At Clock Software, we do what we are best at – developing hospitality software. Our modern all-round hotel PMS in the cloud that lets you... read more
- Based in London
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At Clock Software, we do what we are best at – developing hospitality software. Our modern all-round hotel PMS in the cloud that lets you... read more
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Dave Berkus knows hospitality technology more than nearly anyone. Back in the early 1980s, his company, Computerized Lodging Systems, dominated the nascent hospitality technology market with one of the first electronic Property Management Systems on the market. The immediate popularity of the technology resulted in rapid growth for the company, which was recognized on the Inc 500 list -- twice. Dave also created FOSSE, the property management system technology that Marriott used for almost 36 years. Today, there are over 700 property management systems for hotels. With such a dense thicket of choices, it's hard to imagine the early days of hospitality technology. These are the days when only a few players dominated, offering truly game-changing solutions that defined how hotels began using technology to operate more efficiently and profitably. Dave is also an accomplished angel investor, having achieved an impressive 97% internal rate of return from over 150 investments to date. His Wayfare Ventures unites five partners from AIG, TAJ Hotel Group and Starwood, alongside a board of accomplished travel industry veterans, to make early stage investments in travel technology startups. Hotel Tech Report’s Jordan Hollander recently enjoyed a wide-ranging conversation with Dave on the Hotel Tech Insider podcast, where the two discussed how Dave’s history in hospitality technology has shaped the way he sees the industry today. These are the most pertinent themes that reveal how this hospitality technology luminary sees the future of hotel tech, as well as what he looks for when evaluating both ideas and entrepreneurs for investment. The future of the PMS With so many property management solutions competing for business, it's hard to envision a post-PMS future. Yet, this future is coming, Berkus says, due to the increased importance of the Central Reservation System. The CRS owns the guest name record, which has made it more of a centralized source of data than the PMS: The PMS systems are, for the chains at least, becoming increasingly less important, as they handle right now in-house functions only. Berkus notes that the cloud PMS companies of today are likely to be the players who evolve these CRS like capabilities so while he believes that their technology will remain a core piece of the tech stack, he believes that what it means to be a PMS will change more in the next 5-10 years than in the last 20 years combined. Guest history has shifted to the CRS, while the PMS has transitioned into a fully operational role for specific properties. As hotels have both consolidated and established micro-brands, the CRS naturally became the way to share guest preferences across the portfolio. The centralization of data cemented the role of the CRS at the center of modern data-driven personalization and marketing strategies. says Berkus: Big Data's being used in very important ways but certainly not just from the PMS system anymore. The question then is: if the CRS could potentially supplant the PMS as the source of all-important guest data, will we need a PMS system in the future? Berkus says yes but the legacy PMS companies will be forced to innovate and more specifically open up their architecture to become platforms themselves because CRS, CRM and even Revenue Management companies of today have the requisite data necessary to become the center of the tech stack according to Berkus. Eventually, Berkus sees most hotels relying on a single cloud-based system that aggregates all functionality into one flow, which reduces errors and increases accuracy as it doesn't require passing information around multiple systems. A hybrid PMS/CRS/CRM solution means a single guest record that enables better, more accurate personalization. The consolidation of functionality also simplifies the tech stack and should help hotels effectively use existing data to power personalization at the individual guest level. A unified tech stack unleashes the full power of data-driven decision making, which will soon be table stakes for how hotels everywhere compete. Rather than relying on incomplete sets of data, hoteliers can constantly make decisions based on the holistic view. A unified tech stack can also be achieved through seamless integrations and Berkus says that “there will always be best of breed solutions in various categories.” This vision will take a while to achieve, and so the PMS will continue to play a critical role for hotel operations: If we look ahead ten years, it would be easy to see a single cloud-based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through. Even with this view, Berkus sees the potential for category leaders to dominate specific verticals, while still providing the essential services necessary to run a hotel. For example, revenue management, which may be a feature of a CRS or a standalone solution -- all depending on how an individual property derives its revenue, and the sophistication of its revenue generation strategies. Part of the problem, he says, is that people confuse hotel tech with quality hotel tech: just because a hotel has a system doesn't mean that it is a good system. For Berkus, this means that the hospitality technology industry has plenty of dynamism ahead of it and he believes that it’s far from maturity. The transformative power of analytics For Berkus, the primary reason for the PMS’ uncertain future is due to its isolation from data and analytics. Even the most integrated systems have challenges when it comes to gathering data from disparate sources into a unified view. Even so, it’s the analytics on top of all of this data that drives profitable hospitality today. Whichever technology hotel uses, It must facilitate the types of analysis that drive “more capable decisions,” across the organization, says Berkus: Analytics are everything. The most important single change that's going to come is the fact that every piece of data that arrives at the central source will be analyzed. You're going to find that more capable decisions will be made to maximize revenue...based upon AI and data analytics. That's your future. The unsaid implications here is that hotels with a sub-par data and analytics approach will be left behind. Hospitality has become not just about the guest-facing product but also the hidden back-end of intelligent data capture and analysis. The top performers will effectively oscillate between analyzing the data and making clear improvements based on this analysis. The data-driven hotel GM As data and analytics move to the core of a hotel’s operation, general managers must evolve their skill sets to match. While operations will never cease to be a part of a hotel general managers role, success in this role is increasingly about the ability to enhance profitability by effectively translating data analytics into actionable initiatives. Currently, GMs have a steep learning curve to build muscle memory around analyzing large amounts of data from disparate sources. As machines become more capable of doing the analysis on their own, the best GMs will be able to take action on the analysis presented by the tools to increase profitability, Berkus predicts: A manager has to be able to add value by adding revenue and by increasing guest satisfaction. Those two things are not necessarily the operational things that a manager today normally concentrates on. Marketing also matters more to the GM of the future. As marketing campaigns become data-focused, GMs will engage more deeply with their marketing teams to leverage a data-driven approach to spend marketing dollars more efficiently. It's all about the relevant message consumed in the right context, as GMs seek to add value in new ways. Sourcing true pain points from sales and marketing Berkus is an active angel investor, and his recent announcement of Wayfare Ventures brings his focus to travel technology. When it comes to developing an idea, Berkus sees real value in entrepreneurs solving true pain points rather than perceived problems: I love it when somebody in marketing or sales develops a company and says “I feel the pain” and let's try and solve the need. As opposed to what I see most often, which is an engineer says I really got an idea and I'm going to make that idea work. The contrarian view is noteworthy in its opposition to the engineer-focused view espoused by many investors and technologists. Part of this view comes from the plummeting costs of cloud computing, as well as the prevalence of APIs which make it simpler to plug into an existing ecosystem without having to build as much technical infrastructure. Differentiation comes less from tech and more from truly knowing the problem and having clarity around what needs to be solved -- rather than building a technically-flawless solution that misses the mark and fails to gain traction because it doesn't solve an actual problem. An early-stage solution that solves a real problem for a specific segment sells itself and helps a startup gain traction at a lower cost. It’s expensive to convince people that a product solves a non-existent problem. Market trends poised for investment As far as trends in the market that have potential, Berkus points to artificial intelligence, robotics, and data analytics as three disruptive forces. However, things change fast. Apps are no longer the hot commodity they once were. Today’s opportunities are all about AI, robots, and data analytics. When evaluating the most exciting opportunities for investment, Berkus expands his view to encompass all of travel technology. This expanded view allows him to see opportunities from the interconnectedness of the travel and hospitality industries, which is a core part of the thesis at Wayfare Ventures. It all comes down to using modern technology to find new revenue that may not have been easy to uncover in the past. Whatever it be, there are opportunities now for revenue that weren't easily available in the past but are today. But the whole point is if guest satisfaction goes up and guests are able to do things they couldn't do before, like order a meal from text, then you're going to have better revenue and more satisfaction. Enjoy the full podcast episode here. Outside of the points covered above, Berkus shares the fascinating foundational story of the first property and yield management tools for hotels.
