To talk about the future of in-room technology and the evolving guest experience, Skift podcast host Samantha Shankman and Skift co-founder and Head of Content Jason Clampet spoke with ALICE's CEO and co-founder Justin Effron and Chris Holdren, Starwood Preferred Guest and Digital SVP.
We summarized the key takeaways from their discussion in an earlier post. We've got the full transcript of Episode 7: How In-Room Tech is Changing Everything About Hotel Guest Experience below.
Hello and welcome to the latest episode of the Skift podcast: Skift’s weekly conversations on the trend line shaping global travel.
This podcast is sponsored by MasterCard, one of the world's leading technology companies. MasterCard and Skift recently announced a future series, an exploration of major destinations preparing for the new age of verbal mobility. From connected infrastructure to smart technologies, this upcoming series examines how global cities are creating seamless and personalized experiences for visitors and residents. Learn more about the project at futurecities.skift.com and join the conversation on twitter using #SkiftFutureCities.
Samantha - I’m Samantha Shankman, and this week I’m joined by Skift Co-founder and Head of Content w. A hotel used to be measured in stars, but today it’s better judged by Wi-Fi strength and the ease with which room service can be order through an app. Guests expect a seamless tech experience from the moment they walk in a hotel’s door, mirroring the on-demand reality that exists with everything from ordering a cab to dinner. Smartphones are at the center of this revolution with hotels and third-party services quickly developing apps and tools that transform personal devices into portals for the hotel experience. With the rapid change of consumer technology, it can be very difficult for any tech initiative to stay relevant for long, leaving hotels and a constant struggle to keep up with consumer demands. To talk about the future of in room technology, we are speaking with Chris Holdren, Senior Vice President of Starwood Preferred Guest and Digital and Justin Effron, CEO of on-demand concierge app ALICE. Holdren has worked with Starwood for fourteen years, overseeing many tech initiatives from the group’s first virtual hotel to QS entry. Effron co-founded ALICE two and a half years ago, the startup now works with 35 hotel groups, providing a tech platform for guests and staff.
Justin, Chris we are so glad to have you with us today, thank you for joining us.
Today we are talking about in-room technology and Justin you are the CEO of ALICE, why don’t you tell us a little bit of what ALICE does.
Justin – Yes absolutely, ALICE is a mobile engagement platform that allows both guest to staff communication as well as staff to staff communication. So the view on it is rather than using different systems to control your guest experience and your staff work flow, you can have it all combined into one.
Samantha – And how are hotels using the platform? Where did you see this need for that want being fulfilled before?
Justin – Like most companies, it was really born out of personal frustration as far as actually traveling with a few friends and really just noticing the same inefficiencies, like you request something for instance, a towel, you call downstairs, 30 minutes later the towel is still not there, they have no idea what you are talking about so that idea didn’t really make sense and we will want to understand why. So we dove into the space and spent 9 months interviewing and shadowing 500 managers, GMs etc., and what we realized was that a lot of these inefficiencies stemmed from a lack of technology or the fact that there were so many distinct solutions running a hotel, so we figured that that was a pretty good problem to solve.
Samantha – And you have about 35 hotels using the app now. Who have been the first adaptors, what kind of hotels are really looking to innovate their technology?
Justin – Well, we have been really fortunate to work with some very, leading edge and well-known boutique groups. So typically groups that have anywhere from 5 properties to about 50 properties. So some of the notable ones here in New York are groups like the Gansevoort, which is one of the early adopters and actually helped us continue to refine our product so we very much believe in a partner mentality. We work with groups like Gansevoort and Starwood to work through innovation to this solution and make sure that it best fits their needs.
Samantha – And what about customer habits about using the app. How is the app being used by customers?
Justin – Yeh, it’s a great question. On the guest side, it still continues to be adopted. Mobile is becoming more and more prolific in everything we do, but in hotels the idea of using your phones to connect to hotels is still fairly new, so it depends on the property and the highest used items are typically housekeeping and food and beverage, but because the numbers are still typically around 10% – 15 % for most properties in our space, that’s really the value of the backend, the ability to track every request, even if it comes in person, over the phone, etc.
