At ALICE, we believe hospitality is born in you. It is an an art form, an intuition, a gene. All of us in the industry, we, were the children at the birthday party who were setting up the table. We are the entertainers and the hosts… you know this, you were the ones at the bar ordering drinks for your friends while they were all having fun…
Dare we say that a long time ago, people who sacrificed their sleep, their family, their free time and other joys of life were called Saints... today, we are called Hoteliers.
And like all of you, we have been hyper focused on building better hospitality but i think it could be said we haven’t really succeeded yet.
There are other industries that are doing it better, that are literally kicking our butts.
Because, despite all of our hospitable efforts, we have not kept up
By knowing your name, an Uber driver knows more about you than most hotel staff.
Amazon gives you more transparency when delivering someone else’s goods than hotels do when delivering their own goods.
Siri fullfills more of your local queries on trips than your concierge does.
We have failed so badly to keep up as an industry, that Millennials chose to sleep on someone else’s dirty ass couch just to get a better experience!
And this Keeps us up at night.
Where other industries have figured it out, have evolved… our beloved hospitality industry is stuck.
But… despite all this...people still LOVE hotels. There are so many hotel products to satisfy every type of customer and more new product coming online every year.
This only heightens the need to stay ahead of the curve, delivering products, services and experiences that appeal to fast-changing consumer demands.
And technologies that allow hotels to know you better, to anticipate your needs more consistently, and ultimately deliver a better experience
My name is Alex Shashou and I am one of the cofounders of ALICE and we started the company because we were obsessed with how hotels can deliver great service.
What most travel writers find so boring, we find extremely interesting. We believe in the little details that come together to create great hopsitality.
You may have read about how, for the first time, your housekeeping and maintenance and front desk and your guests can all work through one system , one platform… but today I will not bore you with what we do. Instead I want to tell you about why we do it. And to the best way I can do that is to tell you a story about a company whose name is synonymous with innovation and technology…
That’s right… as many of you guessed... Dominos! Today, we are going to tell you a story about Pizza!
Now, you may be wondering how a pizza company applies to innovation in hotel operations but stay with me because, of all the companies we have researched and learnt about, one of the most extraordinary innovations, as it applies to our hotel industry, is actually in the pizza business.
You see… In the late 1990s, Domino’s became one of the first companies to allow for online ordering. An innovator. Loved by all…the company experiencing explosive growth that led to an IPO in 2004. Domino’s was off to the races.
But much like so many companies, Domino’s was playing to win and when they won, they paused. They rested on their laurels and by 2008 Domino’s growth had stalled. Their stock price was at an all time low at $2, their pizza was deemed to taste like cardboard. Just like many industries, Domino’s had become stale.
So, in 2010, they brought in a new CEO that changed everything. He didn’t restructure their finances, or come up with a new product to sell… Patrick Doyle simply asked the company a fundamental question… “what business are we in?”.
See it turned out that Domino’s thought they were in the pizza-making business. And this was their crucial flaw in their thinking.
What Patrick helped them realize is that they were actually in in the pizza-delivery business.
How could a shift in one word dramatically change the course of a fledgling company that was once great?
You see they were so obsessed with making pizza, and the way you make pizza hasn’t changed all that much. The delivery of it… well that’s another story.
Armed with the new perspective, the company realized that in delivering pizza new things started to matter… like the time it took to get your pizza, or the experience felt when ordering it… how it arrived to you… technology was evolving and changing all of these factors.
When Domino’s stopped think just about selling pizzas...but about delivering pizza, great things happened.
Today, 10 years later, Domino’s is the second largest pizza chain in the world, with more than 12,500 locations, in more than 80 countries and a share price is not $2 but actually $180… you do the math. Domino’s is yesterday’s bitcoin.
So how does this matter to hotels?
Hotels are so focused on how to get more bookings…how to sell more rooms… but maybe we should challenge ourselves to ask the same question that Domino’s did “what business are we in?” “Why do guests stay in hotels?”
If we for a second assume we are not in the business of selling rooms… what are we in? I.e. what if we took a step back and we changed our mindsets.. Like Domino’s, what if stopped focusing on what we do, and started focusing on how we do it. Not just the services we offer, but how we deliver that service.
So...for the next few minutes let us take a step back and ask oursevles… “What does a hotel do”?
Most companies only have one product or service. Hotels… not quite… hotels deliver hundreds of services and products, with each guest choosing a different combination of them:
From one guest who emails the concierge for dinner reservations three months before arrival, to a guest that loves to have extra pillows on their bed and countless towels in their bathroom, to another guest who always happens to leave a little present behind for the lost and found.