One of the biggest misconceptions that hotel workers believe is that technology and artificial intelligence will take their job. Here’s a news flash - it won’t. Don’t believe us? Just take a look at history. From early Mesopotamia to 17th century Europe economic growth grew at a steady pace. Blacksmiths forged iron, tailors made clothes and so on. At the dawn of the industrial revolution many predicted that factories would displace this workforce and create mass unemployment. In fact, the opposite happened and factories created an entirely new economy with explosive employment and economic growth. What we see time and time again is that game changing innovation creates growth that in turn delivers net positive jobs. Hoteliers who want to succeed in the future are advised not to focus on the jobs that technology will displace but on the jobs that it will create. The same misconception from the Industrial Revolution resurfaced in the late 70s with the advent of spreadsheets. Analysts thought that they would lose their jobs to intelligent computing programs but found that technology actually empowered them. The top analysts of the 70s were those who were best at doing advanced calculations off hand while the top analysts of the 80s were the ones who knew how to effectively manipulate, visualize and analyze data in spreadsheets (check out this awesome history of spreadsheets). For the hotel industry it’s inevitable that automation and A.I. have been driving a more profitable business model. The trend is also leading to a new breed of top hoteliers with a different kind of skill set. In our interview with FOSSE creator Dave Berkus, he told us that the hotel general manager of the future is going to require less operational knowhow and more analytical chops. Hoteliers believe that revenue managers will lose their jobs when artificial intelligence gets good enough. I believe that artificial intelligence is going to make revenue management an even more valuable skill because it will take more insight and analytical rigor to stand out from the competition set in a data-driven world. ~Aditya Sanghi At the core of this change is the property management system and few have changed the game for the PMS market like Hotelogix founder and CEO Aditya Sanghi. Aditya has launched a wildly successful business in some of the toughest markets like Asia and Southeast Asia (due to language and culture differences). The product he and his team have built is so strong that it transcends these cross border discrepancies and is widely used by hoteliers around the world. Hotelogix is becoming increasingly popular in markets like Europe and the United States - a testament to the incredible company that Sanghi has built. During this interview we learn from Aditya’s unique perspective on life, hotels and business. We also talk about the future of hotel property management systems and what qualities hotel managers must focus on developing in order to succeed in the A.I. revolution. What was your background prior to starting Hotelogix? Hotelogix was founded by Prabhash Bhatnagar in 2008. Before Hotelogix, Prabhash used to offer web solutions’ services, where he interacted closely with many hotels. That’s where the idea of offering a cloud-based PMS to the mid-segment hotels germinated. I joined Prabhash as a Co-founder, as I was always interested in making a product for the global market, and Cloud PMS gave me a perfect opportunity to do so. Before that, straight out of college, I had co-founded another product-based company, EDISPHERE with my brother Ajay Sanghi. I believe that my early exposure to creating products played a great role in shaping my entrepreneurial journey. What made you decide to jump in and create Hotelogix? I had a burning desire to create a product that had global reach and appeal. India was not known as a hub for products back then and I always believed that products would drive the next phase of economy for the country. I started my corporate life as an entrepreneur. I am known to be a ‘happy-go-lucky’ kind of person and have never feared consequences. I think a major factor in becoming an entrepreneur is to not have a fear of failure. I come from a strong sports background, where winning and losing was part of the game. I believe that losing a battle is an integral part of winning the war, and one must enjoy the whole journey. I think I was better prepared to live the life of an entrepreneur because of my learnings from sports and my family background where ‘risk taking’ is normal. There is also a certain sense of joy and contentment in creating footprints for someone to follow. Any footprints that Hotelogix can create for other companies to follow will be a huge accomplishment for me. Changing the life of a customer is another factor that drives me. And, co-founding Hotelogix gave me a perfect opportunity to do that. I realized that the industry would soon transition to cloud PMS as the entire travel world was poised to go digital, and I took the opportunity to drive this change. On how it started… Prabhash had shared his idea in a ‘New Year Party’ in December 2007 while we were sipping whisky by the fireplace, on a chilly winter night. I think my decision was taken in a couple of hours of our conversation. All the above factors were too compelling for me to continue working in Informatica Business Solutions in Bangalore, where I last worked. I have taken some of the most critical decisions of my life in less than a couple of hours. And, I do not regret any of them. Who was your first customer at Hotelogix? Our first customer was in 2009, a small boutique hotel called Faros Suites from Lonian Islands, Greece. Convinced by our ‘try and buy’ model, they took a free trial of our PMS. Back then, we did not have any sales team and the founding team would respond to chat and email queries. After a few days of self-running trial with assistance on chat and email for concerns and clarifications, Angelo, the owner decided to go ahead with Hotelogix. Their decision to implement Hotelogix did not involve any huge financial investment, but it did involve their time and resource investment. They were moving from pen & paper to adopting our cloud solution. Such a transition is never easy. Wow, so your first customer signed up through a trial, is that something that Hotelogix makes widely available for hotels? Look to any industry and software buyers can try different solutions before they buy. We believe that is the future for hotels too and have made trials available to any hotelier who wants to take our software for a spin. Great hotel business starts with a powerful Cloud PMS and hoteliers should be able to see the product in action before they sign on. This is why hotels in more than 100+ countries trust Hotelogix Cloud PMS. Hotelogix is a smart solution that helps our clients stay organised and connected. If you want to simplify your operations, get more business and keep your guests happier - don't take our word for it - try Hotelogix free. The Hotelogix dashboard is intuitive and easy to learn for new staff Who is one mentor that has really helped you scale the business? That would be Shekhar Kirani, from Accel Partners (our investors). He is also on our board for quite a few years now. Shekhar has taught us that it is ok to make mistakes, fail and move on fast. The day and age is not suited for over analysing things to take decisions. He also taught us to how to think like a funded company, and the switch that needs to be made from the ‘boot strapped’ mind-set. Here are a few more things that we have learned from him – On hiring – If you need one sales person, hire three. Choose the best person for the job without losing time. If more than one of them turn out to be good, it is never considered as a bad investment. On our website that is expected to generate demand – The first fold of your home page is for humans, and rest is for Google. Look at