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The HotelTechInsider podcast interviews the top leaders at the convergence of hotels, travel and technology. Guests include founders, executives, top hoteliers and industry organization leadership. Find all of the episodes at hoteltechreport.com
And I ask them, have you ever used any coding assistance? Have you used Replit? Have you tried any Vibe coding? Oh, no. No.
Speaker 1:No. No. I don't I'm not well, then what are you talking about? You have no idea what these tools can do. You don't really know.
Speaker 2:From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them.
Speaker 3:Today, we have Geoffrey Toffetti on the podcast. Geoff is the CEO of Frontline Performance Group, a company which helps frontline staff, like front desk agents and restaurant servers, improve sales performance. Geoff shares a ton of best practices, both about increasing incremental daily RevPAR at hotels and navigating big changes at his organization. Let's dive in. Well, thank you so much, Geoffrey, for joining us today.
Speaker 3:I'm really looking forward to chatting with you. To get us started, I would love for you to introduce yourself, tell us a bit about your career and your company.
Speaker 1:Well, it's great to be with you. Thank you so much for having me. As you mentioned, my name is Geoffrey Toffetti. I'm the current CEO of Frontline Performance Group, also known as FPG. I started my career in hospitality a long time ago, almost thirty years now.
Speaker 1:And so, you know, I came up the ranks there over a multi year period, but then left the industry and went to a startup in a completely different industry, but had taken the lessons I learned in hospitality into that other industry and then spent ten, twelve years there. Then bringing that hospitality out into the other industries, you know, kind of stayed with me. And then I was at that company for twelve years before joining Frontline Performance Group as a much smaller company and kind of tied my all my roots together. My last company, we went from services to SaaS, had been through that transition very early, you know, ahead of the curve, so to speak. And so had this services to technology background rooted in hospitality.
Speaker 1:So when I came to FPG, it kind of made the roadmap, you know, obvious for me, certainly not to everyone else in the organization right away, but we had this amazing concept of how to help frontline teams perform better and sell more things and enhance the guest experience, but we had no technology at the time. So over time, we've started building technology in response to our clients' wants and needs and also to enable our services, tech enabled services, you know, you hear that. And but we ended up building out a platform that, you know, unique to than other systems perhaps is the origin story. So ours was built out of spending hundreds of thousands of hours on the ground in client environments working with their teams and building tools that would help them versus building technology that you think will solve a problem and then trying to sell it to the industry. So we were coming from the ground up.
Speaker 1:I mean, we had consultants that would stand elbow to elbow at a front desk for an entire shift and demonstrate how to engage the guest. That kind of experience is unique. And when that is what is being funneled up into the roadmap of the technology along with, you know, hearing from clients, we've built technology to enable human performance and we've done it from being on the front line for so long. So yeah, it's been a really interesting ride and I'm excited to share more.
Speaker 3:I was hoping you could talk me through the founding story. I know the company has been around for some time and technology obviously has changed so much in the past few decades. What did the company look like in, I think, early nineties when it was founded? Yeah. What was really the impetus to start the company?
Speaker 3:What did those early years look like, and how did the growth continue?
Speaker 1:Yeah. So we were founded by a gentleman named Ziyad Khouri, who's still the chairman of our board. He's my boss. And he started it he was a rental agent in car rental and became, like, the top agent in the company and got promoted to manager and sales manager. And he developed a sales system that he called service based sales that was transforming his company.
Speaker 1:Well, one of his early bosses was like, you need to go start your own business and I'll be your first client. You need to be teaching us this, but not as an internal employee. So he did. He was like 26 years old and he went out and started as a, you know, consulting training company. And then like over the next decade had grown to a decent sized business, you know, for that type of business, for a training company.
Speaker 1:And then they landed a really big client. They had some big clients, but they landed one that was a little different, which was an automotive manufacturing company, a dealership brand. And so that that kind of had to change the trajectory of the business a bit. And that's right when I came in. And when I joined, I had just finished a twelve year run going from the first employee of a startup to, you know, being a top five executive of a company doing hundreds of millions of dollars of revenue.