That is the thing about hotels, hotels are like mini cities. And they are the most complex of systems and to run a hotel, you need all of your departments working in perfect unison. Like an orchestra who, only in perfect tandem, can play a symphony than no one individual can.
So why is it that we are failing so badly today?
Well over the last decade, technology and the internet has revolutionized the world of hotel distribution… how we find and book hotels has fundamentally changed… BUT the same cannot be said of how hotels actually work.
When it comes to the actual operation… the thing that we actually are… the experience that a guest books for… not much has changed.
If anything, technology has made it worse. The current technology stack has been generally built with a single department in mind, rather than the entire hotel. And so coordination happens in very dated methods with silos of technology, date and processes in each department, making it very hard to orchestrate the guest experience.
And with the addition of guest facing technology, we have even more disparate systems, which exacerbates the problem. Hotel staff are literally doing backflips just to stay coordinated, just to deliver service.
What’s the result?
We are failing our guests, and we have fallen behind as an industry in embracing technology that fits the needs of today’s customer and service model/
All the while, Airbnb and alternative lodging solutions are challenging over ⅓ of Americans to ask the question of what it really means to be a “hotel”... And doing it well with an average satisfaction rate as high as 90%!
So… what does a hotel mean to you? Why do you stay in hotels?...
Security --- do you sleep in a bank? No… Service…“Service” is why we stay in hotels…
Yet how can we then afford the reality that servic, continues to be the single largest detractor of guest experience today. This is not because the people working in a hotel, don’t want to provide great hospitality. NO. We are obsessed with providing great hospitality…we just simply aren’t given the tools to execute what it means to deliver great service today.
But how so… we have seen so much innovation, mobile booking from hotels.com at 55%... well that’s the thing...booking is not the barometer. You don’t remember a hotel for the way in which you booked it! Who here has ever given or read a tripadvisor review? Right, we all do. Guest’s sell to guests. When’s the last time someone praised a hotel for their booking experience?
Never! We judge hotels based on what a hotel is, not how we buy it.
So we must adapt…
To embrace technology, we must first understand it. What has happened to our world over the last ten years…. We must look outside in.
Technology is evolving at a rapid pace, and that has brought on significant industry shifts, that we now have the opportunity to learn from.
As almost every industry turns towards a technology disruptor, we get to ask “What has really changed?.”
But what’s interesting is that the the fundamental offering remains. We are still taking a car, watching a movie at home, and buying a book.
The services we are using and our needs have not changed one bit…
That’s the thing about technology… it rarely changed what we do… just how we do it.
This “disruption” has led to one massive shift…
HOW services are delivered.
What has truly changed is how these services are delivered to us…… technology has made operations seamless, allowing the same service to be offered cheaper, faster, and with a personalized touch.
Resulting in a far superior customer experience.
The service on demand revolution has given us more control where we have all the options at our fingertips, more transparency where we don’t just have to wait for the end result but get to watch it along the way, and made those we buy from much more accountable.
It places the consumer in charge.
What’s so interesting is that ALL of these breakthroughs are the result of one phenomemon. Platforms. Taking an old line industry delivery model where value creation is linear...one way… consumers are told what to buy, what to do, when to do it by the business… towards a platform, where everyone is connected in one ecosystem.
Where consumers don’t only get to make the request, but see it through its execution.
It is the difference between the postal service and fedex, where in the postal service you drop a mail in a box… you have no idea when it arrives and if it doesn’t, good luck finding it! … to Fedex where you get to track it at every stage of the journey.
Does this mean, good digitalized service is only reserved for the new companies? Do existing companies like hotels have a chance?
Absolutely. Look at Domino’s who embraced technology in their service delivery. Focusing on the delivery of a service in today’s digital age meant focusing on technology.
Domino’s CEO said “We are as much a tech company as we are a pizza company,” Where today, of the 800 people working at headquarters, 400 work in software and analytics. Domino’s started investing in technology as a platform, connecting how a customer might order using the Domino’s app, or directly via twitter, or even by texting an emoji; how their customer’s would monitor the status of their order, getting the transparency demanded today; and ultimately how Domino’s manages its operations, from working on GPS connected delivery cars, with just one seat and a warming over for 80 pizzas to researching delivery drones to stay ahead of what good delivery means tomorrow.
What is the ROI: Since 2008...Domino’s is the fastest growing technology stock. Faster than all these disruptors. Who would have guessed.
We keep talking about disruption and disruptors… but lets bring it back to you again.
There is a man who wrote a book on disruption. Clayton Cristensen. One of his insights is that we have two purchases. The big purchase and the little purchase.
The big purchase is the actual purchase of the product… the little purchase is the experience from using it.
Loyalty comes from a little purchase.
Let me tell you a story about a little purchase that happened on ALICE recently.