your website from that perspective. Don’t overly spend time trying to beautify what pleases the human eye but has no bearing on Google. On any process, like mailers to be sent once a form fill is done on the website - Just copy the follow up mails from some service that is successful and don’t waste time recreating it. On focus: Shekhar has also worked closely with us to bring in lot of focus in the way we think of the road ahead. This helps us choose the next two battles to win, rather than going all out and not winning anything. Hotelogix team building exercise What's one commonly held belief that most hoteliers believe to be true in your niche that actually is false? For example: Hoteliers believe that revenue managers will lose their jobs when artificial intelligence gets good enough. I believe that artificial intelligence is going to make revenue management an even more valuable skill because it will take more insight and analytical rigor to stand out from the competition set in a data-driven world. Hoteliers are used to looking at PMS as a cost centre of the hotel. With the maturity of Cloud PMS, the paradigm has changed. A PMS should not be considered as cost, but as a system that will help them grow revenues and business. Also, for most hoteliers, deciding on PMS is an operational decision whereas I feel it should be more of a strategic decision. What's the most surprising thing you've learned about scaling technology into hotels? The most important thing that I have learned is the difference between products for a vertical vs. horizontal industry. When you are looking at a vertical industry like hospitality, you can’t ensure a frictionless scale-up unless you understand the behaviour of even the housekeeping staff. It requires going deeper into the domain and environment. Another great learning is to choose the battles to fight. ‘Is this the right time to solve this problem?’ is one question to be answered. Gut feeling is important but scaling up needs data backing. Instinct should get things on the table for consideration, but one needs to get to data points to decide on it. Thirdly, support is the most critical aspect of serving a hotel. Even if the product is not evolving and innovating as quickly, one must spend disproportionate time trying to understand how you can be more effective in your support. Is there a company that has been a particularly good partner for you? Yes. We have been partnering with several third-party solution providers to help hotels leverage the power of cloud technology. Some of them have been quite important to us. They are - Vertical Booking Channel Manager - The integration we did with Vertical Booking was first-of-its-kind back then. It was a complete two-way integration to support very critical aspects of OTA distribution like contract allotment vs free sale. Vertical Booking also stood alongside as a robust solution and the integrated offering is still what our customers enjoy. This was the first channel manager integration with Hotelogix and our customers saw instant benefits in terms of nullifying double bookings, getting more OTA bookings, increasing revenue and many more. TripAdvisor Review Express - Review Collection automation, and ability to influence reputation from Hotelogix PMS was the perfect thing to happen. Hotelogix was mainly a solution positioned for independent hotels and we have always believed that reviews are a great leveller between independent hotels and brands. Our customers saw how Hotelogix and Review Express integration seamlessly improved their TripAdvisor ratings, that benefitted them in terms of better ARR and more bookings. Where do you see Hotelogix in 5 years? 5 years from now, I imagine Hotelogix to be a word that is synonymous with Cloud PMS. Hotelogix will be more like an Operating System for hotels, providing various services on top of its PMS platform. We will be a product that is associated with simplicity that drives great customer value. We will be known as a catalyst to this change of bringing about automation to the mid and small sized hotels, and driving the change from on-premise to cloud-based systems for running operations. More objectively, Hotelogix will be the largest Cloud PMS in the South Asia and Southeast Asia markets and will be in the top 3 leading products in developed geographies like the North American market. How will the property management system and overall hotel management software space change in the next 5-10 years? Today, Hotelogix is mainly serving semi-service and limited-service independent and group properties like Hotels, Resorts, Apart Hotels, B&Bs, Hostels and more. You will see specialized product offerings for these different property types. You will also see Hotelogix becoming a key player in anything that needs booking of a room/desk like corporate housing and co-working spaces. Hotelogix as a brand will become a ‘Gold Standard’ in the industry and will be adopted by hotel management institutes to train their students on PMS. Hotelogix will be that self-serving platform that a hotel business can get up and running within no time – where he can quickly subscribe, adopt and benefit from the solution. This means a lot more smaller hotels will be able to avail of our solution without having to go through adoption challenges that come with a new PMS. Hotelogix is highly passionate about small to mid-sized hotel businesses. For a very long time, this segment didn’t have access to great technology as service providers across the globe concentrated on the five starred community, like Opera and Travelclick. Things are changing now. Tech providers are focusing on this segment as adoption of technology lagged in this sector. The popularity of this segment has also been purely driven by market dynamics, where travelers are now choosing to stay in independents and smaller properties. So, it’s time to focus on enhancing the guest experience for such properties. The community should look at creating more services/products that are geared towards the guest. Treating them like 5-star guests by leveraging AI driven technology can be used to serve and monetize better. What are some of Hotelogix's recent product innovations that hoteliers should be aware of? Hotelogix has released its Developer platform. Using this, third parties can develop apps on Hotelogix. Our firm belief is that hotel brands will become more like consumer tech businesses (like Amazon), and each one of them would have technology at the forefront to drive their brand strategy. This would mean, giving them the flexibility to develop apps that are not necessarily provided by us or any vendor, but are customised to their needs. We have toyed with this approach and it has been adopted by a couple of customers. I think this is the ‘Uber’ effect that ‘PMSs’ can provide to brands. Additionally, we would like to promote our Mobile Developer Platform and see if the industry feels it is of value to them. What advice do you have for hotel tech entrepreneurs? It’s a fantastic industry to be in as long as you can empathize with hotels and their guest experience. Hoteliers and hospitality professionals are a very interesting bunch of people. They have many anecdotes to share as they deal with people from all walks of life. Sometimes, entrepreneurs looking to get into the hotel tech space need to be ready to wait it out, if they believe their product will bring value to hoteliers. Like, in the case of Hotelogix, we were clearly ahead of time when we released our Cloud PMS way back in 2009. But now, the environment is great and cloud PMS has emerged as one of the hottest pieces of hospitality technology. Make technology such that it can be seamlessly adopted. A hotel already deals with so many challenges that adoption of something new can become a bigger challenge. Generally, people in operations are the users of technology and your product needs to fit seamlessly in their lives.
