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September 8-10, 2010: CIO Summit – Omni San Francisco

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October 01, 2010
CIO Summit Review
Kris Burnett - kris@hospitalityupgrade.com

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San Francisco in the early fall is a beautiful setting for an event. The ninth CIO Summit, with more than 55 in attendance and over 20 other participants, was one of the most popular and well-attended events yet.

“Very rarely does someone get an opportunity to network and share ideas with a large group of leaders in their industry,” said Lyle Worthington, CIO, Horseshoe Bay Resort. “The CIO Summit brings together many of the most influential and experienced CIOs in the hospitality space to discuss some of the most pressing concerns in hospitality technology. The networking and information-sharing opportunities for CIOs are unmatched in any other industry conference I’ve attended.”

After Hospitality Upgrade’s networking event, speed-dating style, the conference officially began with the annual opening-night barbecue.

After a good night’s sleep, the first session, “Connecting the Dots: Social Media & Tech-Savvy Travelers,” was moderated by Douglas Quinby, senior director, research, PhoCusWright.

According to Quinby, four of the main social media outlets for the travel industry include: traveler review Websites like TripAdvisor®, TravelPost.com and IgoUgo; online travel agency hotel reviews; social travel guides such as TravelMuse, WAYN (Where Are You Now) and Where I’ve Been™; and travel blogs like TravelPod™ and Travel Blog.

Quinby said there are 1.9 million traveler reviews and posts each year. But, surprisingly, regarding online travel agencies – the conversion rate of referrals to book is well below 1 percent. “Online travel agencies have to generate a much larger share of direct referrals to generate bookings,” he said. “When you go from a travel Website to hotel Websites, you get a much higher booking rate.”

When polled about their views of Facebook, the audience responded with 12 percent saying they got meaningful referrals/traffic, 31 percent saying they did it for branding, 24 percent using it for customer engagement and service, and 33 percent saying they got little or no activity from Facebook.

Ron Hardin said, “Facebook users do not want to be advertised to or sold to on Facebook.” But, Myles Cyr, vice president, CIO for Carnival Cruise Lines, added, “They are opting into pages for companies,” and that can translate to increased business.

Paul Major, managing director, IT, Aspen Skiing Company, said it has actually been an advantage for his company using Twitter and Facebook – especially with a little bit of creativity. “We have our own channel on Facebook,” he said. “Our marketing team has videos. We get a lot of feedback and followers – we get a lot of buzz about our resort just from posting a video of snow falling.”

Quinby pointed out that nearly nine in 10 social network users log on at least weekly if not more often. He added that one in 10 posted a review, one in three made mention of a trip online via Facebook or other networks, one in five follow a travel company or brand, and one in five have done some travel shopping online (booked).

Regarding the volume of converting referrals from Facebook to hotel Websites, Quinby said there were at least 5.6 million direct referrals to hotel Websites in 2009. According to Quinby, the Facebook conversion rates for booking exceeded that of the traveler review sites pretty dramatically. 

Kerzner International Bahamas Ltd. Senior Vice President and CIO Bernard Gay asked, “Do you think it’s because the people feel it’s a network you can trust and you are interacting with people you trust?”

Quinby said, “Trust is definitely a factor. Whether or not it is the sole factor, I don’t know.”

Mandarin Oriental CIO/CTO Nick Price said, “Trust and convenience too. If it is trust, you trust your network. But, how do you get your marketing department to gain that trust in that network – marketing people don’t get that trust is so vital in social networks.”

Ken Barnes warned that there are hazards to misusing social networks like Facebook, and said, “Our food and beverage director posted five-star reviews for a restaurant that wasn’t even open, even creating stuff on Yelp. Members of the social networks saw it and completely trashed it before the restaurant ever opened.”

MGM Resorts International Senior Vice President and CIO Scot Campbell cautioned against overuse. He said, “One of my brands sent 15 different tweets to Facebook in the course of five minutes. That’s really irritating. Trust comes from someone saying or posting she had a great time in that resort.”

Quinby suggested that when hoteliers take time to respond, it can pose its advantages. “Personally respond to customer comments and at the same time, you have a subtle way to show an offer in the response,” he said. “This can be a very effective and great way to reach viewers/potential travelers.”

Paul Major does see benefit in using social networks, but said it has to be managed.”You can’t just let this (your property’s or brand’s profile) sit there and run itself,” he said. “We have 10,600 people who like our profile right now. It is a very powerful tool. It is really about the PR value, the presence more than letting other people define who you are.”

