The State of the Hospitality Technology Industry: A Roundtable Discussion with a Panel of Experts

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June 01, 2014
State of Technology
Geneva Rinehart

Hospitality Upgrade Managing Editor Geneva Rinehart assembled a distinguished industry panel discussing some important trends in hospitality technology and the state of the industry during a recent podcast. Joining HU were John Burns, Jon Inge and Jeremy Rock, each with a specific point of view within the industry. Mr. Burns is our resident distribution expert, Mr. Inge focuses on property systems and Mr. Rock specializes in infrastructure. While these areas overlap and intersect, each expert has a unique perception on the current state of the industry. We started our discussion with some overall observation questions. The podcast is available for download at: hospitalityupgrade.com/11TechnologyTrendsInTheHospitalityIndustry.


Q1 From your perspective on the industry, what technology is available today with the potential to significantly improve operational efficiency and guest satisfaction?  What is the industry overlooking?

John Burns: I don't so much see systems that are not implemented, but rather systems and technologies hotels have on board already that are being under used.  For the most part awareness of the existing systems’ capabilities is far below what it should be. How can we train staff so that these features are used on a consistent basis? 

Second, a comment about hotel websites. In many cases, the information is currently unappealing, with lackluster descriptions of the hotel and of the individual rooms.  We ask travelers to select our hotel but in too many cases, there isn't a strong, compelling reason to do so, not at least in terms of appealing photographs and persuasive phrasing on the website.  In too many cases, the same photo is used for every room type. There isn't a strong differentiation between one room type and another to suggest to people that there is merit in moving up to a more expensive room. 

Jon Inge: There is so much functionality in every system that never is explored; we really could make a difference by exploring what is available. All the same, there are definitely lost opportunities in staying with older systems well beyond their most effective use date. Newer systems give much more comprehensive and accurate views of their guests and the operation as a whole. 

This in turn leads directly back into guest service; having an accurate guest picture and then really catering to his or her needs makes a big difference. 

The other thing that has changed, or that people don’t look at enough, is the impact of good user interfaces. Older systems can be really awkward to use; many modern systems have more thoughtfully designed user interfaces that guide the staff through what they are doing and present just the right data at the right time for each particular guest interaction. It’s not just the more complete data presented in the right context that makes the difference in guest service, it’s also the added confidence the staff gains from being able to trust it.

Jeremy Rock: We often keep older systems on board from habit instead of looking at something that's newer, more efficient and more interactive. 

The world is changing and we need to include more mobility and the ability to interact with guests through different channels and technology. It used to be just the younger generation that was using mobile devices, but now it's really across all generations. We need to focus more on social media; how we sell the properties is just different these days.

Advancements
Q2 What is one of the most significant developments or advancements in your area of focus over the last several years?
  

John Burns: The remarkable growth in use of mobile devices is where I would begin,  also I would include social networks and the impact they have had, in particular TripAdvisor, in bringing transparency to the hotel industry, in revealing the best players. But at the top of the list I would put the emergence and strengthening of online travel agencies.  I think this has been a quiet but significant revolution for hotels – and not one that we have fully acknowledged or dealt with very successfully. 

The reality is that online travel agents and now metasearch engines (and maybe Google as well with its steadily increasing hotel shopping functionality) have fundamentally changed the hotel sales marketplace. These organizations have been very good at convincing the traveling public that there are better places to look and reserve than the hotel company's brand website. This is a seismic change with huge implications.

Jon Inge: From my viewpoint, one of the most dramatic things has been the improvement in interface capabilities between systems, based on XML messaging. This has made a massive difference in how we exchange data across a property’s multiple systems and how we can better accumulate it to build a more complete and more accurate picture of the property and of the guests' activities. 

I'd put the development of better screen design in there as a significant change as well.  There has been some excellent work in learning where users need to get the information, how much they can use at any one time, and how it should be presented so that they can grasp it quickly and use it to interact with the guest in front of them. 

Jeremy Rock: Internet access has become the No. 1 driver within hotels. If you don't have it, it's a big issue. The number of devices that are now being connected within the room and the complexity of the in-room technology has placed greater demands on bandwidth requirements. Additionally there is the issue of the converged network requirements driven by the need to leverage the hotel’s IP network. We have to make it seamless for new systems and devices to communicate over these networks.  In order to satisfy the guest, we must have the right infrastructure in place and a significant amount of bandwidth available. Another area of focus is cloud-based applications and providing the ability to connect to them. 

