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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
Or the stuff that I lose my sleepover is does AI actually know everything about my hotels the way that I want it to know about our hotels?
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:On today's episode, we chat with Joe Pettigrew, the group chief commercial officer at L and R Hotels. Besides walking us through his tech stack upgrade, Joe shares some great advice on segmentation, benchmarking reports, and how to stand out in a crowded marketplace. Plus, he gives us a crash course in stablecoins and what they mean for the hotel industry. Let's dive in. Welcome to the podcast, Joe.
Speaker 3:Thanks so much for taking some time to speak with us. I am looking forward to hearing all you have to say. To kick things off, I would love for you to introduce yourself. Tell us a bit about your role and your company.
Speaker 1:Yeah. No. Thank you so much for having me. I'm Joe Pettigrew, the group CCO at L and R Hotels. We are a private commercial real estate investment firm, but the majority of our investments are in hotels.
Speaker 1:And so we have another division called L and R Hotels, which is the division where I'm a part of. We have 113 hotels around the world, most of them being globally franchised properties based in Europe and in The US and we have some in The Caribbeans as well. We operate the majority of the hotels that we own, particularly here in Europe. But we also work with third party management companies and or brands to operate the hotels that we own. We're probably one of the few hotel owner and operator at our scale.
Speaker 1:And so we have a lot of flexibilities in terms of what we're able to accomplish from both from the investment side or the operating side. And we own a truly unique brand and IP as well called the Iconic Luxury Hotels within which we have a collection of some of the world's most iconic properties and luxury hotels in it such as the Clifton House and the Chewton Glen in The UK. We just opened the Palm House in Palm Beach, Florida. We just opened our brand new hotel in Grand Marbella Resort and Beach Club in Marbella. So we have a very eclectic mix of properties ranging from select service, you know, Holiday Inn Express in rural United Kingdom, to one of the most famous and iconic properties, like the ones that I've just mentioned, and also the likes of Fairmont and Monte Carlo and properties like that.
Speaker 1:And then my role, of course, within that is to oversee our commercial function within L and R Hotels at the group level. And so for us, that means revenue, sales, marketing, digital, and just any kind of functions that oversee in maximizing the market share of our assets and driving profit.
Speaker 3:I am curious. In a portfolio that's as diverse as yours, both geographically and in terms of property type and brand, you know, you have five star hotels at one end of the spectrum, then you have select service at the other end. How do you think about technology across such a diverse portfolio? Do you have the same ethos for all hotels? Or do you take a differentiated approach where different hotels need different things?
Speaker 1:Yeah. So it's probably not that straightforward of an answer. But at least in our portfolio, these select service properties are essentially franchise businesses. And so your tech stack essentially is largely driven by the brand standards. And then I would also say that about some of the other full service properties that we own, they are, again, if it's a part of a franchise, then it's mostly driven by the standards that are set by the brands.
Speaker 1:You do have obviously some flexibility outside of some of these core systems, but, you know, core systems is really what drives the most of the tech stack. At least they form the foundation. So it's mostly we're kind of working with what we've been given. And then there are a set of hotels that we manage directly that is unencumbered by a brand. And so for those hotels, even there we have a quite ranging set of properties.
Speaker 1:They range all the way from a super, you know, luxury country house to like a countryside lodging, corporate retreat type property to city centre like London full service properties. But the way that we're looking at the technology there is really try to at least have some consolidation or a standardised set of core foundational systems like the PMS, CRS, CRM. Because I think those types of systems are mostly fairly agnostic to what type of properties that you have, especially if you're operating at scale. If there is one hotel that might potentially benefit from a different type of PMS, for example, for that specific property type, that actually the benefit of keeping everyone under that same environment at the portfolio level often outweighs that very specific one or two individual use cases. And so for the hotels where we have full control over our tech stack, the way that we've been approaching that is, yeah, foundational core systems, everyone under the same umbrella, And then outside of some of those core systems then we look at bringing in different types of tech that, you know, may be specific to that hotel's needs.
Speaker 3:So thinking of your own tech stack, what would you say is the most critical technology partner or the key system that you use across your properties?