Speaker 1:And so I sort of had a different perspective. When I joined the company, it was fairly small. There was only less than 30 people in it. It was still focused in automotive. And coming with that hospitality experience, I knew that what they were doing would apply.
Speaker 1:And so we went on a mission. Now ironically, we did not land a hotel customer first. We landed Universal Studios, which was a whole different story. But we ended up working in their ticket booths and in their call center and really had, you know, outsized transformational results there. And an executive there introduced us to an executive at Hilton.
Speaker 1:And Hilton became our first hotel customer. And so we were still doing that on-site training and development consulting practice really up until COVID. I mean, we were operating that way and starting in 2016 when we started deploying our technology, we were deploying it to enable our program. It wasn't the program itself. But then with COVID, we couldn't go on-site anymore that no one wanted that.
Speaker 1:And so we pivoted. We spent a year and a half preparing the technology to be the primary delivery mechanism. We built out our learning management system. We created we took all the training that we had been doing for decades and made it into digital content. We made it so that it was a self-service platform.
Speaker 1:When we emerged from COVID, we basically signed up all of our hotel customers on a subscription and have since been selling our programs through technology. And now we've just rolled out a food and beverage program running on the technology to do accomplish the same thing is how do you help people at the frontline engage the guests and sell more. So, you know, this technology now is the platform with which we deliver all our solutions. And recently, we've brought it out to restaurants and bars. We have other solutions coming that are touch points within hospitality.
Speaker 1:Yeah. So that going from that consulting and training to tech enabled to now SaaS subscription first has been quite a journey as you can imagine, but the transformation is complete. And interestingly, the results that we were getting at the hotel level prior to COVID when we were still going on-site have been eclipsed by the results that hotels are getting on our platform because they're taking ownership over the results rather than, you know, you have an external consultant, sometimes you give too much weight to them. And instead now we're developing, you know, the solution is providing the toolkit to the front desk managers and the supervisors, making them more capable. Yeah.
Speaker 1:So and now we can instead of having 300 hotels pre COVID, we're in almost 3,000 hotels now.
Speaker 3:I'm curious if you have some case studies or examples you could share of hotels who are doing this really well. How are they using that data? What are their frontline teams maybe doing differently? What's the change that's happening, and what are the results they're achieving?
Speaker 1:Yeah. So to answer the second part first, from a front desk agent standpoint, understanding your own performance and what are the metrics that underlie that and then how much you're earning on that is a critical foundational thing. So the system provides metrics to them that are easy to understand that apply to them. So they can see what was my revenue, what were my goals, how much are my incentives, how much more do I have to sell to get to my next tier of my incentive, what would my projected income be. All that stuff is like on the screen for them.
Speaker 1:So their use of the system tends to be focused on how do I maximize my income and how do I finish the training that is gonna help me maximize my income. And so when we're looking at specific metrics as an example, we have a hotel. We have a lot of them, but we have one in particular that is we have a metric we call IDR, which is incremental daily revenue. It's basically how much incremental revenue do you sell divided into occupied room nights. So it's like an incremental ADR, if you will.
Speaker 1:It helps us normalize across a lot of different properties based on luxury, whatever, because it's relative to occupancy. So you take the IDR of a hotel, $5 of IDR is pretty good. You're gonna have a great result. Well, we have a hotel that's doing $18.98 as of year to date in IDR. They are doing over $3,000,000 a year at the front desk.
Speaker 1:And they're a luxury hotel, fair enough, but that's still a tremendous amount of added money. And when you think that that is 85, 88% flow through to GOP, you know, they're adding two and a half million dollars to the bottom line of the property. And and their front desk agents, their turnover has plummeted almost to zero. Their top performers are making 6 figures when you combine their hourly rate and their incentive. So it's an example that the technology is giving them the toolkit, everything that a property could possibly need to have that kind of outsized result.