Another area Quinby discussed was how reviews are being affected by the economy. Three and four-star brands see more reviews in the recession as luxury and extended-stay have slipped. According to Quinby, a couple of recession dynamics are driving this change.

Omni Hotels VP Technology Richard Tudgay said, “I am not surprised. We have all had to start playing the Priceline game. Look-to-books have gone up the last few years.”

Paul Major added, “The ones who are the most vociferous about opinions are those (who used to be two or three-star hotel visitors) that can now go to three and four-star hotels (because of the recession). The only people who comment are the ones who stay one time and would never spend $1,000 a night for the room they spent $275 on.”

And whose customers are happiest?

The three biggest (Expedia.com, TripAdvisor and hotels.com) are relatively the same, while Priceline.com is significantly higher. “With the name your price, they are getting a better deal or are under the impression they are getting a better deal… and are having a more positive experience (because of it),” said Quinby.

Even with the extent of interaction and discussion during the first session, the next session, “Doing More with Less,” was by far the most popular of the conference. Dr. Dick Ruhe of the Ken Blanchard Companies, put his own humorous, entertaining and informative spin on doing more with less.

After setting the tone of the session, Dr. Ruhe pointed out a few ways to do more with less in these challenging economic times where downsizing and cost cutting have become the norm. Regarding motivating staff, he said, “If you really want to improve efficiency, don’t add to their to-do list, add to their not-to-do list.” 

He said the fact is, people are more motivated if they have positive reaction/behavior. “Catch people in doing something right,” he said. Another point he mentioned that can apply to one’s personal life as well as professional life, was maintaining spirit. “The need to accomplish the mission while increasing the human spirit (is important). Mission and spirit – we would all like to have a high score in both.”

After breaking for lunch and then the annual cover photo shoot, the afternoon break surprised all. Two attendees, Jeff Parker, vice president of technology for Magnolia Hotels, and Mike Uwe Dickersbach, vice president, technology, Thayer Lodging Group, showcased one of their many collective talents–beer brewing. The attendees were all treated to an afternoon break of beer tasting, with seven different homemade brews from the pair.

The third session of the day began after the tasting and highlighted two different CIO panels. Moderator John Burns, president, Hospitality Technology Consulting, posed questions to the first panelists including Kris Singleton, CIO, Kimpton Hotels & Restaurants; Ira Greenfield; Vivek Shaiva, CIO, La Quinta; and Richard Tudgay.

Question 1: Are on-demand movies a dying concept?
This highly interactive session began with this question. The four panelists all answered yes, with the audience weighing in at 82 percent yes, 18 percent no. Singleton explained that the premise of on demand is still there, but how we get movies, that’s how it’s going to change.

Shaiva agreed, but said there was still a usefulness for now. “I don’t think it’s dead yet,” he said. “I think there is still a revenue stream.”

Tudgay said it hasn’t affected his properties as much. “We have never had adult content, so it really isn’t an issue for us,” he said.

Question 2: Is IPTV the wave of the future?
“The future is a long time,” Tudgay said. “But on the flip side, we have to replace the coaxial (with anything–CAT 5 or 6 ). We have some buildings where we could never do it and we have decided to put both in. We do a lot of business with cable companies.”

Regarding Kimpton, Singleton said, “With new property development, we have to go with a converged network. On legacy properties, we have some with cable, but also the opposite for wireless.” There has been a need for more wireless, and at Kimpton’s Philadelphia property, they have streamed wireless VOD and the guests don’t notice a difference.

Question 3/4: Should Internet access be free? Will Internet access be free?
3-The audience responded: Yes–35 percent, no–65 percent.
4-The audience responded: Yes–50 percent, no–50 percent.

Singleton said that Kimpton provides Internet free for top-tier or frequent guests. “If you sign up for the loyalty program, you get it free,” she said. “A lot of people buy it; I think that is segmented by business traveler vs. leisure, as they figure ‘I’m going to expense it anyway.’ I think a lot of our guests expect it to be free, and we get a lot of people to sign up (for our loyalty program) because of that.”

Regarding Extended Stay, Greenfield said, “People expect what they have at home. A tiered model is what works, to check just e-mail, can be free, but for Slingbox® (or more needs), there should be a tiered model. At a reasonable cost, we are finding they are willing to pay for it.”

At Omni Hotels, Tudgay said, “Even with our select guest option (signing up for the loyalty program and receiving free Internet), they still get a lot of money collecting the Internet fees.”
Question 5: What keeps you up at night?
When asked what issue was keeping the panelists up at night, Singleton said, “CRM (CRM and incident management including more alerts, more rule based and action oriented) and how that impacts my long-term business strategy. Is it time to look at a major overhaul to keep wowing and moving the needle up, focusing on the guests.”