Speaker 1:It's a great question. And I'm not sure if there is like one piece of technology that is critical to success. For example, when we were just opening up our hotel in Marbella, you know, we're putting together a full list of all the systems that need to go live by and by when, know, have this wonderful Gantt chart of the systems go live dates so that we hit the deadline to open the hotel. And I think we saw something like 40 systems on that list. And I would say that I wouldn't put all of them on the critical list, but they all serve a purpose in one way or the other.
Speaker 1:But if we were to just look at maybe, like, the commercial team and trying to see like what the most critical systems are, I would actually say that that is probably on the intelligence side. So I don't even know if we can classify this as a technology. And I'm talking about platforms like CoStar, Amadeus, you know, formerly known as Hotelligence. Yeah. Like Lighthouse.
Speaker 1:These basically give you access to the intelligence in your market. They're your eyes and ears. They replace guesswork with data. And actually having, whether it's actualized or forward on the books data, or if it's our pricing versus the comp set, or your positioning within, you know, on your OTAs and whatnot, really help you you shape your commercial strategy of the hotel moving forward? Like, if I had a choice between do I want industry benchmarking tools and operate the hotel with pen and paper versus the other way around, I think I would actually choose to have the industry benchmark.
Speaker 1:Because I feel like I can maybe figure out a way to make sure a guest is checked in and checked out, you know, like, maybe make that happen. But that doesn't guarantee me the success like, the intel that I need to be really successful and maximize my market share in in the market that we operate. So if you're a part of the commercial team, I think probably the most critical system, maybe I'm gonna put a bucket, which is more of that kind of industry benchmarkintelligence platforms.
Speaker 3:So I would love for you to talk me through your tech stack. Maybe more relevant would be the properties that you manage as well since for brands, you'd be using the brands PMS and any other piece of tech that they mandate. I would love to hear the tech stack that you've chosen. And if you could also walk me through the thought process in assembling that tech stack. Like, have those systems been in place for a long time or are any systems new to the company?
Speaker 3:I'm curious your thoughts on why you chose this.
Speaker 1:Well, for the hotels that we operate directly where we have essentially the full control over our tech stack, our tech stack has actually been very fragmented. So our hotels were using different versions of the PMS, and every hotel was using different RMS, and CRS was fragmented. And so we are actually just on a journey right now where we are consolidating all of those core systems into a single stack and under one environment. So for example, we were going with Opera Cloud as our PMS of choice. Our hotels were largely operating with, call it, two different versions of Opera and a different one other PMS in our portfolio.
Speaker 1:But they were also all built in their own little individual environment without kind of the chain above it. And so, you know, when we say even when we were trying to just standardize everybody's PMS into a single, you know, the same version of call it Opera Cloud, that it couldn't also just be, hey, everybody get Opera Cloud so we know we know how to, you know, train the people the same way and pull the right reports the same way. But it also had to be hosted under the same chain so that there is an economy of scale and productivity, right? So when you build a rate code, you just have to do it once and then everybody gets a copy. Or that you're able to pull an enterprise level reporting.
Speaker 1:And so we've kind of done that exercise for those core systems. So that's PMS, RMS, and CRS. As a part of that exercise, we also had to standardize all of our data structure. So, you know, when you are standardizing your some of these core systems, every hotel calls different things differently. Right?
Speaker 1:So room type are all different at every hotel. Market segmentation is different at every hotel. Like origin source code, like VIP codes, you name. Every single thing that is a code we're all called different at all of our hotels. So we took this opportunity to standardize our codes essentially, which then allows us to, a, speak the same language, so then it brings us closer together as one team.
Speaker 1:We're no longer operating in silos. And that it's really easy to collaborate between hotels because now everybody's using some of these core systems are the same. Reporting is the same. You know, my standard room code is the same as your standard room code. Like, it's super easy for our folks to, you know, get exposure into different hotels and jump in really quickly.
Speaker 1:And then also, by standardizing all of it, we were able to take this as an opportunity to also just kind of relook at what should a standardized market segmentation should look like, as an example. And rather than choosing a very traditional route of maybe, you know, hey, let's use like a new Sally format or standard of market segmentation, we decided that we were gonna choose a different set of market segmentation that perhaps might be more modern and more realistic and actually more actionable in driving the commercial performance rather than, you know, choosing something that everyone else uses. Which has pros and cons, obviously. You wanna pick know, if you pick something that everyone else uses, it's much easier in reporting and everything else. But at the same time that USally market segmentation has been around for like twenty years, right?
