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"The Future of Hotels is Digital" Says Industry Legend Michael Levie

  • Why 10-years from now COVID will be looked at as a positive evolutionary force in hospitality

  • What makes the Middle East the most exciting market for hotel technology

  • How to pitch technology investments from an ROI perspective

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Alain Derderian in Operations

Last updated May 31, 2023

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With a shift in guest preferences and a rise in popularity of apps like ChatGPT, you might be wondering whether widespread technology adoption in the hotel industry is here to stay. We can confidently say it is, thanks to our recent conversation with CitizenM co-founder Michael Levie. And if there’s anyone we can trust when it comes to technology and the hotel industry, it’s Levie, whose tenure in the industry includes leadership stints at Sonesta and NH. Levie also brought SynXis to the European market, opening and leading the company’s European office. More recently, Levie launched the CitizenM brand, which uses technology to truly streamline the modern travel experience, rather than adding tech amenities as an afterthought or a marketing pitch.

Our conversation touches on actionable advice, like how to use technology to automate and reduce costs, and big-picture thinking from which you can draw inspiration as you increase tech adoption at your own property. In this article, we’ll cover the highlights from our conversation which can help you refine your tech buying decisions, shift your team’s mindset about technology, and get you excited about the future of hospitality technology.

Levie says, “If you have been thinking [about technology] in workarounds, then you have never thought about what technology can do in your organization and where you can adjust business processes,” so let’s dive into our conversation where we explore what technology can do for your hotel and the hospitality industry as a whole.

How Hotels Miss the Mark on Technology Today

For many years, technology outside the hospitality industry outpaced the tech you’d find at a typical hotel. For example, at home, you probably had blazing-fast WiFi, but at many hotels, slow internet was the only option. Many hoteliers knew that their technology was outdated, but it was difficult and expensive to change. Then, as Levie recounts, “all of a sudden, COVID happened.” Hotels were given a technological wake-up call: guests wanted contactless options and high-tech amenities to make travel during the pandemic possible. Levie continues, “However, in this industry, we were confronted with, okay, we have been accepting legacy systems for way too long. We do not understand how to get out of this mess. And now that we have to step up with digital, we really don't know how to do it. And I think that, if you go from large to small, the major chains are trying to do all kinds of niceties, and I call it niceties, because, in reality, they're not able, due to the fragmentation in ownership, to really get it done.”

If hotels had the intent to upgrade their tech, then why was the rollout rocky, if it even happened at all? Levie cites a few reasons why many hotels miss the mark on technology. First, the fragmented ownership structure and dizzying matrix of decision makers at many companies makes any big decision complicated. In addition, the traditional RFP process means that technology buying is a slow, unnecessarily complex undertaking. Then rolling out a new product or amenity in many locations requires careful coordination of staff and physical items (like signage or devices) that is equally complex. Combined with staffing shortages and tight budgets, it’s no wonder why hotels struggle to adopt new technology quickly and effectively.

Levie offers one tip to make tech adoption easier for hotels: switch to a PMS with an open API so you can more easily connect to complementary systems. One hurdle for many chains is that they use legacy property management systems that are not nimble enough to integrate with the latest and greatest apps on the market. So, the first step in bringing modern technology to your hotel is to start with a PMS that makes innovation possible.

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Constant Re-evaluation is the Key to Progress

Technology is not a “set it and forget it” piece of your hotel’s operations. The best hoteliers constantly re-evaluate their processes and their technology, iterating to get to the ideal state. One effective way, Levie suggests, is to leverage a project manager to lead the reimagination of a process from beginning to end. As an example, “During COVID, nobody wanted housekeeping. So what do we do afterwards? We [offered] housekeeping again. Right? And, if you're halfway smart and you have some ability to deal with your guests, then, have an opt in, have an opt out, but give [them] a choice.” Collecting feedback and reflecting on the efficacy of a program or project is necessary if you want to continue to improve.

How Technology Can Improve Your Hotel’s P&L

Another opportunity for improvement, which technology can help drive, is automating repetitive and routine tasks. For instance, many hotels still scan physical credit cards manually. Why not automate these types of back-of-house processes? Levie states, “[hoteliers] understand that repetitive jobs can be done by computers. And when they start to understand that it is relatively cheap to get that implemented, and it has a huge impact on their P&L, it starts to happen.” A financial incentive can spur action, so when hoteliers can put a number on the amount of time or money they can save with automation, it’s an easier sell to decision makers who need to approve technology spend. What’s the desired end state? Levie looks to the airline industry: “In aviation, when is the last time you have gone to a counter? I mean, maybe in the worst case scenario, if you were too late on your app, you went to a kiosk.” The automated check-in process for flights is so convenient and intuitive that travelers get frustrated when they can’t check in on their app. Levie imagines a future where checking into a hotel is just as seamless.

Why the Middle East is the World’s Most Exciting Hotel Technology Market

Is there a good example of hotels adopting technology in a holistic way? Levie cites the Middle East as the pinnacle of hospitality embracing technology. While many western hotel companies are thinking ahead five or ten years, hoteliers in the Middle East “are taking a real look at 2050, at 2070, [and considering] what will be the tech requirements then, or how do we monitor ourselves to stay ahead?” One way Middle Eastern hotels are future-proofing themselves is by building smart buildings and incorporating ESG into their plans, making sure that they are operating sustainably to preserve resources. Above all, the Middle East is investing big money in technology, whereas many hotel companies in the west are “penny-wise and pound foolish,” trying to save money here and there rather than investing in big things that will make the difference in the future.

The Future of e-Learning in the Hospitality Industry

Speaking of the future of our industry, how will up-and-coming leaders learn about the topics that will matter tomorrow? Levie is passionate about the education space, and he envisions a future where hotel professionals can get a high-quality education online. His vision is of AI-driven e-learning in more easily accessible formats than a bachelor’s or master’s degree. Rather than traditional 4-year programs, “we want to reduce that back to increments of a week or a month, whereby anybody in our industry can update themselves on topics, learn about topics, and we're doing it at the entry level.” To make these topics as accessible as possible, they will be open to professionals at any level of tenure, from supervisors to executives.

Levie has already secured funding for his concept and is working on “Hopefully in a year, or year and a half from today, I can proudly get people to start doing courses online [and] package that into compensation.” His goal is to give professionals bite-sized continuing education that will allow them to step up their careers and get paid more to use the new knowledge they gained.

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Alain Derderian
Innovation Analyst
Alain is an innovation analyst for HotelTechReport. Alain is a hotel operations and technology expert with over 15 years of hotel industry leadership experience as the GM of famous properties like Freehand and Pod Hotels.

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