Hotel technology should not be vendor-lead

We’ve previously published parts one and two of our interview with Michael Levie, founder and COO of CitizenM Hotels. In this third and final segment we talk technology.

The minute your guests notice technology – you’ve failed.

The other day I was meeting somebody to show them around Citizen M. The gentlemen showed up with two people; I had a booking for them and after we walked into the hotel I said – “Check yourself in”.  They said “What?”  But they intuitively went to the kiosk and within in a minute and a half they checked themselves in. Cool. I said “Go to your room” and let them figure it out. And by the time I came back for a drink in the living room he said, “This is brilliant!” I said, “Well, it’s really rather simple.”

I think the technology hoteliers use often was vendor generated – so a vendor had a brilliant idea and they generated whatever brilliance there is. The hotelier at best uses maybe two percent of the functionality of its capabilities and features, and I think you need to turn this around. Ask what the basic principal needs are and also what the future trends are.

For instance, flying here, I noticed only a few people are still using the entertainment system of the airline. Most people bring their own entertainment. A hotel room isn’t any different. But try to get to get your content onto a television in a room – good luck! We’re stuck in these seven year contracts with vendors that have the most horrible content and you need to pay a fortune to watch a movie.

That is what I think is vendor-driven technology, whereby the hotelier cannot invest upfront because our margins are just not big enough. That does not mean that everything that comes to us should be at a usage cost, that we should sign up and put it into the hotels. Technology must be an enabler.

Technology is moving on a shorter and shorter cycle and things are changing faster and faster. If you do not equip yourself well enough, then it’s over. We opened our first hotel in 2008. We’re now 14 hotels and I’m changing for the third time the core structures of our technology. I’ve done so because the industry is not ready and we are ahead of the cycle, but also because technology is changing so fast and I want to stay up with it.

Do you develop in house – or do leverage vendor solutions?

The last thing I want to do is to think I know how to develop technology. In reality, we have been the instigators with the vendors or developers in order to create something. Simply because they have not gotten there, or they did not see the trend and we get them involved. I don’t necessarily always want to get involved, but at times I have to.

Take demand management for instance. Everybody is still thinking, should I have a revenue system? Whereas the entire distribution landscape has changed in the last ten years and everybody is still selling the traditional way.

Many hotels have their segmentation and sell most of their product over a year out. Some of it six months out, for example the group business. We have a perishable product, and 70 percent of inventory is over a year out? But then they go and ask, what is that big OTA doing to me? Well, they’re working the market, like you should.

As a hotelier, we have to understand a lot of the traits, it can be very difficult but if you don’t understand the traits then you need help, or you’re going to have a serious problem. That’s the issue for hoteliers – we’re often caught in a vendor- lead situation without a profound understanding of what needs to be done.

So as such, CitizenM is deeply involved. We are creating a dashboard or cockpit of all information that lives in our hotels. I’m not saying we are doing anything revolutionary at all. But we are aggregating it all in real time, in one cockpit. Stunning, and you know why? Because if you work the market and you want to have accurate information with setting price, then you need to have the technology to deliver it.

How could you be a stockbroker without having information on the market? As hoteliers, we have the information, the marketing report, the annual budget, statistics here and there. By the time we aggregate it together or even find it all and put it together, the opportunity has gone.

We are now a using a company called Snapshot who are helping pull our information together simply because we need it. Manually, it’s impossible to do it all – you have to be deeply involved in technology even if you don’t want to, because you need to push the fringes or the boundaries of the industry – you have to be involved.