Face to Face with Ginn Company: An Interview with Bob Bennett

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June 16, 2006
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Richard Siegel

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Interview with Bob Bennett
Chief Information Officer
Ginn Clubs & Resorts

Note from Rich: Those in CIO positions like Bob Bennett often have interesting backgrounds. Who would have thought that we would be meeting at his office outside Orlando, Fla., as compared to 10 years ago when we met in his office outside Washington, D.C. There are typical hospitality companies and then there is the Ginn Company. What a very interesting interview and a great read. By the way, it is pronounced Ginn with a hard "g", not Ginn as in gin and tonic. Enjoy.


Rich: Let’s start with your background. First of all, where did you go to school?

Bob: I went to the hotel school at Cornell University.

What was your first job after graduating?

Right after school I started with Hilton International. When I joined them I was the first person dealing with technology. They had no computers in the company, so that was the start of a really great relationship and career that lasted 15 years. By the end of my time there, we had installed systems in 44 different countries around the world. It was a great experience.

What type of systems were you involved with?

Hilton was one of the very first users of the HIS Property Management System. Originally we put in a few EECO and NCR PMS solutions, but then switched over to HIS. With most of our installations we were the first system in the country and in many cases these were running on the IBM System 34s and 36s. Quite often we were the first customer in those countries to use that product. It was a very different environment than we have today where so much was focused on hardware versus applications and usability.

In that time frame IBM seemed to dominate the industry with their mini computers.

Right. We wanted to use the same computer system around the world and back then IBM was the only vendor that could do that.

And you were there for how long?

15 years.

You have had the opportunity to work on both the hotel side and vendor side, correct?

Yes, after Hilton International, I spent nine years with Marriott International where I focused on property-based systems. I’ve also had positions with MICROS-Fidelio, heading up its product development, and also with Pegasus doing product development. I have worked as a consultant with PricewaterhouseCoopers doing hospitality technology consulting. I’ve seen it from the operator side, the vendor side and the consulting experience. But I’m pleased to be back on the operator side now with Ginn.

Tell us about Ginn Clubs and Resorts. This is not a typical hotel company, correct?

No. It’s not a typical hotel company by any means. It is a real estate company combined with club management combined with resort operations. Bobby Ginn buys raw undeveloped land and we turn this land into communities, highly amenitized resort communities with signature golf clubs, and often marinas, stables and high-end club houses with very nice food and beverage. In all cases people will buy into these communities and build single family homes or they will purchase one of the condominiums. Where the hotel aspect comes into play is in the larger communities where we also have a rental program. Individuals can give their home or condominium back to Ginn on a multiyear basis for one to two years at a time and we will operate those as if they were hotel rooms and share the revenues from those hotel rooms with the owners. Vacationers can book a room at one of these resorts. It is not in all of our communities but a few select communities can do that.

So, at those communities where owners rent their units, are these typical resort facilities?

Yes. They have a front desk, restaurants, water parks and they will have several golf courses and many have beaches or ski facilities.

Do they have spas?

Always a spa. It is a high-end resort experience.

Tell us your responsibility at Ginn.

I have oversight of all of the technology we use. It’s a little different than a typical hotel company.

How so?

It includes all the infrastructure technology that we put in the communities including all the base services from the video, voice or data services, along with the typical hospitality applications that you would find in a hotel or club environment. We also develop software in-house for our unique needs and we do our own networking and telephone support. We have a lot of infrastructure.

Do you have typical hotel applications?

Yes. We have property management systems, point-of-sale systems, food and beverage systems and golf and spa management systems to name a few.

Who do you use?

For our rooms’ management we are using PAR Springer-Miller. We’ve started to standardize InfoGenesis for our food and beverage. In our clubs we have some JONAS installations and some IBS installations. We use Datavision as part of our accounting for hospitality operations and DataWorks to support our retail shops.

What about for sales?

We use Delphi for our group sales.

You operate some of your bigger resort properties as typical hotels but you do not own the units. Who builds them and do they have to meet certain criteria for you to operate these properties as a resort?

Yes. We dictate what we call our minimum wiring standards for all buildings in a community whether it is a single family home or a unit in a condominium. We say that any unit built in this community will have to have, for example, Cat 5 wiring to many locations throughout the residence and will have a structured wiring panel and will accommodate multiple phone locations and television locations. We dictate all that. We know that any unit that is built in that community would, from a wiring standpoint, be suitable to be in our rental program. If the owner chooses to put the unit in the rental program we then require the owner to purchase our electronics package for the room which includes the televisions, the stereo systems, the switches, the wireless access points, the phone sets, all of the hospitality upgrade. They also have to pick furniture that meets our standards so that we have a consistent guest experience.

