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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
So there is a software that we use that allows us to basically synchronize our information pertaining our five properties on all free or paid publishers that are online.
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 this episode, we're talking with Roberto Pacaccio, the revenue manager for five small independent hotels in San Francisco. Roberto walks us through his hotel's journey from nearly having to close during COVID to embarking on a full scale tech overhaul, and why you to pick a system that's easy to use and integrated with the rest of your tech stack. Let's dive in. Well, thank you so much, Roberto, for being on the podcast. Really looking forward to chatting with you.
Speaker 3:To get things started, I would love for you to introduce yourself and tell us a bit about your company.
Speaker 1:Hello, Adrian, and thanks for inviting me. So my name is Roberto. I was born and raised in Italy. Rome precisely. I moved to San Francisco fifteen years ago, 16 probably.
Speaker 1:And I've been doing a lot of back and forth between Italy and The US. I am the Revenue Manager and Expense Manager actually of a small group of family owned hotels based in San Francisco. There's five of them at the moment. We like to name them GWT Properties, but technically they're all independent hotels and they're all located in San Francisco between North Beach area and the Mission District, So very essential. We have a total of about 160 rooms, 164 to be more precise, so fairly small.
Speaker 1:And they've been operational since, under the current management since 2012 or 2013. And then the last one that got purchased was dates back to 2015 actually. And we're here after COVID.
Speaker 3:Can you tell me a bit about your typical guest? Is it mostly leisure, mostly business travelers?
Speaker 1:Sure. So all five hotels are two star properties and typically our clientele ranges primarily leisure, a bit of both. San Francisco is a very corporate city or used to be, I guess, prior to COVID. So we used to get a lot of business travelers during convention days. Things got shifted drastically after COVID.
Speaker 1:So right now, 80% of our travelers are leisure travelers and they're typically budget travelers. Budget in the sense that because we're two star properties, we tend to attract a clientele that's, that is not looking for luxury or high level amenities that we cannot offer.
Speaker 3:You mentioned the changes in the San Francisco market since COVID. Can you tell me a bit about how COVID affected your properties and how the evolution of technology occurred during COVID?
Speaker 1:That's a very good question. San Francisco got hit very hard. COVID changed pretty much everything. And to be honest, the reason why I've been doing a lot of back and forth between here, Italy and The US is because of COVID, there has been a lot of flexibility and, you know, a lot of people started traveling. And so what happened to us after COVID is that after the first lockdown, of course, business went down to zero.
Speaker 1:Basically, we started hosting some essential travelers, but in 2021, summer twenty twenty one, business was back to a decent level. As a matter of fact, in 2020, when COVID hit, all property got shut down temporarily. And then when business resumed in 2021, this is back, I would say July, probably June, July 2021, one of the five remained closed. This was the Edwardian Hotel. And then all the others started operating under a completely new business model, which involved a lot of technology, a lot of new tools that we did not use before, before the shutdown.
Speaker 1:So we basically took the year and a half, I guess, between March 2020 to June 2021 to introduce, review our business model. We knew that we needed more technology to be able to survive the pandemic and the crisis that we were forecasting. And so we started introducing technology and they involved, for example, software like Evivo that we used actually prior to COVID. It needed like a completely new revamp or it needed to be refreshed. We did a lot of training to staff that stayed with us.
Speaker 1:We We introduced a new digital key technology that's called OpenKey that a couple of years ago actually got integrated with Amibus, so I ended up helping a lot with streamlining our checking process. We started using a software called Keepsu that's helping us with messaging. So right now we are able to communicate via text message and WhatsApp with our guests, which is something that we absolutely did not need before COVID because we had staff on-site. And so I guess the major, the biggest change that occurred was that four out of the five, three technically out of the five properties right now do not offer traditional front desk services anymore. So we don't have a proper front desk and that's where technology kind of took over.
Speaker 1:In a certain way, helped us provide the same type of service that we used to offer before, just under a very different type of customer relationship and completely different business model. What happened after COVID was also that it was very hard to hire. San Francisco is a very expensive city, like all major US cities and a lot of people left the state of California, as a matter of fact, during COVID. And so when business resumed in December 2021, honestly, there weren't enough people to, that could provide the services that we're looking for. And, and so, and again, technology kind of saved us.
Speaker 3:So can you talk me through the decision process to choose the specific vendors that you ended up with? Like, were you working with the PMS previously? Or how did you decide which systems to implement when you did this tech stack overhaul?
Speaker 1:Sure. So we started working with Avevo, which is our PMS and channel manager in 2000 and, I believe '18. We transitioned from, so the five hotels at that time were being managed under five different PMSs. So they were all there. Yeah.
