized, and now we'rekinda seeing the fruits of their
(13:07):
automation elements today.
Speaker 3 (13:10):
I'd love to go through from pre stay to instay
to post day, like the tech stackat ProInvest, and where it was
when you guys started and wherewe are today. And then maybe
we'll go into the areas ofinterest for the future where
you feel like, you know,obviously, there's always more
work and optimization to bedone. So let's start with
presale. How are you guysacquiring guests? What are the
(13:32):
big focuses from a technologyperspective, whether it's CRM,
revenue management system?
How do you bring guests in thedoor?
Speaker 1 (13:40):
There's a few. Prior to starting, there wasn't a
strategy. It was just bang outemail marketing, try to get them
to book. So that was thestrategy. Now in this current
state, we've got AI poweredrecommendation engines.
So particularly luxury brandscame in. We effectively the
marketing aspect needs a bit ofwork. So we're in the process of
(14:00):
trying to bring in Revinate toreally feed the different
personalization element of it.But what we do is we have a
unified hotel website, and we'veinvested quite heavily on
digital marketing agency that'soptimizing the search engine
optimization, keywords,particular brand pages,
promotional opportunities. Sothat's our bread and butter for
(14:21):
customer acquisition.
We are investing, we'reidentifying them quite early in
the journey, and we're trying tomarket to them where possible
for those indirect means. Sowe've brought in this agency
that really helps us elevateidentifying them early, and we
use a variety of tools wherewe're experimenting constantly.
You know, the great thing aboutbeing early stages, we tried
(14:41):
Hotel Network. You know, we'vetried many different tools to
help to bring that marketing. Iwould say it's a devolving
process.
I don't think we've got it rightyet, but we'll eventually get to
a point where when we have acentralized CDP unified across
the entire group, that's when westart seeing the real fruits of
upselling. So let's say thatwe've transferred with they've
(15:02):
booked with we've got a
Speaker 3 (15:03):
pre
Speaker 1 (15:03):
arrival email, just just the general PRM. Some of
the groups, we use guest foliofor the upsell element, but some
use naught 1 with a variety oftools.
Speaker 3 (15:12):
Which booking engine do you guys use? Is that unified
across all the properties also?
Speaker 1 (15:16):
No. We use variety. So independents, we use, the
Sabre CRS solution. That'sgreat. It's a great solution.
That's been around for a longtime in terms of I didn't feel
the need to change that profile.I put delivered what we need.
It's quite easy to plug and playand scale that particular
platform. But the others is weuse the edge for their core
brand, and then IHG's got itsown proprietary booking engine,
(15:37):
so we don't have a choice. So,effectively, we just hand off
the booking straight to IHG oncewe've converted the customer
from a digital perspective.
Speaker 3 (15:46):
What is your guys' meetings and events tech stack
look like today?
Speaker 1 (15:50):
So we use Delphi FTC, similarly because of our
relationship with IHG. It doesthe job. But if we looked
objectively around the productitself on what other players are
doing, there are far moreinnovative solutions out there
that I've used. And wepreviously, I used Ivy, which is
a great it was a startup at thetime. It was if you look at into
(16:11):
quite an end to end tech stack,and then you I'm liking what
like, meeting temple.
We try to put meeting temple in,but they didn't have Oracle at
the time. It wasn't ready to dointegration, so that was a no go
for us. But they're doing somepretty interesting stuff around
the digital space and howthey're booking into an
elements. Delphi FTC, itoperates on a Salesforce, so you
(16:33):
need a in house developer thathas Salesforce skills to really
enhance the product. It's quiteexpensive to aggregate theirs
out of that into your Power BI.
So there is a true enterprisesystem, but I think this space
will get disrupted over the nextfew years with General AI. Like,
whoever has a General AI CRMwill win a lot of customers.
Speaker 3 (16:53):
Could you talk about the role of the data warehouse?
What are the data sources it'singesting? And what does it
allow you to do that youcouldn't do without it?
