Mews Systems Podcast: Episode One

Removing the reception desk, the demands of the millennial traveler and how to overcome the challenges of implementing new technology
 

Marek: 

Hello everyone, it’s Marek here and i would personally like to welcome you to a brand-new line of Mews Systems  Podcasts, where we will be discussing some of the current hot topics and trends within the hospitality industry.

Marek:

In today’s edition, we’d like to welcome Mews’ very own founder Richard Valtr, former hotelier who started Mews with the exciting vision of providing a future thinking property management system. I’m also glad to welcome Mews’ very own CEO, Matt Welle, a hotel guru some may say who previously spent 10 years working at senior levels for Hilton and most notably excelling through their elevator programme. And last but certainly not least, I’d like to welcome Mews’ commercial director Greg Naidoo, former consultant who previously spent 10 years working for a wide range of clientele within the hospitality industry.

Marek:

So, to begin Matt, we wanted to firstly ask you what you believe are the latest trends and the biggest challenges the industry is experiencing?

Matthijs

So I think in hotels, it's been a slow industry to move and when I talk in front of big audiences, I always tell story of my first experiences in hotels when I was a young boy, and that check-in experience was passports, and paying for rooms, and getting keys. Then you fast forward 30 years and nothing has really changed intrinsically in our industry. I think, that's the challenge where we sit today, that there's clearly something wrong with the industry and we're trying to figure out what ... Where did it go wrong? Airlines have come up huge innovations in terms of getting onto the plane, but we in hotels haven't. I think that's the underlying question.

Richard:

I think for me, when I think about what were some of the driving forces for actually starting Mews, it wasn't just to kind of innovate certain experiences. But actually, to kind bring the idea of hoteliering back to its roots, and back to where it really kind of began, which is in the age of concierges, the age of people actually showing another traveller what it is like to actually live in the city. The idea of somebody coming into your home, and you looking after them in the best possible way. When you get up from more than one room onto, let's say, a 100-bedroom hotel or a 1,000-bedroom hotel, that experience. The idea to replicate that becomes very difficult, unless you have technology working in the background, actually making that possible, making that happen. I think nowadays, people are looking for more and more of those technology-enabled experiences that bring more and more personalization. I think that's the biggest challenge and that's the biggest focus for hospitality going forward.

Greg: 

I'd have to say, I'd ask the question I'd always ask myself is that, "Is it safe to be behind the desk?" There's always been this need in hotels, to be behind this desk, and it's never changed. You have to have the computer. You have to have someone sitting in there. You have to have someone coming to the desk. That fear of being behind that desk and rather than having a receptionist come out front and actually talk to people, is where hoteliers are probably not wanting to move things forward. As they felt afraid of actually changing that whole set-up, and there's a load of costs that come with it where people just feel maybe that's not necessary as people expect this. I guess that's where it all sort of stems from is the perception, is that we think that what we've seen for the last 30 years is okay, and therefore we're not challenging it.

Matthijs:

So if you look at those traditional hotels, what would happen if you would actually physically removed the desk, because this is what something that Richard did in his first hotel project. He actually said, "I'm going to remove that reception desk and we'll see what happens." So what, in your opinion, would happen in that case?

Greg:

Lovely space for a couch and a nice coffee table. But no, I think what would happen is people would walk through the door, there should be a host, standing and waiting for you. I'd love someone waiting with a glass of champagne, that would be amazing. Somewhere to sit down as if you're welcome. My friends come to my house, I don't make them stand at the door and ask them questions. I ring them in and I ask them, "Would you like something to drink? Come sit down." Isn't that the same hospitality that should happen with a guest?

Matthijs:

True, yeah, and I think that's hospitality and that's what should happen, but what happens in the back office, because now suddenly you've removed all systems from that experience? Will that break everything in the hotel back office?

Greg:

I don't think it would break everything, I think people would be a little bit bewildered on what to actually do. So a reception ... Firstly, and I put myself in those shoes of being that person now sitting on that couch, I feel unprotected because I don't have a desk in front of me, like I'm completely 100 percent visible to the guest, the customer, and what am I hiding behind? An iPad? I'm scared, naturally, because I'm like, "You can see everything that I'm doing, physically. You can see me enter your name, you can see me bringing up your reg card on the iPad."