Speaker 1:I mean, that's when I was at Expedia, like faxing bookings to hotels at that time. It was a very different world than when it is today. And so we wanted to get a chance to, you know, I mean since we have this rare opportunity to create the market segmentation from nothing, we should just ask the question, if we could just create something, what would that look like? So we've taken that kind of approach to all of these different codes. And so we've just finalized that, and we're actually on this journey of rolling this out across all of our hotels by the end of this year.
Speaker 1:So it's an aggressive rollout plan. It's a lot of work, a ton of work. There's a lot of pain and suffering in the hotels and and within our teams. But, you know, once we get through this and we iron out all of these issues that inevitably occur when you roll out new set of systems, we think we're going be in a much better place and really leverage it to drive the performance next year.
Speaker 3:So you mentioned Opera Cloud is the new standard for PMS. What are you using for revenue and CRM?
Speaker 1:For revenue management, we're using Duetto. And the CRM, we have not yet defined exactly what we want that to be. Basically, we didn't want to front run what our overall guest experience strategy should look like before choosing a vendor. In other words, there will be very specific requirements on what our CRM needs to do in order to satisfy the types of guest experience that we would want to deliver. And so we wanted to make sure we had what that delivery of guest experience looks like before we choose the CRM.
Speaker 1:So that one is kind of parked on the side right now. But like I mentioned, with all the other systems, yeah, every hotel uses different CRM at the moment. And then we're also unifying all of the CRSs into Synexis.
Speaker 3:I'm curious to understand the process to decide which vendor would be the one that you roll out across the whole portfolio. Did you do like an RFP process to kind of go out to the market and say, hey, we're looking for a new RMS? Or was it more of an internal decision like, hey, we've tried these x number of vendors. This is what we like about some of them. Like, what was that process like?
Speaker 3:And who from your team was involved?
Speaker 1:So on the RMS specifically, it was actually a very small RFP. So the beautiful thing about my previous role as Starwood Capital Group, I mean, was overseeing a portfolio of more than, call it a thousand hotels around the world. All different platforms and different types of hotels. I was an active user of literally every single RMS. I am very familiar with a lot of these RMS vendors and systems.
Speaker 1:And so when you do that, you kinda, when you're in this position, knowing how we want to drive our commercial strategy moving forward, in my head, I already had maybe three RMSs that I wanted to approach. So it wasn't a very wide RFP selection process. It was pretty narrow because we had very specific requirements on what we wanted to do and accomplish. So we went to, yeah, three vendors, basically, and then asked how they would, you know, come together and solve the problem that we have. And then in that process, we obviously involved our revenue management and commercial teams to be a part of that selection process.
Speaker 3:And then talk me through the rollout process. Has there been training upfront? How have you gone about securing buy in from all the team members around the world who would be using these systems?
Speaker 1:So we essentially had to put one person to essentially project manage all of this for us because actually the single biggest pain, maybe I shouldn't call it a pain, but it certainly feels like it. But the one that's more the most complex to migrate is the PMS. So again, I think we are somewhat fortunate in that there wasn't a huge amount of convincing or buy in that we needed to get from the hotels. Actually, because a lot of these hotels were on the older version of Opera that needed a migration over to the cloud anyway. And so that work stream was gonna happen with or without our bigger systems consolidation project.
Speaker 1:And so because that was happening, it was more like, hey, while we're doing that, let's also bolt on the CRS and the RMS project at the same time. Oh, and by the way, and if we're doing all of that, let's also make sure we're standardizing all of these codes so we can better work together moving forward as one team. So I think a lot of the, hey, wait a minute. Like, all of a sudden, why are you coming to us about, like, changing all of this stuff? We don't need this distraction in a year where we have to perform.
Speaker 1:A lot of that convincing was handled, I guess, by the fact that they had to migrate their PMS in the first place. So that was a fortunate opportunity that we just couldn't let pass. And it's also one of the reasons why we kind of accelerated a lot of these systems and data migration, you know. So rather than me and the team spending months to really meticulously think about, like, how any of these things were going to work, that actually are like, all these hotels have to migrate to Opera Cloud this year. Well, then let's accelerate everything else so that we do it all at once.