Speaker 1 (17:01):
I think the first purpose of a data warehouse for
us is, you know, we needed adata map to a consistent
standard. We look at ROI revenuebased on market segmentation,
and we're working with IAG, Aquaand Independent Brands. It was
quite difficult to really getsomeone manually to map some
spreadsheets and some macro to,you know, to to make sense of
the data. So, you know, when Ifirst started, 1 third of the
(17:24):
office were somehow doing someform of mapping data, like 1
third, if you live with the headoffice, they're just sitting in
the Onyxel spreadsheets tryingto clean the data before they
could use it. So what InTouchdoes is it it's got our
standard.
It's ingesting data whateverform from whatever hotel. So
we're taking pause data. We'retaking payments data. We're
taking every single data pointin there so we can really drill
(17:47):
down to really to thetransaction level. You know?
This credit card surcharge onthis particular booking, we can
drill down quite rich. Right?And then we brought in demand
data, we brought in STR data tosee where we're calling ranking.
We're bringing in a lot ofbudget forecast that are into
the platform. And the beauty ofthis platform is we can now see
(18:07):
on a particular head of aparticular month on a particular
market segment, how we'reperforming over the last few
years.
So that's the beauty of thisplatform. For me, the fruits of
it is pulling that data out intoa a generative platform. The
jury's still out around whatplatform handles that data the
best. I'm using Microsoft, butI've seen some great tools out
there that has some IP logic inthere that's moving quite quick,
(18:29):
so we can pivot quite quickly.That's the beauty of having it
that your data centralized.
You can pivot the data streamquite quickly. And that's the
purpose. It's to clean our data.It's to make sure it's
consistent, reliable. And theETL element, you know, they're
doing it generally, you need aquite a proprietary tool like
Matillion to pull it and costmore than a probably 4 PMS's
(18:49):
just to deploy it.
InTouch has got its own scripts,its own proprietary code that
can ingest out of Oracle, youknow, or out of certain
platforms. And that gives us theprobably the most cost effective
data warehouse tool out there onthe market today. So that's the
main endpoint of that platformis to fire data in a standard
that we want so we can do somecrazy stuff with it.
Speaker 3 (19:11):
So a guest gets the property. Can we talk through
the guest experience tech stackof, like, what goes into
powering that at yourproperties, and how much leeway
did you have with the brandswhere they're like, oh, you have
to use this solution versus,like, what could you actually
bring on yourself, and how'sthat going?
Speaker 1 (19:27):
So I'll look into the brand where we're kind of
innovating quite heavily. Weoperate for a franchise model,
so there's certain flexibilityyou can operate and put a tech
stack. So, like, for Kimpton,we're all about that customer
gets experience. So we don'twanna put too much technology in
front of your face, but it's allabout understanding
personalizing. So we're we'refocused quite heavily on what
(19:49):
they like, what have beveragethey like.
So we leverage QR code orderingat the rooftop balm, for
example. We use that for tap andorder. But equally, it's not in
your face. It's only there whenthe queue's long. So we try to
balance that technology.
We have tablet, orderingsolution, post to calling down
the phone, just nice simple menuclick in straight ins. It's just
(20:12):
we try to make it free clicks,and then you can get your
burger.
Speaker 3 (20:15):
And is that something you guys built in house, that
tablet solution?
Speaker 1 (20:18):
No. We chose a local partner, Australian partner
called Tapendium to do that. Sowe looked at many solutions out
there, like global brands, buteveryone's trying to make a buck
and try to answer othercapability. We just wanted it to
do a very simple thing. Alright?
We don't wanna replace thephones. A lot of people try to
replace the phones, but thetechnology does play up quite
(20:38):
consistently in the room. So wejust wanna make sure if they're
unhappy about something, theycan just pick up a phone and
call reception. So the bit of atablet, a nice tablet size is we
work with a celebrity chef, LukeMannigan, and it's very
appetizing. There's famousburgers and certain steaks.
