2017 Executive Vendor Summit Review

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July 06, 2017
Executive Vendor Summit Review
Kris Burnett

©2017 Hospitality Upgrade
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When you think of San Antonio, fantastic Tex-Mex food, refreshing margaritas, The Alamo and the River Walk come to mind... but helicopter rides, microbreweries and ghosts roaming around a hotel? Actually, yes, if you attended Hospitality Upgrade’s 2017 Executive Vendor Summit.

Welcome to the Alamo

This year’s event marked HU’s 13th gathering of C-level executives from the hospitality industry’s leading solution providers. The educational sessions provided a peek into the world of artificial intelligence, blockchain, company valuation, privacy and data security, among many other topics.
 
“I thought the sessions were really good this year,” said Jim Walker of Agilysys. “I particularly enjoyed the one about valuation; that was a good conversation to hear some of the thoughts that go into how investment bankers… value companies these days, because that changes on a regular basis. The emerging technology bits were very informative; it’s just always good to see what people are trying to get together and put into the hotel environment.”
 
And in addition to the informative educational sessions, the networking opportunities are always a favorite reason to attend. “You get to see people on the vendor side of the house that you don’t normally run into,” said Walker. “Some of them you compete against, some of them you don’t. But it gives you a chance to exchange some information in a non-threatening environment.”
 
As John Clark of Systems Associates added, “(There was) lots of great content, and I think a lot of it came from the conversations at the table, which you can’t get from a TED video or a YouTube video; you have to be here to experience that… it helped us design and model an actual product opportunity that we’re going to look at next week.”
 
Session 1: Who’s Coming to the AI Party?
 
Bryson Koehler, chief technology officer–IBM Watson and IBM Cloud, general manager and distinguished engineer-IBM, kicked off the conference with a fascinating look at artificial intelligence (AI) and its uses within the hospitality industry. 
 
“It’s all about a connection and it’s all about helping your business connect with your customers,” he said. “That’s really what AI is all about – helping the machines connect... connect to you, connect to your business, connect to people.”
 
As he said, the more data you collect, the more you have to bring into your brain, “and theoretically, the smarter you become.” But, as he added, you have to actually be able to process that data, store it and retrieve it – a problem for humans as well as technology.
 
He examined different factors that affect predictions – from weather to spend behavior – and noted areas where the hospitality industry can make use of this information/
 
Session 2: Is the Center of the Hotel Technology Universe Changing?
 
Traditionally, technology in the hotel world revolved around the property management system (PMS), but as this session explained, many other solutions have come into play to affect property perfor-
mance. But how do properties manage all of these disparate systems without sacrificing guest service? And how will the growing trend toward open APIs and cloud computing in hotel technology affect the PMS?
Panelists for this session included Shawn McGowan, president and CEO, Scribe Software; Jan Jaap van Roon, president and CEO, IreckonU; and Lyle Worthington, CHTP, CIO, The Student Hotel. 
 
Both Scribe Software and IreckonU focus on helping hotels integrate disparate systems, proving ease in process management and the ability for the property to focus more on the guest. The Student Hotel, on the other side of the table, is a unique group of properties where the dormitory meets the hotel with a combination of both long-term guests and short-term travelers, calling itself “a modern hybrid in hospitality.” Student Hotels are located in cities throughout Europe including Rotterdam, Amsterdam, The Hague, and under the Melon District brand in Paris and Barcelona. With regard to technology, Worthington, as the hotelier, looks for partnerships more than anything. Addressing the audience of technology providers, he said, “No one in this room has a product that is 100 percent… Can I (use one of these solutions) to make the system do something it doesn’t right now? That’s what I look for.”
 
Whether providers, integrators or customers – as McGowan noted, these different personas can provide different challenges. A few of the sample challenges discussed when working with independent software vendors (ISVs) include the expression of concern over keeping up with the constant updating of APIs (application program interfaces), the team’s focus on new core features over integrations, support issues that take up time that could be focused elsewhere, and lacking the tools necessary to troubleshoot and support.
 