Infrastructure
Q3 Let's continue to talk about infrastructure. How can hotels keep up with the insatiable Wi-Fi demand?
 
 
Jeremy Rock: The old wireless networks just don't have the throughput and capacity to handle the demands being placed on them today. Density and coverage requirements have increased to accommodate greater demands by users and applications. Many people thought that we would be moving away from provisioning hardwired cable in buildings, but the reality is, you need the cable to support a robust wireless infrastructure, not only for the guests, but in order to run mobile applications for administrative and operational teams. 

The other side of it is making sure the property is equipped with an infrastructure capable of providing an ever-increasing amount of bandwidth. It's a question of designing the network correctly, selecting the right partners, and engineering on the front side to make sure you have the wherewithal to address the needs going forward. You're going to start to see more offloading of network traffic from the cellphone companies onto the wireless networks. Hotels represent a good opportunity for the cellular companies as partners. Given this scenario I think most hotels are going to have to invest in upgrading their infrastructure and wireless networks.

Jon Inge: Infrastructure is critical here and I think for new-build hotels, the fundamental approach has to be a fiber optic network around the hotel. Copper has expanded its capabilities extensively over the years and it's amazing how far it’s progressed, but every improvement now is incremental and progressively more expensive. Going to fiber, at the moment, is about the same cost as going with copper and it has far more potential for handling future demands than copper will ever have. Wi-Fi coverage and bandwidth are critical; you've simply got to have Wi-Fi everywhere.

Jeremy Rock: While the access points may themselves have an increasing ability to deliver bandwidth and wireless connectivity, you may be limited in delivering enough throughput to them via the rest of the active equipment and other infrastructure constraints – not to mention limitations on the amount of bandwidth coming into the hotel. There is a great deal of talk about bringing fiber to the room, especially with the new focus on GPON (Gigabit Passive Optical Network), but the cost of the various components and other construction-related costs need to be carefully considered too.

Jon Inge: Hotels need to constantly upgrade infrastructure to keep up, to take advantage of newer technologies that do improve bandwidth and coverage. Second, some sort of tiered pricing will be an inevitable outcome to support those guests who want to stream movies in the hotel room as opposed to guests who just want to check email. Maybe in 10 years the technology will have advanced to the point where we won't even think about this issue at all, that Internet access will be available as universally as electricity or hot water in hotels, but we’re not there yet. 

John Burns: I sympathize with hotels with respect to the cost of these ongoing upgrades and the difficulty in estimating just how much bandwidth is going to be required.  That said, I think bandwidth is mission critical. The lack of good strong Wi-Fi service is a deal killer for hotel guests. 

Network
Q4
Who owns the network and who owns the issues that are affecting the deployment of converged networks?
 

Jeremy Rock: This is a big problem right now.  I see many wireless service providers actually supplying the network and in most cases, hoteliers are trying to save money by using it as a converged network.  I know that the directives from some of the corporations, flags and brands are to have separate networks, but in reality, that's not really what's transpiring.

All the in-room technology that needs to be connected, from online electronic door locks to energy management systems and guestroom automation, is all connecting to the same network, and in many cases, communicating through the wireless network as well.  It's very important that we understand who is actually deploying the network, who is designing it, and who is supporting it. 

In most cases, that's turning out to be the wireless provider.  I would encourage hotels to make sure the network is engineered to their specifications, taking into account all of the security measures, PCI compliance, etc., because of all the devices being carried and connected to the network including not only the guest Internet access but also rapid response systems, point of sale and PMS connectivity, etc.  We need to be cognizant that this is probably the most important part of the infrastructure in the hotel, and hoteliers need to spend the time, effort and research making sure they're fostering the right solution provider. 

Jon Inge: In addition to the wireless providers, companies such as door lock system providers or guest request application providers can provide their own Wi-Fi networks throughout the hotel for their own products. While that can be an attractive installation option for the property, it leads to all kinds of complications, as to who actually is responsible for maintaining it and what other services can run on that network. 

Systems
Q5 Let’s talk for a moment about some issues that are affecting everyone; the challenges being faced by the sunsetting of Windows XP this year and then Windows Server 2003 next July.
 