That makes sense since the better the accommodations, the more likely it is to generate revenue for the owners, correct?

Right. These are very high-end resorts from landscaping, amenities, pools and the beaches. You want the rooms to be at the same level. You want the televisions, the furniture and the kitchens to be outfitted so that it gives the same luxury experience across the board.

There is so much going on with in-room technologies. Do you dictate what the owners have to put in and clearly state what is needed?

Yes. We select all of the electronics, all the in-room entertainment, as well as Internet. For example, we put high-definition flat panel televisions in all the rooms, surround sound stereo systems, DVD players in each room, hospitality grade telephones, and switches so that multiple locations have Internet access and the Internet access cost is all built into the room rate. Then, in addition, we provide wireless access in all public areas as well as now adding wireless to all the rooms that are in the rental program.

Sounds like a typical hotel technology initiative to me.

One of the things we have to do is, obviously, explain to the owners why it has to be the equipment we list. What’s special about a hospitality television versus one that they can go purchase themselves? Sometimes an owner will say, I can go down to Best Buy and get a TV, but what they do not understand is the service aspect. If we buy 200 televisions of a certain type, obviously, we buy a few spares so that we can repair them. If we let the owners buy the make and model television they want we would have a maintenance nightmare. It would be inconsistent guest service. For instance, the remotes would all be different and if a guest calls the front desk for assistance there would be no way for the front desk to help. It is different with a couch, a chair or a bed. You can have many vendors and still have a luxury couch. You can have a satisfactory experience even though there are several vendors doing your furnishings. But on the electronics, if the front desk is not familiar or our in-house tech team can not come in and repair your television, you are going to have a bad experience with the entertainment and, of course, the whole objective is to give you a better than average experience; we want a luxury experience.

What about guests that bring their own entertainment?

We are putting connection points in all the rooms so that guests who bring their own entertainment, whether it is an iPod, MP3, video camera or laptop, can connect easily into all this equipment in the room.

That’s a pretty big issue in the hotel industry today. With Ginn doing so much new construction, other hoteliers would be envious.

Yes, new construction is great. There are many more locations in a room today where you want a Cat 5 connection then you cared about a few years ago. And, in addition, the furniture that we buy is obviously built to accommodate the flat screen TVs as opposed to some of the older models. So we are in a lucky position in that regard.

You mentioned earlier about owners wanting to go to Best Buy. I imagine you run into owners wanting to shop on their own often.

Actually we have very good pricing, so the homeowners end up economically getting a very good deal. They sometimes just ask why we have to do it for them and then we have to explain the consistency and hospitality models on the television sets. As the movie industry starts to distribute high-definition content, the televisions are going to have to be able to work with the encryption. Not all models of televisions do that. But once we explain it they accept it.

A person that invests in one of your units whether it be a home or condo, do they necessarily hope to recoup their investment via the rental pool or is it by other means?

The folks who buy in our communities have many different motivations. As I said many people buy to live there and so that is going to be their home. Some are buying because it is their second or third residence, and from an economic point of view, it works for them. Those who put units into the rental program, many of them are expecting and are receiving appreciation on just owning the unit and having the ability to sell it to another investor in the future. The rental program covers most of their carrying costs, but as our occupancies grow and our name and recognition grow, we expect the rental program will be profitable for everybody.

Are you also pursuing group business?

We have done a number of groups and, again, those locations that are viewed as resorts have the facilities that you expect from a resort hotel. They have ballrooms, meeting rooms, restaurants and function areas that are suitable to groups. We are not a convention property. These are smaller upscale meetings and groups. We definitely do groups, absolutely.

Where are your properties located?

We have about 20 projects in various stages. Quite a number in Florida, also in South Carolina, North Carolina, Vermont and Colorado. But the three locations that right now offer rooms to the public are in Hammock Beach, Fla., (between St. Augustine and Daytona), Reunion Resort & Club (West of Orlando) and Belvidere Club and Resort in Charleston, S.C.

Where are the new ones you are planning to build?

The ones that are under construction are in Boone, N.C., and Minturn, Colo. (near Vail). We have a very large project taking place in the Bahamas on Grand Bahama Island and there are a few others that are being planned.

Will these be the same formula where I can buy a home or condo and it will be operated as a resort with my unit being in the rental pool?

