The Modern Hotelier #105: Enabling Hotels to Take Control of Their Distribution & Personalize the Guest Journey | with Eric Lutz
===
David Millili: Welcome to a special edition of The Modern Hotelier. We're coming to you from the green room at ILC, Sausalito, California. Steve, who do we have on the program? program? David, today we have on Eric Lutz, CEO of Olive. How you doing today, Eric? well.
Steve Carran: for having me. Good, good, good. So, Eric, we'll kick it off with something easy for you.
Tell us a little bit about yourself, where you grew up, and how you got into hospitality. Alright, well, I'm a California boy through and through. Grew up in Orange County, moved to L. A. for school, and have not left ever since. Don't see any reason to leave, uh Southern California, although, you know, work takes me on the road quite a bit of time. but got interested in hospitality from a very young age. I was, uh, about eight years old when I got this idea that I wanted to be in the hotel business. Just thought, what a cool career, it looked glamorous. So right after college, hopped right into operations. I actually started my career as an overnight front desk agent at a hotel in 
Hills. 
Eric Lutz: Realized pretty early on it was not as glamorous as the division that I had when I was a kid, but it was great. Incredible experience, spent a few years on property, then was over on the private equity side at a couple different owner operators, most recently leading the hotel division at another LA based private equity fund. and that's where I really started to feel the pain of how bad hotel technology is and, uh, a few years ago and decided to do something about it.
David Millili: Yeah, so is there something specific that really drove you to build Olive? 
Eric Lutz: I mean, look, we started this journey as our own customers, me and my co founders. We were really looking for this technology that enabled us to manage the hotels and, and sell our rooms or our products the way that we wanted to.
Cool. We saw, obviously, what different software solutions look like in other verticals, and I was always questioning why we had to deal with such bad technology in the 
hotel space. 
and I felt that, kind of, throughout my journey, whether that was from a guest, or from the guest perspective, whether that was as a front desk agent, then on kind of the management or asset management side.
Um, we were always kind of hamstrung by our technology, so, I got this silly idea that we'd be able to do something better, so. 
Steve Carran: we're today. 
For those that might not be familiar with Olive, What, does Olive do? 
Eric Lutz: Yeah so we're a personalization platform for hotels, but essentially what we do is we help hotels with their websites, with their e-commerce experience, their booking experience, not only making it a better UI or UX, so making it easier to book on the hotel's website, but also personalizing that entire journey.
So, I think hotels have, historically, they've not focused on the digital experience when it comes. they're typically worried about What's going on the property, or how do I serve the guest who's standing right in front of me? And for a number of reasons have essentially outsourced, all of the customer acquisition to, online travel agencies or other resellers.
But I see the real opportunity for hotels is to focus on their digital experience. It's a really important part of the journey. Hotel websites get so much traffic. because they're baked in as part of that customer journey, well, they'll visit the hotel website well in advance of making a reservation, no matter where they're reserving through.
So, we wanted to see, hey, if these guests are coming to the hotel website, what do they want? What does a guest want when they come to a hotel website? how do we serve it up to them in a way that gets them to book direct 
Steve Carran: Have you got any feedback from not only the hotels, but also guests using, you know, these updated websites and any success stories from 
Eric Lutz: them?
Yeah so it's been exciting to see we've had a lot of really great early success stories with hotels a lot who hoteliers tend to be a little skeptical which they should be for many reasons I think they get sold a lot of different stories that don't actually pan out. to, to looking anything like reality. so it's been exciting to see an almost immediate uplift in their direct business. We've even seen not only kind of a shift in business, but an increase in revenues as well, so we have some properties, for example, that have increased their revenue like 15 percent year over year and their, uh, call center volume is down 40 percent year So it really takes a lot of that lift off the on property team so they can spend their time in person forging that emotional relationship with a guest. Uh, instead of worrying about who's on the phone or how they can navigate their way through the website. And then from guests, we've heard how easy it is to book, how easy it is to, pay with the, the currency type of the choice, maybe a digital wallet, maybe a buy now pay later option. and it's, uh, it's been great, just 
Steve Carran: Love that
David Millili: That's great. And so we went through a bunch of stuff there.
What are some specific things you think that the hotel should focus on for next year driving business, making it, making it more focused? 
Eric Lutz: say this year it's really important for hotels to kind of get back to basics, right? Focus on the guest. I know it's silly to say, but so often we forget as hoteliers, like who we're here for and we're here for the guests. There's so many things going on, uh, and for us, and that's what we do whenever we approach a hotel partnership or a product that we're releasing.