Some believe the enterprise service bus (ESB) is going by the wayside and microseservices are the future… either way, the focus is flexibility and scalability of the infrastructure. Van Roon suggested ESB and microservices are not necessarily enemies but friends – an ESB essentially integrates new and old systems into one central environment, where mciroservices are a series of small services that work separately but are connected/communicate together through the APIs.
 
One question posed by the group was, how do you judge the difference in a well built and poorly built API and how do we protect ourselves? McGowan said you really want to look at some middle-tier tooling and have some standards. “If that API goes down, it’s still your system that goes down.”
 
Session 3: Is It Time for the Hospitality Industry to Embrace Blockchain?
 
This session was led by Greg Simon, the co-founder of loyyal, a loyalty and rewards platform built with blockchain and smart contract technology, and president of the Bitcoin Association. He also has 15 years of international banking experience. In this session, Simon discussed the advantages of blockchain (the technology foundation behind bitcoin) and whether the hospitality industry is ready for it – even in its infancy stages. The group also discussed effects blockchain will have on businesses and the industry.
 
In blockchain, a transaction is presented as a “block.” This block is broadcast to all parties and then approved by concensus before a block is added to a chain of different blocks and ultimately the money is moved from the first party to the second. In general, instead of the risk of centralizing sensitive information in one place, information is in several places (or blocks) to protect it.
 
“It’s changing how we pay for trust… trust is something we need in (every relationship or interaction we have),” he said. He explained it in more simple terms… “I have to trust that bank, and I can’t move that trust to the other banks. (Now I don’t have to trust all of those others).  The cost of trust has gone down significantly.”
 
While the benefits of Bitcoin/Ethereum include privacy, lower cost of trust and the ability for anyone to use them, the challenges include regulatory compliance and cumbersome governance. With blockchain initiatives like Hyperledger/Enterprise Ethereum/loyyal, the benefits include regulatory compliance, orchestrated governance and the fact that they are enterprise friendly. Challenges include cost of trust and technical complexity.
 
Hospitality uses include a connected customer experience through loyalty and incentification, in-room entertainment, CRM universal ID and PMS/hotel operating systems, and operational performance through global distribution systems (GDSs), online travel agents (OTAs), supply chain/procurement and accounts payable/accounts receivable. Incentives and benefits include guest personalization, streamlined check-in, and having status follow you through cross-partner ratings.
 
Trust is important in any environment, but as Simon said, “It is especially important in relationships, commerce and interactions.” And he added it is still a new process, “If anyone says they’re a blockchain expert, run the other way. There are no blockchain experts – (we don’t know enough about it yet).”
 
Session 4: Peer into the Future with 20/20 Hindsight
 
In this session, three young companies had the opportunity to hold an open discussion, describing their initiatives, the challenges they have faced while entering the hospitality industry and then being open to advice from the seasoned attendees in the room.
 
Panelists included Charles Cadbury, co-founder of Dazzle Technology, Madhu Madhusudhanan, CEO and founder of Proxce, and Greg Simon, CEO and co-founder of loyyal.
 
Dazzle is a voice-enabled personal assistant for hotels that essentially replaces the guest directory. It can make requests through Alexa and then forwards them to the correct department. It is currently being tested in a few select Marriott properties and was a recent Marriott TestBED contest winner.
 
Proxce can be described as an identity manager. As travelers, we all have multiple identities – Proxce provides “frictionless identity” – all custom branded. According to Proxce, the average traveler or guest actively uses 2.84 social profiles and has more than 15 online accounts like corporate ID and airline loyalty membership, among others – all of these constitute our “identity.” Proxce allows for a seamless association of different types of user profiles with locations and connected devices (IOT), and can help facilitate mobile check-in, keyless access and other location-based services. Proxce is currently live with Jumeirah Group and is also working with HomeAway vacation rentals and a large theme park in Asia.
 
As noted in the previous session, loyyal is a loyalty and rewards platform. Its goal is to consolidate loyalty programs in an effort to “reinvent loyalty.” As Simon noted, 20 percent of points will never be redeemed. The company is working with Deloitte and Jumeirah, and has a proof of concept with Emirates Airlines, plus eight new clients are on the burner with a plan to launch a beta program by this issue’s press date.
 