Yes.

Ginn has utilized fiber quite a bit. Explain to me what you are doing and why.

The industry is going through changes right now about how to deliver technology to a home or a building. Not that many years ago, and in many cases still today, if a developer starts a community he would call the phone company and say please wire these houses; the same thing for the local cable franchise, and that really would be the end of it and the community would end up with a copper infrastructure for telephone and a coax system for TV. Our point of view is that that is not good enough, particularly for the homes in the communities that we are building. Many of our homes will be several million dollars in value and we like to think we are building what we are calling smart communities. To us that means that they have to have a very high bandwidth available, top-end video services and top-end voice services. We work with the local suppliers to make sure that our communities are all implemented with the fiber backbone infrastructure. If that means we have to contract with various video content suppliers or phone companies that are not the incumbents, we will do that. We will put together the package so that over a single fiber infrastructure to each home and each residence we deliver the leading voice data and video services. We believe that we have to deliver very high bandwidth and that’s not achievable over the copper/coax infrastructure.

Because our residents can flip back and forth between rental and residence, we have to deliver two types of service over this infrastructure. So as a resident your phone service is different then if you are in the rental pool. If you are in the rental program you are going to be connected to the rental program PBX. If you are living there you are going to be connected to the central office phone service. You will get different video services in hotel rooms than are allowed to be delivered in homes and visa versa, and your Internet connection through a hotel may be different then your Internet connection as a resident. All of this has to be controlled centrally, so we usually build a communications building on the property. All of the services come in and are all connected in this building. We can change a unit back and forth from residential to rental and we can control the quality and the bandwidth from a central location. We just don’t want technology to ever be an issue. In fact, we want technology to be a positive selling point and a differentiator for our communities.

Other than the fiber, are there things you are able to do because of the unique make-up of your properties versus what you think a typical hotel company could or could not do when it comes to technology? In the hotel industry, it can be difficult to get owners of franchises to implement technology. I am guessing it is easier for you because of the unique ownership.

I think because we are doing new builds and because the costs of building these resorts or communities are shared, we put in some money and the owners put in the balance. It enables us to afford things that may not fly in a normal hotel environment. It may be that for a given size or given occupancy another hotel company may not put in as many electronics or as high-end, but because the costs are spread out in the way that they are we are able to afford that infrastructure and technology.

You’re a big believer in voice over IP, correct? Tell me how you see it being used.

All of the admin phones within the Ginn organizations, actually, any location other than a guestroom, are all IP phones. We put in our own PBX system, we administer them and we tie all of these phone systems together over our own network. So we are spread out over 20 to 30 locations, but we basically run our own IP phone network over that.

How spread out are your locations?

With all of our different sales locations, operating locations and various administrative buildings we have probably close to 30 locations where we administer phone service. Some might be a sales trailer or a development trailer that may have a dozen people, and another location could be an administrative office with 200 people. But all of these are on our own interconnected IP phone network. We have wired all of the units to accept IP phones, but we are still running analog phones for the time being because they are more suitable for the guestroom at this juncture.

This is not unique to you, the whole industry wrestled with this. Many are using it in administration versus the guestroom. A lot of it is a cost issue.

Right. Those phones today are still more expensive, and while they offer more features, the tradeoff is still difficult to justify on a large scale right now. But I do expect that to change in the next couple of years.

How so?

I would expect that perhaps one of the luxury condo towers that we will open two years from now might be the changeover point where we outfit it with IP versus analog phones for the rental units. While I may be an early adapter of IP phones and want to put them into rental units and have a hospitality system that uses IP phones, I have to understand that the owner who might live in the unit might be happy with an analog phone for the next 10 years. I still have to put in an infrastructure that supports that analog system. I still have to put in an infrastructure that supports television over coax even if I might start to deliver IP TV to a rental unit exclusively a few years from now. This is why our infrastructure is so important, because we have to serve two masters. We have to serve what is the leading edge because we are a luxury product and we want to deliver the luxury experience when you are in the rental program, but we have to accommodate owners who don’t really care about the latest TV or phone and want to be able to go to Radio Shack, plug a phone in and have it work. So our infrastructure is a very important thing, and we want to do it from the least expensive way. It has to accommodate everybody, but be affordable, and that is what fiber helps us do.

The Ginn Company seems quite unique. When did it start? How long has it been in business doing what you are doing today?