Jeremy Rock: Some people aren’t concerned about the fact that Windows XP is no longer going to be supported and are planning to upgrade over a period of time. Others have been kicking it into gear, upgrading and replacing their XP computers right now. One of the key fears is that the delivery of security patches for Windows 7 and 8 was scheduled for release in May, and thereafter may provide hackers with clues to where deficiencies still remain in Windows XP. Several interface computers and other key workstations attached to the network may still be running XP and could be vulnerable. 

The next milestone to be concerned about is Server 2003. There are certain key point-of-sale systems and other systems and networks may be affected by its scheduled sunsetting in July 2015.  These properties will either need to upgrade the operating system or move/upgrade to another application. 

Jon Inge: This feels a bit like Y2K all over again, but it's not as cut and dried as that was.  There was no doubt when Y2K came around that some systems would not work properly and would not report dates properly; in this case, we're just looking at potential breaches and potential risk.  As we've seen with the slow rate of PCI adoption, a great number of people are waiting for something to trigger a need to upgrade away from XP.  Even if they do, of course, it's no guarantee that they won't get breached some other way in the future. 

It’s really a question of risk management.  I think we really need to focus on raising awareness of the risks and making the migration path as smooth as we possibly can. Fixing Y2K made the problem go away, once and for all, which is one reason people were motivated to do it.  This isn't the same situation; this is not going to take away the problem, although it is going to reduce the risk significantly. 

Mobility
Q6 We touched a little bit on mobility, and that is a very hot topic. When do you think that guests will be able to use their cellphones as door keys, to control anything within the guestroom or to be part of an all-in-one amenity during their stay?
 

Jeremy Rock: It's going to be a little while. For starters, cellular technology is currently not standardized across all manufacturers, let alone countries, and then there are security considerations and other costs. Most phones operate on different protocols and different standards; even the RFID components on them, for example, would need to be standardized for some of the technology to work effectively.

Jon Inge: You can already do a lot of these things on your phone now, but not in any unified way. Many apps will handle guest requests both before they arrive at a hotel and while on property, looking for room service, etc.  These apps really need to be interfaced into the back-of-house systems to provide the best outcome, and there are so many different ones in different hotels that it becomes a complex challenge. It is the same thing with controlling the room lighting, the thermostat and the drapes. It's certainly doable but with so many different systems in the hotels there's still no common interface; guests can’t yet download one app that will work in multiple properties.

I think what we’ll see is a move to a different, more universal approach to this kind of technology. It will probably be Bluetooth-based for device communications because Apple® is not going to put NFC on the iPhone®, and that immediately locks out half of the traveling public. We may see more interface devices that will take whatever messaging is required in a particular property and convert it into a universal set of commands that can be used by a generic app on people's phones. 

The door lock situation will improve over time but there is a great deal of retrofit required on existing door locks, most of which are still mag stripe. They will require some sort of adapter to use Bluetooth or maybe a 2-D bar code scanner as used for airport check-in. 

John Burns: I would zoom out on this question a bit and think less about the specific technology and more about the competitive differentiation opportunity for hotels who are aggressive in empowering people to use their mobile devices.  Everyone has a mobile device.  Increasingly they can be used as wallets, as GPS, as photo albums, music libraries, personal assistants, deal locaters, you name it.  It can track your flights and do a thousand other things.

I think there is an opportunity for the hotels who are aggressive, who are going to spend the money to differentiate themselves as technologically in the lead, attuned to guests, attuned to the people who are the early adopters. Actually, these are now more in the mainstream and they are anxious to use their mobile device as an appliance of real convenience. It's to the hotel industry’s detriment if we say we're not going to replace our door locks until the handles fall off. That’s a risky position.  

Mobile
Q7
What advice would you give to properties who are trying to incorporate mobile?
 

John Burns: When hotels are talking about traveler or guest interaction, they should stop thinking about the PC as the primary interface. We need to reverse it, to take it from PC first and mobile device second to thinking first and foremost about how our presentation and value proposition appears on tablets and mobile devices.  If we do those two areas well, we'll be more than adequate on PCs.   