Matthijs:

Something we did in hotels, right. Difficult customer you would put on profiles and surely you can't do that on an iPad because they'd be looking over your shoulder, so you'd have to find different ways of doing that.

Greg:

I lean over and, "You've blacklisted me.

Matthijs:

So Richard, you implemented kind of a hotel without a reception desk and as you were building that hotel, you removed the reception, but what were some of the challenges that you then encountered, in terms of systems set-up?

Richard:

I think that that kind of the "nowhere to hide" aspect of it, because I think people do have a tendency, when they work at hotels, they have a tendency to hide, so they just find new hiding spaces. Instead of being behind the reception desk, there's always somebody playing around with papers, something that needs to be sorted in the back office, or for the preparation for the accountants. People just find tasks to do, because the idea of standing, talking, creating an experience for somebody actually arriving, that's a really scary thought for most people. I think the three or four of us, are really quite hospitable people and we love the idea of meeting new people and having those new experiences.

I think it does take quite a lot of training and quite a lot of exposure to that, to actually bring that up within yourself. I think the other thing is, the tendency to go back to ways that people understand. A lot of the times, I think, in the initial phase, there was so much excitement, but at those people then left, went on to do other projects, which is totally natural in the hospitality industry, just the level of turnover. Then the new people coming in, just couldn't get their heads around it. There were fewer people, right from the beginning, who were pushing, the same kind of agenda. So people were like, "Well, we should probably have this, because this is what I've encountered in another hotel." I think it requires a kind of a constant change of mind, constant, almost retraining, and reprogramming into what the hotelier of the 21st Century should actually be.

Greg:

I wanna add, because there's actually quite a lot of interesting things that you said there, right. So the one where I'd sum up for reception desk, is this dependency to rely on the things around you, the stapler, the calculator in case I incorrectly calculated the guest, a stack of all the receipts from the spa to the restaurant, to ... I don't know, wherever else in this resort, you've been to. It's not having all those things physically around you, to grab it, in case you need it. But I ask myself, "Why did you need it?"

I stayed at a hotel and I said, "I need all the dockets from the restaurant, from the spa." She brought a pack, they're as probably as big as the yellow pages. I said to her, "No, I need that for my counting and stuff." She starts photocopying everything and giving me like, 83 photocopies. I said, this is obviously a big chain, and I was just blown away. The point I'm trying to make is, why would you not ... those dependencies of having a calculator in case you made a mistake over the programmes that it was incorrect, and it didn't calculate the city tax and now you're having to work it out. There's no need for that. The system should automatically do all of it. With all of these dockets, why not just press send via email? I just don't get it.

Marek:

So these are real lot of challenges and a lot of positive challenges. How do then enable hotels to adjust to these challenges? How do make them to implement, because as you said, there is a lot of unwillingness, from maybe the staff here, maybe they feel insecure about these things, so how do enable them to proceed with this?

Matthijs:

Yeah, and I agree, there's a lot of unwillingness, which is mostly coming from fear of change, because we've always done it this way. It requires a leader. Someone who comes in, who has a vision behind what he believes that hotel needs to represent to their customers. It is in the end, about the customer, it isn't about you being comfortable with being behind a reception desk. There needs to be a visionary in the hotel who says, "I want to create this new vision, so we're going to remove the reception desk."

So logically, a Legacy system that sits on a local server that is mobile is not going to work for me. That leader needs to go out and actually figure out, is there another system solution on the market. This is where Richard and I started when we opened the Emblem hotel. We reached out to the industry leaders, you know, some of the dinosaurs that are holding hostage of this four and five-star segments. Then, we're like, "Well can you put your system on an iPad?" They laughed at us. Then you start looking for Cloud solutions that are mobile-optimized.

You find that has never been a focus for them. They've always focused on being behind a reception desk and creating features there, but mobile optimization wasn't critical, but surprise, surprise, the customers are all mobile. You know, 90 percent of our travellers come in with a mobile phone, so why can't they check themselves in, like with an airline, for example. I think that's where Richard and I really started thinking okay, rather than just building a cool app that sits on some Legacy system, we need to revamp that kind of property management in the backbone, and really focus on mobile optimization.