We've seen, like, 20 to 30%revenue uplift just by kinda
(20:58):
showcasing his products I mean,their products. So it's all
about right fit. Then we at theHolly Express, you know, the
clientele, they don't wannaspend a lot of money. So it's a
simple QR code in every room. Wedon't provide actually room
service, so so once they order,they have to walk down and grab
the meal.
The benefit of that is thesystem will give them a text,
your food is ready or youritem's ready, and they'll come
(21:19):
and get it. So we've had tosimply just innovate in that
area because we're staffing wasa big issue in Australia. It was
for ex we have one of thehighest minimum wage in the
world. So it's crazy how much wepay just for entry level role.
So naturally, we to ensure wemaximize returns, we had to
provide a cost effective way todeliver a similar service.
(21:41):
So QR code was was a naturalorganic evolution. And then we
started doubling into webchecking, tell them to select
the room, allow them to prepaythe room. The issue with that
technology with web check-in istraditionally, we have a Shirley
has a high concentrate of OTAs,which comes with a virtual
credit card. That's a big issuebecause, like, your virtual
(22:02):
credit, you only can charge oncheckout. So we only can capture
certain elements.
So web check-in, it's great.It's a value add. You can just
collect your key or when AppleWallet comes, you can go
straight to your room. So itcovers about 20% of our market
segment. Generally, corporateguests, return guests, loyalty
guests, they love the solution.
But there's no ROI. Like, theamount of money we spend on that
(22:24):
solution, there isn't a payback,but we focus on more of the
guest experience piece.
Speaker 3 (22:29):
Obviously, 2 things that are really top of mind for
hoteliers are sustainability andcybersecurity. I love to talk
through your beliefs on both,like, where are we from a
sustainability perspective.Obviously, there's some camps
who say that we kind of, like,overshot on sustainability, and
now, like, the ESG initiative isjust like there's a lot of fluff
there and that some of thethings aren't as economical as
(22:50):
we thought they would be. Butthen, obviously, you have, like,
you know, Maliha announcing thatthey're getting a couple of
their Thai and Vietnamese hotelsto, like, 10 to 30% solar power.
So where do you seesustainability?
Where are you guys at from arenewable energy sustainability
initiative at Proinvest?
Speaker 1 (23:04):
It's a great question. Very relevant for
Proinvest. Proinvest brand isactually built around ESG. So we
have a one countless experiencebrand that's logo. And the
company's vision is that wepartner with financiers,
investors that wants to achievea certain ESG rating.
In Australia, we work withNeighbours, which is effectively
(23:25):
measures your water wastage andyour energy consumption. Across
every new build that we've done,we're achieving 4 and a half to
5, which is near 5 is, like,kinda like near the maximum,
right, of the rating. So ourparticular portfolio, Holly
Express, we're achieving,clearly a lot of them are fives
in the portfolio. As a result,we hold one of the biggest green
financing loans with Ariel Bank,which is a very large bank
(23:47):
overseas. And so there areactually financial benefits to
be sustainable.
We see it as a founderscorrespond we see as a
responsibility to be in aresponsible investor. So we kind
of drive that in the market.Every single conference we're
in, we're talking about ESG. Sowe're a leader in this space.
And it's not just energy andwaste.
It's just like we there's an sin ESG that a lot of people
(24:10):
don't focus on, the socialelements. So we launched, like,
a sponsorship program for peoplethat that's doing it tough. So
we're sponsoring universities.We're sponsoring certain courses
to help hoteliers or help peopleget into hotels. So some across
universities, one of ourbusinesses that we partner with.
And the funny thing is what wewould do is we actually recycle
(24:31):
all the cans. You know, you get5¢ back or 10¢ back per can. And
we actually put that entirerecycle process and the money we
get back into the sponsorshipprogram. So those are the type
of things that we we alsolaunched quite an extensive
graduate program. We'recommitted for 2 years to groom
an individual to be very matureleader out of that program.