Jon Inge: A recent survey reported that the conventional wisdom that people only use their phones to book hotel rooms at the last minute isn't actually true.  They are using cellphones more and more to book further ahead, which makes it absolutely imperative that you have the right presentation on the phone to make this easy – easy to find a room, easy to book it.  This design discipline is also really good for the rest of the industry; make sure that you are thinking what you want the user to do with the app on each device and focus on providing enough information in an appealing way to make that simple.  This applies to the admin systems as well; there's so much you can do with mobile devices.  Obviously tablets are good for mobile check-in around the lobby or up in the room, as long as you can work out how to get the keys to the guest, which is still an ongoing challenge.

Two things are really important if you're going to provide apps to help your staff interact with the guest.  One is make sure that the information presented on that app is a useful data set for that particular guest interaction, one that’s focused and doesn't try to compress everything that you know about the guest onto one small screen.  The other is to train the staff in the value of eye contact; otherwise, as far as they know you could be checking Facebook.  Interaction with the guest means exactly that; training is as important as providing the tool itself.  

Jeremy Rock: I'm seeing a lot more interest in the use of hand-held tablets and mobile devices in operations for a number of different areas and reasons. But newer technologies coming out within the next six months promise to be a lot more effective.  I think we're going to see quite a game change in some of these areas. 

Q8 Some new requirements are coming in October 2015 and there's a concern about some of the proposed solutions that will be available or are available now. What is your advice around securing personal data, and what concerns should properties and hotels be aware of in the coming year? 

Jeremy Rock: EMV or chip and PIN is being mandated for October 2015 and could have a financial impact on the merchant. Depending on the extent of the solution this could prove to be expensive. What is concerning given the time frame is that I don’t think we as an industry have an effective game plan that has been widely vetted by the various point-of-sale providers, the primary systems affected by this requirement. I wonder about the number of systems needing to be changed out; what’s the solution, how is it going to operate, how is that going to affect the operation?

Also, we have PCI 3.0 coming. This promises to be more restrictive and will have an effect on the use of mobile technology as it focuses on emerging technologies and mobile payment security guidelines. 

John Burns: In talking about data security we tend to think about PCI and credit cards, but I believe we need to broaden our focus and think also about what’s known as PII, personally identifiable information. We hold a remarkable amount of this in our hotel systems, most of it unencrypted, some of it with relatively weak barriers to access, and we need to think more seriously about securing it. I suspect at some point we are going to have a PII incursion that grabs a great deal of that data and will be a significant problem for the hotel brand that suffers it.   

Jon Inge: I think that the PCI viewpoint with credit card data has been addressed reasonably well, given that hospitality is no longer the No. 1 target for attacks. I am also seeing activity from point-of-sale vendors improving the security on mobile devices and bringing in EMV certification. The whole PII issue is extremely thorny for the hospitality industry, which needs this information on guests to recognize them and give them the service expected. Keeping that information secure without hampering the hospitality aspect of what you're doing is going to be incredibly challenging. 

Even if it’s regulated, there’s still the industry’s adoption rate to think about. Canada has had chip and PIN technology on credit cards for years, and yet it's still only in the last year that credit card and hotel technology companies have developed interfaces that will handle those cards in credit card transactions.  There doesn't seem to have been a demand from the hotels to implement that technology until quite recently, even though their guests may have been carrying the cards for a long time. I fear that it is going to take a severe data incursion to wake people up to the problems and really drive adoption. It's an ongoing challenge; I don't see us ever getting totally on top of it, and it’s something that we'll have to address continuously. 

Jeremy Rock: PCI 3.0 is going to be more restrictive in what it does and what it requires. As for PII, we also need to be cognizant of the rules and regulations within not only your local ordinance or the state, the federal requirements, but also internationally. It's going to be a little bit of a challenge for those companies that deal with a lot of international guests to be able to standardize this particular issue. 

Jon Inge: I see the challenge here as managing the privacy requests of individual users, who may want to restrict the use of their information using some kind of generic app they might have on their phone. They might want to share only some travel information with some companies under specific circumstances for a defined period of time, data that might be very useful in support of a travel itinerary, but doesn’t need to be shared outside that immediate event. Reconciling that with the demands of marketing folks and hospitality operations companies that really want all of that information to help drive their own business and provide good service is going to be very interesting.

CRM
Q9
What are the critical factors that you see in making CRM work?
   