Jason – You know for ALICE and then for other apps being used by larger hotel chains, larger properties, the focus really is on the user first and as a hotel guest I get the sense that everything really isn’t always for me. How does digital open the door for the direct relationship with guests at Starwood?
Chris – No it’s a great point Jason, I think it’s what really transformed the guest experience from a technology perspective is mobile you know, before mobile really evolved, before we all had iPhone and Android devices it was very hard for us essentially to interact and enhance the guest experience when one of our guest was in one of our hotels through a digital channel, like a website is not going to help a guest when they are actually staying with us, and so having mobile has really revolutionized what we can do and having that, being able to enhance that guest experience through that technology,
Justin – Yes I will agree the fact that you have that personal devices with you everywhere you travel, and that has a lot of information about you, it makes it really easier for a hotel to serve up personal recommendations, they can understand what part of your stay you are in. Whether you are actually on the property based on location, or you are arriving the next day and they can use that to really customize your stay.
Chris -- But one additional point, I think you are right that most of the hotel company groups have really started with our guest you know and building applications and trying to enhance their experience but I still think there are tremendous opportunities to enhance the experience of our associates to help them deliver better guest service, so a great example you know, last summer we embarked on a project to gather unique characteristics of every single individual room in our system and typically before the mobile app that may have taken months to do you know, people carry around clipboards and loading a laptop room to room, but we built a simple mobile app and in a 6 week period, we had over 10 million pieces of information gathered about our rooms that now we have centrally so now we can more ably monitor that the hotels are doing what we’re asking them to do for a specific guest. So to make sure that it is about the guest to help enhance that consistent experience, our SPG member are being upgraded to their right rooms. So building mobile applications for our associates is opening up new door as well to help us enhance the experience that our guest have when they stay with us.
Jason - You know a lot of the stuff happening is on the back end and Justin you mentioned that that has been one of the fastest adoptions happening on the back-end there, what are some of challenges with user adoption, still when I’m at the hotel, that has an app in the room for instance or I haven’t downloaded an app, I still can naturally go to the phone, pick it up and look for the little icon to hit the button for the thing I want, how do you induce guests to go for this more efficient system, whether it’s using the SPG app or ALICE?
Justin - I think there are a few different areas to it. The first is just the idea of allowing it to be mainstream, like would most things if you had thought of calling a cab by using your phone through Uber like 5 years ago, you would just say why don’t I put my hands up its obviously easier. So getting through that notion of actually using your phone is easier and not harder to make a request for a lot of people it’s going to be what drives it as well as the younger generation starts to travel more and more, these are the groups that are really using their phones for every single thing they do in their lives, so I think that over the next 5 -10 years, it’s hard to imagine a world where you walk into a hotel and you can’t interact with in on your phone. The last part is how hard the hotel actually wants to push it, we have some properties that push it extremely well, they are seeing 35 – 40 % of their guest using it, we have others where its more secondary and they are using it more for efficiencies on the back-end, understanding that they want the optionality of the guest side as it moves forward, and for a group like Starwood they have a great advantage which is you can use one central application for all their properties. You know it’s very hard to convince somebody to download an app for a boutique property that they are staying at for 3 days and they don’t know the next time they are going to be back, so that also plays a lot into why we offer the platform approach where people can jump onto ALICE which can still be customized for the hotel, but they can have one app that they can rotate from each property.
Chris – And that’s exactly right, I think there is, that where SPG does help us and some of the other large hotel companies that have loyalty programs, because you need to have that overall relationship to give people enough reason to actually download an app, there is a friction involved in downloading an app. I don’t want 30 different individual hotel apps on my phone and I don’t think anyone really wants that, but by having that loyal relationship it gives you the platform to encourage members to download the app and that becomes their one stop shop for everything they need regarding Starwood, and there is the challenge for that infrequent guest or one time stayer to get them to adapt this technology and to start using it, that is a tougher challenge.
