DAY ONE:
Investment Program New to this year’s agenda was an investment half-day program held the morning of the first day. Prakash Shukla, managing partner at Wayfare Ventures, introduced a full lineup of sessions designed to connect vendors with the investment community.
They represent a continuation of an investment program presented at the end of the Hospitality Industry Technology Exposition and Conference (HITEC) in Charlotte,NC, last year.
The Future of Artificial Intelligence in Travel Technology
First up was Philip Rothaus, managing director for Alvarez and Marsal. He focused on how artificial intelligence (AI) is making its way through our industry. As AI matures, he predicts misconceptions will give way to opportunities and disruption. Generative AI (think ChatGPT) makes up a small portion of the AI landscape. The majority of AI in use today is focused on predictive analytics, machine learning, and algorithms.
There’s a new buzzword on the horizon, he noted – agentic AI. This concept gives AI a greater level of freedom to determine the best way to complete a task to achieve the defined outcome. For example, AI in revenue management could be given full control to implement strategies that would typically require human intervention to review and approve.
Rothaus concluded with a few key points for vendors deploying AI:
- Watch your words: Aim for plain or “weekend” language. Cut out the “AI washing” (overestimating AI’s capabilities) and buzzwords.
- Be honest: Manage customers’ expectations
- Be authentic: Talk about your AI Journey
AI implementation isn’t easy, he noted, but solutions for guest-facing AI bots are getting better every day.
Travel and Hospitality Tech Capital Market Update
AGC Partners' Jonathan Weibrecht was up next with a deep dive into capital market activity and a particular focus on technology companies in travel and hospitality (T&H). In his assessment, M&A is firing on all cylinders with a 140% year over year increase in T&H tech deals, outpacing other travel-related investments in lodging and airlines.
He credits a combination of revenue growth and improved earnings before interest, taxes, depreciation and amortization (EBITDA) margins with driving growth in the
T&H sector. These, he noted, are two key factors investors look for. They’re interested in large scale platforms with moderate growth over small platforms with exceptional growth. In the valuation process, revenue growth can be as much as three times more important than the EBITDA margin.
Despite all the growth in M&A activity, there are potential headwinds. Weibrecht pointed out five key areas:
- A potential U.S. recession
- Geopolitical crises/global conflict
- Damage to “Brand America”
- Major unicorn (a once highly valued company) goes bust
- Debt markets tighten Fireside Chat: The Mechanics of Investment
Serent Capital Vice President Adam Gzowski sat with ProVision Partners Founder and Senior Vice President Greg Pesik to answer questions from an investor’s point of view. Gzowski’s insights gave the audience a better understanding of the investor’s perspective when evaluating opportunities. The factors they find important, he said, may not always align with what the company is looking for. This often results in the need to compromise.
Lessons from the Trenches
In the day’s final investment session, Hudson Crossing Partner Max Rayner moderated a conversation between Hapi President Jeff Bzdawka, Aiken Street CEO Sherry Marek, and Nomadix Global Vice President of Strategic Partnership Mike Gray about their firsthand experiences preparing a company for acquisition. Though each offered different stories, all carried a common theme – it’s a complex process. Investing in an advisor with hospitality technology experience is extremely important.
Pre-Conference Event
Every EVS kicks off with some form of special event tailored to the host city. This year’s event was all about baseball bats and bourbon. The group took a guided tour of the Louisville Slugger Museum and Factory. Hillerich & Bradsby have been making Louisville Sluggers for more than 100 years and currently supply 20% of professional
baseball players’ bats.
After the tour the group went to the Barrels and Billets Bourbon Experience, owned by Hillerich & Bradsby, and were guided through a tasting of six bourbons, each with unique characteristics. Then the fun began as each of us “crafted” our own bourbon and each unique “blend” was then bottled and labeled before our departure. See pages 68-69 for photos of the pre-conference event.
Welcome Reception and Dinner
The day ended with a reception and dinner in the Seelbach’s Rathskellar. This room was fashioned after a traditional Bavarian beer garden decorated with rare Rookwood Pottery and a number of carved pelicans.
After dinner, Master Blender for Sazerac Drew Mayville, shared the history of bourbon, Sazerac and Buffalo Trace Distillery. The sample lineup consisted of Sazerac Rye, E.H. Taylor Small Batch, Weller 12, Stagg, and Blanton’s Gold. Even if you don’t like bourbon, you must appreciate the history and lore that comes with every label produced.
DAY TWO:
A Glimpse into History: The Seelbach Hotel
The EVS agenda officially got under way the next morning after breakfast. Larry Johnson, The Seelbach's lobby concierge and hotel historian, gave us a fascinating history of this grand hotel, which first opened its doors in 1905.
Construction began in 1903 for the hotel, which was the dream of two Bavarian brothers – Otto and Louis Seelbach. When it opened in May 1905 it was billed as the city’s only fireproof hotel. A five-hour public inspection on opening day drew 25,000 visitors to admire extravagant finishes and furnishings sourced from all over the world.