Working as a front desk agent at a hotel is insanely hard work. Hotel guests have extremely high expectations: they want to be checked in fast, they want amazing service, a 24/7 smile and they want to be upgraded to the best room for free. They want you to know everything about them but not too much that it’s creepy. They want friendly conversation but they don’t want you to talk too much. Check-in systems break down, reservations are lost, overbookings happen and so much more can go wrong that is completely out of your control. All that said the buck stops with you as the front desk agent. Rarely will guests ever call your GM to tell them how great you were but they are quick to let your boss know when you’ve messed up in their eyes. So you’re frustrated and stressed behind the front desk - what do you do? If you’re anything like Kevin Brown you’ll find your passion and put in the work to follow your dreams. Today Kevin Brown is a Product Marketing Manager at Amadeus Hospitality, creator of global hotel management software like Delphi Sales & Catering, HotSOS operations software and core GDS solutions for hotels. Most front desk managers and housekeeping managers would think that Kevin’s role today is out of reach. The good news is that your successful career as a technology executive is completely within reach. To get there you’ll need curiosity, outside the box thinking, self guided learning and lots of hard work while your colleagues are going out for drinks after their respective shifts. Here at Hotel Tech Report we’ve recently documented similar career rises like how Matt Welle parlayed his role as a Hilton sales rep into becoming CEO at Mews Systems, one of the hottest technology startups in the hotel software space and creator of a leading property management system for hotels. “What I wish I understood far earlier in my hotel career is that the hotel and travel industry actually set the standards of service for every other industry out there. The skills you develop in hotels DO translate, and frankly what you learn about service in the hotel industry is cutting edge.” ~Kevin Brown Kevin began his career in hotels at the Cosmopolitan Las Vegas, a property known for its sophisticated technology integrations and infrastructure. While at the Cosmo, Kevin took every opportunity possible to learn about the technology under the hood of the hotel. His unquenchable thirst for knowledge led him into learning the intricacies of every system in the hotel and developing a clear understanding of what was working as well as what wasn’t. Kevin took advantage of his role at the hotel to build relationships with technology companies, he became a power user of their products and they began learning from him as much as he was learning from them. When Kevin first met the Customer Experience Manager at Amadeus Hospitality he knew that’s where he wanted to be. Kevin’s story is an incredible journey that demonstrates how you can leverage your role behind the front desk into a successful technology career so we interviewed him to learn tricks and tips for hoteliers who are thinking about a career in technology down the line. Remember to build close relationships with your existing technology vendors, try lots of different technology products and never stop learning. Can you tell us about your career background in hotels? My career in hotels is quite odd since I only worked in one hotel before I became a part of the tech industry. I originally came from the marketing and production world of the music industry. It was by happenstance stumbled upon an opportunity at The Cosmopolitan of Las Vegas. During my time there I was able to hold almost every major departmental role in the hotel division; both traveler facing and back of house areas. What I enjoyed most about working in hospitality was the blending of so many cultures and nationalities and how much I could learn from people. The only part I dislike about the hotel industry is that it is the most overworked and underappreciated industry. What every hotel industry professional has to go through and deal with on a day to day basis is astounding. To create memorable experiences for travelers is truly nothing short of extraordinary, and yet a majority of the time the only feedback hotel staff get from travelers is negative. Many travelers do not get to peek into how much talent and effort goes into making their stay amazing, and I think hotel staff like room attendants and call center managers deserve recognition for that level of service. What was one technology that you couldn't live without while working at the front desk? I could not live without any tech that automated my work processes and ability to quickly turn data into knowledge. Manual process and effort is the absolute bane of our industry, and with the rapid evolution of traveler and group expectations for personalization and quick response times I do not know what I would’ve done without those empowerment tools. I was lucky enough that I was immediately introduced to technology the moment I stepped foot into the hotel industry, and I feel like I was exposed to cutting edge stuff like chatbots, task automation, and traveler profiling years before hoteliers even knew about it. When the Cosmopolitan opened, the vision of tech integration was a key foundation to the success of the hotel's brand. What would you say is the most widely held misconception that hoteliers have about technology? I think the single biggest misconception is that hoteliers think the solution to their traveler personalization problems is to invest in traveler facing technology and create an omni-channel experience. The biggest problem hoteliers face is actually their staff turnover. What is the point of having traveler facing technology, without experienced staff that have the right technology to empower them to deliver on the brand experience? Your staff must always come first if you want to truly personalize and fulfill your brand promise. This means hoteliers need to balance their traveler facing and staff facing investments more effectively. Tell us about your journey from hotelier into the technology industry. I am 100% a geek and love keeping up with the future of technology. Once I got into hotels, with an immediate exposure to technology, it became a goal of mine to inevitably work with hotel technology. When I was a customer many vendors just wouldn’t listen to the real pain points that my teams had. Many vendors that I was exposed to were just trying to sell their technology without showing me what value they were bringing to solve an actual problem that we had. I developed a strong point of view on what great vendors did and what bad ones did so that I could start adding value and also to help me identify where I’d ultimately want to work. When I met my CEM (Customer Experience Manager) with Amadeus, he and I struck a solid relationship that built over time into a really strong partnership. When my CEM decided to get back into hotel operations, he asked me if I wanted to replace him. Every staff member I met from Amadeus was solely focused on solving problems for their customers. After my interview with my soon to be leaders, and learning that almost every one of my teammates worked in hotels in the past, I knew I had found my new home. The rest is history! What was the most challenging part of moving from hotels into technology? There really was no challenge for me. For me, the adjustment was so surreal to see how greener the side of this world is that suits my passions when compared to the constant, fast-paced nature of hotel operations in Las Vegas. I have to admit, I am lucky beyond measure to let my inner geek out, travel, meet incredibly brilliant people I can learn from, and tell stories that have real meaning for our industry. You obviously loved Amadeus as a customer even before you worked there, what is it that stood out to you about the company? Hospitality is all about the human connection and a property’s ability to deliver positive experiences for guests. Amadeus’ technology solutions provide cloud-native capabilities for the Central Reservations System, Property Management System, Sales & Event Management, Business Intelligence, Media, Guest Management solutions, and Service Optimization. These solutions not only cover the entire life-cycle of a guests’ journey, but offer properties the added benefits of usability, functionality, and visibility into guest data. This represents a game changer for the industry, as venues commonly work with multiple technology vendors and have fragmented views of their guests. Imagine that you're going to open the hotel of your dreams tomorrow. What kind of hotel would it be? My dream hotel to open would be independent, targeted at middle upper to luxury travelers. It would be small with about 75-100 rooms in the heart of Chicago or Las Vegas that catered to music, art, and entertainment with a 40’s-50’s post modern flair. I would also ensure that the property had tactful touches of advanced technology bordering on science fiction levels of experience. I would love to find the right way to bring back the big band era style of hospitality. That post-modern design, and the elegance back