The company started with Bobby Ginn and a few others about seven years ago. The first project was Hammock Beach. As I was saying earlier, it started by purchasing land and doing all the planning, all the visioning of how to turn that into a top-end luxury community and resort. Bobby Ginn has a lot of experience in that type of development. The folks that started with him have experience in developing other resort communities, but he saw an improvement on the vision of how other developers did things and the company grew very quickly. In 2004, we sold about $1 billion of real estate, and in 2005 it was close to $2 billion. So it’s growing very rapidly.

Are the resort type of hotels still a big part of what you are going to do?

Yes. At Reunion we only have about 500 units in the rental program right now, but when that resort is fully built there will probably be 50 percent of the residential units in the rental pool which is close to 5,000. So it would be like a 2,500-key resort and most units are multibedroom. It will be a huge operation at full build out.

This whole operation seems like a no lose situation.

Ginn was one of the very first companies to really aggressively go after this model. Our success has not gone unnoticed and a few others have done the same. The whole rise of the condo/hotel is now catching on by everyone. Our formula is still somewhat unique in that we don’t build just the building, we build the entire community. We have the residential aspect, we build the golf courses and we do all of the envisioning. What also makes us unique from many real estate developers is that we stay on and run the HOA (home owners association), the golf club and the golf course maintenance. We have a group called Ginn Lifestyles that will stay and take care of your home, cut the grass, wash the windows and fill your refrigerator, so we don’t build something and then move on. Even if it’s an entire residential community, we stay with that community and continue to provide services for the foreseeable future.

Ginn is new to the hotel industry. How long have you been booking rooms?

We have only really been open a little over two years. We started taking room reservations for our hotels about two years ago.

CRM is a big, big part of business today – know your customers and how to market to your customers. Is that something you are focusing on?

Yes. It is a big focus and it is something that we are spending even more time looking at right now. We, of course, start with our owners and even potential owners (folks who have shown an interest to perhaps purchase something in a Ginn community). They are a good base to look at as far as room nights/guests because they already understand the product and the locations. But an owner in one community can still be a guest in another community, and an owner then becomes a member of our clubs. So we have many different relationships with the same person. They can be a lead for a future purchase, they can be an owner of a property, they could be a member of the club and they can be a past guest or current guest in another location. What we are trying to do is create a system that captures all of these aspects, and this is one of the main things that we are working on in-house because there are not really off-the-shelf systems that deal with all these different relationships and the way we need that done. The focus of our in-house development is to provide better service, simplify the processes for these individuals to deal with Ginn, and communicate with them but not overly communicate or barrage them, because so many different parts of the company deal with the same person.

Good point. That’s always an issue the hotel industry faces, being too aggressive with your potential customers or past customers versus not being aggressive enough, which is another mistake that can be expensive.

Agreed. This list of names is interesting to the real estate division as a buyer and to the membership division because they want to let them know about all the member activities. It is interesting to the hospitality division because they would like them to stay at the resorts. You can over communicate with people, so we have to be careful of that.

Do you have any wireless initiatives going on?

Yes. We use quite a bit of wireless. We use wireless in the back of the house operations to connect many remote locations all over the property.

Give us an example.

At a club, we may have a network connection to the main clubhouse but we have a lot of remote maintenance buildings or sales or development trailers that are spread out around the property. Instead of trying to get fiber out to all of these locations we may communicate to them wirelessly, but it supports all of their telephones and all of their computer activities. That is one way we have used point-to-point wireless. In our guest facing operations, besides providing wireless to the guests, we are working on hand-held tablets for our concierge.

Keep going.

If you check into a Ginn property, at Hammock Beach for example, you really don’t ever have to go to the front desk. You are met right at the front door and you’re escorted directly to your room. We plan to give the concierge hand-held tablet PCs to use to check the guest into their room, make reservations in the restaurant, or make a spa or golf tee time reservation. All of these things can be done off the tablet in the room and they don’t have to come down to the desk. Or if the concierge sees the guest out by the pool or out in a restaurant, these things can all be done wirelessly in these locations as well. We are also giving our supervisors who oversee the golf course maintenance and development hand-held devices to keep track of the different jobs and hours, and then this data is remotely updated to our payroll and cost systems.

Are these things internally developed?

In the case of the tablets we are using the PAR Springer-Miller property management system but displayed on wireless tablets. In the case of the labor cost system that uses the hand-helds, that is an internally developed application.

What about maintenance in general?

We use HotSOS from MTech as our work order system and guest response system in our resort locations.

How are you dealing with distribution of your room inventory?