Throughout its history, The Seelbach has hosted guests both famous and infamous – including many heads of state. During prohibition, the hotel was frequented by such notorious figures as Al Capone, Lucky Luciano and Dutch Schultz. Cincinnati’s George Remus, known as “King of the Bootleggers,” frequented the Rathskellar. There he met F. Scott Fitzgerald who was going through Army training at nearby Camp Taylor. Remus became the inspiration for The Great Gatsby. Capone could often be found playing cards in The Oakroom, which still has two hidden doors behind special panels leading to secret passageways.
The Seelbach’s age raises obvious questions about ghosts and there are a few haunting tales. The story of The Lady in Blue was especially unsettling. Johnson shares this and many other fascinating stories in his book The Seelbach: A Centennial Salute to Louisville's Grand Hotel.
The Biggest Risk in IT is Running Blind
Cyber Tek MSSP CTO David Neel took to the stage to give an insightful presentation on the most important aspect of cybersecurity today – being prepared for the risks you never saw coming. Most organizations focus on known threats but lack a framework to identify their operation’s blind spots. Plus, they don’t have disaster recovery plans.
Early cybersecurity was built around a castle mentality, he said, with multiple layers of defense, including physical protection. By 2015, cyberattacks had become much more sophisticated and ransomware extortion sites were becoming increasingly prevalent.
Preparing a strong disaster recovery plan is your best defense for the unknown, Neel noted. He advised the room to conduct tabletop exercises (a la war games) to determine their response to scenarios such as internet outages, natural disasters, or even ransomware attacks. Being proactive in this process can save a lot of time and
money after the fact, he added.
He proposed using the “left and right of the boom” approach to the tabletop exercises. “Left of the boom” is the period before an incident happens. The focus is on prevention, mitigation and preparedness. The “boom” is the actual incident. “Right of the boom” actions center on response, recovery and lessons learned.
Bobblehead Time
Next it was time to recognize those attending their 10th EVS with their own personalized bobblehead. The newest members of the 10-year club include Mike Gray, Greg Pesik, Evan Brown and Jeff Venza. We also took the opportunity to acknowledge those who also attended the very first EVS in 2005 – Sherry Marek, Greg Pesik and Mark Holzberg.
The Generative AI Productivity Paradox
Michael Goldrich, AI advisor with Vivander Advisors, shared strategies for successful generative AI projects. Many of today’s efforts are failing to meet expectations, primarily due to a lack of alignment with all areas of the hotel.
The problem begins with literacy, he said. It’s the top challenge leaders worry about when implementing AI. However, when asked to name their top challenge over the next five years their concern shifts to the cost of implementing and running generative AI.
Goldrich offered a four-part solution to successful AI adoption:
- Set the tone from the top down
- Get the right tools
- Give yourself time to experiment
- Train your staff to upskill, or learn new skills
Creating a daily habit for AI literacy upskilling is critical, Goldrich noted. Microsoft recently identified the AI Habit Tipping Point, which holds that users begin to perceive AI as useful when it saves them at least 11 minutes a day. To solidify the AI habit, staff need to use it consistently.
He recommends practicing AI use for 11 weeks. This is where users reach the tipping point. The result is increased productivity, improved work enjoyment, and a better work-life balance. AI implementation should focus on increasing joy, while decreasing toil. He gave this simple equation: AI Literacy + AI Mindset = Retention and Growth.
Vendor Voice: The No-Filter Forum
HFTP CEO Frank Wolfe and Sherry Marek were next up to facilitate a conversation with vendors on what HFTP could do better. Participants touched on their likes and dislikes with HITEC and involvement with the association through memberships, Corporate Allied Sponsor program, and a vendor advisory council.
Gregg Hopkins said he’d like to see increased exhibit hours at HITEC. Mike Gray asked if HFTP and AHLA were now at peace after the date snafu with The Hospitality Show. Jeff Venza asked if HFTP could provide some form of training to vendors for greater understanding of hospitality operations as a benefit of being a Corporate Allied Sponsor.
Finding a Better Way to Work Together
After lunch, attendees reconvened for a panel conversation. Along with moderator Bzdawka, panelists included Laura Calin, senior vice president for Oracle Hospitality; Dan Kornick, CIO for Loews Hotels & Co.; McLean Xavier, CIO for InnVest Hotels; Andrew Sanders, vice president, North America for DataArt; and Rohan Jani, associate vice president of Hotel Technology Products for Hyatt Hotels Corp.
The panelists agreed that COVID created an environment that increased vendor community integration efforts to directly benefit their mutual customers. The resulting cooperation amongst competitors was quickly turned into a new buzzword– Coopertition.
Bzdawka asked the panelists a warm-up question: What needs to change in the hospitality tech space? The responses were insightful. Kornick, who was the first to respond, said application data needs to be more portable. This will ease the pain of data migration to a new application or vendor. McLean also commented about data, but from the perspective of franchisees needing more access to customer data, especially for companies operating different brands. Many brands have restrictions that limit franchisees’ ability to leverage data for their own company’s needs.
