Interview with Shannon Knox - Vice President and CIO, Destination Hotels & Resorts

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June 01, 2005
Face to Face
Richard Siegel - Rich@hospitalityupgrade.com

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© 2005 Hospitality Upgrade. No reproduction without written permission.

Note from Rich:
After 13 years of doing interviews with CIOs I have come to realize that some companies overwhelm their properties with technology initiatives, others underwhelm and then there are companies like Destination Hotels & Resorts—Destination dictates certain technologies to ensure that as a company it succeeds, but also realize that with so many diverse properties, each property has its own unique needs. Shannon is another emerging star in our industry who started at the bottom and worked his way to the top. Enjoy another great interview.

Rich: How long have you been with Destination Hotels & Resorts?
Shannon: I started with this company 10 years ago right out of college.
 
Really?
Yes. I started at the hotel level in Sunriver, Oregon. I began as a general cashier. I counted money for about three weeks, then was promoted through accounting. Six months later I realized that I did not understand accounting.
 
(laughing) We have a lot in common.
Then I moved into the IT department at the hotel and did that for two years. Destination Hotels & Resorts was creating an IT department at the corporate office for the first time and I moved there.
 
You moved from Oregon here to Colorado?
Yes.
 
What happened when you arrived?
I came here in a purely technical role to help get IT projects launched.
 
For example?
I helped with getting the wide area network in place, setting up e-mail and those kinds of things. About five years ago I moved into the role I’m in now, which is vice president of information technology.
 
I’ve noticed our industry seems to be using the vice president title more and more today vs. the CIO title.
We don’t have a lot “C” titles in our organization. Our president’s title is president and chief operating officer, but he is the only one with a “C” in his title. In general there are not a lot of “C” titles in our company.
 
How big was your IT group when you took over?
When we started there were three of us in the department. We had a vice president and two people in a technical role; so there were three of us when we started the department. We now have 10 at the corporate level and another 30 at the hotel level.

What type of properties do you have? Do you manage only or do you manage and own your properties? Destination Hotels and Resorts (DHR) is really a hotel management company. We’re owned by a vertically integrated real estate company based in Los Angeles. Lowe Enterprises owns us and we are the hotel operating entity. Lowe Enterprises does other things such as commercial and residential real estate, retail and other things. We are the hospitality arm, therefore, the majority of our capital that we have comes via Lowe Enterprises. Typically, we manage on behalf of capital that’s managed by Lowe Enterprises. We do have some contracts with individual owners which make up approximately 20 percent of our portfolio.

DHR has all different kinds of properties, correct?
Yes we do, including conference centers, resorts, condominiums and city hotels. We are a little bit of everything, primarily non-branded. We do have two flagged properties, the rest are non-branded. We generally see the property as its own brand rather than trying to put a flag on top of the property. We manage the uniqueness of the property.
 
What are there challenges to not flying a flag?
There are certain people who make their stay decisions based on the points they are going to get.
 
I’m not one of them.
That’s good to hear. We like to hear more people saying that’s not the way they do it.
 
But, frequent traveler credits can often motivate travelers.
True. We see points as a losing game in our mind. Everybody is offering points now and people are carrying around 15 cards with them with 15 different chains. Most people can’t figure out how to use all the points that they have accumulated. So we haven’t really given into the point’s game. We try to get people to stay at our properties because they like the properties and have a good time there, not because we are giving them points.
 
Let’s talk about your IT department here in Colorado. What type of things are you doing?
Primarily, we do corporate level projects – systems that we have standardized and/or centralized. We implement and maintain those systems. We also provide secondary support to our property IT people. Destination Hotels and Resorts is a decentralized company. We don’t have standard operating procedures. We hire smart people at the property level and we become a support structure for them.
 
That’s interesting, especially as you continue to grow.
We think that the people who are at the property live technology day-to-day and understand what their property needs from the capital that needs to be put into the property to the rates that they should be charging and to the groups they should be bringing in. We try to become a support structure for them and do things to help the properties rather than tell them how to run. That’s a company philosophy, not just an IT philosophy.
 
Has it always been this way?
Five years ago when I took the technology head role we were 100 percent decentralized from an IT standpoint. The properties made the decision which property management systems to put in or what financial system they were going to have. The need to share data to the corporate level was a complete afterthought.
 