(24:52):
So 1 third of our head office isgraduates at this stage. So, you
know, that's one thing we'rereally, really proud of. If we
take a step back, we look at,okay, like IG, Accor, you know,
they're all saying ESG ESG, butwhat can they really do to push
the boundaries? It's not aboutjust, you know, eliminating
plastics. Right?
It's about looking at I thinkthe number one area that we need
(25:16):
to address is the energyconsumption is, I think there's
a lot of buildings out there,legacy buildings, old buildings.
They're just chewing upprobably, I would say, 80% more
power than in any othertraditional new building that we
you build. So I think there's aresponsibility we're starting to
see, like, banks not allowingrefinancing if you don't hold a
(25:38):
certain ESG rating. So it's aresponsibility to do with, you
know, the initial cycle ofinvestors. And I think the big
brands should only partner withresponsible owners.
You know, we need to startcreating that boundary. If
you're not committed on thislevel, it's very CapEx
intensive. So we haven't seen aframework out there for a large
(25:59):
brand to say, this is what youneed to do to comply with our
ESG rating. It's very greenwashy at the moment. They
eliminated plastic.
They do a few things veryoptically, and I think they've
ticked the box. Right? But youdon't see anyone holding the
neighbors rating, you know,like, it should be something the
hotel brands being, you know,they're the one who's is driving
(26:20):
this demand. They should bekinda mandating this. It's a big
problem for our environment.
Speaker 3 (26:27):
And from a cybersecurity perspective, where
do you feel like the state ofcybersecurity is for Australian
hotels? Obviously, Australia maynot be a big target, but hotels
always are because of thetransaction volumes. Where are
you guys in that journey? Whatdo your vendors look like?
Speaker 1 (26:41):
You are correct. You know, like, cybersecurity is
probably 20% of my remit. Youknow, that's what keeps me up at
night. And, you know, there wasa period where during the
Russian Ukraine war, Australiawas a target because of the
influence in certain aspects ofinvolvement with some donations.
So I saw probably 200% growth inDDoS attacks from Russia.
(27:05):
And so that's a big issue. Sowe've had some major breaches.
Medibank, one of the largestbreaches, like everyone that was
affected in the country. I thinkthey had 80% of the country on
their database that's beenaffected. But it's true.
I've worked for so many hotelgroups. We're very lucky that
our footprint's so small. It isnot even worth the time and
(27:27):
effort to hack such a smallhotel group. Hackers only really
target people in the billions,you know, and the 200,000,000
plus ransomware. So I'm reallyconcerned by a lot of hotel
groups, you know, a lot of PMSstoo.
During the due diligence ofPMSs, I asked them, do you
mandate 2 factor authentication?Do you have geo, fencing for
(27:49):
your PMS? 90% of the PMS don'thave that capability. So if you
get key logged, if the hackerknew how to get into a PMS and
they knew the product, we wouldhave probably 90% data breaches
everywhere. And we've got somany weak solutions out there
that don't mandate 2FA.
One thing I like about Oraclesolution is it's mandatory. It's
(28:10):
not negotiable. Right? Theyapply that minimum framework
compliance framework on theirplatform, so you can't breach
the platform.
Speaker 3 (28:18):
Anything else other than 2FA that you look for in a
PMS that differentiates betweenthe good and the bad ones?
Speaker 1 (28:24):
So geofencing is one of the number one, probably,
things I look for. So Oracle,for example, you can go
geofencing you can turn on,like, IP white listing. So what
that means is, on your network,your office can access that
Cloud PMS. Being a Cloud PMS,you don't want people in Russia
logging into your platform.Like, it's scary.
Right? You know, it's soaccessible. So that's the number
(28:47):
2 feature I look into. Number 3is I look at their whether
they've achieved certaincompliance, you know, ISO
2027001 compliance for dataprotection laws. So what that
means effectively is they purgetheir data, they purge their
credit cards, they follow such arigor compliance.