Richard:

Yeah, because if you think about it, one of the things that's broken, within hotels, is the entire model of what you're actually doing. So, the idea that you're only supposed to service that customer, from the moment that they arrive, up until the moment that they leave. I think that's something that the hoteliers have figured out. That's not just your window. Your window is from the moment that the person signals interest that they would like to come to your property, until the moment that they're thinking about coming back. That's your window. It's not just those two days that they're actually staying in your hotel.

That's something that hoteliers have to start thinking about and have to start thinking about, creating an online space for somebody else to be able to interact with them on a constant basis. That's the beauty of the Cloud is the fact that you have a constantly virtual presence, for somebody to come back to. You have a home that they can check into at any point. That's the idea of putting your solution, your back-end solution in the Cloud, means that you're always there, you're always available for that guest.

Greg:

I think the thing to add is the customer, right? Going back to what the original question is to why has the hotel industry sort-of not moved forward is, has the customer that demanding, that we have to react just yet? That's what's kind of happening, right? Our customers aren't asking, so the small percentage of millennials or the larger percentage of millennials now coming into hotels, is only going to get bigger.

What my dad and mum may have been used to with getting a stack of bills on departure, is not what the millennials are going to expect and because that wave of the millennials hasn't really hit and that's going to happen, probably in the next 10 to 15 years, when that generation really starts staying at the best hotels, is that you're going to see, them being demanding. It will be too late, because we had the window to change and we didn't change in time.

Matthijs:

I think ... You saw this in airlines, right? Initially, they came in with an online check-in and in the beginning, I was like, "Oh, that's such a hassle." I still printed out everything myself, but slowly, because the check-in experience became better and better, it became a minimum requirement for other airlines to offer that online checking as well.

I think, in hotels, because 99 percent of hotels still don't have an online checking, we've educated the customer that nothing like that exists, so they're still fine with it. The moment 25 percent of those hotels move to an online check-in, suddenly the customer's like, "Okay, that's amazing." So they kind of start demanding that from other hotels who are still in Dark Ages effectively.

I think, at some point, that customer will see, okay it is possible, it's just that that hotel hasn't invested in the technology. I think the customer, at some point, will start to push the hotels to innovate, but I think it's still too early, because there's no one else who's doing it currently.

Richard:

I think these kind of things happen incredibly quickly. One of my favourite Louis CK sketches is about people getting WiFi or the internet on an aeroplane, and everyone kind of going up in arms about the fact that it's not working. I think that's what essentially happens with technology. You didn't know that you needed that functionality before, but once you've had it, once you've experienced it, you start expecting it everywhere. I think that's something that happens ... that rate of change, that you guys mentioned, happens incredibly quickly.

Once you've stayed at a hotel where you can just text any kind of request to a concierge and order directly from, let's say, that messaging platform, you'll find every single other hotel that doesn't enable that, incredibly slow. You'll find every single hotel system that doesn't enable that, incredibly backward. The idea that your needs and requests won't be met in a realtime fashion ... I think that's something where people will be like, "Oh my God, why is this hotel so stuck in the 20th Century?"

Greg:

You talk about hotels, and I know we say it, but we actually have hostels and we have some really cool, trendy hostels across the world, that are with us. The thing is, they have seen the light already. Probably about, I don't know, two years ago where they already started looking for this technology, which is why we have a big portfolio of hostels. Because their demand of their clientele, being in their mid-twenties, staying in hostels, travelling across the world, Europe, wherever, are already using that technology of online check-in. Sothey're seeing the demand of that already happening in their industry, that hoteliers haven't seen mainly because of the demographics that they currently have in their resorts, BnBs.

Richard:

I actually think that demographic argument is baloney. I think it probably counted ten years ago, when people like my father, wouldn't have been able to check-in online, but now, he can do just the same amount of things as I can. The whole idea ... One of the things I think, we had to do as well as the system, is think about the UX, the User Experience, and everyone is thinking about this on the internet.

These processes become incredibly easy. It's very, very easy for somebody to check-in online and increasingly so. I think that the same thing should be happening with all of your systems. With everything that's happening in your hotel, you should be able to create new reservations very, very quickly. You should be able to check-in people very, very quickly. You should be able to find people very, very quickly. All of these of things should be much, much quicker, and almost realtime.