Justin – And I think the second part of it is really, how to make it more powerful for the user, if you know you can go into the application and not only make a request but also use that to communicate and talk to the concierge and say hey I’m down and it raining what’s the good activates to do, the things that would usually create more effort, look up the number, call, get redirected. It’s easier to just chat or text, so as the capabilities for these solutions coupled with the back-end capability allowing the staff to be mobile, I think as those grow together, it enhances the experience.
Chris -- And for us it adds fun right, when we are enabling room service across our hotels there app, we add secret menu items that are only available if you use the app, and so you can’t get it if you call them and request room service and our chefs love that, you know it’s a challenge they get to experiment, create their favorite dish and have it available through the app so you can get really creative and try and find ways to encourage adoption.
Samantha – Something I’m curious about is how you approach technology depending on the different brand of Starwood, if you have a more luxury brand, are you going to provide a different experience for somebody maybe one of your lifestyle brands?
Chris – You know it’s a great question Sam, you know, to date we focus primarily on the numbers. So our SPG members travel across and hotel brands so we want to provide that consistent experience for our app. As we go forward, I mean there are specific initiatives like SPGQS where we started with our truly tech forward brands like W and Aloft, in particular, to bring that to life and let guests check in and open their door using their Apple Watch or phone. You know I think we will see more diversity going forward and as we focus on perhaps something different at St Regis but right now it really more about the guest, than it is about the brand.
Samantha -- I was thinking a lot about design and how, with all this using our smartphones, our laptops there is such a, there is no longer a need, there is a need for less technology in the room, you have to provide less. How does it impact the design of the room?
Chris – I think as we move, as people do expect all the connections from their own devices so putting the content up on the TV is to be able to watch all their favorite movies, TV shows, the things that they downloaded, you know it becomes a challenge, so the technology requirement, they may not be right in your face like the hotel room but what’s required to let people connect their devices is actually some pretty complex technology, especially as you look globally, whereas in 100 countries their standards do differ around the world and as you look at Android, iOS other platforms, and it’s not always easy to find that cross-compatible solution to really make that easy for our guest.
Jason – Can you talk a little bit about, Justin first about adoption rate and what you learned from the users, you know what are the demographics like, you are saying you know faster uptake, younger users, or is that like a nonsense myth, hardcore business partners in their 50s are doing?
Justin – Yes it’s really interesting, we of course when we first started thought that actually the group that will be more inclined to use this will be the younger generation. What we have seen is number one it really again it depends on the hotel and what their typical demographic is but more importantly it depends on the use cases. In one of our properties we allow people to order directly to their pool and beach chairs so you can go on your phone sitting in the chair, order and not you have to wait for a waiter. We see people from ages 15 up to 75 using that because of the ease of being able to do that and find somebody and then we have other properties that have a much younger demographic and it just similar in term of percentage, it’s just different use case. I think it really varies, most of our properties they tend to be more towards the leisure travel than the business, so we are seeing a lot of families coming in, so even though the parents aren’t using it the kids are, there is somebody from that group that’s using it, but I think again as people continue to get more and more business idea for business traveling especially, make so much sense because they are coming in and out potentially going to bunch of meetings back to back they get what they need and not have to speak to somebody so we think that that will continue to trend up.
Jason – And Chris, are the differences at Starwood more aligned with properties and the demographics tied to the properties, or are you are seeing commonality kind of across the user base?
Chris – Yes, I mean we see broad usage across all demographics so again according to SPG and you know to our membership 70% of our lead SPG members around the world use our app, you know, on a regular basis so we are seeing that adoption there and they span all ages and all incomes and just are passionate about travel and have come to count on it. I think it more of a myth just because you know, my mother is in her 80s and she is on her iPad 12 hours a day and she actually has two, it drains her battery down so fast and just swaps between them you know and so if she can do it I think anyone can do it and the goal is to make is easy for everyone.
Samantha – What about the ROI on this technology, when you are implementing new technology at Starwood or just when you are talking to your hotel customers at ALICE. Are you finding that this new technology is increasing sales, people are more likely to let’s say, order room service or entertainment or service offered by the hotel, or is the cost of technology kind of counter-balancing the increase in spend?
