What hotels (as well as the rest of us) can learn from tech companies?

Richard Valtr, Mews Systems founder and director, talk summary at Travel Tech Conference Russia
Richard Valtr is a former hotelier and a founder of Mews Systems, the tech company that develops a cloud-based property management system. Richard always shares his ideas and experience that can be useful for hoteliers. He visited Travel Tech Conference Russia in Moscow with a talk "How hotels can become more like tech companies".

We publish a summary of the talk. You can watch the full talk on our Youtube channel. Subscribe:)
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I didn't start out as a tech guy, and I didn't think I was going to build a tech company.

I've started as a hotelier.

I wanted to create a hotel with a real kind of experience.

So we've built a real hotel in Prague. But when I wanted to get this thing going, I went to many tech companies and asked if they can provide us the access to APIs that we'd need for services like automatic check-in. So the only thing that people who work in the hotel will do is to sit on the coach with guests and talk about actual experiences they want to do around.

I believe that hoteliers should think about hotels rather as a product, instead of a traditional hotel. What kind of features would you have in a hotel as a product? First would be a great sleep. It would be personalization. Building loyalty. Upselling great services.

But in reality on day-to-day basis hoteliers have to deal with completely different things, such as general repairs, high staff turnover, competitor actions, losing ground to OTAs and other things.
In our tech business we divide tasks in three groups – core, neutralisers and differentiators, so I think a hotel has to consider it too. Core things are matter of the business, delivering right service to a right customer. Neutralizers are following the regulatory environments. And differentiators are the things that make your business unique, super memorable for customers. Something that delivers a great sleep and a great customer experience.

I think those type of things are always lost in a routine. If we'd have a look at your product road map, I'm sure we'll see that 5% of the tasks are dedicated to differentiators while 95% are distributed between neutralizers and core things. You are basically try to catch up with the market.
Great tech companies think about it differently. What you really should be doing is to think about the differentiators and push innovations that make you to stand out. You should be actually talking on a daily basis about that stuff.

Neutralizers are annoying, and core things are important so you can't avoid them, but don't spend your whole time working on it.
Think about objectives, not KPI's.

Leading by objectives require different type of processes, to move from long-term oriented tasks to short-term agile processes.

But objectives are not individual tasks, they are the visualization of company goals. They depend on what product do you want to serve as a hotel, a chain or a brand. These things decide what the outcomes are. So use OKR - Objectives and Key results - for the company, for each department and individual employee. I will be really curious to see how a hotel cleaning department will organize themselves trying to deliver a great clean experience for the guest. If it's just about cleaning, you do the bare minimum, but if you try to delight a guest with the cleaning experience, that's innovative.
To give you an example I came up with few things that would be instructive and move you forward into the future with delivering a great service.

Objective: driving real customer service

How would a tech company think about this? They might look at a customer response rates and customer satisfaction levels, as well as look at the NPS (Net Promoter Scores) and bunch of other things like CSAT and others. Tech company will be open about improvements, basically saying that we had these issues, that's how we solved them. While hotels will probably keep these things hidden, nearly every tech company publishes these things online.
Use NPS, but think about places where you want to ask for the score. If you ask for the score when a guest is having a breakfast, that would be wrong timing. But you might want to place these scores in right places, as well as on your website, like every tech company.

Do the same things with release notes. Every time you have a problem or something didn't work, like there was a bad smell because a sewage wasn't working. How many hotels would actually look at that and say that we need to inform guests that they've improved their product?
Objective: High revenues and high margins.

We had a discussion about OTA rates, with a point that comparing to Tesco and Unilever, where Tesco takes 40-50% of commission, Booking.com 18% is not that bad. It's true if you think only about the revenue, but you actually sell an 8-hour experience which is called sleep.

So how would tech companies approach that? They will think about customer acquisition cost and lifetime customer value, not about TREVPAR. TREVPAR is just an insane metric that just needs to go.

What you can actually do to expand some of these opportunities? Think about your hotel as al landing page. So guests just arrived to a new city and you've got that captive audience, what you're gonna do with them? The hotel at the heart of it is the gateaway to the heart of the city, and right now you're doing nothing with it. Why not sell services, experiences, because that's what is people are there to do.

Customer spend is total spend, not only money that they spend in your hotel, rethink partnerships, cross-sell networks, etc. I stay in the hotel here, and they utilize services inside the building, but nothing outside.

Objective: obtain maximum yield per room

How would a tech company approach obtaining a maximum yield per room? Let's start from the prices. Why there are just two type of rates, non-refundable and fully flexible, and this pricing is a shame. It's basically "pay now and get 25% discount" or "pay when you arrive". And it doesn't make sense. Same goes to wholesalers and alotments. Why not put and call options? Hotel rooms are just commodities that can be differently priced, so why can't a room be resold for a higher price?

In the end, why not to separate hotel services? Right now you have the place to sleep, work and relax: three fundamental services that a hotel room covers. But why not split them up? Why not to say that we are going to sell you 8 hours of sleep, two hours of fun and four hours of work in specifically designed pods for that. These things are really really excite us, and there are some brands who work in this direction already.

So if you have a hotel, or any other business, think how would it look like in 21st century?

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