Greg:

Agreed. So my dad is turning 70 and he just got an iPhone, and he's over the moon, right? I get WhatsApp messages from him every morning of some meme that someone created and circulated. The point I was trying to make is, earlier, I said that the hoteliers haven't felt the demand from the customer coming, wanting these sort of technology requests like online check-in, mobile keys, and stuff. But hostels see it every single day, because of the demographic that's staying at their hostels. One would actually argue that hostels don't have a younger demographic anymore. That's actually changing. It's now actually a lot older people, that families are staying at hostels. So even they too, are putting a demand on hostels or hotels asking for that sort of technology.

Marek:

Well, Guys, we've been talking about customer experience point-of-view, which is pretty cool and we all as our end users or guests in the hotels can appreciate these things. But what does this actually mean in the hotel's perspective? From the back of this term. This for us, is amazing, but for the hotel, this is something that they need to face with and they're probably scared of that. What is that they need to do or how do they make this change?

Matthijs:

So looking at the industry today, and it's an estimate, right. So probably 90 percent of hotels still sit on legacy local server-based solutions. You buy the PMS, the POS, the EMS, all from one vendor. They're all not best in Cloud, but because they have everything, you took it. But connecting to other kind of companies, who are best in Cloud. So for example, if you wanted a different event management system or point of sale, that's extremely difficult, because they don't have open networks. I think what the Cloud provides us is the ability to say, in the property management system, we're best in Cloud, but we have an open API, which allows other Cloud systems to easily integrate into it.

So we started organising an event. I was like, okay, let's reach out to a few of our partners who are integrated. At some point, we had about 14 different partners who are all in unique verticals, who had just integrated into our system, because it's so easy, right, because we put an open API out. There's enough start-ups that would like to have a simple app on top of our ... You know, not everyone wants to build a PMS, which is extremely complex. If you do an upselling app or a housekeeping app, you just need to get some data from the PMS and if you try to talk to local server-based systems, that's really difficult.

If you go to the Cloud partners, everyone has an API. Integrating is made really easily. As a hotelier, the moment you say, "Hey, I want to improve my housekeeping, because I see that the waiting times for rooms, it's too long, so I want an app." So you go to an app provider, they plug into the PMS to take the data out. If you like the app, that's great, but if you don't like it, you just switch it off and move to the next one. Previously, you would have made this decision, and the integration would have taken six months to get it live. Then, you would have to sit on that app, that housekeeping app, for the next ten years to return on investments on it. The Cloud enables you to just try it out, for 30 days. You switch it back off if you don't like it, or you stay with that solution for the next ten years, if the solution is great.

Richard:

I think that's one of the things where you go to a lot of conferences, and everyone is always griping about the slowness of change within the hospitality industry. I think that's really the main contributing factor, is that ... If you look at all of the industry verticals, there are usually systems that have open APIs, that make connectivity really, really easy. You just don't seem to have that in the hospitality space. Even if you do have APIs, they're still kind of working on hybrid systems, not fully Cloud systems, which make that connectivity, not realtime. If you're talking about, for example, housekeeping apps, or any kind of service delivery apps, that's where that kind of realtime element becomes absolutely crucial. That's why it's so necessary to have a Cloud-based system that's just passing through that information through APIs, in realtime.

I think that really is one of the things that's holding back the innovation. We see and we are really surprised at how many different companies are crawling out of the woodwork. How many different young innovators are really trying to connect to us. They're like, "Wow, you guys make it so easy for us to actually connect with you." I think that's one thing that we've been surprised is how many young start-ups there are, working in this space. It's great to see that there's so much diversity and so much dynamism in this area as well.

Greg:

I think there's a portion of hoteliers that don't understand Cloud, right? It's something that's happened, but nobody sort of explained it. We were using probably Cloud solutions and didn't even realise we were using Cloud solutions. I think that's probably the biggest part. Do they really understand the difference of it, right? That all these network cables and all of these things that have ports. I still go into hotels and there's a broadband plug-in point by the desk. I'm like, "What do I do with it?"