Justin – Yes so I think that from our perspective, we look at it in two ways: in some hotels who are really going all out and are doing things like room controls for light and TV and shades and air conditioning, because the cost for those are still pretty prohibitive it’s hard to make an ROI on that, at least in the short term, when you talk about you ae simply giving a solution where you can interact with the property then you are not necessarily seeing increase sales but what you are seeing is efficiency in the back-end, so again because we are allowing the hotels to track everything through one system regardless of how may guests are using it they are seeing the ROI and that’s usually where we saw lack in the industry, is a lot of people were spending several thousand dollars to build an application and it was really hard to prove, ok we are getting 10% more sale from F&B so we think it’s not enough just to have one side of it like you really need both, but because of that we were able to show our way.
Chris -- And then it’s a real mix of art and science alright. There is no, some of the initiatives, it’s very difficult to come up with a compelling ROI for but you just know they are the right thing to do and you make a bet, but I think you have to, you know at Starwood at least we focus on is this going to mean give a meaningful benefit to our guest. Is this going to dramatically enhance the experience they have, you know we don’t want to do things that are gimmicks, we don’t want to just for PR, for example we really focus on that core guest experience, and to try and bring that to life and I think the risk is or the fear that comes with it is, because they are huge capital investments you are talking SPG, you have 150 hotels and 30 countries, 30,000 door locks, that’s a capital investment that has to be made, and so, is the technology platform that you are investing in going to stick around for 5 or 7 years or is it going to go away, some great company develops a whole new platform and even when we were looking at QR you would never know, we started 5 years ago, really and started enhancing through RFID-enabled SPG member card and we were waiting till be felt comfortable placing a bet, and I think the risk is you can wait too long and then not move forward and then fall out of line with the expectations of yesterday today.
Samantha – You bring up a point about how quickly technology is changing and what point for hotels do you ever get a chance to catch up, I mean with consumer technology changing so often, there is another iPhone coming out I think in the fall, how as a hotel can you keep up with the changes?
Chris - I think that’s what’s exciting, that there is always there is more mountain to climb and more things that we can do, every new device generation, every new platform enhancement opens a door to great new experiences we can provide, so we get really excited about it, but it does take continued focus, continued investment, you know once you start on a platform, you know if you look at mobile for example, to your point you know, website you build and you can change the color, change the look and feel every 3 years every 4 years, not like browsers are going out of, or the website is going to go out of date really, but on a mobile app when IOS 9 comes out this year, we will have to do a new IOS 9 app and when then latest version of Android comes out this year we will have to have a new Android app, you know you do get locked into that same pace that apple, google and others are setting.
Justin - I think what you just said is actually why there are so many companies sprouting up to solve this and why some of the bigger brands are considering doing partnerships and not necessarily building it all in house because if you think about the need and resources to keep up with everything exactly as you said iOS 9 comes, you redesign. Well what If you just released iOS 8 a year ago, so when are working with companies that are a little bit smaller and a little more nimble actually know everything coming up beforehand make sure that they are adapted to it and move a little quicker, it makes it easier to keep up with that technology change, so that’s kind of how we look at ourselves and partner with the hotels. We say you don’t have to worry about keeping up with the changing times, we will do that for you.
Jason – When we did a series of interviews with hotel CEOs last fall, the common thing was high tech, high touch. We want to deepen the relationship with our guest we also want better technology. You talk a bit about how technology is allowing hotels to deepen their relationship with guests, especially in loyalty but also even for properties who don’t have loyalty program, how does that make the experience richer?