John Burns: There are so many components in a successful CRM operation.  We need to think in terms of disciplined data entry. It starts at the reservation process with getting the required data and making sure that its entry is consistent with hotel and brand data format policies. Then the challenge becomes aggregating that data, de-duping it, cleansing it so that it becomes a series of usable guest profiles that we can put in front of staff. Once achieved, if it can be achieved, it also becomes a huge resource within digital marketing, enabling very targeted contact with people who are receptive to our messages.

Finally comes delivering the appropriate recognition on property. We need to make sure that we are accumulating and stewarding good, clean information that we can use successfully in our CRM and guest recognition programs.   

Jon Inge: CRM is probably the most strategic system that any hotel operation can have, given that it holds all the information that it has on all its customers. It takes a great deal of training and incentives to encourage the staff to get the data in as completely and accurately as they can. It is a constant exercise, but essential. It's relatively straightforward to accumulate information, de-dupe it, clean it, and keep it accurately, centrally. It's much harder to get it back out into the field in front of the people who are actually interacting with the guest. 

Jeremy Rock: We are collecting all this information, and it just becomes unwieldy to use. I think that most hotels, especially independents, don't do anything with it. There’s also information we are accumulating in digital format from other systems such as CCTV and security systems. This can impact things if it gets into the wrong hands. We need to be sensitive across the board, not just to Big Data.

Jon Inge: It's so important to keep data clean and accurate. People now expect you to know a certain amount about them and their preferences. If you get it wrong, the impact is much worse than if you didn't try to do it in the first place, because you've built people's expectations for better service. Misspelling their name or getting their birthday wrong are critical errors. 

Q10 If you were to offer just one piece of advice, what would it be?

John Burns: I'm going to go back to my distribution focus and repeat that it is to provide an even more intense focus on the website of the hotel. We do a poor job of communicating the reasons why someone should stay at our hotel, and of incorporating local information. People don't come to stay at the hotel just for the hotel. They come for the community. The hotel is the portal to the local area. There is an important strategic opportunity for hotel operators. 

Jon Inge: To reference Douglas Adams’ “The Hitchhiker's Guide to the Galaxy,” don't panic. Things are changing fast, we are seeing an awful lot of interesting technology developments and it can seem overwhelming, but it can make a great difference to operations, too.

Seriously though, my core advice is to focus on infrastructure. We don't really know what applications are going to be coming down the pike. We do know that they are going to need to communicate with each other. We don't know how much bandwidth they're going to need, but they'll need a fair amount. If you have anything to spend on technology at the moment, put it into the infrastructure of your hotel. That will allow you to add new applications and new interconnections between those applications as they become available. It's absolutely fundamental.   

Jeremy Rock: Infrastructure is key. Guests and hotel operations are targeting wireless technologies and so everything within the guestrooms, everything the guest is carrying, and the way we are actually operating throughout the hotel is turning to a wireless environment. Unless you future-proof your property, you won't be able to keep up with technology. We know that technology is ever changing, we know that that there are all sorts of new technologies that are going to be deployed in the coming years. However, it’s all going to require some kind of platform for it to operate and be deployed effectively, and this is where having the right infrastructure is key.   

Q11 What might we see in your area of expertise five years from now? 

John Burns: I see something that is potentially disturbing to the hotel industry, and that is a change in our business model. I think if we stand back and look at the impact that online travel agencies and meta-search engines, and the search engines themselves, especially Google, are having on our marketplace, it's not impossible that in five years we will have moved even more profoundly to a wholesaler/retailer model in which hotels give the vast amount of their inventory to retailers – online travel agencies and their peers. I think there is a very real possibility that online travel agencies will move from somewhere around 10 percent of our sales, to a significantly higher proportion. That has many implications, not least of which revolve around the ultimate profitability of hotel operations.   

Jon Inge: I foresee consolidation in this industry and the adoption of more widespread, more fully integrated systems. In five years, maybe we won’t be very far down that road, but we’re definitely going to see a trend toward it. I see pretty much every system being delivered from the cloud; there are just too many issues with trying to maintain them on property.  People will by default go there for their integrated solutions, either from one vendor or multiple vendors.

Jeremy Rock: From my standpoint everything is tied into wireless communication. I think most applications are going to reside in the cloud, and the infrastructure within the hotels, the amount of services and the space required are going to dissipate down to almost nothing.  It's all going to rely on solid bandwidth coming into the hotel and good infrastructure. Five years really isn’t that long, though.
We’re likely to find out that the existing legacy, infrastructure and lengthy decision processes will hamper it, but I do see it as the trend. 