Until recently we have not had a great deal of inventory to sell on the Internet or through third parties, but we have had a relationship with Sceptre for some time where they distribute our inventory to the GDSs and out to the various Web sites. We also use EZYield to update rates of available inventory on a number of resort-oriented Web sites. Each PMS system also has a direct connect to Expedia. We have always primarily promoted our own Web site which has a booking engine in place. We are just now kicking off a project to update our Web sites to make them easier to use and to make the booking engines more robust. We want to accommodate not just rooms but spa, golf and dinner appointments, and we want to integrate as much of that experience online as makes sense. Our current approach is that when you book online a concierge will call you and make these arrangements at your convenience. We know many people would prefer to do this over the Internet and not do it by phone, so we want to give them a choice whether to continue to have the conversation with a concierge one-on-one or have it available online. So it is becoming more of a focus for us to work on our distribution and upgrade how our Web sites operate.

Is Ginn a big believer in video teleconferencing?

Yes, it is something that we have put some effort into, but we have struggled with it. We’ve invested to the point where we have VTC services at all of our management locations. We have over 20 locations and we have our own VTC network. We are still constantly tuning the system to get consistent maximum performance out of the equipment to the point where it can substitute for a face-to-face meeting and save a trip. We definitely have had some success with that and it gets used every week, but our experience is that this is still an evolving technology, and for anyone who wants to go beyond one or two locations and is looking at something like 20 locations, it takes some serious management effort to keep it up and running. But to us it seems worthwhile.

This technology has evolved over the years but has yet to be totally embraced by the industry.

It’s hard for the cameras and the microphones to be as reactive to 15 to 20 people in a conference room as you would be if you were sitting there. It can be very effective, but it is something you have to pay attention to.

What other technology is Ginn doing on its own?

The whole area of cell phone technology. We have over 300 Blackberrys and many hundred other cell phones that we use in the company. Cell phone service for our own use as well as for our guests is a high priority. Often the communities we build are some distance from metropolitan areas and cell signals can be weak or non-existent. As part of our developing a community we don’t just worry about the in-ground services, we also will build and promote a mixture so that cell service is brought to that community. The cellular vendors would do this eventually, but they would do it four to five years after we bought the property.

How do you get the big guys like Cingular and Sprint to put a tower up early? Is there a process one goes through?

From the cell provider side, there is not a clear process. It is negotiating with them and offering to split the costs and contribute to make it economically worthwhile. From their point of view, when there is very little business, it is a very expensive undertaking until there are enough calls to make it worth their while. So we supplement that to encourage them to go in early. We consider this both important to our ability to do business there, but also a guest or resident service if you will.

So there is no real magic as far as going to the cell phone companies.

Well, we also hire companies. There are companies out in the cell world that do this and that work on your behalf with various vendors to get towers put up. We have hired some of those companies that do this work for us.

Let’s switch gears. You have been pretty involved these past few years with Hotel Technology Next Generation (HTNG).

I have been very pleased with how that organization has developed. I have put quite a bit of time into it, and in my mind, it is time well spent. One of the areas that I pay particular attention to is the in-room technology workgroup. As I said earlier, we put a lot of emphasis on infrastructure, moving from the analog world to the IP world, and what you have to do to get ready for that when putting in high-end entertainment systems and such. The choices we as hoteliers have in the marketplace right now are not very good in terms that they are not integrated. They are hard to use, you have to have many remote controls and you have to have a lot of extra wires or a lot of extra devices. This makes the room even more expensive or hard to design or hard to maintain. HTNG is a combination of hotel folks, consultants and vendors, and all of these groups are working toward common solutions. I find it very practical. Folks are really trying to come up with products that can be built and purchased and solve today’s issues. But these are bigger issues than any one company can do on its own – any one vendor or any one hotel company. As you know, HTNG has developed specifications that enable software products to perform in an integrated manner. I really believe this is what we also need on the hardware side for in-room devices. HTNG has grown very quickly and it makes sense because of the practicality and the work products that are coming out of it.

Do you think we will ever get to the point where the hotel industry will only buy or do business with companies that are HTNG-approved or HTNG-endorsed?

I don’t know if we are very close to the point where the industry will only do that, but I do believe that vendors who have worked on the HTNG workgroups and have contributed time and intellectual capital to try and improve the situation, should be rewarded with the business. The whole idea of HTNG as well as many other associations such as OTA is that what you put in is not proprietary; everyone gets to share the work. I think vendors have contributed time and talent to try to create a product that others can go and copy to some extent, but if they are not part of HTNG or they have not been certified, again I think the vendors who did the work should be recognized for their contribution. I’ll tell you for me it is even more than that.