So how did you get the property data?
Five years ago we had people e-mailing spreadsheets with daily report information and someone would hand-key a consolidated report for our properties.
 
Weren’t those the days? (smile)
They were. Sharing data between properties was just unheard of.
 
So then what did you do?
We made the decision five years ago as a company that there was a need to share data at different levels. We started making system changes around this new philosophy and centralized on a common financial system. After the financial system was in place, we moved on to the front office and group sales applications.
 
Where are you with the front office applications?
We are nearing completion with PAR Springer-Miller in all our hotels.
 
What about your financial systems?
The financial system was the first thing we centralized. About four years ago, we bought a package called SQL Financials from a company called Clarus, who shortly after we bought it sold the application to GEAC. Since then we have been supporting the application ourselves. We are in the final stages of selecting a replacement that which will include an HRIS system that we do not have at all right now.
 
How far along are you in choosing the new system?
We will have a pilot hotel rolled out this year and then subsequently, the remaining hotels will come on next year.
 
You have some great and diverse properties. How do you handle group sales?
We have five, national sales offices throughout the United States and they sell primarily to large clients. However, that’s not the primary focus of group sales. The primary group sales happen at the hotel level. Of the 160 or so sales managers, eight are considered national sales people. The rest sell their own property.
 
How about cross-selling among your properties?
We encourage cross-selling of our properties and have systems and procedures in place to do that, including a commission structure. The primary group sales are done at the hotel level, but then we try cross-sell to sister properties. If a group comes in and says ‘We’re having a sales conference on the East Coast instead of the West Coast next year,’ there is a lead generation application that we use to generate leads and the sales manager who handles the lead gets compensation for that.
 
What technology do you use?
We use Delphi for our sales and catering application. We also have an application from Newmarket that runs on top of Delphi called Delphi.net which integrates with the NetXchange application that integrates with the Delphi system at the property. A sales manager might get a call that a group won’t work for one of our properties but there are three other locations that it might work. They go into the system and generate a lead for the three properties that might work for and it integrates directly into the Delphi system and shows up as a prospect. The sales people at the individual properties take it from there.
 
You have some condo properties as well as hotels, right?
We have some properties that have both. They have a hotel component and a condominium component. We have four properties that have that mix and six other properties that are straight condo hotels. We operate our condo properties just like a hotel since they have the same needs as a hotel with the exception of our having to address owner accounting.
 
Is the technology different at those properties?
Yes, but that is because they are generally smaller. For instance, instead of having the standard Delphi system at each property they actually use the Delphi.net application as their sales and catering system. They do all the account, contact and inventory management through Delphi.net. It’s what I call Delphi’s lite version of what they offer. It is integrated into the system that DHR uses, but they do it a little differently than a full-service hotel.
 
What about front-office applications at the condo properties?
The condo properties have or will be using PAR Springer-Miller.
 
How many properties do you have?
32.
 
If they are looking for a new point-of-sale system, do they look on their own or do you encourage them in a certain direction?
We have a few systems that as a company we have standardized including property management, sales and catering, financial and some other ancillary systems. These are solutions with hard and fast rules and are the systems that will be implemented at the properties. There are other systems where we have a preferred vendor arrangement with and recommend these systems to our properties. We have a strategic relationship with these vendors and include some terms that have been negotiated at a corporate level, but it’s not a requirement to install, they are free to look at other systems if they want. The majority of our properties will go with the system that we have a relationship with. There are other systems that we don’t get intimately involved with, but we will assist where needed.
 
Like point of sale?
Yes. We don’t standardize a food and beverage point-of-sale system so we typically bid that out for each property and make a decision based on what we think is best for each property.
 
What motivates you to standardize a system?
It comes down to what systems we think are essential to share data. The three primary ones are the back office systems including financials and human resources, the sales and catering system and the property management system. For other systems, we use a cost-benefit analysis rather than choosing them because we think we need to gather critical information from them to share. We’ve made conscious decisions which systems we think are critical to standardize.
 
Has this worked?
Yes, remember we prefer not to tell our properties what to do with their systems. It goes against our general culture. We let our properties make intelligent decisions on their own with assistance from us.
 
How diverse are your properties?
The largest hotel we have is Pointe South Mountain Resort, which has 640 guestrooms, 115,000 of indoor and outdoor meeting space, a golf course, spa and water park as well as other features. We have others that rival it. We also have some properties that have several golf courses, not just one course like at Pointe South. But Pointe South, from the room size and revenue side, is our largest property. Our smallest property has 86 guestrooms.
 