HU: Thank you to our panel of experts. We appreciate your thoughts on these questions.
 

©2014 Hospitality Upgrade
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Miraval Resorts Focuses on Guests' Mobile Booking Experiences
Earlier this year, Miraval Resorts launched a new responsive website. Wanting to optimize all available real estate, Miraval did not want content blocks to be too large or cumbersome for the user to read. With its partner Interactive Sites, they created multiple column layouts, accordions, sliders, and a use of negative space to imply structure, advanced jQuery and JavaScript techniques, the teams were able to achieve a modern look while keeping an organic and fluid user experience. These techniques were implemented to keep site speeds fast, and site performance high – all while keeping in mind that browsers, screens and devices are not created equal.

The site was designed to allow users to quickly find the area of the resort that would speak to them and assist them in planning their journey.

The desired results of the redesign were to increase engagement, online revenue, SEO optimization and recognition, and allow guests to efficiently find information about the Miraval experience. In the first 60 days after launch, Miraval saw results that exceeded initial estimates. Overall revenue increased on every device, and in many cases more than double. Most notably, a 79 percent increase in desktop bookings and 50 percent increase in booking revenue was realized. Additionally, tablet user rates also increased and bookings and revenue increased 52 percent and 29 percent respectively.

Purposeful placement of content and the combination of inspiring photography has proven to keep the guest on the site, reducing the bounce rate by 10 percent.

Additionally, Miraval increased its brand presence by redesigning the PLAN YOUR STAY area of the website. This new section now provides guests with a one-stop shop to finding and researching all there is to do at the resort. The website gives the user an organic and exploratory approach to engaging with the site. With Miraval’s wide range of activities and services, the user can quickly research and review each area of the site without being overwhelmed by content. Miraval has found this approach to be most successful and has increased its user duration on the site.

Knowing that the site was built with a long-term scope, Miraval can focus on enhanced website capabilities and integrations.

 

How Sweet It Is
Dolce finds real benefits from modern mobile apps

Submitted by Jon Inge
With an interesting and diverse mix of 21 hotels, resorts and conference centers across North America and Europe, Dolce is always looking for ways to try out new technology where it can see a potential operational advantage. This paid off remarkably well recently when it was the first hotelier to try out Micros’ new Front Desk Mobile for Opera 9 at its Aspen Meadows Resort.

“We first saw an opportunity for remote check-in at Aspen airport, which is just 10 minutes away from the property,” said John Edwards, Dolce’s VP of IT. “We stationed an agent there to meet incoming flights, carrying the pre-assigned room keys for the expected arrivals. They were checked in, given their keys and could then go directly to their rooms when they reached the property. It worked well, the tablets proved to be reliable and affordable, and we now have them in seven properties.

“Tablets are not going to replace our main systems, but they supplement them very well,” Edwards said. “Given their affordability we’re able to keep a couple at the front desk for use as and when needed, and soon found other ways to use them to make hotel operations more effective. For example, at our Napa property we use them for remote check-in at our evening wine tasting receptions on the front porch, which makes for a good, low-stress arrival for our guests. If we have a heavy conference group checkout scheduled, we’ll take two tablets and a printer down to the area outside the group’s breakfast room, and check delegates out as they go to their first morning session. This really helps housekeeping get an early start on room cleaning.

“It helps that we have strong Wi-Fi coverage throughout all our properties as a corporate standard, which encourages us to be flexible in where we might use tablets. But it’s not just the mobility that helps; the new user interface has also made quite a difference. Front desk training has dropped from two days to 2 to 3 hours for new hires. Further, if we have a heavy group turn in the morning, we can give a tablet to a bellman or van driver with a few minutes to spare, pop up the list of due-out rooms, ask them to quickly go and check each one, and if it’s vacant, mark it as checked out. None of them have needed more than a couple of minutes training, and it makes a real difference to housekeeping.”

So what’s next? “We already have Delphi and HotSOS running on the tablets,” Edwards said. “The next step is to find the right tablet solution for F&B, so we can take charge payments at the remote cash bars we use for outdoor receptions. Once you have a good, reliable and flexible platform, the possibilities keep expanding.”



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