Speaker 1:It just comes down to how important is it to the property to get this revenue. And a lot of the times what we see is properties will they'll they'll implement, they'll be doing okay. They're having okay. And then something will change. Something they'll realize something and they'll double or triple their revenue.
Speaker 1:And now all of a sudden they're like, this is material. And those are the properties, you know, we have over a 90% renewal rate and we have properties that have been with us for twelve, fourteen years now. And the first few properties we ever implemented are still clients because the results are really, really solid. We average in luxury a 50 to one ROI, overall a 23 to one ROI. And because of turnover, the nature of the positions, no one stays a front desk agent forever.
Speaker 1:Well, there are places they do, but in most cases they don't. So every year or two, you're having turnover, and our system provides that foundation that allows them to maintain high performance even with turnover because all the training's there, all the tools are there. Even if your manager turns over, you don't lose any of that knowledge or wisdom. It's there in the system.
Speaker 3:Where do you see the most incremental revenue coming from? Is it room upgrades? Is it early check-in, late checkout? Is it F and B? Like, is it something else?
Speaker 3:I'm curious where some of that IDR comes from.
Speaker 1:I have to answer it in two parts because internationally it's a little different than in North America. In North America, it's probably 80% room oriented. Not necessarily suites because it's great when you have available suites, but it's views, it's other kinds of attributes that the room might have. Like we like to tell hoteliers there's in in in your room type, so if you go to your website, you have a room type. Within that room type, there's probably better rooms than others.
Speaker 1:And you don't wanna create 50 categories. So at the time of arrival is really the best time to monetize it because you know it's available, the person standing there. If, like, you have a a room with a special view, you can monetize it at the time of arrival because it does have a special feature. So a lot of it is just that, is in room category or one to two room category upgrades. You know, what we're teaching the front desk agents is that it's always about their circumstance, which is why it's really critical.
Speaker 1:Again, I could prompt the front desk agent and say, offer the junior suite for $70. Okay? To who? How do I know when to offer it? So you have to ask questions like, what brings you to town?
Speaker 1:Who are you traveling with? Which are questions that Forbes and and AAA want you to ask anyway. And then listen and then say, okay. Because you're traveling with your teenage child, I recommend the junior suite. You'll have more room at night and there's two TVs.
Speaker 1:You know, whatever that is, that is knowledge that that's something the front desk agents have to be taught how to do. Otherwise, they might make the wrong kind of offer. It might come across sales y. They might not offer it at all. So it's really like that kind of bridge between technology and human performance.
Speaker 3:Talk me through how you're leveraging AI in your system, how that is bringing the tool into the next chapter.
Speaker 1:Yeah. So it's a really exciting time for us because one of the things that we've dreamt about doing is being able to provide the individual employees direct guidance. Cause we used to be able to do that when we'd go on-site and that's a great way to get a result because you can connect with people. Well, now the technology's caught up where because of our view on things, because of, let's say, because of our knowledge about what works and what doesn't and what frontline employees do or don't do that they should and shouldn't and how that manifests itself in the data. We've been able to train the AI to interrogate the data and then provide natural language guidance to the employee level and the management level on how to address the opportunities that exist.
Speaker 1:Because you can have you can have two people that are equal on the leaderboard for different reasons and neither of them are at the top. So in order to really understand how do you get them to perform better, what are their opportunities, you have got to go down into the detailed data level. You have to find the data, and then you have to run it through a filter that says, okay, how do you address this? So for instance, if someone is only selling within two room categories, and they sell consistently, but it's only those two room categories, or you have someone that only sells suites, they could be producing the same amount of revenue, but you can imagine there's a big opportunity. This person needs to learn how to sell this product, and this person needs to learn how to sell this product.
Speaker 1:Because everyone who buys a suite well, not everyone that buys a suite wants a lower room, but people with lower rooms, they want lower rooms. So how do you teach them those two different things? Well, there's different training available. There's different actions the manager should take. There's different messaging that would go to the agents.