Even if you breach, it's notgonna be a mass breach. It's a
bit of very limited containedbreach.
Speaker 3 (29:08):
And probably lower probability of a breach because
the hackers know there's lessloot when they get in.
Speaker 1 (29:12):
Exactly. And then tokenization, you know, till
this day, there are some vendorsthat some PMS's don't mandate
tokenization for credit cards,which is concerning. But then
the fraud protection of creditcards are so great now that it's
pretty hard to know. Like,hackers probably don't look for
credit cards anymore. What theyare looking for, if you look at
the behavior of a hacker,they're looking for your
(29:33):
information, looking for yourdate of birth so they can steal
your identity and empty yourbank account, steal your mobile.
They're they're looking forenough information so they can
take your mobile from you, andthen they can eventually
probably reset your 2FA and thenget into your bank account.
Speaker 3 (29:48):
So in that rubric, there's ISO certification,
there's 2FA, and then what werethe other ones that would be
those check boxes?
Speaker 1 (29:56):
SOC compliance, we look for. Just make sure that if
you're holding credit card, whatPCI level you're holding. So we
look at all those type ofthings. More certification, the
better, I would say.
Speaker 3 (30:07):
And so it's just those certifications for
anything that contains bookingor payment information,
basically?
Speaker 1 (30:13):
Any type of, like, guest data. Anything, like,
considered as PI data, they'vegot to have that minimum level
of compliance. So when weonboard a supplier, everyone
needs to make sure they completea privacy impact assessment. A
lot of people don't do that.Like, it's quite scary.
Like, they're getting non ITpeople approving cloud products,
you know, for HR systems oreven, like, storage platforms.
(30:35):
There was a big hotel group,independent operator, that got
hacked because they put theentire employee filing system in
a cloud, you know, a cloudsoftware storage provider.
Right? It only took 1 HR personto get keylogged and hacked, and
they had the entire employeedatabase. So isolating sense
information is so critical inthis day and age, and
(30:56):
encrypting, very important.
Speaker 3 (30:58):
Awesome. Well, Howard, I know you have a busy
day ahead of you. Is thereanything else that you feel like
hoteliers need to be aware oftoday that we haven't covered?
Speaker 1 (31:05):
I think the most prominent point I would probably
make is your tech strategies,it's gotta be layered with AI,
Genov AI, not just AI, but GenovAI. And more we push as an
industry, the more innovationthat will occur. There's only a
handful providers that arelooking into the space and
invest in the space. So we don'twanna be behind the 8 ball with
(31:26):
technology, and we all have acollective responsibility to
push our vendors to to innovate.You know, if we're putting in
crap solutions because it's socheap, like, we don't have
ourselves to blame.
So I think I would reallyrecommend everyone to spend
their time to make sure they'relooking through the road map for
every every solution putting in.
Speaker 3 (31:45):
Howard, thanks so much for coming on the show
today. This has been awesome,and we're absolutely gonna have
to have you back soon because Iknow there's a ton more to
cover.
Speaker 1 (31:51):
Sounds Sounds great, Jordan. It's a pleasure.
Speaker 2 (31:55):
That's all for today's episode. Thanks for
listening to Hotel Tech Insiderproduced by hotel tech
report.com. Our goal with thispodcast is to show you how the
best in the business areleveraging technology to grow
their properties and outperformthe concept by using innovative
digital tools and strategies. Iencourage all of our listeners
to go try at least one of thesestrategies or tools that you
(32:16):
learned from today's episode.Successful digital
transformation is all aboutconsistent small experiments
over a long period of time, sodon't wait until tomorrow to try
something new.
Do you know a hotelier who wouldbe great to feature on this
show, or do you think that yourstory would bring a lot of value
to our audience? Reach out to medirectly on LinkedIn by
searching for Jordan Hollander.For more episodes like this,
(32:41):
follow Hotel Tech Insider on allmajor streaming platforms like
Spotify and Apple Music.
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