Speaker 1:Just have one pane, get it done, and the next year, we're clean and no more systems. Well, certainly at this scale moving forward. But we did have to, you know, communicate the rationale and the reason why we're changing a lot of this data structure and the code the way that they are, why it's important to have a single set of codes. I would say more of the buy in had to be done on the standardization of the codes because that impacts the reporting and, you know, it touches other systems. Right?
Speaker 1:Like, stuff is mapped to 10 different systems, and so now you gotta touch all the remapping. So that's where the, probably, the most heavy lifting in getting the buy in had to take place was actually probably that. And then from a revenue management side, it was about just philosophically how we are going to be doing revenue management differently than what they were used to doing previously. So as much as we'd like to say that, you know, like, let the system kind of free up your time to be more of a revenue strategist, there are certain systems that are actually really good at enabling you to do that, and some that are not so built to do that. And in order to adopt a system like Duetto, it has to come with a philosophical change in revenue management and the way that you view your revenue strategy overall.
Speaker 1:And so there was some education piece that we had to do there on that one.
Speaker 3:Are there any vendors or any types of tech that you've seen on the market that are on your wish list or something that you're considering adding to your tech stack in the future?
Speaker 1:Yeah. So I mean, I'm sure this is on top of everybody's minds right now, but AI and stablecoins, they are the two things that are on top of my mind. And I don't even know exactly in what form or what, but we're constantly thinking about the AI and its impact that is going to have on the discoverability of our hotels, the accuracy of the information and how that gets portrayed, And or the stuff that I lose my sleep over is does AI actually know everything about my hotels the way that I want it to know about our hotels? And so there are companies out there that are trying to kinda coordinate and help the hotel or travel companies and hotels to optimize their content displayed by the AI, and you start to see a lot of startups emerging in that space, and then lots of thesis out there about how to really optimize or maximize your visibility on AI. So when users are asking all these different sets of questions that, you know, how do you be included in those top three hotels that AI recommends back based on your query, essentially?
Speaker 1:And so we're thinking a lot about that and that we think that impacts a lot on the way that we do PR, communications, the signals on social and review scores, reputation, like all this stuff that we always knew were important but as commercial professionals always kind of put them aside as that's like the operations teams to handle, a lot of those things we were looking at and going, if these are the most important signals of the future, then as people responsible for driving and maximizing our revenue for our properties, how do we drive that? Like we need to actually be in the driver's seat to work on that. So that's on top of our minds.
Speaker 3:I wanted to ask also about stablecoins. What is on your mind there?
Speaker 1:Well, so I mean, as you know, all these legislations are getting passed and signed into law in The US right now with the Genius and Clarity Act. And the Genius Act, I think, if everything that I'm reading is really gonna come to life, is gonna have a massive impact on the adoption of stablecoins at large. Again, I'm not an expert in this field. I'm no blockchain expert or crypto guy. But if what I read is true, then every bank is going to start issuing their own stablecoins, every payment providers are going to be issuing their stablecoins, and the stablecoins are essentially little codes that also happens to act as a currency that is now pegged to a dollar.
Speaker 1:So this essentially makes crypto as currency in the mainstream that is programmable. Right? And so you can tie the transaction to inventory at the hotel, the number of stays at the hotel. You can have a wallet, a user's wallet, now be the central identity holder of all the major different loyalty programs, which then kind of breaks the custodian of data and loyalty away from companies to now individual wallets and them having the full custody of that information. I mean, it changes a lot of those things, and cross border transaction fees will plummet, and what does that do to international travel, and all the payments are going to settle incredibly fast.
Speaker 1:All of those things, and I I don't really know what that means when it comes to, like, what is that impact gonna be for my hotel and or how do I leverage that today in order to get a head start on everyone in adopting that technology? But that is one that we are also studying because it has wide implications, not only in overall demand generation. I mean, a lot of our hotels don't even accept Apple Pay today. And so, you know, what does that mean for you know, if you don't adopt, what is that adoption curve going to look like? And so how ready do we need to be?
Speaker 1:Just all that stuff. So, yeah, on stablecoins, we don't really know what the answer is, but we are exploring and wondering and studying and thinking about what impact that will have on us. So to give you a maybe a real hard example on that is, as in when we're looking at all of our tech stack consolidation, payment is one that we kinda wanna wait. There's no real sense of urgency and because I think the adoption curve is gonna be pretty quick on this one if by the sounds of it. It's very easy to issue now that this legislation has been passed.