We put ourselves in the guest's shoes, try to understand what do they want? What do they need? Like, you know, I think it's easy for hoteliers, right? Anybody, any of us can go on a hotel's website. We can find our way through a booking engine. We can, you know, do that function that, that we need to, but the guests, the, the, They don't have the same level of familiarity with, uh, these different products.
They don't know what a best available rate is versus an advanced purchase rate. All these things that we kind of just take for granted. so I'd say for hotels, really just, just think about who is your guest? What do they want? and definitely please take a look at your websites. Go through your websites.
It's, you know, the, the hotels we work with, they get hundreds of thousands of visitors to their website. Um, but they, they don't think about it. Like that, right? They're worried about, of course, uh, the on property service and experience. And then the website, they, you know, update once every couple years, they treat it like a brochure. but it's really important because before you ever get a guest on property, they're going to be on your website. And, that's an important part of their buying journey. And that's how they kind of reach that intentionality to book 
Steve Carran: Absolutely, and kind of. Kind of on that note, I think this is something that I've seen more lately since COVID is cutting costs, increasing operational efficiency, and I feel like sometimes that can impact the guest experience. Is there a way we can, you know, still be cost effective and efficient, but also not decrease a guest experience?
Eric Lutz: A hundred percent. I think it's a great question. look, I think that is where a lot of maybe operators or owners go to is to cost cutting mode. I mean, it's the first thing I did when I got ahold of a P& L and when I was 23 years old. but I think what hotels need to realize is, you know, There's a number of factors going on, but you really can never cost cut your way to profitability. And you need to see, if you're cutting costs, what that comes at the expense of.
And oftentimes it comes at the expense of that guest service. Um, and hey, maybe you get a guest on your property and the, the service, or you're not kind of upholding that promise that you made to the guest. through their booking journey, then they're never coming hotel. So now, uh, it's not just, you know, the, the dollar or two dollars or three dollars per occupied room that you're saving, now you're losing revenue into the future because you're not going to get that back, guests back to your hotel, and it, it kind of puts the, the industry in a really precarious position. 
Steve Carran: Absolutely. 
David Millili: Yeah. And so what, we see it across the board, whether it be management companies, ownership groups, brands, independents, what advice would you give to hoteliers who are hesitant to adopt new technology? 
Eric Lutz: Yeah, I would say, look, obviously there's a lot of people I've been in the seat myself, being sold all kinds of different technology solutions.
And I think that a lot of the vendors out there sell these grand stories that they can't really deliver on and don't really hold the promise, which is really unfortunate. That's why we started this journey because we basically got so fed up up with, how it looked that we decided we'd do it ourselves.
But I think it's important to not only find a technology solution that fits your property or the needs, but you're really finding a partner. .so it's about the relationship. It's partnering, with Whoever that vendor might be to make sure that they align with your business interests with your guests and for us where we differ a little bit is we kind of put our money where it is So we're willing to let anybody try us out We won't charge you anything until you're absolutely happy and I think you'll find that most vendors are not like that they're trying to sell you and get to sign you into a long term contract lot upfront fees. for us, we made it our website. our website is tryolive.com we want 
to let 
you 
try it, 
We want 
to 
make 
sure 
you love it.
and, that's kind of how we're 
approaching it 
Steve Carran: I love that. So a lot of hesitancy. comes from hotels, you know, who are implementing new technology, they're worried that that technology is going to replace that human interaction with the guests. How do you see that kind of being the opposite where technology can increase the interaction with the guests? 
Eric Lutz: Yeah. No, it's, it, it's a fabulous question actually. It's something we think about all the time, and I think there's a lot of anxiety or there's this hysteria around new advances in technology, especially around ai. I was fortunate enough to speak on a, a panel to a bunch of UCLA students, uh, about six months ago on, on the future of AI in business. And there was, you could tell from the line of questioning, they're like, hey, what should we be doing? We're not going to have 
jobs 
after 
school and all of 
these things, 
right?
Which I think 
you've 
seen time and time again throughout history with every kind of technological change or shift. Um, and if you see, it's always added productivity over
time. There's always been an addition of jobs with each new. Incremental technology and for us the way we look at it. It's not as much.
Hey, what can technology replace? But what can technology help us to do? So if it's to help us deliver better guest experiences Certainly computers are great at one thing and humans are great at another thing and you're never going to be able to Or at least hopefully you'll 
never be
able,
to replace that with it that So, for being here, and we'll see you next time.
When they are, you know, they're in their booking process or in kind of that whole pre arrival journey, we're understanding who they are and helping the hotels deliver on that once they get on property. And so they greet you by name. They understand that you want the room far away from the elevator or that you like your, or your room turned down a certain 
Steve Carran: Absolutely. We'll see Elon Musk is building robots. We'll see how close he gets to the human interaction on those. So 
Eric Lutz: Exactly. 