Speaker 1:So I guess the consolidation process started in 2018 with the adoption of E vivo. And then again, COVID hit and we started introducing additional technology, we looked into the strategy was basically we talked to E vivo, we asked them what kind of partners they were integrated with, or they were in the process of integrating with. And that's when we, we started listing down all the options that we had available. And then I talked to some of them that includes OpenKey for the digital keys, which, which we ended up choosing, and then Keepsue same for messaging system. But I can talk about, you know, for the smart blocks that we're using, same story for, you know, AccuLox versus Salto or other companies that we talked with.
Speaker 1:We started collecting the quotes, of course. We looked at fixed costs, variable costs, and potential additional one time fees, installation fees, setup fees, and so on. So there was a bit of a mix of, I guess the decision making process was a bit of a mix of financial elements, but at the same time, technological elements. We wanted to make sure that whoever was going to maneuver that software and those tools could do it fairly easily and ideally from one place only. And that would be, of course, Edivo.
Speaker 1:It didn't happen right away, meaning that the integration with OpenKey, for example, was deployed only in 2023, late twenty twenty three. So for the first couple of years, the team had to move from one software to another to be able to issue the digital keys versus checking people in within the PMS. Same story for Kibsue, when Kibsue was not integrated back then. And as a matter of fact, we're in the process of transitioning from Kibsue to the evivo messaging system, because in the meantime, they have developed it internally. So there were a lot of little pieces that needed to be put together.
Speaker 1:The primary goal, at least for me, who I was part of the, you know, I was in the decision making team, was I wanted to make sure that the team was comfortable with what we were going to deploy and adopt and then deploy. And then I wanted to make sure that it was easy for everyone, basically. We were beginners back then. You know, our use of technology was pretty minimal. We're doing some things online, of course, but we were still operating very, very old school way.
Speaker 1:Being able to talk to somebody and being able to trusting somebody was, was what we were looking for and the companies that we ended up choosing. So Vivo, OpenKey, Kipsu, and Salta on the one hand, and AccuLox on the other. Yeah, those were the people that ended up spending more time with us, you know, going through the details with us and what it implied and several training sessions with the team. And so that was very important.
Speaker 3:With the transition to smart lock fender, were you transitioning from, like, plastic key cards or physical keys?
Speaker 1:Or Physical metal keys. Yes.
Speaker 3:Did you need to, I'm assuming, like fully replace the hardware on the doors?
Speaker 1:Yes, that is correct. We had to replace the hardware. We had to replace basically, sometimes even the doors, just because the size of the door was not, I guess, compatible with the size of the lock that we ended up choosing. Again, this is something that we had discussed about throughout the years, but COVID kind of accelerated everything. And then when we, when it became necessary, everything needed to happen quickly.
Speaker 1:And that's why I wanted to mention that level of, the importance of trusting who you're working with, because it just happened very quickly. So having somebody that you can rely on was very important.
Speaker 3:So from a guest perspective, you mentioned there's no traditional front desk. So what does the pre arrival and check-in experience look like? Is there an app that the guest uses, or is there some sort of instructions that they follow to check-in without going to that traditional front desk imprint?
Speaker 1:So there is an application that guests will have to download. The application is powered by OpenKey. But as I said, because OpenKey and Evivo are integrated, technically the check-in process for our team happens within the Evivo system. So once the rooms are ready, meaning that they have been cleaned and prepared for the next guest, Our team is instructed to generate the digital keys by checking people in. There's technically a pre check-in process.
Speaker 1:So the guest receives an email that says, please pre check-in. The team collects all the information, makes sure that, you know, there's IDs and everything online. Then once that is done, then the team is instructed to basically generate the digital keys through the traditional eVivo checking process. And the guest receives a text message that informs them that their room is ready and invites them to download the OpenKey app. The OpenKey app is, of course it works on both Android and iOS devices.
Speaker 1:There's a version for Android and there's a version for iOS. It works fairly well. It's pretty simple. And what it allows our guests to basically unlock the doors with, from their phones with one click. There is a lot of additional information in there that helps us basically communicate with the guests information about, for example, the internet network or where the bathrooms are located, because some of our properties have shared bathrooms.
Speaker 1:So sometimes being able to, I show a map through the app is very useful so that people can move around the buildings more easily. There are quite a few other things that we use on a regular basis through the app.
Speaker 3:Are guests required to download the app then, or is there a path for them to check-in that doesn't require an app download?