How so?

Let’s say for example I’m looking for a video on demand system and I have a vision of where that is going to go in the future. It is going to move toward IP, it has to have HD content, we want to have servers in our system that allow us to put in our own content, and we want a set-top box that is integrated with our audio system. All of these things are discussed at an HTNG session. If one of the vendors that I have to choose from in the marketplace has been sitting in these same sessions, I already know that we share the same vision. I do not have to explain to that vendor why it has to be IP, why I have to have certain rights, why I have to have certain flexibility, because we have all reached this vision together versus another vendor who does not participate and I would have to try explain all this to them. So, to me, it is very efficient if you work with vendors who have already been on a committed basis and you have spent time with them and we are all going in the same direction.

Well said. How large is the IT organization here at Ginn?

Right now it is about 70 people.

That is a sizeable number.

The majority of those individuals are working on our internal support, meaning taking care of the 24/7 help desk on all of our applications and any network issues or phone issues.

Are they all here in Celebration?

The majority of them are based here in Celebration, Fla., but we also have individuals out in all of our key administrative locations that are onsite. We have IT folks that come to your desk when you have an issue and resolve that. The majority of our IT folks are either doing software support or network, data or voice network implementation and support. Then we have another group that concentrates just on the community infrastructure and not only plans and negotiates the infrastructure of each community, but then as the community is being built out, works with the vendors and the suppliers to see that it is going in according to specification. Then we have, as I mentioned earlier, an in-house software development team.

Talk about that software development. You must have some unique needs because of the way you operate. How do you decide whether to develop something internally versus looking outside?

Our preference is to use a package that we can buy and implement quickly. That is always the quickest way to a solution and the least expensive. We have over 50 packages that we use between hospitality, accounting and other administrative functions. But as I mentioned earlier, we have some unique business practices because we are a developer and an operator. If you go to the developer marketplace it only goes so far. If you go to the hospitality marketplace it doesn’t start far enough back. So our major undertaking from internal software development is building this database that is sort of our baseline system that all the other systems talk to. This is our system of record where we have everything we need to know about owners, members, our lots and units, our inventory and our sales process. There is data that really is collected from a dozen or more systems that all feed into this centralized system. We really have not been able to find an off-the-shelf package that keeps track of everything we need to keep track of or operates in the manner in which we want to operate.

It is interesting that you work for a company that is involved in real estate as much as it is in the hospitality industry. How different are the two industries as it applies to technology?

Both industries market, of course. In one case you are in a pure hotel-only environment and you are marketing to guests that come and stay at your hotel for one night or a week or for conventions. In real estate, you are marketing to folks that will buy your product and invest a great sum of money into a lot, a home or a condominium. The techniques that are used in real estate marketing from my viewpoint are quite different from the techniques that are used in regular hotel marketing. On the other hand, a couple of years ago, real estate had almost no interest in using the Internet or the Web. It was 100 percent face-to-face selling. While there was a lot of direct marketing most of the information sharing about our company was done on a site visit. Selling just a guestroom in the hotel industry is pretty common on the Internet without talking to anybody. It is basically unheard of to buy a lot or condo over the Internet without talking to anyone. But what we do know is that people want to know more online. We are trying to work out the right balance between a real estate sale and the information available online versus what you save for the onsite in-person visit. So there is a transformation going on where the pure hotel rooms have already passed most of that, but real estate is still trying to figure that out.

But everybody looking to buy a house uses the Internet extensively.

We know you can go online and see the house when someone is just selling a house. But we are not selling just a unit, we are selling a lifestyle. We call it living the dream. Our units will go for a premium over the same square footage in a non-Ginn community. Buyers will pay a premium to be in a Ginn community, but you are getting a lifestyle, you are getting all the amenities, you are getting the environment. And that really has to be explained or we want you to see it in person. So that’s one thing that has been interesting to watch and see how it evolves.

Is there a Ginn philosophy you can share in regards to the big picture with technology?