Technology needs for a 640-room, full-service resort property can differ dramatically from your smaller, up-scale resort.
That’s exactly right, which is why if it’s a system like food and beverage point of sale, a property that has seven or eight F&B outlets has different needs than one that has one restaurant and bar but nothing else.
 
CRM continues to be a big part of the hotel industry. Is this something you are focused on?
Yes. We layer our CRM philosophy on top of our sales and catering system and our front office system. Our CRM efforts are generated here at the corporate office. That’s one of the main reasons that those two systems are standardized and data is centralized – to handle our CRM efforts. The need to have that customer data is imperative.
 
What about in-room technology at the property?
Because we have such a wide range of properties, what you expect at one property may be different than what you’d expect at another. We have some standards that we recommend and implement at certain properties but at other properties, we may or may not need the same set of standards.
 
For example?
The type of television you might expect to see at one property at a certain price point, might be different then the type of television you would expect to see at a different class property.
 
When it comes to things like televisions and in-room entertainment, when do you get involved?
When our design group handling capital projects with renovations or new construction and that kind of stuff gets brought in, that is when we get involved. We help make decisions.
 
And for in-room entertainment?
For the most part, we are a LodgeNet organization which falls under the category of a vendor we have relationship with but it’s not a mandate to our properties. Most of our properties have LodgeNet, except for a few very small condo properties that don’t have pay-per-view.
 
What about plasma televisions?
We are in the process of doing a total renovation at one of our properties and putting plasma televisions in every single guestroom.
 
Good for you.
There are other properties where we have plasma televisions in suites only. It depends on the property.
 
Putting plasma televisions in certain hotels can often justify healthier room rates, correct?
Yes. It’s all based on the market position of the property. If we think the property demands plasma televisions, we’ll put them in it. We will make the decision based on what’s best for the owner.
 
When wouldn’t you put in plasma televisions?
For example, we manage a Doubletree Hotel and in today’s environment putting plasma televisions into every guestroom in this property does not make financial sense.
 
Have you built any properties from the ground up recently?
Yes. We just built a hotel that opened this past summer in La Jolla, Calif., called Estancia La Jolla. That’s the newest property we have.
 
Did you do anything with technology that’s a little different from other properties because it was new?
It was much easier to implement high-speed Internet access when starting from the ground up, as opposed to retrofitting properties, which are typically what we do. Primarily we grow through acquisitions so we acquire the technology being used as well.
 
You must have loved a new build then.
Yes. You get to plan exactly what you want to do. The La Jolla property has wired and wireless high-speed Internet access throughout the entire property, including the outdoor space. We have a great deal of outdoor space there.
 
Offering wireless outdoors at properties, especially resorts, does it work?
It does now. There were some challenges in the beginning, but it is working well throughout the entire property now. Wireless always brings challenges.
 
Who are you using?
The La Jolla property is using Guest-Tek.
 
Do you believe the guestroom should be wired or wireless?
Our philosophy is that you should offer both everywhere, throughout the property and in the guestroom as well. We do not have that today. As we make changes to high-speed Internet access at the properties, that’s typically what we are implementing. There are still many customers that have requirements placed on them by their companies and can’t use wireless.
 
In your experience what kinds of companies have requirements against wireless?
Many pharmaceutical companies and financial services companies, in particular have that requirement, so they still need a wired service. Today wireless is becoming more prevalent in residential homes. When we are talking about in-room technology, one of the things we look at is what people use at home and we think that should drive decisions concerning what to put in guest rooms. As people become accustomed to plasma televisions at home they will expect it in their guestroom. As people have wireless networks at home they will expect wireless to be installed in their guestroom as well.
 
With the older hotels, are there many headaches concerning offering high-speed Internet access?
We have some properties that are 100 years old where we are trying to offer high-speed Internet access.
 
How do you deal with that?
We like to rewire the properties and put CAT5 in, instead of using DSL technology. But it’s not feasible in some old properties that have wire plastered in the walls. It’s almost impossible. Our general philosophy is that we would rather rewire than use DSL technology but will do both based on what’s best for a property. We had many more challenges three or four years ago, but today the technology is relatively stable and we don’t run into nearly as many problems as we used to retrofitting properties.
 