then was so timeless. Pairing that timelessness with technology would really be unique in a market so saturated with the same kinds of offerings. I would name it The Indigo. Not only do I enjoy the color, but indigo dye has a really interesting history and it was one of the largest influencers in the globalization of the world. From a technology perspective I would focus on building the hotel with the best infrastructure out there so it was future proof for the next 10 years like fiber lines, BLE, mesh sensors, and building management automation. Otherwise, if I didn’t I would have to keep upgrading every other year or so which is so much more expensive in the long run. I would actually highly limit traveler facing technology, and be tasteful with what channels and tech travelers were exposed to. I would then invest in the best staff facing development tools and technology money could buy to ensure that my staff could work smarter and not harder. I believe staff should always come before the guest, so I would want make every effort to ensure my staff to have every tool they need to easily conduct their day, maintain building integrity, and have knowledge about any traveler they interact with to make the ecosystem engaging and meaningful for both staff and travelers we would host. What's one piece of advice you have for hoteliers who have dreams of working in technology one day? Surprisingly, there are many hospitality tech vendors out there in the world with a majority of staff that have never worked for a hotel a day in their lives. Because of this problem, I think we actually need more hoteliers to move into the tech space than ever before. Thankfully with Amadeus, I am surrounded by decades of hotel experience between my teammates, but almost everyone I work with shared a similar sentiment when they were in hotel operations. Many hoteliers think the moment the work in a hotel, they are sucked into a vacuum of an industry they cannot get out of, and that their skills cannot translate to other industries because travel is so specific. What I wish I understood far earlier in my hotel career is that the hotel and travel industry actually set the standards of service for every other industry out there. The skills you develop in hotels DO translate, and frankly what you learn about service in the hotel industry is cutting edge. It takes years for other industry sectors to adopt hotel industry best practices, so you have more to your advantage than you think. What's one podcast, newsletter or book that you recommend hoteliers read if they'd like to eventually move into tech? Read everything by Malcolm Gladwell. Blink, The Tipping Point, David and Goliath, read all of his stuff. His work opened my mind to new perspectives about how to help others, learn, and gain a greater understanding about what it means to be in service to others. Hospitality is about engaging with people, and dealing with human problems. There is no uniqueness to the problems hoteliers face every day. Travel technology needs as much humanity as possible because travel is all about connecting with a place, with people, and with yourself. What is your favorite hotel in the world? As much as I have thought about this, I honestly cannot pick a favorite hotel in the world. It is just too hard because every great hotel I have stayed at has always offered something different that I enjoy. Each one stands out in its own way. However, I can say this: I think the best hotels in the world are the ones that anticipate my behavior and needs based on what they know about me, especially if they greet me by using my name. What is the most exciting technology you've seen in the hotel tech space that is not built by your own company? Why? Mesh networks and beacon technology. I think that is one of the most impressive future hardware developments not only for hospitality, but for the world. While it is an extremely fine line – where many data collectors have pushed the creepy line to the edge with tech like this – I think that mesh network and beacon technology can truly enhance the lives of travelers and consumers alike. What is one thing that most people don't know about you? I am an identical twin.
In this episode we chat with Dave Berkus, one of the most prolific angel investors of all time. Dave is the creator of FOSSE - the property management system that Marriott used for nearly 4 decades. He is one of the most storied entrepreneurs in hotel technology and has invested in countless travel technology startups. In the interview we cover topics such as: - How Dave landed the deal with Marriott to license his software - Why Marriott used FOSSE PMS for almost 4 decades - Why hotels in the future may not even need a property management system - The increasing importance of CRM, Business Intelligence and CRS - Why hotel general managers need to sharpen up on new skills or be replaced by robots Enjoy the full podcast above, followed by a transcript of our conversation. Outside of the points covered above, Berkus shares the fascinating foundational story of the first property and yield management tools for hotels. *** Jordan Hollander: So I think there's something like 700 property management system vendors globally on the market today. I know that you weren't the first but what number were you? Dave Berkus: I think Computerized Lodging Systems was probably the third of the PMS companies. Eco was the first in Santa Ana, California. IBM was the second, and then there are several of us that contend that we were the third. But it was early. It was 1974 when I wrote it, and 1976 when it first began being installed in hotels. Lucky for me, the IBM system was being installed at the brand new Bonaventure Hotel in Los Angeles and the Aladdin Hotel in Las Vegas. Both of those IT managers gave me a chance to sit through a little bit of the process, and the night audits. From that, I had the idea that I could do it better and faster and cheaper with a mini computer and that's how it all began. That same Miramar Sheraton was the first customer. JH: So you created a property management system business in the days before most hoteliers knew what a property management system even was. What was the growth like in those early days? Was it really slow to start out? DB: From 800,000 in the first year to two million to 4 to 12 to 18 to 24 to 30 million. Then these are all 1980, 1981, 2982 and 1983 dollars. About the same as a hundred million dollar business today. JH: Wow, those are some numbers that startups even today almost four decades later would be pretty happy with. A lot of companies think that the only way to get to that kind of scale is through enterprise deals, and I know that you pioneered one of the early ones. Can you talk about the partnership that you had with Marriott DB: I licensed it to Marriott in 1982. Marriott was to use it for a brand new concept that was being developed called Courtyard. They told me there would be 50 Courtyards, so we licensed it accordingly, and went through all the effort of getting ready to put multiple hotels on a single mini computer, which was rare, but I had done it numerous times for other smaller chains. We got three million dollars from Marriott for a universal license for the Courtyard Hotels. That was a lot of money back in those days. We sold them the MAI hardware and the usual markup was about 25%. So I can look at about 14 million dollars that we billed Marriott. So that's not bad at all. But they had the rights. I had no idea that Marriott would then begin to call this FOSSE and distribute it through Springfield, Fairfield, Residence Inns, all of their auxiliary products other than the Marriott and JW Marriott branded hotels. Today, it is now 36 years later. They are just coming to end of life on using it in 2,200 hotels. JH: To most of our listeners, it's going to be pretty unbelievable that a company like Marriott kept the same systems in place for almost 40 years -- especially a company like that that's known for being at the forefront of technology. But I'd like to point out that it's really not just Marriott. We've had some massive Innovations in the consumer and industrial sector when it comes to technology, things like cloud computing and universal access to Wi-Fi. Despite all of this, there's been really no rethinking of what it means to be a property management system and the job to be done. Can you talk about where you see the property management system playing a role in the hotel tech stack of the future? DB: The real question is where were we way back in the 80s when this became the absolute mandate for every hotel over 15 rooms, and where are we today? That story is the story we need to concentrate on. In 1980 or 82 or 84, all of the central reservation systems were written in the 60s. And they were on mainframes. In fact, some of those systems still survive today despite the fact that Amadeus is rewriting IHGs. There are other systems like Marcia that survive from the 60s. Yes, it's true that the UI has changed but it's still flat files on mainframe computer and that will certainly evolve over time. The central reservation systems own the guest name record; the guest name record is the critical element we need to