VANCOUVER—Hotel Business spoke with Michael Driedger, cofounder of Operto Guest Technologies, who recently stepped down from his position as CEO, to get his take on how the COVID-19 has affected hotel technology, specifically software as a service (SaaS) offerings.
2020 has been the year in which everything changed for global business and the hospitality industry. Where do you think the opportunities lie for hotels to capitalize on the current situation and make progress into 2021? Hotels have a real chance to leapfrog over legacy technologies that were just “placeholders” for modern software as a service (SaaS) offerings. A good example of this is the hotel door lock that can be opened with a phone app. While that seemed great at the time, it only dropped front desk visits by less than 20%. The app was confusing and hard to use. Guests were perplexed by the process and needed education. Now there are smart locks that can be opened with a phone or a code. A code has a 99% success rate at allowing people to skip the lobby and get into their room.
Examples like this have happened alongside the emergence of multichannel and automated hotel booking software, which are better than anything from five years ago and constantly improving. Since these new SaaS companies are based on a monthly subscription, hotels are always going to have access to the newest and best—upgrading is no longer a large, fear-inducing project. Contactless and online experiences are going to be easier to offer and that’s really what guests have been wanting for some time.
2020 just accelerated the number of people who want a frictionless hotel stay. I prefer to think of frictionless rather than contactless. The contact with a front desk person isn’t the issue here. There is just so much transactional friction in the industry which still needs to be streamlined. Think of how easy it is to jump in and out of an Uber. Moving most processes online reduces the amount of friction for the guest—this could be an area of real progress for hotels in the future.
Can you give an overview of the hotel industry’s relationship with technology adoption and suggest any reasons why the sector may have lagged behind other industries in this respect? Many industries are slow to adopt technology. When you have a model that works it’s hard to justify change. The construction industry is pretty similar but even that industry has gone 3D and paperless in many instances. In construction, much of that change came from competition (i.e. outside forces), and the hotel industry has seen a real challenge from the alternative lodging industry. As a result, we’ve started to see an acceleration in technology adoption in hotels.
This process has been quickened by the experience of the pandemic, which has broken down some of the traditional resistance to technological change in the hospitality industry. Hotels know now that they need to tool up and they are investing in that in order to progress.
You describe a resistance to change technologically—how has the pandemic affected this attitude and altered hotels’ perspective of tech in relation to operations and guest experience? Technological change often comes with operational change and staff education. 2020 has brought change to most areas of hotel operations. If done right, technology brings operational improvements—just like a cordless drill is an operational acceleration of the manual screwdriver. However, it’s the wrong tool choice for the task of driving a nail.
I think that the industry has been burned in the past with a lot of the interim technologies that have bridged us to where we are today. Often people were using the wrong tools for the job. I’ve seen accounting teams struggling with a hotel-designed financial tool when all they want to use is Quickbooks or some other tool designed specifically for accounting.
The beauty of all these modern systems is that they are open and can be connected together. No more need for an all-in-one tool like a Swiss army knife. Now teams can get the specialty tools they need and can really start excelling at what they do operationally and in terms of guest experience.
How has the evolution of SaaS enabled a step change in the way that hotels can now invest in technology? What are the advantages which connected tech and SaaS can bring to our industry? The move to SaaS has really been a result of shifting software completely online. Before that, you could only ever get updates if you purchased the newest CD that could run an update to your computer. That meant slow upgrades and limited access to software because you needed to have your work computer or be on site to do your job. It also meant great changes between versions, as a small change wasn’t worth the hassle of distributing a new disc. With SaaS, upgrades are seamless and incremental, so people adjust gradually to new workflows, while always benefiting from the latest developments.
Now a software addition has a direct return on investment as monthly costs are baked into your operations and can more clearly displace hours and costs, and instead create profit opportunities. An online platform like my company’s, for example, can offer paid room upgrades through a guest portal. If the room is available on a high-tech SaaS PMS, it can automatically assign a guest to that better room, take their additional payment and give them an access code to check themselves in. SaaS is always improving so these types of operational and revenue opportunities are increasing every day.
Can you give us an example of a hotel which has identified the need to automate their systems and has recently made the leap into SaaS? How has innovation affected their business and guest satisfaction? My favorite boutique hotel example is the Annex in Toronto. They have no front desk, but instead a beautiful restaurant and a very popular bar. From the outset, they wanted to take the front desk (which costs money) and turn that valuable square footage into a revenue center (in this case it’s a small coffee shop). Guests can book their room from the Annex website (which looks great on mobile devices), and then go straight to their room using their door access code. They can check in anytime—night or day. Front desk staff aren’t stuck behind a desk anymore and can greet people as they enter or make them a drink or a coffee.
The web app for guests also allows you to pre-order things like a crib. If you enter your room without staff seeing you, the staff get an alert that you’ve checked in through the connected smart lock and a member of staff can bring up the crib. It’s everything that guests want. Great hospitality, but all interactions are on their terms and few are transactional. All the transactional pieces happen online to reduce friction and increase guest satisfaction.
How does Operto work with hotels? Operto’s signature product is Operto Connect. The basic idea is that it allows you to connect your guests, teams and your technology. It functions like a giant connection engine to bring your booking software and smart device technology together to make teams more efficient and to make the guest experience better.
Our foundational technology was focused on connecting bookings systems to smart devices like smart locks, smart thermostats etc. This portion allows for operational and utility savings, but also creates a better guest experience because a guest can just check themselves in and walk into a space that is at their ideal temperature. When they leave you get the benefit of utility savings because the system shuts itself off.
We’ve recently launched web portals that connect the guest even further, giving direct control of devices and reservations information, while providing real-time data to your booking, cleaning and guest services teams. These portals are constantly improving to accommodate innovative workflows from our entrepreneurial clients worldwide.
Finally, what are your predictions for hospitality tech for the next five years? The last five years have actually seen significant technological changes relative to the 15 years prior. Most of this was a result of guests wanting to book and conduct most interactions from their smartphones. The rise of alternative accommodations (Airbnb, etc.) was very well-positioned to meet that changing consumer demand and subsequently forced some hotels to respond quicker than others.
COVID-19 has put all these changes, which were already happening, into overdrive and pushed organizations to change. I predict that this will result in a lot of hotels adopting SaaS-based technologies at a much more rapid rate. Consumers have increasingly moved online and those hoteliers who are best able to offer great hospitality, great guest experiences, at competitive rates will be those which grow the fastest over the next five years.