Greenfield said he is mostly thinking about the emergence of his company from bankruptcy and its new ownership company. He also is focusing efforts on CRM and accounts receivable.

So what is keeping our CIOs up at night? Shaiva said, “Telecom and outages – centralizing all of these services in the cloud – and how do we reduce the number of outages we have.”

For Omni, Tudgay said, “We are a privately held company and we have a management agreement with a management company. My focus is how to get SaaS compliant by December 31.”

Question 6: What technology is catching your attention?
This question closed the first half of this session. Tudgay answered first with interactive digital signage. Shaiva said he is interested in touch-enabled mobility, Greenfield is curious about all the buzz around the iPad vs. other technology and BlackBerry smartphones–where technology is taking us. Singleton mentioned the premise of going back to mainframe-type processing.

The second panel assembled by Burns for the next round of questioning included Nick Price, Lyle Worthington, Ken Barnes and Scot Campbell.

Question 1: Is ASP/SaaS the future operating model of IT?
The audience responded: Yes–75 percent, no–25 percent.

Worthington said, “It’s just not centrally hosted and streamed out. With security concerns, you will always wait to have some things behind the firewall.”

Campbell said, “Matching servers, the quicker we can get this model, the quicker we can (not use so much manpower).”

Bernard Gay asked, “Have you found any restrictions on the gaming side putting in ASP?”

Campbell said, “From the gaming side, they want to make sure we are keeping track of the financial side, but that would be on a private cloud.”

For Mandarin Oriental, Price said, “It is enormously problematic with regard to PCI – too much is merged in the hotels.”

Question 2: PCI compliance achieved, no data security concerns?
The audience responded: Yes–8 percent, no–92 percent.

After the audience response posted Burns responded, “Clearly there are still areas of concern.”

Price said, “In the United States, we are doing a good job, but the further you go outside the U.S, the worse it is.” But Worthington added another caveat and said, “No, the most significant data concern is people. People are very susceptible.”

Barnes said, “From the management company side, it has changed (but) not achieved. The guidelines are there, we know what we should be doing, but breeches happen all the time.”

On the gaming side, Campbell said, “It is different now, we get too distracted with what we need to do. We need to protect customer data and move on.”

But, Price pointed out one thing that concerned all members of the panel. “I think there is nothing more threatening than losing millions of customers’ credit card information,” he said. As an industry we have not managed to employ people with the appropriate skills to protect guests’ information.  Until we do, Price said, “We can never be properly PCI compliant.”

Jeremy Rock said, “There is inconsistency across the board in terms of PCI. What we as an industry need to do is figure out what really is our standard and share the information of where these breeches are occurring.”

Question 3: Understanding mobile devices
The audience responded: Yes–4 percent, no–96 percent.
“Look at the numbers, less than 3 percent of all of our traffic comes from smartphones,” Worthington said.

At White Lodging, Barnes said, “That is a large investment to stay on top of it all. I would rather see time and money spent on branding or for browser-based from iPhone and Android (Google Android).”

Question 4: Revenue Management – ROI wise?
The audience responded: Yes–22 percent, no–78 percent.

Price said one of the issues he finds is a lack of people, and a lack of skills at this level.
The final session of the first day covered a new venture in the sharing of technology knowledge and experience between the hospitality community. Bob Bennett, president, Starr Technology Consulting, and Richard Siegel, publisher of Hospitality Upgrade magazine, explained how invaluable this concept, HUTechShare, will become to the hospitality industry by providing an open forum for system and process analysis across brands and properties.

Participants will be able to list their technologies, who provides them, and in return can have access to data from other properties, brands and management companies. HUTechShare will be launched in the fourth quarter of 2010.

The last day began with Jeremy Rock moderating a group representing different segments of the hospitality industry including Jeff Parker; Van Baltz; Bill Martin, vice president and CIO of Royal Caribbean Cruises Ltd.; and Brian Garavuso, executive vice president marketing and CIO, Diamond Hotels and Resorts.

Question 1: How is IT helping to enable your business?
Baltz said, “The CIO had just left, and senior management/leadership was needed at the time. Database marketing, then entertainment, front-end business activities –have been very successful for us. It has really been very helpful to have the business in alignment. We have 22,000 slot machines –we are really a gaming company that has some hotels.”

Garavuso said, “The three things we do are drive revenue, drive better customer service, and think how to  reduce costs. Our goal as a timeshare company is to sell timeshares, get them on a tour, get them to buy. We are using technology to do that with lots of demographic modeling and lots of information about potential buyers. That has a significant cost structure–finding other candidates via demographics to see who buys and find others like them.”