Speaker 1:So we're using AI to interrogate noisy complex data, run it through the pipeline of our experience, which we've trained it to do, and come up with individualized guidance that can go to servers, bartenders, front desk agents, anyone on the front line, and give them direct guidance that's relevant to them. So it'll say, Geoff, we see that you haven't sold a suite in the last three weeks. Here's some videos on your suite content, you know, how to present a suite. We also recommend you go on a room's tour with your manager. And the manager's getting a message saying, you should take Geoff on a room's tour because he needs to understand the value of the suites.
Speaker 1:That kind of what to do about it, there's just no way to do that with technology if you don't understand how the sales process works and how people actually sell. You can present the data, but the how to fix it is kind of, we think, pretty unique to us.
Speaker 3:You know, AI obviously is a huge disruptor and like an inflection point in the tech space. What do you see will be the biggest changes in your system over the next few years or this category in general? Do you think it will be integration of AI type of features, or is there something else that you see as a disruptor?
Speaker 1:I think AI is gonna be the big one. But I think one of the things that is interesting about AI that I don't think has manifested itself yet, but we're starting to think about it, because just the nature of it, When you've deployed an AI tool that actually can output things like recommendations, let's say, you start to think differently. And one of the things that's occurred to us, and this is gonna sound a little shocking maybe, but over the next couple of years, I think software as we think about it will no longer be necessary. And I'll give you an example. If you have a BI tool that you use and it outputs to you a report, and you're a manager and you need to take that report and do something with it.
Speaker 1:The it that you're gonna do with it can be done for you. So you don't need the report anymore and you don't need the BI tool, you just need the data and you need the AI that knows how to interrogate it. And when you can ask the when the AI is sitting on your data lake or your data warehouse and you can ask it a question, which ultimately the reason you're running a report is to try to get to an answer of some question that's either a metric you have to report to your boss or whatever. If you could just ask for it and you get it, and then you can say, by the way, I need this in my inbox every Monday morning at 08:00, and it just does it. You don't need software anymore.
Speaker 1:You just need data. Now where you'll still need software is something like a PMS so you can punch in the guest and get them into the system. But a lot of software that we think of as software today will become obsolete, and it will become an interaction between you and the technology. And so the direction that we're going is how do we take, let's say, a restaurant manager out of the business of running reports and more in the business of managing their team and running their business. And the way we do that is it's all AI forward.
Speaker 1:So how does the AI interact with the manager, with the agent, the server, the above property leaders to give them exactly what they want when they want it and to make it natural language. So you don't have to wade through data for hours on end to try and answer a question.
Speaker 3:One other question I like to ask, which I think is along these same lines. What's one thing that you believe about technology in the hotel space that peers or competitors might disagree with?
Speaker 1:Yeah. I think I was sort of touching on it is I see a lot of emphasis being put on workflow automation and that the technology is gonna solve our problems because it's gonna automate this thing. But, ultimately, in order for that outcome to occur, a person is involved. Now, again, this is the space we're in. So we're at a table in a restaurant.
Speaker 1:We're not talking about, you know, the laundry. We're saying you're you have a server at a table or you have a front desk agent at the front desk, and you think you're gonna automate something, but you're forgetting that in order for it to work, a person has to do something. And I think that that is in hospitality sort of unique in that way in that everything that you want to have happen with a guest is ultimately going to flow through a person or in a lot of cases in food and beverage, certainly it will. You can't automate all of that if you ignore the people. You might get a better result than having no automation, but you're not gonna get as good a result than having automation and the ability to influence the frontline.
Speaker 3:As we wrap up, I wanted to shift gears just slightly and dig into your experience leading a company which has been through so much growth and changes over the years. I would love to hear from you any learnings or best practices on navigating change. So, of course, AI and the shift toward a SaaS first model. You've experienced a lot of change. What best practices can you share on leading your organization through changes like that?
Speaker 3:And it sounds like coming out stronger and more successful on the other end.