talk about. The PMS systems are, for the chains at least, becoming increasingly less important, as they handle right now in-house functions only. So guest history, which used to be a gigantic important part of a PMS system has been stripped in most systems and is now very much part of the central reservation system. Whether you want to foam pillow or a special kind of anti-allergic something now is known chain-wide as opposed to just at that property where you made the request way back when. That's important. How many stays you've had and where you've had them: for analytics and Big Data, is really important. In fact, that's one of the things that Cindy Estes Green's company uses now as input from many of the chains to help them to understand better who their customers are, where they're going, and occupancy/future occupancy. Big Data's being used in very important ways but certainly not from the PMS system anymore. That leads to the question of: do we need a PMS system in the future? The answer is, for the short-run, yes. Property-based systems get rid of the problem of dependence upon any form of Ethernet or outside communications. In some areas of the country, the reliability of those systems still is a problem. If we look ahead ten years, and certainly beyond 10 years, it would be easy to see a single cloud based system integrating everything from CRM to reservations to the accounting functions at the properties, all the way through all forms of marketing and follow-through. Then we have a single guest named record that doesn't have to pass through from one system to another to be validated that they are the same -- what happens if someone changes and address when he's standing in front of the front desk -- all of those things go away. JH: When you say there's going to be a single PMS system or centralized system that's going to take care of all of those functions, do you mean to say that hotels are only going to have one type of software or do you think that there's room for specialists in different categories? DB: So you're always going to have best of breed in some areas. Take for example, revenue management, which is a very important part of all of this. It can either be a feature in a central reservation system or it can control everything else depending on where the real revenue is coming from. So Revenue Management Systems may end up being more important, for example, then CRM systems. Certainly both of them more important than just a simple accounting system at the front desk. We have some things to understand and to evolve over this next half a decade to decade and it's going to be interesting. This is not a stagnant industry, despite the fact that people think that every hotel has a system, therefore the industry is mature. JH: You briefly touched on the growing importance of systems like CRMs, customer relationship management, CRS central reservation systems and even touched on Revenue Management Systems. I know you have quite an extensive history in the revenue management space. Can you talk about your experience there and how it's informed your view on the market today? DB: So I was called at the time by both Marriott and Hyatt, both of them called me to their offices -- Hyatt, Chicago. Marriott, Washington -- to talk about their system and how it could be made into something that was much more. That was something more like the airline system. In the case of Marriott, they had what they had termed tier pricing. You become eighty percent occupied at a future date, then you close to government and other cheap rates. You become 90%, then you raise the rates by 10%. You become 100%, then you raise the rates some more. That was tier pricing and that's all they had. Hyatt had nothing. So both of them said what can you do? I went home from both of those meetings and said, what can I do? The thought immediately occurred to me to copy the airlines. I happened to be a reseller for Burroughs, which became Unisys. And Burroughs let me in to see what was going on at Piedmont Airlines, and Piedmont had copied Sabre. I mean, this is all very insipid industry, isn't it? So I came in and saw the Piedmont system, came back and said even I can do that better. As I came back on the airplane from seeing the Piedmont system, I was up all night in a overnight flight designing what I thought to be a yield management system that would work for hotels. I wanted something different. Artificial intelligence was one of those terms you threw around back in those days, like we are today. In those days it was much more much more gravitas. So I called somebody I knew who had three programmers from MIT who knew how to program in the LISP language, which was the programming language of artificial intelligence. It ran on a UNIX-based machine that was made by Texas Instruments. So I found these three programmers and hired them. I went to Texas Instruments, literally by flying to Austin, and having a meeting with them telling them what I intended to do and getting their buy-in. Together, we designed the very first artificial intelligence yield management system. So we had two systems, two hundred and fifty thousand apiece. The owner of Sonesta refused to pay for it because he thought he could do it on the back of a napkin. I bought back the system from Sonesta and I told my chief programmer to take this code, forget the fact that it's artificial intelligence, and make it a feature in the reservation system. It probably had 80% of the functionality, which we released as an $8,000 'check the box' feature and virtually every customer we had at the time began to order it. Yield management became something people could afford so they bought it -- even if they didn't use it in many of them didn't. That was the beginning and that was 1988. JH: So that year, 1988, was really the year that hotel started using data to make decisions about pricing globally. It's a huge transformational shift in the industry. As we look forward, what do you think the next 5 10 15 years look like and where some of the most important changes happening in the market? DB: Analytics are everything. Decisions are going to be made by analytics that are created by machines. There are a lot of people who will lose their jobs, and then maybe be retrained or other people take those jobs, that are now menial, especially in the back office. These roles have to be replaced by people or by machine analytics and people then act upon those analytics. The most important single change that's going to come is the fact that every piece of data that arrives at the central source, whether it be from a query and a lost sale, whether it be from a booking at a low price that might have been up-sold, whether it be an honored guest that was rebuffed because there was no occupancy. I'm giving many examples but there are hundreds of them. Each will be analyzed. You're going to find that much more capable decisions will be made to maximize revenue than have ever been possible before based upon AI and data analytics. That's your future. JH: I definitely agree that business intelligence is a huge part of the future as we get a more sophisticated and granular understanding of where people are coming from, and how profitable certain segments are. To a large extent, hotels are still using some of these tools and datasets of the past and are waiting around on Tuesday for their compset report. DB: You gotta think of STR and Concur and a lot of these others as the equivalent of the central reservation systems of the sixties. It's nice to have them, they just haven't figured out yet how to make it actionable enough to be worth. So little for the money we need to pay today. JH: So STR is up for disruption, property management system, CRS, CRM -- pretty much everything is on the chopping block here. What are some of the most exciting opportunities that you're seeing today? DB: If we look at hotel tech and expand it to travel tech, which is really where Wayfare Ventures, our latest firm investment firm, operates, there are a lot of ways to do things that have nothing to do with what we were used to in the past. If you can get a plane in and out of a gate five minutes faster, and multiply that by the number of planes and gates that there are going in and out of airports in the US, you can save multiple billions of dollars. I mean that sounds strange over a year's time. If you can do the same thing in hotels by better serving a guest, by up selling that guest, by finding out whether guest satisfaction is a problem or an opportunity. Meaning: can you sell them meals even if the meals are delivered by a third party from outside the hotel? Whatever it be, there are a lots of opportunities now for revenue that weren't easily available in the past but are today. But the whole point is if guest satisfaction goes up and guests are able to do things they couldn't do before, like order a meal from text, then you're going to have better revenue and more satisfaction. Those are the ones the applications that are going to make some sense. JH: I agree with you there. We're seeing a huge amount of demand for our guest messaging software on Hotel Tech Report. We also see a lot of hoteliers looking for merchandising