Regarding the cruise industry, Martin said one focus is electronic ordering of meals back to the galley. Trying to feed thousands of people, and making sure service can be fast enough. “Just by electronic ordering, we have been able to limit overcooking of foods, which translates to a significant cost savings,” he said.

On the gaming side, Baltz said, “We touch our guests two or three times per week. It is really important to be efficient. We have a player card–everything else centers around that. We looked at an electronic version, the guest comes in, swipes a card, a significant cost savings” of hundreds of thousands of dollars.

Parker added what he sees on the management company side. “A lot of our costs are buying licenses,” he said. “Reducing the time of my staff–prepping PCs, etc., we have had a lot of success reducing these costs.”

Question 2: Mobile Apps–Speed to Market
Regarding mobility, Martin said, “We looked at it as another technology that could help the guest get around the ship. The challenge was understanding the security of this. Plus, the charges to use a phone on the ship are very expensive (via satellite). Also, we use technology to track the kids on the ship. All kids 12 and under get a bracelet–geolocating picks them up on the ship. We want to get this technology to a phone where this is a downloadable app.”

At Station Casinos, Baltz said, “We have a Nevada state regulator watching what we do. With sports wagering we can have mobile or PC based. We are complementing that with a new smartphone app (and GPS). We are also fairly confident that we aren’t going to have any security breeches because of it.”

Parker said, “We look at apps–most of our guests seem to be BlackBerry users, (who would) order room service over an iPhone, Android or BlackBerry. We can also offer last-minute bar deals (if the hotel bar is empty, the staff can post deals).”

Question 3: iPad
Rock then asked if the adoption of the iPad is a fad or if it is going to stay. To which all four panelists said it would be here for a while.

Parker said, “I think that technologies like these are here to stay. We are developing apps for these; I just want to wait for these to be securable.”

Royal Caribbean is also finding uses for the iPad. Martin said, “We are leveraging the iPad for the Solstice and Celebrity Cruise brands. We are continuing that Apple relationship and have just started using them for our art tours around the ship.”

Baltz said that each of the four company’s executives in his company have iPads. He said, “It still has a cool factor, people think it is neat.”

Question 4: Digital Signage
Martin said, “On Oasis, one of the ways to move people around the ship is through digital signage. Some are interactive (enter room, see restaurant menus and how full the restaurants are before start walking to them.) As a result, none of the restaurants have a line because people see there is a wait and choose another restaurant. It has been very effective. We use Four Winds Interactive and it is an incredibly effective tool to help the guest navigate the ship, from grandmas to grandpas to kids, because it is extremely intuitive.”

But in gaming, Baltz has a different focus. “We don’t want the guest to get up and go over to a different area; we want to give the guest the information they need, but not take their focus away from what we want them to do (which is spending money),” Baltz said.

Parker said Magnolia is looking at digital signage as well, and Garavuso said they have touch-screen devices in use to show prospective buyers their properties.

Question 5: Outsourcing
On the timeshare side, Garavuso said, “With off-shore development, we are finding ground; we can get stuff to market faster and at a lower cost. We have had some good luck.”

Baltz said, “We do a little bit of outsourcing. Outsourced the POS hardware repair because we just don’t have enough hands. Finding IT help is next to impossible.”

Question 6: New Initiatives
Baltz said, “We are just emerging from debt restructuring. We just got about 12 capital initiatives approved in one week. We are looking at automating some manual processes.” But, he cautioned, “We have some legacy stuff that’s just not stable; it can always be better.”

Martin said his focus is on retrofit and bringing that guest experience. For Magnolia, Parker said his focus is on putting in rapid response in Q1 and using Passkey. He said, “This is the first time in a couple of years I am able to spend money.”

Garavuso said, “The last couple of years they have been redeveloping a module at a time. As a result, we are developing some new modules. PMS was the first module we attacked, and we got processing down to 25 seconds to check someone in and get them a key.”

The final session of the conference focused on a hot topic: cloud computing. HP Vice President Strategy and Industry Solutions Sandeep Johri lead the group in a lively discussion of the concept. “Like most technologies, (cloud computing) can have a huge impact if you use it right,” he said.

By 2012, 20 percent of businesses will own no IT assets, according to Gartner Inc. Johri said that Capex is a challenge and time to market is a factor.

“At the end of the day, (cloud) is all about agility. People look at it to reduce costs,” Johri said. “CIOs get excited about the agility it gives them. The idea is to have that control and be the service provider to your organization.”