Speaker 1:It's a great question. I appreciate you asking it because it's probably the, like, the thing I I am most proud of as a leader myself is being able to navigate change. So I think the most important thing is the culture that you've established. If you have a trusting culture, you can ask people to change. If you don't, then they're gonna be very guarded and defensive and it's gonna be very difficult to achieve.
Speaker 1:So leadership in general is critical. Assuming you have a good culture, then I think the big thing is communication. People have to understand why the change is happening, how it affects them, be honest with people. We're all adults. People are very smart.
Speaker 1:They've been around the block. You gotta be honest with them. You gotta, you know, communicate frequently during change. During COVID, we were having all hands calls like every week, just even if we didn't have a lot of new information just to hear people and they could hear us and, you know, everyone's working from home for the first time. And the only way to overcome that was to over communicate.
Speaker 1:And I think you also have to create the vision, you know, why would we change? Obviously, some of our change was forced on us because of COVID, but we had always wanted to move toward technology. So we were still laying the groundwork to do that. And I think, know, if you communicate well and you have trust in your culture, it's part and parcel to your culture, you're gonna be able to ask people to change. Now, personally, from my perspective, I think leaders have to also go first.
Speaker 1:So things like AI, you know, I'm asking my entire company to adopt AI tools, to embrace AI becoming smart about our business so that it can help us. But in order to really ask people to do that, I've immersed myself in the AI. You know, I've done my own vibe coding, believe it or not. I've written four or five applications now that aren't they're not enterprise worthy, but they function. And it it's just really to set the example that we need to start thinking differently about how we operate as a business, not just our products, but even in our own lives.
Speaker 1:We're now at a place where we can build personal software to do things we do in our personal lives, which is just an insane reality. But you can in a weekend, you can build an entire fully functional software program, which is just crazy because I have no coding experience. But if I wanna ask my people to embrace these tools and I don't embrace them myself, like, is something that drives me absolutely crazy. When I talk to leaders and they're we're having conversations about AI and they're making strategic decisions about AI and I ask them, have you ever used any coding assistance? Have you used Replit?
Speaker 1:Have you tried any vibe coding? Oh, no. No. No. I'm not.
Speaker 1:Then Well, what are you talking about? You have no idea what these tools can do. You don't really know. You're using ChatGPT to help you do your monthly report. Great.
Speaker 1:How are you embracing it? So from a change standpoint, I think leaders need to get neck deep. They need to experience what they're asking their people to do. They don't have to be as good as their people because that's impossible, but they have to be able to to live it, to ask others to change to do it. And then lastly, I think you have to give everyone a real chance to change, multiple chances over a long period of time, but then be prepared for those that will not change.
Speaker 1:They might have to move on because, you know, when you're talking about the welfare of your whole company and your clients. So give people ample ample opportunity, be straight with them, communicate with them, demonstrate it for them, and then ultimately make the decisions you have to make to see that change through.
Speaker 3:Well, thank you for sharing all those pearls of wisdom. Change is hard, and it sounds like you've navigated through a lot of changes quite well. So I appreciate you sharing the best practices. Really appreciate your time. Have a good rest of your day.
Speaker 1:You too. Thank you.
Speaker 2:That's all for today's episode. Thanks for listening to Hotel Tech Insider produced by hoteltechreport.com. Our goal with this podcast is to to show you how the best in the business are leveraging technology to grow their properties and outperform the concept by using innovative digital tools and strategies. I encourage all of our listeners to go try at least one of these strategies or tools that you learned from today's episode. Successful digital transformation is all about consistent small experiments over a long period of time, so don't wait until tomorrow to try something new.
Speaker 2:Do you know a hotelier who would be great to feature on this show, or do you think that your story would bring a lot of value to our audience? Reach out to me directly on LinkedIn by searching for Jordan Hollander. For more episodes like this, follow Hotel Tech Insider on all major streaming platforms like Spotify and Apple Music.