Chris – I think there are numerous ways that it can. So by reducing friction in the experience and then helping us being able to deliver a consistent experience, but I will give you an example and this may seem small but when we first launched our new app in 2012, we really focused on personalizing as much of the information and the experience based on the relationship we had with that specific guest, and mobile devices give us a lot more information as well, so an example will be if you’re travelling to Italy and you need to change your flight, you know today if you go to an airline website, you are scrolling down the list, which phone number, what country am I in, a leap number so what’s the right number to call, and that’s frustrating it can take a while to find the right number to get help. You know, just from the app on the phone we can know where you are, we know, because we have that relationship we know who you are and so we give you the one number when you go to contact us in our up, that’s for you wherever you are in the world, or giving local directions to the hotel, in local language. So if you are in China and you get in a taxi and the taxi driver does not speak English well, you can show him the address of the hotel in Chinese right from our apps to help you get to where you are going. So just even those little things, loyalty is built on a series of small steps, you know little moments, magic moments where you create over time and that’s what technology is letting us do. Reducing that friction creating more of those moments that really make our members lives easier.
Justin – And very similarly from our perspective it’s the things you can do to make their stay that much more enjoyable, so I think there is two elements for us on this, the first is, aside for local information it’s just simply connectivity, again when you are in your everyday life and you are in your home town you have everything you need from your phone being able to transfer that to your hotel when you can match your hotel stay with your home stay, that’s really when you win. The second part is, things like language, so we recently released the ability to have anything in every language you are looking for, so the guest can speak to a staff member, if the guest can speak English and the staff speak in Spanish, you can speak to another staff member in Russian and get it in English, all that’s done in real time, so it’s a product that we spent like about a year developing, and we have seen some really powerful results and now no matter where you are in the world, you always feel at home and that really enhances your stay and that’s something I think guests really look for.
Chris -- And I really love the example you gave earlier too, which was, one of the big pain points in a resort experience today is that you are up by the pool, you want to have another drink, you want to keep the good times going, you have to get up and go find someone to place the order or flag down someone who is running by then wait, but now with mobile, you are able to order that drink, right from your phone when you are sitting with your loved ones, have that go right to the hotel systems and someone come up and who can with beacon technology know exactly where you are sitting and hands you that drink, that creates a magic moment and its takes out a lot of frustration.
Jason – You know with anything tech related, I think we always tend to think about the optimal, when the Wi-Fi is working, when you have a connection. Can you talk a bit about, you know the hurdles that get between the guest and actually using the technology, implementing better Wi-Fi across 100 markets or making sure that you can still get that Wi-Fi connection when you are in the lounge chair by the pool?
Chris – No, I mean it’s a challenge, I mean the hotels even if you look across our system, the hotels that were built in the 1400s that are in there and so we’ve been working to ensure great connectivity no matter where you are but we are also talking about you know again 100 countries around the world, boxes that are, buildings that are massive concrete structures, where it’s hard to make sure that they aren’t any dead zones, and a big area of focus for us actually is the heart of the house, like where the associate areas, because those typically have not have the same level of connectivity that our guest areas have, so if you are building new technology for your associates to help deliver this experience but then they can’t get connectivity, on the devices you are giving them when they on in their break room, that’s a big issue.
Justin – Yeh, I think the reality is that technology get with its surroundings, so as Wi-Fi continues to get more and more powerful, off course that will help but in the meantime you do things to try to optimize the solutions, so on the guest side if somebody puts in the request and they are not online, that requires will go through the minute that they get online, and same thing on the employee side, that request will go through the minute that they get online and in dead zones it’s never too long of a delay, but the reality is, is that, still things aren’t perfect and that will continue to improve over time.
Samantha – What are the hotels staff reactions to the increase in technology? We are talking a lot about who the guest is using it and how’s its improving their experience but, so much of that is the back-end too. Is the staff eager to adopt the technology? Is it making their jobs easier or is it kind of a challenge to introduce this new technology?
Justin - Yes, for us that’s what actually been most exciting. When we go to a property and we show them the solution they are going to be using on the staff side, the responses are always positively overwhelming and the reason for that is from day one our focus has always been the experience can’t just be about the guest, because if the staff doesn’t use the solution it will be back of mind, and if its back of mind it will never get pushed to the guest. So we build the staff side where it’s really easy to use, you can train a staff member in under 5 minutes, we have online training to support any questions you may have and we have made it really simple for you to do your job better, so we’re actually had staff member email and say, you guys made my life easier, I used to hate the noise of radio and now our radio is gone we don’t have to listen to the jabber back and forth, so I think thinking about the staff as an important part of the equation and making sure it works for them in the way that they need, is really important so that’s really what we spent a lot of our focus on as well.