and up selling tools that can help them improve the guest experience while generating more revenue per guest, which is really a win-win on both sides. When you look at the investment landscape and your current portfolio, are there any companies that you're really excited about today? DB: Think of the hotel pool, the hotel spa, all of those things -- even the gym -- which lay fallow during many hours a day, especially in city hotels that are principally business occupied. So a little company called Resort Pass, which is one of our companies, came along and said what would happen if we contract with the hotel to bring in outside guests who are members of Resort Pass who make a reservation to use the pool for two hours when the pool would have never been used at all. The answer was these hotels love it because it's ancillary revenue for fixed assets that really have no other form of revenue generation because they're free to the guest. JH: Resort Pass has been really well received by the market. Like you said, it's almost a no-brainer for hotels. Why wouldn't you want to leverage and get some more revenue out of these underutilized spaces? I don't know the Resort Pass team personally, but I know a lot of the other founders that you've invested with, people like Adam and Richard over at Cloudbeds and John and Chris over at Whistle. Are there characteristics that you think really make great entrepreneurs stand out from the pack? DB: I love it when somebody in marketing or sales develops a company and says I feel the pain and let's try and solve the need. As opposed to what I see most often, which is an engineer says I really got an idea and I'm going to make that idea work. It's like pushing the rock up the hill because they didn't do the research. I have good stories about companies that flamed out, including some of my own, that didn't do the research and end up paying the price. JH: I know when you're investing in companies, you will generally look at the founders and see the quality of the team as one of your key drivers or Theses around an investment, but the other huge aspect is how big is the market and what are the market trends going on. So I wanted to ask what are some of the trends that you're seeing in the market and that you think have the strongest legs behind them. DB: That is a moving target. If you were to say I had an app 8 to 10 years ago, we might have been really excited because there weren't enough apps out there. Today, if you say you have an app, we're just gonna face the other way. So the today answer is we're looking very much at AI, robotics and data analytics. Tomorrow is going to be something else and it's going to be more sophisticated. So if I had to answer it today, it's those three things. JH: As we have a large hotelier audience on the show, do you think that the role of a general manager and a hotel is going to change in the coming years? It seems like we're moving away from an operationally-focused GM -- not to say that that's not important anymore -- but in the future, there's actually a huge shift towards being more analytical and almost acting like a product manager. What do you think that the GM of the future looks like? DB: The high-tech keynote that I gave in Toronto two years ago was entitled "Will tech take your job and it was addressed toward those managers and to the financial managers who were there in the audience. The answer is there are so many things that will be taken over -- not necessarily by robotics, that's the cleaning and the other things perhaps delivery to guests -- it's more the kinds of things that a manager has to learn to do to add value. A manager has to be able to add value by adding revenue and by increasing guest satisfaction. Those two things are not operational necessarily. As the operational thing that a manager today normally concentrates on. Tomorrow that manager is going to be a data analyst and he's going to be very much a marketing person, despite the fact that he'll have a department that supposedly assist at the property or in the chain to do that for him or her. JH: And where there's crisis there's always opportunity. I think that the general managers that are able to capitalize on this trend and sharpen up their skills are going to find that there's more opportunity than ever before in this market to add value and really take their careers to the next level.
How many hotels are there in the world? Back in 2012 STR estimated 187,000 hotels with more than 17.5 million rooms globally but we’ve seen estimates from Booking and Expedia north of 300,000 and that figure is growing at a rapid clip. Hotels have a stigma for being slow to adopt technology but that’s changing quickly as digital natives moves into leadership roles at hotel groups around the world. Hotels are extremely complex businesses to run operationally with lots of moving parts. How do you price across channels? Which channels do you focus on? How do you manage bookings? How do you service guest requests across shifts? How do you recruit and train new talent in a business with massive turnover? Hotels need software for all aspects of their complex businesses including: finance, revenue, operations, guest experience and sales. The typical hotel can run on up to 15 different technology systems. Multiply that by the number of hotels in the world and it’s easy to understand this massive market opportunity. Shockingly, tons of hotels today still run their operations on pen and paper or via on premise systems from decades past. Cloud computing was a buzzword for the rest of the world back in 2010 but here we are nearly a decade later and hotels are finally catching up. When venture investors look at hotel tech they see the biggest online market in the world (travel) and a massive whitespace for technology companies that can solve real business problems and deliver strong ROIs for hotel clients. They see a rapidly expanding middle class with discretionary funds for leisure travel and a booming corporate travel market for companies looking to connect employees and clients through meaningful in person experiences. Adding to these macro trends - fast, frictionless API integrations and the low delivery cost of cloud computing catalyze the perfect environment for outsized venture returns. Here at Hotel Tech Report we get tons of calls from investors asking us which companies they should consider investing in but few understand this market like Matt Melymuka at PeakSpan Capital. Matt and his team at PeakSpan have developed a sophisticated understanding of this nuanced market opportunity and have put money to work in some of the most innovative and successful companies in the space such as Cloudbeds and Zingle. We have yet to meet an investor who understands this market better than PeakSpan so we were lucky to catch up with Matt to understand his view on the market. Top venture firms like Thayer Ventures and TCV also invest heavily in the space but few offer the level of support and guidance to portfolio companies that Peakspan offers to hotel technology companies. The firm is unique in its thesis driven approach that has identified hotel tech as a key area for investment long before this thesis became mainstream. In this interview we’ll talk about the evolution of hotel management software, how customer messaging platforms are changing the way hotels interact with guests and why hotel tech companies need to build globally distributed teams in order to win. PeakSpan's Matt Melymuka leads the firm's hospitality practice How did you get into the wonderful world of venture? I've had the pleasure of working with growth-stage software and technology businesses my whole career, and have been a tech enthusiast my entire life. I started my career in investment banking and then transitioned to principal investing, as I really wanted to work more closely with entrepreneurs and teams who have a shared passion for innovation. While every stage of company development is interesting and unique, I have always focused on companies in the "growth phase", and really believe it is the most intellectually stimulating and exciting phase of evolution - companies that have matured beyond the concept in a garage phase and have answered some of the existential "Can we build it? Will they buy it?" questions, and are looking for a thought partner to provide capital and guidance as they look to navigate the next part of the journey. The challenges and opportunities our teams face are typically related to execution and developing/implementing sensible scaling initiatives, iterating our collective way into the optimal investment plan that drives resilient, sustainable growth and long-term value creation. How does PeakSpan operate under the hood? PeakSpan has a simple, highly-focused mission: to be the partner of choice for growth-stage, B2B software companies. Our focus manifests itself across every area of our business, but I'll highlight three primary areas, as well as one philosophical tenet that underpins our strategy and approach to working with teams. First, we only invest in business-to-business software companies. Next, we focus on a tight roster of themes (we call them our "BluePrint Market Themes") as a