What else do you look at in the room?
One of the things that we look at every time is the telephone and what role the telephone is playing in the guestroom. Most people come to the hotel with cell phones, so what’s the point of the telephone in the guestroom other than wake up calls and room service? We struggle with whether or not a hotel even needs a two-line telephone in a guestroom anymore and whether or not we should we be putting IP phones in guestrooms.
 
Great point.
Telecom is one of the things that we really labor back and forth with as we build or retrofit a property.
 
So what are you doing?
Today we are still putting in two-line telephones and typically, a cordless and corded phone; one at the desk and one at the night stand. It’s the kind of a thing that we continually wrestle with— whether or not it’s still the appropriate model.
 
Do you think we will reach a point where there are no phones in the room?
If there weren’t the 9-1-1 issues, maybe you would not have telephones in the room anymore and a different communication method. It’s something that we have discussions about all the time and it’s something we don’t have an answer to. Hopefully, someone smarter than me will come up with the answer. (smile)
 
Your comment about not needing a two-line phone anymore is so true.
Mobil and AAA certifications are the only reason you have two-line phones anymore. They still require it for a four diamonds rating.
 
How screwy is that?
I agree. We should probably track how often the second line gets used other than when a guest accidentally hits the second line when picking the phone up to use it. It’s almost never the case anymore that somebody is actually trying to switch between having their laptop dialed-up and using the guest phone at the same time.
 
No one dials up anymore and hardly anyone uses the guestroom phone. What are the odds of having someone doing both?
I agree.
 
Is integration an issue today?
Integration is an issue at all levels. Integration is still an issue at the hotel level and at the corporate data center as well. There are companies or organizations that are dedicated to trying to get integration issues worked out such as OTA along with what HTNG is doing. Throughout the hospitality industry you hope and pray that there will be a light at the end of the tunnel someday. We believe that integration should be totally seamless. It is not that way today. When you are building hotels you still have boxes in the basement with serial interfaces. Integration is an issue that everybody is still dealing with.
 
Has it gotten better recently?
It’s starting to get better. There are vendors now trying to write to standards as opposed to writing proprietary interfaces. It’s certainly not close to being fixed, but it’s in the process of getting better and with the number of vendors we have developing applications using advanced technology tools, it’s getting better. It’s going to be a while before it is fixed, the good thing is that everyone in the industry sees it as an issue, including the vendors. With everyone understanding that it’s an issue, it becomes more important that attempts to solve the issue continue to be made. That’s the first step: admitting there is a problem. We have gotten over that point and it is now a matter of fixing the problem and figuring out the proper way to do this.
 
Very well said and also very realistic. Earlier we were talking about voice-over IP. Do you see it in the guestroom?
Yes. You know my take on voice-over IP is that it is still more expensive to implement in a hotel environment. What we’re trying to find is the reason to implement VoIP. We’re waiting for somebody to come out with a killer application that says, here’s the reason why VoIP is appropriate or, at some point, the cost for implementation will be below the analog implementation. It certainly hasn’t happened yet, so we are looking for somebody to say, here’s how you are going to drive revenue. If it is going to cost more, then there has to be some incremental revenue that goes along with it to justify spending the money to put it in. That hasn’t happened yet and I look forward to the day when it does. Many people in my organization think maybe we should be putting voice-over IP phones in the guestrooms. We are waiting.
 
One of the ways to generate revenue in the hotel room is charging for high-speed access. Do you?
It depends on the hotel and the market that hotel is in. Right now, about 50 percent charge for it and 50 percent give it away. It really depends on what the competition in that market is doing. Interestingly enough, the usage rate is about the same for the properties that charge for it vs. the properties that give it away. The reason for giving it away is that somebody next door is giving it away and you think somebody is going to make their stay decision based on complementary high-speed Internet access.
 
I remember when Marriott announced it was going to charge $10.95 a day, but was also going to include free long distance. I’m not sure giving free long distance is a benefit because people seem to use their cell phones. Personally, I would always use the phone in the room if it was free.
You have to remember that the ultimate goal is not to drive up utilization of the phone lines and your T-1s or high-speed Internet access, the goal is to make money. We have to decide where it makes sense to bundle things together and to charge a certain price for it if you think you are going to make more money doing it that way. More money might not necessarily come from telecom. It might come from higher occupancy or from offering these services and will be reflected in a higher ADR. You don’t know where it’s going to come from but it’s got to be a financial decision. The goal shouldn’t be to get excited because your high-speed Internet access utilization is 35 percent because you’ve given it away vs. only 32 percent if you would have been charging for it. But if you say I’m increasing occupancy by 3 percent, then that’s certainly a viable reason to give away high-speed Internet. We look at alternate pricing patterns for telephone and high-speed Internet access.
 