David Millili: So congratulations on winning the Indy Award for Best Tech Innovation. And so we'd like to know, looking ahead, what technology advancements do you think will shape the future of hospitality? And how is your platform positioned for that? 
Eric Lutz: Yeah, so, obviously, we are undergoing this massive shift in this platform shift to artificial intelligence, and I think that hotels today, obviously, they've been reluctant in the past to adopt new technologies, even today, We're seeing what was the previous platform shift, which was, the move to the cloud. Hotels are just now moving their systems to the cloud, especially over the past few years. so I would say that, one, it's important, obviously, to stay up to date on what the, kind of, the latest and greatest is. For us too, we look not as much as what's going on in the industry, but what's going on outside the industry. So that kind of informs how we approach technology. when you look at, at guests today, I think everybody outside the industry spent basically the whole pandemic shopping online. So they're very sophisticated when it comes to online shopping experiences. They're used to using things like Amazon or Netflix that are extremely personalized and, offering up personal recommendations.
And I think that's obviously where the hotel industry has been historically in kind of the physical world, offering that personal touch or that personalized service. and that's an important opportunity that, We should not be missing out on as a hotel business moving into the future. And that's what technology is opening up.
I would say that it's important for hotels to realize we're going through this massive shift. AI is going to remake or reshape every single industry. The hotel industry is going to be no different. And the last thing I want to see is for the hotel business to fall behind like we have in the past. And then, Hey, Expedia or booking.com do they need more money? And do they need, to, control even more distribution? And. So there's a massive shift in power that's also going to come. And I think that hotels need to be ready to take advantage of that shift. even looking at the systems, I think here today, we've already talked a lot about the legacy systems, that and what they're built around and fundamentally all the systems are built around.
The inventory, and there's a tremendous amount of data silos in the systems today, so it leaves us even further behind if we're trying to apply, like in our business, these AI models that are built around the guests. So it's really important to consider who the most important piece of the puzzle is, and we always go back to the guests, because that's who we care about at the end of the
day 
Steve Carran: I 
love that. I love that. So we've been asking two questions to all, everybody we've talked to. So you mind if we ask two final questions for you?
All right. So what is your prediction for the independent sector for 2025? 
Eric Lutz: Oof, it's a good one. I predict 
that, um,
more and more hotels are going to, control their own destiny and control their distribution, and I know they're going to try out Olive, and they're going to love it 
much like all of our customers have previously. and realize, hey, it is a really important thing to focus on the guest, and see and look at every single different touch point throughout the journey, and especially the digital ones. See where the opportunities are to better serve the guests, that's how I see and what I see as the opportunity for AI is really how we better serve our guests, how we better deliver hospitality to our guests, and I'm excited to see, uh, where the industry goes with
David Millili: And what challenges do you think we're going to see next 
Eric Lutz: I think we're gonna still see a lot of the same, so whether it's challenges from, uh, the resellers, from the OTAs, right, who I think even now you look at who's leveraging generative AI in the hospitality space, it's the OTAs, they're there, they understand that this is an e commerce business, they understand that the digital part of the guest journey is so important, that's why they're able to charge hotels to 30 plus percent for the rooms that they drive to them. And I think the labor shortages will continue to plague the industry. I think, look, I was a student of the industry from a very young age. I love this business. I think that there's no more rewarding business to be in than the hospitality business. I mean, what greater act of love than acts of service to complete strangers?
I think it's such an exciting industry. And it's going to keep growing if we look at emerging economies now starting to travel if we You know, travel isn't going away. Travel is definitely not being replaced by AI. I mean, we saw what happened with the Apple Vision Pros. I think everybody 
had this 
dream 
of, we're 
gonna hang out in the metaverse.
But no, travel. Every year continues to grow. We're going to continue to see it. in order to solve those labor shortages, we need to begin to attract more people into the industry, the right kind of people, the younger generations who are unfortunately not going to hotel school anymore, but you don't have to go to hotel school. I didn't go to hotel school. I studied political science, um, but it's just about making an attractive industry to work in. And, uh, the reality is the younger generations, they don't want to work with these old cumbersome systems and this bad technology that we've had to deal with for so many years. They don't even know how to use it. So how are we putting out technology that not only supports, uh, the guest journey, but also supports those that we're trying to bring who will better serve our guests 
Steve Carran: 100 percent 
David Millili: All right, well that does it for this special edition of The Modern Hotelier, coming to you from ILC, Sausalito. We appreciate it. 
Steve Carran: Thank you for joining us, Eric. 
Eric Lutz: Thank you guys. This was fun.