Speaker 1:Guests are required to download the app. Yes. And this is probably the element that we're still working on with both Vivo and OpenKey. You know, downloading an app might not be the best, or not everyone likes that. So I should have probably talked about this earlier, but out of the five properties, as I said, four right now do not offer traditional front desk services.
Speaker 1:One of them, which is the Edwardian Hotel, currently still offers 20 fourseven traditional front desk services. So we have staff on-site 20 fourseven, and they are the ones that are technically helping and coordinating anything that pertain to pertains front desk activities at the other properties. So yeah, everything has been centralized in one location and that location is providing assistance to the other properties. So if there is any sort of issues, say at Hotel Des Arts or at Washington's Green or any of the other properties, those would be handled by the Edwardian Hotel. So for example, if the OpenKey app for whatever reason cannot be downloaded or it doesn't work, we have plan B, which involves the Edwardian Hotel team, so the front desk situated at the Edwardian Hotel to provide them with either physical keys, if we're just guessing a guest option one, or potentially even physically go and help the guest.
Speaker 1:So technically we're offering 20 fourseven assistance. It's just not physically located in own properties, but it rarely happens that we need to, you know, send somebody with a taxi from one hotel to another to be able to assist. The fact that the OpenKey app is a requirement is not ideal, but it hasn't been the biggest problem that we had to face after we transitioned to this new business model.
Speaker 3:We've talked quite a bit about the guest facing elements like the check-in, the locks. Given that you are the revenue manager, I also wanted to ask what does your tech stack look like from revenue management perspective? Are you using a standalone revenue management system?
Speaker 1:I am using right now a dynamic pricing tool that's called Vroom Price Genie. It's integrated with Vivo again. So it's feeding Vivo with live data coming from regular calls that they do in the San Francisco area. So they shop around that they see what the pricing is in San Francisco Bay Area, and then they feed Vivo with pricing. This is very helpful for me.
Speaker 1:It's helping me a lot because checking the rates 20 fourseven every day, it's something that, first of all, it's humanly impossible and say, well, that's not, it's just not my, something that I would like to spend my day doing. So it's been a very useful tool for sure. I would suggest actually everyone checking it out because it's been very, very helpful. Again, the integration with Vivo makes a huge difference. If I had that software sitting somewhere else and not talking to Evivo and having to export data and reimport data, not ideal.
Speaker 1:I mean, would be helpful, yes, but it wouldn't really streamline my daily operations that much. Whereas knowing that I could count on that integration is really, really helpful. Room Price Genie is probably the software that I check the most. Setting up the pricing rules is something that I tend to play with a lot because it's of course embedded in my role and what I'm supposed to be doing for the hotels.
Speaker 3:What's an example of a pricing rule that you would set up?
Speaker 1:A pricing rule would be, for example, I would provide the software with a base rate, which is an average rate that I believe to be applicable to a specific room type. And then I set up the minimum and maximum pricing for that room type, considering, again, what we're offering and the type of demand that I expect throughout the year. And then I play with what they call the yielding tags. So based on occupancy, I would tell the software increase the rate by 10%, 15%, 20% based on occupancy levels. I would tell the software there's an application or I guess a tool that allows me, for example, to apply a discount on shoulder nights.
Speaker 1:So if I know that there is a convention in town, typically the day after is very slow. And so I set up a rule that says apply say 10% off based on, again, occupancy, that is a shorter night. Other examples would be, for example, occupancy levels, right? So I would tell the system in August, I want to be at 80 occupancy, in September, I want to be at 85%, or in January, I'm okay with 60%. And that of course has an impact on how the system computes the rates and my overall occupancy strategy and daily occupancy.
Speaker 3:So we've talked pretty comprehensively about your current tech stack. Is there anything on your wish list or any vendor that you've seen that looks really cool and interesting, but you haven't implemented yet?
Speaker 1:I have a list.
Speaker 3:Yeah. What's at the top?
Speaker 1:Marketing tools. We can do much better when it comes to marketing. So there is a software that we use that's called Yext. Yext is a software that allows us to basically synchronize our information pertaining our five properties on all free or paid publishers that are online, Yelp, TripAdvisor, Google, Facebook, Yellow Pages, Bing, and so on. That software is great.
Speaker 1:It's working great. First of all, it's not integrated with Vivo, which is something that I have been pushing for. If Yext was to collect that information automatically from Evivo instead of me feeding it regularly with any updates we did on, you know, room renovations or, you know, new bathrooms or new front desk procedures or new check-in procedures, it would be much easier. But Yext is lacking in marketing. So when I talked to them, they were in the process of deploying a marketing tool within their platform, and it's something that they haven't done yet.