The Ginn Company has an aggressive and future oriented view and has shown strong support for technology in the time I have been here. I think we have advanced policies for guestroom technology, wide-spread wireless access and cell phone initiatives. Our insistence on high bandwidth fiber-based communities is leading-edge thinking in the real estate world. And the willingness to invest in software development also indicates a support for the benefits of technology. On the other hand technology will not replace certain aspects of our sales processes or club experiences. For example, there is no interest at this time about looking at something like a kiosk. That would be very counter to our philosophy of a one-on-one relationship between the concierge and the individual. We will never build a convention hotel and have 1,000 people checking in all at once. That is not the marketplace we are looking for. We want when you come as a guest to have a club experience, and the best technology in that environment is where it is very efficient behind the scenes. We do not have a big push for a lot of guest-facing technology.

Do you think you will ever see Ginn getting into straight hotel business down the road as they have more and more success with their resorts?

I don’t think I could say that there is any area that Ginn would never get into. As of right now, we have not done that. It has just been the model we talked about. We do not do any timeshares either.

You and I are part of the HFTP GUESTROOM 2010 initiative for this year’s HITEC in Minneapolis. So much discussion is about plasma and LCD TVs. Does Ginn have a position on these types of televisions?

While we have a number of one bedroom units, all of our units will have a bedroom as well as a living area and a kitchen with the majority of them being multibedroom. In our typical three bedroom unit, we are putting in three LCDs and one plasma television, all HD, along with four DVD players. It’s quite a lot of technology for a unit.

As a hotelier, do you think we are at the point now that guests are expecting to have a flat panel plasma TV in their hotel room at least at the high end of the hotel spectrum?

I personally believe that the HD experience will need to be very rapidly adopted and deployed. If we look a bit back at HSIA, hard wired in-room Internet took a while to become a standard and then it just took off. Wireless took off almost immediately when it became viable. I think in only a couple of years, if a guest goes to a hotel and they don’t have an HD television, they will form an opinion of that hotel that negatively impacts all the other services. If the entertainment options are less than what they left behind at home, it is going to detract from any four- or five-star experience for sure. I think people will accept it at limited service for a few more years, but I think it will undermine the four- or five-star marketplace very soon.

So you are talking HD TV in the rooms?

Flat panel TVs are outselling CRTS for the first time this year and soon CRTS will not be available. But the requirement is not just installing flat panel HDTVs, you also have to do some work to get HD content into the hotel room. Most cable systems in hotels today are not delivering any HD content, so just putting in the TV does not solve the problem. You have to deliver HD signals as well. It is the total experience and not that you just upgraded the TV.

But the cable companies do offer HDTV, right?

Well, here is the problem. In most cases, if you have a cable system in your hotel, you can not get HD without a set-top box, and most of the hotel rooms do not have set-top boxes for their televisions. If you do have a set-top box, it is there for your video on demand, but it is not a set-top box that supports HD because the VOD suppliers have not developed those yet. Now with IPTV, some of that is starting. At your home, you can get HDTV, but if you think about it you either have satellite or you have cable, but you have a set-top box. So those have to be implemented into the guestrooms and there is an expense, design and cost involved. If you put in the flat panel TV and skip the HD content, I think you are missing the boat.

I think pricing is the issue. As TV prices continue to fall, they will be installed more and more. We are seeing it in more hotels, and not just in five-star hotels.

Right, I agree. But I think it will be a rapidly adopted technology.

If something like HDTV is commonplace in our homes, hotels have to adapt just like they did years ago with high-speed Internet access.

I think we have a couple of years, but I don’t think it is much longer than that. I think the other area we have to recognize, along with upgrading the televisions, is that customers/guests are going to bring their own content with them and we have to be much more accommodating in the room to connect MP3 players, iPods, video cameras and laptops where guests bring their own songs, or laptops where they bring their own video or even want to download songs or video over the Internet during their stay but want to watch it on the larger television or listen to the songs through your stereo/entertainment system. Most guestrooms are not very accommodating to that. They don’t have a place where things can be plugged in and they don’t have power outlets. I think that is another aspect of in-room entertainment that we have to recognize, that guests will not just watch the content we provide for them, they will drive their own content.

Using your example of downloading MP3s and iPod songs, can you imagine being in a resort where the families use their video cameras to take shots of the kids in the pool and then come back to the room to play it on your flat panel TV versus waiting until they get home? Do you see that happening?

Absolutely, and since we are a resort environment that’s a higher priority for us than other hotels. But that is exactly right.

Resorts sometimes have their own unique needs that a corporate downtown Cincinnati hotel might not have.

I agree.

Is there any next wave technology that you see that might be coming into play in the hotel industry?