According to Forrester Research, July 2010, business is adopting cloud five times faster than IT operations.

Johri recommended that CIOs bridge legacy and cloud worlds, and be the builder and the broker. “I haven’t met any customers who are only going one way (onsite, hosted, public),” he said. “In reality, it’s going to be a hybrid environment.”

“Whatever you do in the cloud, you need to think about applications,” he added. “At least that the infrastructure is in place for the app you are moving to… The more automation you can realize on the back end, the more you can realize in costs.”

New attendees and repeat attendees alike found great value from the educational sessions and networking activities at this year’s CIO Summit. “It is the best way to learn about common issues impacting all our businesses in an honest, effective and efficient way,” said John Bollen of MGM Resorts International.

As Charlie Lystrup, CTO, Windsor Capital Group, said, “This conference exceeded my expectations. I was able to meet many peers and forge a few new relationships that may very well transition to friendships prior to next year’s conference.” 

Thank you to event sponsors Agilysys, Datanamics, iBAHN and transportation sponsors Cendyn, MTech and TRAVELCLICK, our founding association HFTP, as well as meeting facilitator Ken Brown and HP, and RealviewTV.
- By Kris Burnett, Hospitality Upgrade

©2010 Hospitality Upgrade
This work may not be reprinted, redistributed or repurposed without written consent.
For permission requests, call 678.802.5302 or email info@hospitalityupgrade.com.


2010 CIO Summit attendees include: Tina Stehle, Agilysys; Stewart Applbaum, Agilysys; Darren Clark, Andre Balazs Properties; Paul Major, Aspen Skiing Company; Steve Brown, Carlson; Myles Cyr, Carnival Cruise Lines; Robert Magliozzi, CENDYN; Stephane Magnat, ClubMed; Simon Eng, CTF Development, Inc.; Terry McGowan, Datanamics Inc.; Karen Stewart, Datanamics Inc.; Ron Hardin, Davidson Hotel Company; Martin Stanton, Destination Hotels & Resorts; Brian Garavuso, Diamond Resorts International; Ira Greenfield, Extended Stay Hotels; Sam C. Selim, First Hospitality Group; Damian Bridges, Gaylord Entertainment & Hotels; Rajiv Castellino, Great Wolf Resorts; David Butcher, Hawaiian Hotels & Resorts; Frank Wolfe, CAE, HFTP; Lyle Worthington, Horseshoe Bay Resort; John Burns, Hospitality Technology Consulting; Robin Koetje, The Hotel Group; Ken Brown, HP; Eric Harte, HP; Mark Moreno, HP; Jim Gery, Hyatt; Dave Garrison, iBAHN; Sam Thompson, iBAHN; Paul Bushman, Interstate Hotels & Resorts; Timothy McClain, Irvine Company; Raman (R.P.) Rama, JHM Hotels; Jon Inge, Jon Inge & Associates; Bernard P. Gay, Kerzner International Bahamas Ltd.; Kris Singleton, Kimpton Hotels & Restaurants; Vivek Shaiva, La Quinta; Jim Hansen, Larkspur Hotels & Restaurants; Jeffrey Stephen Parker, Magnolia Hotels; Nick Price, Mandarin Oriental Hotel Group; Jane Durment, The Marcus Corporation; Page Petry, Marriott International; Don Wilson, Maxim Revenue Management Solutions; Scot Campbell, MGM Resorts International; John Bollen, MGM/Mirage; Umar Latif, Millennium and Copthorne Hotels & Resorts; Luis Segredo, MTech; Chuck Marratt, MTM Luxury Lodging; Nelson Garrido, Noble Investment Group; Richard Tudgay, Omni Hotels; Wayne J. Fields, Pacific Monarch Resorts, Inc.; Jonathan Clues, Realview TV; David Barbieri, Red Lion Hotels Corporation; Jeff Linden, Red Roof Inns; Jeremy Rock, RockIT Group; Bill Martin, Royal Caribbean Cruises Ltd.; James Lingle, Sage Hospitality Resources; Anand Rao, Shangri-La Hotels & Resorts; Bob Bennett, Starr Technology Consulting; Mark McBeth, Starwood Hotels & Resorts; Van Baltz, Station Casinos, Inc.; Bob Combie, Sunstone Hotels; Mike Uwe Dickersbach, Thayer Lodging Group; Terry Price, The Grove Park Inn Resort & Spa; Erik Lindquist, TRAVELCLICK Inc.; Mclean Xavier, Westmont Hospitality Group; Ken Barnes, White Lodging; Charlie Lystrup, Windsor Capital Group; and John Wimmer, Xanterra Parks & Resorts

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