Speaker 1:So yes, marketing is at the top of my list. I have been talking to a few companies. To me, marketing means basically being able to advertise online on multiple platforms without having to log into each single one. The Alt Tripadvisor, Google, again, Facebook, social media, TikTok. And at the moment, we're not being very good at this.
Speaker 3:So shifting gears a bit, I'm curious to hear how your focus on tech overlaps or contributes to some company priorities. Would you mind sharing one or two high level business objectives that the company is working toward? And how does technology help you get there?
Speaker 1:This conversation would be very different if we had it before COVID, probably. COVID shifted everything. It changed the way we're also seeing the concept of profitability and the way we look at the bottom line. Sadly, as I said earlier, you know, San Francisco was hit pretty hard by COVID and technology was, for us, was a necessity in the sense that we were on survival mode, but after COVID, we just need to survive. So our priority after COVID was to survive the crisis, the rising costs.
Speaker 1:Inflation was crazy high. And so our bottom line was struggling. Our owners, as a matter of fact, had to pour quite a bit of money into the properties to be able to keep on operating. So technology for us was, is just basically what SAIT does. Things are shifting a little bit now that we're seeing the light at the end of the tunnel.
Speaker 1:San Francisco is still struggling, but the goal, I guess, for us is to start looking back at the bottom line as we should, in the sense that we want to make sure that we want to go back to becoming profitable and start distributing dividends to our owners and possibly better benefits to our employees. And so our goal is to introduce more technology in order to achieve this, basically going back to being profitable on one end, and then at the same time, able to offer more to our employees. We may have less employees than we had before, but we want to be able to give more to them based through technology. That's our goal.
Speaker 3:How do you measure profitability? Is there a specific metric that you're focused on? And also, what tool do you use to measure that metric? And do you have an accounting tool that you use or dashboard that you look at?
Speaker 1:So profitability to me personally is revenues minus expenses. Very basic. So a 100 comes in, 80 goes out, right? Not from cash flow perspective, but of course, you know, we properly look the Could
Speaker 3:we look at that on like a per room or per night basis?
Speaker 1:We do it per room. We do it per night. We have several, several indicators that we use or KPIs that we use to measure profitability. The main one is, so we have a clear understanding of what our breakeven point is, and that's per room. So we know that if our ADR goes to under a certain level, then we lose money, then we forebought, then we make money.
Speaker 1:So that's, that's our main indicator, of course. And this is where basically technology is having a huge impact. It has basically decreased that value pretty drastically. Our breakeven point went down pretty drastically after we implemented all that we've talked about. So again, you know, bottom line for me is revenues minus expenses.
Speaker 1:So that's what I look at. And I look at that at an aggregated level, at a hotel level, at the end of the year. But then, of course, we have several, basically on monthly basis when we reconcile our accounts, we check how things went. And then we have a reporting tool that allows us to get a better understanding of what we did well and what we did not do well throughout the previous quarter. And then honestly, having regular conversations with team members is also, it's something that makes a huge difference.
Speaker 1:Understanding, you know, when I look at expenses and I, and I try to track them down, sometimes the answer is in, you know, you have to talk to somebody, right? And that somebody can provide you that right feedback in the way you want to look at those expenses. There are expenses that are multi year expenses that we tend to capitalize. There are certain others that we could capitalize that, but we don't capitalize. So there isn't really a standard way when it comes to looking at profitability or what level of profitability we want to shoot for.
Speaker 1:But I think that having tools that allow you to keep track of things regularly, I think is what makes a big difference for us. We use a software that's called QuickBooks for our accounting. I'm pretty sure that you're familiar with it. It's not my favorite tool, to be honest, but it's pretty functional. It has everything that we need.
Speaker 1:It was fairly simple to set up. And then the fact that it's integrated, for example, with our payroll system, which is ADP, it's helping a lot because everything is flowing automatically into our accounting software, into QuickBooks and so. So being able to review that with a couple of clicks instead of having to go through each a bunch of, you know, Excel spreadsheets is very, very useful.
Speaker 3:Well, great. Thank you so much for running through the tech stack and the thought behind it. I think our audience will be really happy to hear some of your advice and best practices.
Speaker 1:Thank you, Andrean. Yeah.
Speaker 3:Really great speaking with you, and thank you so much for sharing all of this.
Speaker 1:Absolutely. Thank
Speaker 2:episode. Thanks for listening to Hotel Tech Insider produced by hoteltechreport.com. Our goal with this podcast 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 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.