One emerging technology that we talked briefly about at our resorts is RFID. An example is where guests have bracelets or keys that have RFID capability. Our resorts can be very spread out. Let’s say parents get separated from children. They could see where their kids are by using their TV set or a kiosk at one of the three water parks or two or three locations onsite. Or, we can hand out wireless IP communication devices which are different than cell phones and are just used on the property, but are supported by our wireless network so guests can talk to each other while they are on the network. We have not put in any real serious research into those, but those are some ideas that we think we might implement in the future.

RFID is so close.

You are probably right. When you are over 2,500 acres, you want to know where your housekeeping personnel is, where your engineering personnel is, or where your security personnel is because they can be in quite a number of places. Back at headquarters, you might be trying to get someone to go to a certain residence, whether it is housekeeping, engineering or security, and you can look on the screen and know where everybody is at that time. You can do that with GPS but maybe RFID might be another way of doing it.

Right.

So we are considering both of those technologies when you have a very spread out location. Again it is a whole community that we are building.

What do you think has been the biggest change in the world of technology over the 30 years you have been involved in this industry?

Thirty years? Let me say, in the early days we were so hardware focused. Equipment was so expensive and so unreliable that when I was an IT manager at a hotel, you were just lucky to keep the system running. As a 24/7 operation hotels really pushed what the technology could do and if it could stay up and running and be reliable, and did not have to be rebooted you were doing well. At that time a CRT cost $4,000-$5,000, you had to worry about every single device and everything was so expensive and unreliable, it was all about the hardware. Then at some point, the hardware became reliable and cheap, and as an industry we started focusing on good functionality, good workflow and good user interface. That to me was sort of transformation one.

And transformation two?

To me transformation two is the entire Internet. We do not build client server things anymore and everything is integrated. The customer is so much more involved in our systems through their use of the Net and they are on the same applications we are on. Just the whole Net transformation from the stand-alone client server environment, and we are not done with that. We are still going through that one, but that is going to continue to change how our software works and how we interact with our customers. So, you know, it is extremely different when you go out looking for a solution now than when you looked for a solution 20 years ago. You just don’t even think hardware. It isn’t a big issue. You just know you have a lot of variety, it is all affordable and reliable, and you just are looking for the best Web-based solution that you can find now.

That is a good point. What is going to happen in the next 20 years?

Hospitality Upgrade will be bigger and better than ever. (laughing)

We can only hope! (smile) Don’t forget our CIO Summit in September.

I will be there again this year!

Bob, thanks for your time. This is a very unique operation.

It is unique. Thanks for visiting.

Counting Cards: La Quinta Inns & Suites

Guest analytics at a grand scale is a challenge. For La Quinta Inns & Suites this means understanding the most profitable way to target over 50 million past guests. Using a complex segmentation scheme that is applied to every past guest requires efficient processing to ensure timely execution of direct marketing campaigns. More importantly, La Quinta requires analytics that go beyond opens and clicks.  The company wants to know actual guest spend at a granular level. It also needs to know the last time a guest stayed at a La Quinta, which property in which city, how much was spent, what day of the week he arrived, the room in which he stayed and numerous other details.
 
Simple RFM (recent, frequent and dollar spend) scoring is not sophisticated enough for a marketing team that is tasked with driving incremental revenue through a process of targeting millions of “returns” members and non-members alike.   While La Quinta Inns & Suites is in the select service space, its approach to direct marketing and guest analytics is on par with any of the major brands. Another strategy worth noting is its focus on non-loyalty member direct marketing.  Realizing that the aggregate data spend of non-loyalty guests is a significant portion of La Quinta’s total revenue, all guests are analyzed to understand his or her true value to the enterprise, regardless of loyalty membership.  
 
Vice President of Loyalty Marketing for La Quinta Inns & Suites David Sims said, “Executing direct marketing campaigns to millions of past guests requires a highly efficient marketing automation system with no sacrifice on data quality. Our marketing database is the foundation for all our targeted marketing efforts, and the Clairvoyix database consistently delivers. We get our campaigns out on time and without costly errors. We utilize a sophisticated segmentation scheme that is changing as we apply the knowledge gained from the results of every campaign. Applying an actual dollar spent ROI process across dozens of segments and millions of guests is not possible without our Clairvoyix marketing automation system.”
 
Guest analytics at a grand scale is a business necessity for all of the major brands. La Quinta Inns & Suites approaches this problem from the ground floor. Build a marketing database with cleansed and deduped guest data, apply a sophisticated segmentation scheme, target market, and the results will speak for themselves.    

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