Speaker 1:And so, yeah. Yeah. We'll see. We'll see PayPal dollars, And then that's basically gonna be a stable coin moving forward, you know? So we shall see.
Speaker 3:One last question for you. Well, actually two questions. One, kind of shifting gears a bit since you have had a varied career in the industry working in a few different departments, different countries. I am curious if you have one or two skills or characteristics that you would say someone should have in order to be successful in the hotel industry?
Speaker 1:Yeah. If there is one skill, I don't know if it's a skill, but more of maybe a trait or a mindset, then I think that is to have the courage to be different and or be memorable. If you are, you know, operating a hotel or if you own an asset, I think really, especially now with the advent of AI and the change in taste and consumer preferences coming out of COVID and everything, that if the hotel, whether by design or guest experience, isn't different from others and or memorable, and especially if you are an independent hotel, then you're just not going to be able to survive in this very competitive marketplace, or you'd have to become a part of the brand, which is basically what dictates what your experience and design is going to look like. But then you kinda you either have to join a very big network of commodity experiences, or you go way different and distinct and unique and have character to attract those who are seeking something different. And to my point earlier about, I think, AI becoming probably the predominant starting place for many people's travel search journeys.
Speaker 1:I think that AIs will almost by default be recommending hotels that are more unique and distinct just because a lot of the press releases will be written about them, and a lot of media coverage will be about them. Like, not many will have an amazing article on some select service hotel, business hotel, you know, in the middle of the city. You know, like there's nothing cool to talk about it. And then so then for people, for us, same thing, right? Like if you're in a guest or client facing role, you being more memorable will have an impact on your ability to win more business, foster better relationships, and or maybe get better opportunities.
Speaker 1:And if you're in the commercial team, actually, the current status quo is the opposite, which is like, we all run this comp set analysis, check out what packages they've got, like, what promotions that they're running that we need to also copy. Like, everything is about, like, let's check what my neighbors are doing and then copy exactly what they're doing because we're missing out. Right? Like, that's actually our mantra. But, you know, looking back and reflecting on every major success stories of my career, it's all been doing the opposite of what everyone else is doing.
Speaker 1:And so if you see a trend or something that like everyone else is doing and going in the same direction, then I think, you know, doing the opposite or doing something different has always been a shortcut to success. So yeah, so I would say being different or being memorable, I would say is probably the most important skill set.
Speaker 3:Last question, which I always like to end with. What is one thing that you believe about technology in the hotel space that your peers or competitors might disagree with?
Speaker 1:I don't know if this is specific to technology, but well I guess there are many. But I would say one that comes to mind immediately is this incredible push, especially in marketing, about personalization. Right? There has always been this, I don't know, so many tech companies or agencies or vendors who try to sell you the dream on hyper personalization and how that means more business, more loyalty, more direct business, and what have you. But after, you know, trying so many versions of different levels of personalization, I've personally come to the conclusion that at least for now, and again, this might all change with the AI and how granular everything is becoming, but at least up until today, this stuff is very difficult to execute properly.
Speaker 1:And even if you did, it doesn't make game changing results. And so I think the guests expect some very basic personalization, I. E. Call me by my name for the email that I receive. But there is a very flat diminishing return beyond calling that person by name, you know, after that.
Speaker 1:Because if you start including, oh, your headline photo is a family walking a dog because we know that's a dog owner versus having a couple on the photo and then having the different room types to be, like, reordered so that, like, we think this is the most preferred room type for you versus the others. Like, these things don't have that major impact, if at all, even when you do execute it properly. But it's such a hard thing to do and do it right, And it requires so many interfaces and integrations with all these other systems. There are so many points of failures. There are some areas where this might work, but just on the whole, I always view anyone that say hyper personalization is the key to success with a great, great dose of skepticism.
Speaker 3:Well, on that note, thank you so much for your time, Joe. Really appreciate you sharing all your learnings, all your advice. I wish you the best in the rest of your tech migration. And thank you so much for being on the podcast.
Speaker 2:That's all for today's episode. Thanks for listening to Hotel Tech Insider, produced by hoteltechreport.com. Our goal with podcast this is 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 1:Do you
Speaker 2: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.