Calin stressed the importance of better interconnectivity between vendors. Improvements that have been made since COVID need to continue. Cooper-tition should alleviate any gotchas when a customer is working with two different vendors to solve a business need.
Jani focused on the need to refine the check-in process and continually look for ways technology can improve the overall guest experience. Sanders echoed this sentiment, suggesting the industry needs to invest more broadly in technology for guests and employees.
Points to Ponder When Preparing for an Exit
Our last education session was presented by John Rovani, managing partner, Ponterra Business Advisors. His message was straightforward: Starting a company and building it into a successful venture takes time and commitment. Finding the right way to sell your company and exit the business can be equally challenging.
There are many different exit options to consider. You can leave the company to your family, associates, or minority owner/investors; set up an ESOP; recapitalize with private equity; or even negotiate an outright sale. You need to weigh the pros and cons of each option.
Exit options will also depend on your desired outcome. Are you looking to maximize value? Do you need an all-cash exit? Do you want to optimize the exit to minimize tax implications? Is protecting your legacy and the team important? How do you ensure that you don’t leave money on the table? You need to decide first, then plan for it.
Rovani shared three interesting facts with the group:
- Over 75% of businesses put on the market don’t sell.
- Many business owners don’t know the ideal value drivers to capture buyer interest and maximize value.
- Based on client feedback, 90% of inbound buyer interest is unqualified and composed of low value buyers.
You can mitigate these risks by understanding the process and being proactive. Remember to protect yourself and hire an expert advisor, not a generalist. They’ll help organize you, optimize the business, and create a better story to sell the business.
Trivia Time
No EVS would be complete without a surprise activity. This year, it was Louisville trivia. We learned some astounding facts about the city, including the fact that a
third of Kentucky’s bourbon comes from the area and 95% of all bourbon comes from Kentucky.
At the conclusion of the trivia contest, we gathered in the hotel lobby for a group photo. Organized chaos is the best description of our efforts to arrange,
rearrange, and place people in just the right spot. There are two separate photos depending on whether you’re an attendee, sponsor, or a speaker, which only created
more fun. Did Michael Schubach, CIO, Millennium Technology Group/Rosen Hotels and Resorts get in the right picture?
Vendor Roundtable
To close out the day, Hospitality Upgrade Publisher Emeritus Rich Siegel and HFTP's Frank Wolfe moderated a vendor roundtable. This gave attendees an opportunity to provide feedback on the challenges and opportunities shaping our industry, as well as this year’s sessions. There seemed to be a consensus that the topic of cybersecurity wasn’t as present this year. Feedback from this session is critical to developing programming for the next EVS and other conferences.
Dinner at the Kentucky Derby Museum
What would a trip to Louisville be without a trip to Churchill Downs? The Kentucky Derby Museum is filled with memorabilia and stories covering 150 years of the Run for the Roses. Many of the trophies on display are on loan from personal collections, along with photographs depicting the evolution of the first race in the Triple Crown.
After an opening reception, we were “called to dinner” by Churchill Down’s very own bugler Steve Buttleman. He’s been performing the “Call to the Post” fanfare at the track for more than 29 years.
He also offered up a solo performance of Kentucky’s official state song – My Old Kentucky Home – which is sung every year before the start of the race. Unfortunately, the races were still a few weeks away, but we still experienced the excitement of wagering and collecting winnings at the window.
Each table received a racing form for three races that actually ran at Churchill Downs, along with a supply of funds to place wagers. The winning table made a few incredible bets, leaving everyone else in the dust.
After dinner, Wolfe took a moment to publicly thank Siegel for 20 years of EVS, and more than 30 years of Hospitality Upgrade. Though the magazine is now under the HFTP umbrella, Siegel’s influence will always be a part of these events, and we expect to see him at future sessions. To top it all off, Wolfe then presented Siegel with a giant-sized bobblehead. Siegel was thrilled and spent the rest of the evening carrying it from table to table to pose for pictures.
Roundtable with CIO Panel
As with past EVS events, we finished with the highly anticipated CIO panel discussion. This is an opportunity for vendors to hear valuable feedback directly from industry CIOs. This year’s panel didn't disappoint. Participants included; Jani (Hyatt), Kornick (Loews Hotels), Schubach (Rosen Hotels), Xavier (Innvest), and Jacob Apperson, IT Director for AJS Hotels.
The panel consensus: Technology has created an overly complex guest environment in some areas while failing to address the basics. Schubach expressed it best when he vented what he hears from guests, “Don’t make me learn how to use your tech to enjoy my stay.”
Both CIOs and vendors agreed on two of the biggest aggravations they have as travelers revolve around alarm clocks and Wi-Fi. Don’t try and wow the customer with technology if you can’t get the basics right.
With that, we all bid farewell and left wondering where next year’s EVS will be held. Any guesses?