The hotel industry seems to be doing very well today. Would you agree with that as far as your hotels go?
Yes. Business is certainly better than it was last year, and way better than it was two years ago. Yes, in general the industry has picked up.
 
Is this why the industry’s technology sector is revitalized?
At DHR we didn’t freeze technology spending. We spent appropriately through the down turn in the industry. Along with capital being tight for technology, capital was also tight with everything else that goes along with a hotel. As you are coming out of a down turn in the industry there might be more capital for hotels to spend on things that may have been put off a year. Should we buy new PCs or new bedspreads? Should we upgrade the PMS or redo the carpet? You still have to make business cases and show a return on investment for all capital spending, including technology. We certainly weren’t a company that said: there is a capital freeze on our technology spending over the last three years. We’ve spent appropriately throughout the tougher times.
 
We all know the guest does not see technology, but they do see the carpet in the lobby.
It’s an appropriate discussion that should be had on all capital spends and certainly not something we shy away from. We come up with appropriate return on investment models for our technology initiatives just as others do for new carpet in the guestroom. It’s easier for a general manager to see tears in his carpet than to see an outdated chip in a PC.
 
That’s the battle you should have, right?
It’s the battle I must have and it’s the battle I like to have. You always need to do what’s best for the investor in the property.
 
You have a counterpart here in your corporate office in the marketing department, right?
Yes.
 
Do you think the relationship between the marketing person and yourself has changed over the past few years? Marketing drives much of technology today.
Sometimes, I feel I am part of our marketing team.
 
That’s not that unusual anymore.
The majority of IT initiatives are really based around driving revenue rather than cost savings. Cost savings is certainly something that we attempt to do and is a major function of IT, but most of what we do revolves around driving revenue to the organization. We work with sales and marketing on a daily basis. Distribution is such a big topic now and CRM initiatives. These are all marketing and technology issues.
 
How do you deal with distribution issues? Does marketing come to you and tell you their ideas?
It’s a team effort. There are certainly people in our sales and marketing group that understand distribution much better than I understand it. But it’s a team effort within the organization. It’s one of the things as a management company we might do differently than some management companies who count on flags to drive revenue and to be their distribution link to the external world. As a management company of independent properties, one of our major functions is to make sure all our properties are accessible through all distribution channels with the proper pricing throughout these distribution channels.
 
What’s your strategy?
We want to be visible in every channel. We want our guests to make the decision which channel is the appropriate channel to book us through. We encourage people to book through our proprietary Web sites; it’s a goal of ours to do that, but we are not going to shut ourselves out of other channels and the Expedia.coms of the world. We are on a common distribution system. We don’t do central reservations, but we use SynXis for distribution for all GDS and electronic distribution. All of our properties use the same technology. We want to see rate parity throughout all distribution channels whether it’s a voice direct to the property, Expedia.com or through www.destinationhotels.com. We are standardized on the underlying technology throughout the organization and we standardize on our distribution philosophy as well.
 
How about opaque sites like priceline.com?
Those are much more property specific. There are some properties where those are appropriate distribution channels to use for distressed inventory and there are other properties where it doesn’t make sense. The opaque sites are much more property specific.
 
That makes sense.
As an industry we shot ourselves in the foot in the beginning. We saw the Internet as the greatest thing since sliced bread and we put all our inventory out there. Then distribution companies created brands themselves with our guestrooms and we are now paying the price by paying them higher commissions.
 
The chains have been doing everything to get the consumer back to their sites. Obviously guaranteeing the lowest rate is popular, but how do you know it’s the lowest? You go to other sites and find a nicer hotel at a lower price. I am not sure this is working as planned.
We have found that you must negotiate proper contracts with the distribution channels like Expedia.com or Travelocity. There must be a mutual understanding about how you are going to price your properties. That’s one of the ways you do it. But still you might have to go out and check sites on a daily basis.
 