A few months ago a couple were traveling to the hotel that they had booked through the app and three days before arrival, the man started texting the hotel through the API… “ I forgot to tell you that I am proposing to my girlfriend on this trip” … what ensued was a brilliant orchestration of requests, and conversation. I need flowers, the best room, privacy, champagne, a dinner reservation… all of it human, all of it perfectly dispatched to the various departments to execute… all of it silent, keyboard strokes from a man sitting next to a woman whose life could be changed forever...
Now… she said “no” … I’m just kidding, I was seeing if you were paying attention. Of course she said yes, how couldn’t she!
Today this hotel has no landlines, and no one is feeling the difference.
This hotel has embraced its operations as a platform. They are treating their service delivery as a connected science. One where every input has an output, every action a reaction.
So how does our industry look in the future. What if everyone played to win, embraced platforms and started to think not just about how to make a booking but delivery a great, no fantastic hotel stay.
And the good news! We are finally on the right track. Half the industry is looking at investing in operations technology… because we recognize today that Operations is your biggest marketing asset.
A guest who promotes you is your most effective marketing and those of you who leave this room today, inspired to take action, you will start to see a better future. Like Simon Sinek said, you may survive.
However, if you are going to invest… how should you?
Phase one… connect your operations. Make sure everyone is on the same page. Make sure you can understand your own communication and service delivery
Phase two… add in the guest. Give them transparency. Then you achieve the circular platform.
Is all this takes just that… no… Domino’s didn’t just win because they invested in technology, they won because they changed their mindset.
Doyle’s most important lessons are about the mindset required for organizations to do big things in tough fields. Two of the great ills of executive life are what he calls, borrowing from behavioral economics, “omission bias” and “loss aversion.” Omission bias is the tendency to worry more about doing something than not doing something, because everyone sees the results of a move gone bad, and few see the costs of moves not made. Loss aversion describes the tendency to play not to lose rather than play to win. “The pain of loss is double the pleasure of winning,” he argues, so the natural inclination is to be cautious, even in situations that demand creativity.
The reason it took the industry so long to her here is fear… instead of playing to win, we are playing not to lose… people dismiss personalization programs that are poorly executed but there is ample evidence that personalization, even when done poorly works extra-ordinarily well.
In 2015, Coca cola launched a campaign where they put 250 of America’s most popular names on their coke cans, instead of their own logo! What ensued was one of the most viral personalization campaigns ever built, one that raised coca cola’s sales by 2%, had 500,000 photos shared and added 25M facebook followers.
If we asked ourselves what the worst personalization program on earth might look like… we may have said “let’s replace our logo with random names” .
But it worked and it worked so unbelievably well. We mustn’t fear innovation. How many of you fear technology…
Ian Shrager actually said a year ago at a conference I was at “its almost as if the hotel industry wished the internet did not exist”
And no it doesn’t happen overnight… as Simon Sinek said… it happens by taking small steps… one at a time… never ending.
Just the tip of the iceberg… all we have talked about is stage five of a five stage journey. Imagine a world where the entire journey is connected… not just the operations.
This year we have seen ALICE grow from just 100 hotel partners in January… to 1600 hotel partners today, acquiring GoConcierge and becoming the Forbes official sponsor of Operations technology.
Much like ten years ago we questions whether we need our own booking engines online. In ten years time, we will see an industry revolutionized by operations
And through connected hospitality, we will all be part of getting hotels back to the top of guest satisfaction.
At the end of the day, we believe we are in the business of selling experiences.
And experiences are feelings...so we’ll leave you with a quote from restaurateur Danny Meyer that inspires us as a company to build great software.
Because at the end of the day, when service is connected across the entire hotel… staff can deliver great hospitality, every time, and the guest can leave with a great experience.
That’s a great return on experience.
The Future of Connected Hotel Operations - ALICE Keynote at the Expedia Partner Conference 2017
The Future of
Embracing platform technology to
compete in tomorrow’s hotel economy
An Uber driver knows more about you than
your Hotel Staff
Amazon delivers goods with more transparently
than your Room Service
Siri fulfills more of your local queries than your
Millennials want experiences so badly then chose to
sleep on someone’s dirty ass couch over your hotel
We are doing it wrong
All departments communicate together to serve your guest’s needs
Your Hotel Operations On a Single Platform
Return on Investment Experience (ROE)
78%Of millennials would rather
pay for an experience than
6xMore likely to buy with positive
emotional experience, 12%
more likely to recommend the
company, and 5x more likely to
forgive a mistake
Service is the technical
delivery on a brand promise.
Hospitality is the “feeling”
you get when that service is
– Danny Meyer
Subscribe to the ALICE Newsletter