The thing is, the hoteliers haven't gotten to that point. I guess, being a hotelier myself, is that when I have to migrate my whole set-up to the Cloud, all my files from my local desktop, all my personal photos, everything had to move. I then understood actually, that it became so much more easier. I think what we're trying to do also, is educate people that Cloud really isn't that complex. It's actually really straight forward. It's just moving onto the Cloud and getting your hotel up and running within a matter of days. That's probably the biggest starting point that we're trying to explain to people, that Cloud should not be expensive and should be quick and easy to set-up.

Matthijs:

Yeah, so if you look at a hotel with a local server, because it's local, that means that no one can connect to it unless you have access to the hotel network. So that means that, if you want integration, that means you have to get installed on the local network or you have to instal some app locally that connects to it. Where the Cloud comes in, it sits on the internet ... Really, anyone who we allow to connect to it, can connect to it. So it's not just integration partners. Something we realised early on, "Hey, shit. Guest connects as it as well." Why doesn't the guest update his own profile, why doesn't he upload his own credit card or send a bill to himself from his own profile. That's really what we try to do now, getting the guest to access the hotel.

Because if you think about the check-out experience that you get in hotels as well. "Oh, I've got a plane to catch." You're waiting in a queue, and there's some person if front of you who's being really difficult, but you have to get your bill because you have to submit that to your accounting. What if I can go online and actually change my billing address, and send the bill to myself? That's amazing because it changes the guest's experience and they don't have to rush to the airport, they really can do it at their own leisure. I think that's ... Getting the guest to connect to your hotel system, that's where the real innovation will come in the future.

Richard:

I think, if you're thinking about where all of this is going, it's really a completely brave new world, if you think about it. It does completely change the way that you start starting a hotel. I think when we first started, one of the ways that we always thought about the hotel ... Actually, the hotel is a real life homepage to an entire city. You arrive there, somebody takes care of you, somebody actually looks at what you want to be experiencing in that city, and then takes care of you from that moment on. You basically see the hotel as the thing that's defining that entire kind of experience.

I think that if you think about all the different services that you could integrate into that, that's tours ... You could think about any kind of business, work spaces, anything that you would want to kind of connect to while you're actually on that trip, even if it's business or leisure. That should all be coming into the PMS and that should all be feeding in to the guest, so they can see that directly from their kind of trusted resource, which is basically the hotel in this scenario.

Greg:

I want to touch on ... Matthijs actually made a really good point about the access of your information and customising it to what you want, right? I take the airline industry, again. If something is incorrect on my profile, I would log into VA, I would change everything, I would update it. I need to change my flight, I pick a new date, it charges me an extra 20 pounds, I change my flight. I then get reissued a new ticket. I don't have any sort of human intervention whatsoever. Everything I've done completely on my own. Even if I want to upgrade my flight, which I would love the two of you to let me do soon. You can even do that on the app as well.

Why should we not allow our own hotel customers to do exactly the same. I take other eCommerce platforms, almost every eCommerce platform, if you wanted to change something from delivery address to your own billing address, your own credit card detail, you just log in now. On my Amazon account, I can do it in seconds, while I'm on the go, sitting on the train. Why should a customer not experience the same thing in the hospitality industry.

Richard:

Yeah, because I think one of the things that we do so badly as hoteliers, is that we essentially get the customer to ask us for permission to do these kinds of changes. They should be fully within their own. I think that one of the things as well, is that we're super afraid to charge for anything because of the fact that we have this kind of personal connection to that customer. Whereas, if I'm changing a flight, online, I have no problems basically paying another 10, 20 pounds, because I know that's basically the price. If I'm doing it with somebody, I'm always trying to get them to go a little bit lower. But it's actually, I should be getting this kind of thing because I'm a frequent customer, or something like that. Once you actually put it online, people are much, much more willing to actually spend that extra money, because they see it as kind an impartial resource that you can't really argue with.

Matthijs:

I received an email yesterday from one of the hotel owners, who had wanted to improve his team in upselling skills, but that means a lot of training into his team. So I said, "Well, why don't you just have this upselling application integrated so it will automate that flow." He just wrote me that we just raised revenue by 4,0000 euros last month, because of you just mentioning this company that we each just set up in five minutes. We started a workflow and money just started coming in, because every customer was targeted with an offer, targeted to them. If they're leisure or business, there's different offers that you can send. He just wrote me and I was like, "Oh, that's so nice that he actually wrote me that." But clearly, you know, that we just brought him 4,000 euros in revenue just by switching on an app that doesn't cost that much.