Many questions were asked by the audience and solid advice was shared with the entrepreneurs – we can’t share them all here, but topics covered included liability, adoption challenges, costs vs. return, and legal/privacy issues across the globe.
 
Session 5: Taking the Next Step with Your Business
 
This session was led by a panel of investors representing various segments of the financial community in an effort to provide attendees with some recommendations on how to find and qualify sources of capital. Panelists included Umang Kajaria, principal, Apax Partners (a private equity and venture capital firm); Vik Sood, senior vice president, Technology Group, Houlihan Lokey (a leading global investment bank that does quite a bit of work in the travel and hospitality industries); and Barry Symons, CEO, Jonas Software, which owns and operates 70 leading software companies across the globe in 17 verticals. With regard to hospitality, Jonas Software has most recently acquired PAR Springer-Miller and MSI Solutions. 
 
When laying the groundwork, Sood said, “It’s not like putting your house up for sale. There is a select group of good candidates.” He described the boost in travel technology and said 60 percent of online travel searches were for hotels, and online bookings have doubled between 2010 and 2016. These statistics have led to an uptick in mergers and acquisitions.
 
He added that companies have one shot to make a good impression and recommended that the corporate home page match the message/mission, case studies, the vertical(s) your company is going after – all have to be accurate and relevant.
 
Session 6: Layer 8 and the Real Insider Threat
 
Back by popular demand, Peter Hay, senior cyber security instructor at Focal Point Data Risk, examined some known, and more importantly, some unknown risks, with regard to personally identifiable information (PII), payment card data and other guest and employee data. It’s not just unsolicited email messages and questionable links that open the door for a breach. “While many machines are hard to breach remotely, breaches are happening constantly,” he said. “(They ) take advantage of people’s natural inclination to trust or help.” Techniques include impersonation, borrowing authority, bonds of obligation (not just blackmail) or affection (shared experiences, attraction), and fixed action patterns (conversations, front desk people and their activity).
 
As Hay said, “A healthy dose of skepticism will keep you safe.”
 
Session 7: Mini-sessions
 
Throughout the day, a few of the long-time attendees were selected to lead some mini sessions that promoted open conversation and debate about myriad topics. Mark Holzberg, EVP and chief commercial officer, Cloud5 Communications, led the mini-session on “Build, Buy or Partner.” This discussion provided a forum where the attendees openly discussed their motivation toward developing partnerships – including a comment shared by Luis Segredo (founder of MTech which was purchased by Newmarket, and which in turn is now owned by Amadeus) where someone had told him, “Life is too short to work with people you don’t like.” 
 
Later in the day, David Chestler (at the date of the event, Chestler was EVP, SiteMinder) focused his mini-session on forecasting revenue. As he teased, “How can we focus on the good? We’ve already seen the bad and the ugly.” He described how having technology “provides the wisdom of data,” when figuring the costs of customer acquisition, etc., but he said a more holistic platform would be helpful. Sales develop into sales; building your organizational growth allows you to generate leads, and using mathematic equations, you can come up with a really good number and make a better forecast. 
 
“You start to rely on your data a little more (with regard to) your sales leaders… the more they are on top of their sales calls, the more on top of your pipeline you’ll be,” he said. Chestler also stressed the importance of communication with his sales team. “One-on-ones are critical… if you don’t know what your sales goal is, you can’t be held accountable at the end of the year.”
 
In the last mini-session of the day, Sherry Marek, vice president, Datavision Technologies, covered a topic near and dear to the group – finding, recruiting and retaining not just good, but great employees. This mini-session proved a highly interactive one as many shared experiences with the personnel side of their businesses.
 
One recommendation Marek had was to observe prospective employees out in the real world. “Take them out to dinner and see how they interact with service people,” she said. Marek also is very involved with her team and creates a family environment with not just monetary incentives, but events and social gatherings from bowling to ice cream breaks to going to the driving range as a group. But she said, “It’s not just the beer, ping pong and foosball; it’s who’s going to mentor me.” Staying connected to her employees is important to her and her executive team.
 
Holzberg agreed. After distributing an employee survey, he found employees weren’t necessarily focused on compensation, it was more about communication between different groups. “Open communication is a driver, and more training,” he said. 
 