There is an industry buzz regarding Web check-in and kiosks. Do you see this becoming more mainstream?
It certainly is mainstream with the airline industry, which means it may become mainstream with the hotel industry as well. It is counter-intuitive to our philosophy of trying to be a very customer-focused industry. As a company, we want to be very customer focused and we want to make every aspect of the customer’s stay enjoyable. We think a big part of that is the check in. That process includes welcoming you to the hotel. It’s usually the first thing the guest experiences. But then again, if the guest thinks the best way to be welcomed to the hotel is walking up to a kiosk and checking themselves in then we certainly should have that available to them. I think it’s going to have its place within the industry. It might not be at every hotel and I don’t think the front desk is ever going to be replaced by a bank of kiosks, but I do think it can have its place. I believe the kiosk is something that needs to be demanded by our customers, rather than forced on them by the industry.
 
So what you are saying is…?
When customers say they want a kiosk to check in at that time it’s appropriate to have a kiosk for your customer check in. But we are never going to say that’s the only option.
 
You don’t sound like a big kiosk fan.
Many of our properties are in the business of creating memories for people. We think it’s much easier to create memories when people are interacting with other people and not machines. Kiosks will have their place in the industry but I don’t think it will be as prevalent as it is in the airline industry.
 
I think you are biased because of all your resorts and knowing that the front desk is a great place to sell things.
True. You can up-sell a different room type, you can encourage them to book a spa appointment, and you can book a tee time. That’s certainly part of it. It is easier to tell a guest checking in about your spa specials, instead of having a pop up at the kiosk. Before you know it someone will be trying to sell pop up blockers on your kiosk.
 
I can’t wait (smile). What’s the next hot technology?
RFID is something that many people are talking about today and is relatively intriguing to me. Whether or not guests are going to feel comfortable to carry around an ID chip on their person so that you can provide them a more customized service throughout your property is a question that remains to be answered. The ability to turn lights on and off in their guestroom, making the rooms more energy efficient would be nice. There are many things you can do with RFID, but when you start tracking a guest you really run into privacy issues.
 
You actually see guests having an RFID chip that they carry?
Yes. You can have an RFID chip embedded into their room key. Other than the key being used to open the guestroom door, they could use it to charge in the various outlets throughout the property. But it also can be used to track where they are on the property. A ski destination, for example, can give someone a RFID chip and it will tell them how many vertical feet they skied over the last 18 hours or however long their stay has been.
 
That would be cool.
It would be cool. There are some cool factors associated with that type of technology but you really start running into privacy issues. There has to be a way to let people opt in or out of what they can do with RFID. You certainly have to be upfront with them with what you are doing. If you tell them hey we are giving you an RFID chip in order track the vertical feet you skied that’s one thing vs. not telling them that we also want to track how much time you spend in the bar.
 
I can see a hotel having a screen in the lobby that can be used to track down friends or family at the resort. RFID technology is discussed often in the hotel industry today.
There are many companies using it now. As a vendor you can’t sell to Wal-Mart if you don’t use RFID. They use it all over the place. The technology is evolving and there will be many creative uses for it.
 
It will be interesting to watch this technology mature. You alluded to having the guestroom be more energy efficient. As energy costs start increasing I know this will become a bigger issue within the hotel industry.
Energy management is something that comes back into play every few years and then by the time you catch up with it, it’s less of an issue because then energy prices go back down. You are right, energy costs are a big issue today. Will they be a big deal two years from now? As you go through these blips with energy costs, energy is often on the forefront of everybody’s mind.
 
Energy management is tough. If I owned a hotel, I wouldn’t want to be cooling a room when the guest is out.
But then guests complain because they get to the room and it is too hot and takes 10-15 minutes to cool. Today, energy costs are something people talk about and does need to be addressed.
 
You have ski resorts, right?
Yes.
 
Do you do anything with ticketing systems?
We sell tickets at our ski resorts. But we don’t operate any of the lifts. Those are all run by the ski mountain.
 
Especially with resorts, dynamic packaging has become an issue.
This is true. One of the things we’re working on now is to really offer true on-the-fly packaging or what you refer to as dynamic packaging. No longer should a hotel dictate to the guest to choose one of five packages, but instead offer on-the-fly packaging so guests can customize their individual stay.
 
Are you there yet?
It’s something we are working on.
 