Chris – I completely agree with that, but it does create challenges at time, so I mean training is really important but the main area I think where challenges can arise is really evens the playing field in a way so if you are checking one of our hotels and you ask for a corner room and the hotel says I’m sorry we don’t have a corner room available, now, guest can pull up in our app and they can pull up the availability for that day and say, actually right here, you do have a corner room so give me this room. So we are putting so much information in the hands of our guest which is the right thing to do, that they can access right when they are dealing with the staff, and so that training and making sure there is consistent delivery and great service is even more important than it has been in the past.
Jason – That reminds me of a terrible few hours spent in a phoenix airport last year and the flight was late and poor gate agent for US Airways was telling everybody you have better information on your apps, that I have from my terminal, what’s the challenge of making sure that there is a level playing field between hotel staff and the guest that are using the latest consumer-facing technology that you guys have?
Chris – You know I think to be honest Jason, I think there is a need for more investment, we are focusing so much on making apps we build examples for our guest that are easy to use, very intuitive, you know with clear displays of information and everything they need, there Is room for us to continue to invest in making sure our associate’s tools have that same focus, that they are easy because hotels are complex as you all know and some of the tools we use are complex, and so sometimes it’s just easier for one of our guest using one of our apps to see that than it is in the tool that one of our associates is actually using.
Justin – Yeh and just to put you back on that I think it all comes down to the idea of one connected system and the hotel world has lived for the past 100 years no way whether there is a solution for every single department takes that load off and it makes it really hard to get that information transparently flow across to every department and therefore your property, so the more you can get your staff working on one solution the more that information can pass through and the easier it is for everybody to stay up to speed.
Samantha -- How is the guest experience going to be with technology 10 years from now? 5 years even?
Chris – You know, I am an optimist, so I see a great future ahead, I have those colored glass I think it's going be a more personalized experience no matter where you are in the world, really tailored to your needs. If you like the room cold, the room will be cold when you arrive, your favorite TV shows will be available, you know everything it will feel truly like home based on the relationship you have with the hotel and the company to be able to provide that, so I think we are just going to see, I think we are approaching a true golden age of travel that’s empowered by all the technology changes that are coming.
Justin - Yeh, I couldn’t agree with that more I mean I think that by nature I will have to be an optimist in this area, the way that we look at it is that 5 years from now you go onto an application, you book your hotel room. You arrive in that hotel and 3 days from now they send you a message saying can we have a car waiting for you at the airport? You say yes, the car is waiting for you at the airport. You get to the hotel, don’t need to check in, your key is on your phone and you can interact with everything directly with everything from your app, check out, can fill out a survey and check out the next day. When that become a reality, when you can do everything through one solution and you don’t need to kind of take a bunch of things and put in on one thing, I think that is the ultimate travel experience, it makes it more personalized and again it makes you feel like you are at home.
Chris -- We are almost there with Starwood today, and it’s the little things again, the recognition when you walk up to an associate and they say Hi Sam, you know how’s your room? Without you saying anything through a location-sensing technology and I mean that’s going to be a magical experience when you stay with one of our hotels.
Samantha – Does it ever become creepy?
Chris– I think there is a danger of it feeling creepy and so you have to have the right checks and balances and make sure that everything is up then, that everything is fully transparent and up front with what we are doing. But I think the main guard rail against it being creepy is that if we stay focused on really trying to materially benefit our guest and enhance the experience, where it gets creepy is if it I gimmicky, it's all about pushing offers and promotions, if it’s about recognition and tailoring it to your staff, the people will embrace it.
Jason – Thank you for your time today, Chris and Justin, great, I want to go stay in a hotel right now.
Chris – No, thanks for having us.
Justin – That was great. Thank you guys.