Greg:

So people may be listening to this and going, "Well, we're actually becoming a non-hospitality connected. Everybody wants this, "Call us, let us talk to you." I listen to both of you and you're like, "We're not even going to be talking to any of our customers." So it takes out, strips hospitality. So the thing I would say actually is, there's two sides to all our customers. There's customers that want that connection with you and there's customers that don't want that, and just want to be free to do it on their own, and do their own thing.

Whenever I am talking about Mews, people always say, "Oh the technology's obviously going to detach the hotel staff from the customer." And I'll be, "Absolutely not," and I always ask, "What proof do you have that this would happen?" Of course, we've got X amount of properties, live with us, using it. If anything, it's gotten better, rather than what people envision it to be.

 I think the thing I'd say about that is ... When I take it to the airlines and you change a flight, and Richard said something really good, if you call the hotel and ask them to cancel and you were within the cancellation policy, the reception team manager will probably go, "Ah, it's okay, you know, we'll waive it. It's fine, but don't do it again." That's lost revenue. If I call an airline, they'll be like go online and follow the prompts, and whatever it tells you, that's what you've been stuck with. Usually, there's a cancellation fee and you can't get out of it.

Matthijs:

But if you add up, sometimes we do this exercise and one of the hotels will be like, "I don't want you to have these cancellation fees." Okay, let's do an exercise a month later in seeing how much money you've just waived, which is pure profit. That customer is not using the shampoos in your rooms and the sheets, so any cancellation fee that you waive, that's a loss of 100 percent profits to the hotel effectively. I think it's good sometime to take a report and look back and say, "What's the human factor into my profitability?"

Greg:

I love that, that's a good run.

Richard:

But I think that your point as well, Greg. You shouldn't just think about it as technology taking over the hotel. It's also technology enabling your staff to actually do more. Unfortunately, we're not going to always be blessed with the most empathetic people who can just see the person coming through the door and just go like, "Oh my God, this person definitely wants this kind of experience in my city or this person, I can upsell on this particular product." A lot of the time, the technology can actually help your staff actually be prepared for the people that are coming in through the door. That way, you actually just make sure that you have that information in front of you. Then come the kind of ... those moments that, for example, that you see on the internet, because they get retweeted 20,000 times.

It's just where a company has been really kind of been able to go above and beyond, it's because they've used some piece of information. So, it's usually the case is somebody tweeting @Amazon, somebody tweeting @airline or something like that. Like, "Hey, couldn't you make this possible?" They do it and there's a huge reaction, basically from the fact that somebody can pick it up online, go above and beyond their normal call of duty, and actually deliver an experience that the customer is really not expecting. I think that's the exciting part of technology. It's not about the basic ...

Greg:

I think you can usually see that, right? You typically, you know ... Your corporate guests, for example, they're not the ones that want be interactive. They're not going to be, "Tell me about, show me a map, let me go out to the city and see everything. All I want is my burger delivered into my room, the moment I get to the hotel. I don't want to talk to anybody, I want to go to bed. I've gotta get up early. Make sure the iron is there, the ironing board, so I can get my shirt pressed. There isn't enough time." These sort of things with an online check-in, people can automatically can pre-prepare for your arrival. Yes, it's a lot quicker for you to do things.

I do agree with you. I think, the main thing, for me is, the hoteliers by not taking this leap forth in technology, is making an assumption that their business will probable not evolve and maybe, I don't know, stagnate, whatever they may think. Nothing will really change. In my opinion, I think not taking the chance and not knowing the real potential it will bring, is probably more their downfall than anything else.

Marek:

So that rounds up this week’s edition of Mews Podcasts. I’d just like to say a massive thank you to Richard, Matt and Greg for their time today, and thank you all for listening.

Marek:

Join us again soon where we will be further discussing some of the latest hot topics and trends within the hospitality industry. Have a great week. Take care and Goodbye.