That’s good. You seem like the perfect fit.
Yes, there are many reasons to do it. You’re not just managing the revenue of your guestrooms, managing the revenue of your golf course and managing the revenue of your spa, but all these things together. There are benefits to the hotel getting people to book things ahead of time. We don’t want our guests to book a room at a golf resort and then find out after they book their room that the only tee times available in Phoenix in the summer are at 2 p.m. Flexible packaging is very important to resorts and something we have active initiatives in place to address.
 
What are you doing to better understand why guests are coming to your properties?
One of the things we are working on with PAR Springer-Miller is the ability to pick the primary motivating factor for why the guest is coming to the property. If the guest states that she is coming because she is part of a conference, then we know the dates are set and we can book their amenities around that. If she is coming because she loves our spa and the last time she was there Sally gave her a spa treatment and she wants to book her stay around the day Sally is working, we want to know that. With this information, you can suggest options or dates that benefit the hotel and guest. At a resort, there are often very different motivators to book than at a non-resort. So rather than making the room the only way to start a reservation, you have the ability to start with any aspect of the property based on the guest’s motivation for wanting to come to the property.
 
As someone who enjoys trying to play golf, I agree with what you are saying. Let’s switch gears. Do you have any new hotels being built in the next two years?
We have one in the process of being built and there are several more that are planned.
 
As you plan to build a hotel today, what are the biggest changes from the past?
As I mentioned earlier, two years ago we were really doing just wired HSIA in the guestroom and wireless in public spaces. Today we are doing wired and wireless throughout the property including the guestrooms. That’s one example of something that we are doing differently today than we were two years ago. Plasma televisions are an example, depending upon whether it’s appropriate for the property; this is something we might put in today that we probably would never have thought of putting into our guestrooms two years ago. We talked voice-over IP. It’s something we haven’t changed yet, but it’s something we are considering more strongly every time we build. I would say the things that we are consciously doing differently today than two years ago are probably all around the in-room amenities. Not just the television but the sound system that goes into the room. But the wired vs. wireless HSIA has been the biggest difference recently.
 
As you reflect on your seven years in this role, what do you think the biggest change has been?
For our company or the industry?
 
Both.
For our company the biggest thing that we’ve changed is really our philosophy on technology and the whole willingness to standardize technology and centralize technology where appropriate vs. really being a one-off decision made at the property level. Initially, the biggest thing that we did was getting over that cultural hump rather than any specific technology that we put in place. Changing the culture of the organization was a challenge, but one we successfully addressed.
 
How has the company benefited?
We now do our own analysis. As an example, with the old technology that we that we had in place before with groups there was really no way to share leads between properties. We’ve driven several million dollars worth of realized business through the system in the past few years. There is the hard line benefit to us getting over our cultural view of technology decisions being made at our properties only selling their own properties to creating a cultural synergy throughout the organization and realizing that we need to take advantage of our size. Technology has helped us do more for our customers and has helped us realize a cost savings throughout the organization. The biggest change over the last seven years was the cultural change with regards to technology. There have been many changes within the industry. Seven years ago there was no high-speed Internet access in guestrooms. Seven years ago CRM was not a topic at all within the industry. Those are probably the two biggest things in our industry that have changed. We’ve gotten to the point of realizing the need for better integration at all levels. It’s only in the process of happening, but we’ve at least gotten over the hump and started addressing integration.
 
There have been many things that have changed over the years, but don’t forget to include distribution, right?
That’s exactly right. That’s easily the biggest thing. Going from no Internet to believing ‘wow this is bliss—we will never have distribution problems again’ to figuring out how do we get back in control of our inventory was the biggest thing to hit the hotel industry.
 
Are there any regrets or mistakes that you have made along the way? With technology, especially new technology, it never is as smooth as planned, correct?
True. There are many things we have talked about like high-speed Internet and wireless that initially didn’t work as well as it could have. But you deal with it and you learn from it and do it better the next time. Often, you learn by making mistakes. I don’t know if you can even regret. You asked the question if I have any regrets and the only thing you can regret is if you didn’t try. We’ve tried, we’ve made progress and we’ve made some missteps along the way, but in general that’s how you learn – by making mistakes. You need to try new things. That’s how you become a better company.
 
Very well said. Shannon, this has been great. Thanks for taking the time to meet with me. We will see you back here in Denver this September at our CIO Summit.
You’re welcome. I will definitely see you at your summit. It is a great experience for all the CIOs.

Thanks.

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