firm, and Hospitality is one of those themes that I lead for PeakSpan. Third, we only invest in emerging growth-stage companies, which are businesses which as noted above have stripped away some of the binary risk levers associated with classic venture capital. The whole point and purpose of our focused approach is to develop true domain expertise in the categories we invest in, to cultivate long-term theses and informed perspectives on segment evolution (market dynamics, nuanced trends, competitive landscape, buyer dynamics, etc.) to enable strategic levels of rapport with the teams we partner with - from the first interaction and every one after that. Every time we meet with an entrepreneur, we should be bringing a distinct or unique insight or perspective to the table (informed by a breadth of experience) and adding value to that entrepreneur or team in some form or fashion. Lastly, we only put senior investment professionals (Partners) who are domain experts in the category at the tip of the spear, doing the first calls/meetings (and every successive call/meeting after that) with the entrepreneur, to enable a peer-to-peer, decision maker-to-decision maker dialogue that we firmly believe is more respectful and human beings prefer. You've already lead some pretty sizable rounds in hotel management software companies - tell us about those investments. We've invested in i) Cloudbeds, a leader in the cloud-based property management system ("PMS") arena, providing an end-to-end solution encompassing property management/operations and channel management/distribution for independent hotels, hostels, B&Bs and short-term vacation rental owners, and ii) Zingle, a leading provider of guest engagement solutions, enabling hoteliers to deliver personalized communications with their guests across channels, at scale, with high efficiency through the application of AI-enabled automations and intelligent process/workflows. We led the Series B financings for both companies with meaningful 7-figure investments in each business. Cloudbeds offers a truly end-to-end platform, providing hoteliers with the tools and technology required to efficiently identify, attract, engage and convert potential prospects (channel management/distribution), as well as everything required to manage their property on the back end (property management/operations). The platform is easy to use and navigate, encompasses a rich feature set satisfying all core needs, and is offered at a disruptive price point/solution value. The breadth and depth of Cloudbeds' platform is unmatched in market, and is supported by a best-in-class customer success effort, ensuring client experience is paramount. Cloudbeds co-founders Adam Harris and Richard Castle ribbon cutting the firm's new San Diego office Zingle provides a next-generation approach for hoteliers to engage with their guests in a highly-personalized, real-time manner, at scale with tremendous efficiency. The Company's platform gives control of the guest engagement and dialogue back to the hotelier, enabling direct, seemingly bespoke communications with their guests to ensure top tier satisfaction. Zingle intelligently leverages NLP and AI coupled with deliberate, intuitive workflows to deliver these individualized dialogues at scale, with strong efficiency. Guest requests are satisfied in real-time, enabling properties to differentiate through experience, while driving massive ROI through process automations and service efficiencies. How do you come usually across your investments? In both cases, we had developed a deep perspective and investment thesis on the market opportunity for these businesses informed by our thematic focus, and reached out directly to the founders to start a dialogue. These businesses are exhibiting top tier performance across numerous vectors, and (not surprisingly) they were garnering significant interest from the investment community, so we had to work hard to prove value and demonstrate the impact we can bring as a partner to consummate the partnerships with these amazing teams. We're privileged and humbled to work with both of these companies. What's one piece of advice you have for hotel tech entrepreneurs when raising capital? Similar to how we execute our own mission at PeakSpan, we're big believers in focus in company development. There is no need to cede ground on overarching vision and market opportunity, but pursue your mission with ruthless prioritization and by setting sensible, incremental goals and milestones, preserving optionality and alignment with your shareholders along the way. One founder we once worked with had a great quote that I think about every day, noting "Most companies don't die of starvation, but rather indigestion." Biting off more than you can chew and introducing unnecessary operational risk into a business can be toxic, so set reasonable goals, attack them with focus, and then reevaluate and recalibrate as you continue to turn over cards of value creation along the way. How do you think the hotel management software space will evolve over the next 5-years? Despite all the innovation that has taken place in the sector over the last decade, there remains massive, untapped opportunity and potential in many categories within the hospitality arena. Despite being one of the largest and most dynamic segments of the US and global economy, penetration of cloud-based technologies in the segment remains incredibly low, and the vendor landscape remains tremendously fragmented on a global basis. Cloud-based platforms combined with innovative go-to-market strategies will enable vendors to effectively and efficiently target, acquire and retain clients, delivering powerful solutions to clients across the full spectrum of property types, including the long-tail segment. Industry fragmentation and the disparate nature of data within the hospitality arena will continue to drive the need for systems to be developed with extensibility at their core, enabling quicker, lower cost implementations and seamless communication across platforms. There remain so many areas across the hospitality landscape that are under-penetrated or currently served by solutions that are deficient or ineffective - as an investor, this creates an incredibly compelling and exciting opportunity to partner with amazing entrepreneurial teams to capitalize on these opportunities! People often say that hotels are a bit slow to adopt technology. Do you agree? There is definitely some truth to the comment, and one of the main reasons from my perspective is the mission critical nature of the data housed in many of the platforms used by hoteliers today across their operations. This makes it harder to adopt new, innovative solutions than some other categories - even when solutions are better, faster, cheaper and more efficient, there can be operational issues that create friction when considering migration to a new platform. I believe the tide is turning, however, as new technologies and approaches are reducing those barriers, and awareness/appreciation for the need to evaluate and implement next-gen technologies and (importantly) behavior/process change to drive efficiency across organizations has never been higher. If you were leaving venture capital tomorrow to start a hotel technology company - what would it be and why? I won't give away my next area of focus, as there are a few areas I am really interested in investing behind, but I will categorically say that I would not want to be competing with Cloudbeds or Zingle. Both of these teams represent everything I look for in the companies I partner with - passion, grit, humility and integrity - and they are quickly establishing true market and thought leadership in their respective segments, supported by best-in-class technology platforms. What is the most surprising thing that you've learned from investing in hotel tech? The fragmentation of the category globally continues to amaze me. This creates a lot of opportunity, however also (typically) requires the intelligent application of a globally-distributed team to compete on a truly global basis. What is the best book you've read lately? Sapiens by Yuval Noah Harari is fascinating - I would describe it as Freakonomics for Anthropology. It provides an eye-opening perspective on human kind. It's not a book, but I'm also completely hooked on the Freakonomics Radio podcast. What is one thing that most people don't know about you? While I live in New York City and have for more than a decade, I am a die hard Boston sports fan, having grown up in the Boston area. I'll never surrender to the dark side! For all the startups that might want to pitch in your office, what can you tell them about your investment criteria, etc. to help them decide if they are a good fit for your portfolio? We love to develop relationships early, and I am always interested in meeting with entrepreneurs who are going after strategic segments of the universe. In terms of specific parameters, we look for companies with $3-4M+ ARR, growing rapidly on a capital efficient basis, who haven't raised significant prior institutional capital. We typically invest anywhere from $7-15M initially, and always look to lead the rounds we invest in.