And, even in the technology world, the typical academic requirements don’t necessarily come into play. Don Hay of Digital Alchemy took a gamble on a highly talented 18-year-old; he is now 23 and Hay’s chief software architect making six figures.
 
Marek noted that 80 percent of her employees do not have hospitality experience. She said it’s not that they need it before joining, but they do want the knowledge. She has facilitated training for her team to understand its customers better – from jeopardy games to other formats. “They want to understand it because they spend most of their day working,” she said.
 
Another area where companies invest is the office space itself. Rafael Cardozo of Tambourine found that after investing in the space where they work by “making it sexy,” his employees felt a sense of pride.
 
Session 8: Operating a Global SaaS Business in the Age of Data Privacy
 
International data privacy laws… there, we said it. It is of the scariest parts of doing business globally in this day and time. But luckily, Chris Olsen of Wilson Sonsini Goodrich & Rosati, a practice that focuses on privacy, cybersecurity and data security issues, was on hand to shed some light on this very topical issue. In addition to his role at his current company, Olsen is also the former deputy director of the Bureau of Consumer Protection (BCP) at the Federal Trade Commission (FTC). Topics covered include U.S. oversight of privacy and data security, the EU/U.S. Privacy Shield and what it applies to, standard contract clauses and jargon, general data protection regulation (GDPR) data transfer and other areas affecting global businesses and their data across borders.
 
In the United States, the Federal Trade Commission (FTC) oversees privacy and data security; this means it is tasked with enforcing the Privacy Shield (cross-border data transfer framework). Other jurisdiction in some cases includes the Federal Communications Commission (FCC) with regard to hotels, and state attorneys general in select instances.
 
He described some of the more recent FCC cases within the hotel industry – most dealing with Wi-FI or hotspot blocking or the circumstances around this activity – including Smart City Holdings, Marriott, MC Dean and Hilton (failure to cooperate in an investigation).
 
One of the most popular hot buttons during the session was that of data transfer. Transfers of data involving EU citizens are subject to Privacy Shield of standard contract clauses. Additionally, as Olsen said, data processors in EU may also be subject to GDPR. He also examined those data transfers outside the European Economic Area (EEA) to “non-adequate” countries and which qualified under that interpretation.
 
Olsen examined the Privacy Shield in greater detail (which replaces the invalidated U.S.-EU Safe Harbor), from data integrity and purpose limitation to recourse, enforcement and liability. He also briefly covered standard contract clauses – especially those for processors, and GDPR for service providers. (Note – Olsen said, service providers acting as processors have limited obligations under the current EU Data Protection Directive. However, as of May 25, 2018, the Data Protection Directive will be replaced by the GDPR. “The GDPR is a game changer,” Olsen said. “It will significantly affect service providers.”)
 
From smart TVs that track viewing habits to voice recognition products that record voice data, Olsen posed, who is collecting what, how is it being used and how do privacy policies apply.
 
His takeaways included identifying key clients and assessing whether they are Privacy Shield certified. Additionally, he recommended reviewing these client contracts, preparing for revisions and reviewing GDPR obligations (if applicable).
 
Session 9: Annual Customer Insights Onstage – CIO Panel
 
And last but not least, we come to probably the most popular session of this conference each year, our customer insights panel – the CIOs. Participants included Ken Barnes, CIO, Omni Hotels & Resorts; Shannon Knox, vice president, Hilton; and Jim Lamb, CIO, Interstate Hotels & Resorts.
 
Not only did the panelists review current technology projects and those on the horizon, but the audience members – all technology providers, had the opportunity to ask them directly about vendor relationships and tips to effectively reach the CIO.
 
What the Event Means to Technology Providers in the Hospitality Industry
 
We hear time and time again that the attendees get so much benefit from the event.  “I look forward to the Hospitality Upgrade’s Executive Vendor Summit every year because it provides a unique way for vendors to collaborate and strategize without the distractions of our day-to-day routines,” said Heide Werthamer of Edge Communications. “Where we may typically find ourselves competing for the same client, this event focuses more on the industry, where we are now and what we see for the future. This is a forum where we can openly discuss our challenges and celebrate our ‘wins’ in a relaxed, fun environment.”

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