September 2022 represents the 20th anniversary of the Hospitality Upgrade CIO Summit!

Rich kicked things off by remembering the very first summit where he invited 25 leaders, 23 accepted, 21 showed up, and somehow only 20 made the picture (yours truly almost paid homage to that miss this year)!

PANDAS AND UNICORNS

The first session covered something that is top of mind for all technology leaders — cybersecurity. Security Leader and Idealist Peter Hay started off the program with Pandas, Unicorns and Cybersecurity. Successful attacks and breaches are continually increasing, paired with a dramatic security workforce gap. The cyber practitioner is vanishing. It is harder and harder to fill current positions, let alone prepare for new openings. The technology skill gap crisis impacts 57% of organizations, and Hay predicts that there will be a shortage of more than 3.5 million cyber specialists soon.

Why are people leaving? 45% of people are leaving because compensation doesn’t meet with the workload or challenges, and 44% are leaving because there is no clear career growth path within the company. Headhunters know this, and as they are helping companies fill roles, they target organizations and people who are susceptible to jump for more money or better growth opportunities. To help stem the tide, we need to take a holistic approach to continued training, developing long-term careers and helping employees align their personal goals with those of the company. Hay points to two different strategies — captive breeding and breeding in the wild.

Captive breeding is an organized approach to find team members at an early stage in their careers and develop them into cybersecurity experts. Starting with candidate assessments, creative companies must look beyond the resume. Just because a resume is not full of technical experience or buzzword compliant doesn’t mean that the team member isn’t a good fit. Companies that are taking the steps to evaluate candidates beyond their cover letters and curriculum vitae are successfully filling needed roles. Look for students or existing team members who have an aptitude to learn and grow.

Once selecting a team member candidate, it is critical to help them take ownership of their careers with defined roles tied to abilities and a structured path to develop new skills for advancement, developing bench strength to fill roles as they open. Employees feel more stable when there is a path to make them successful, and they are more likely to stay with a company that is invested in their growth.

Breeding in the wild leverages institutional, public education and is fraught with problems. Often students know how to pass a test but have limited hands-on capabilities. These candidates may have impressive resumes, but a pile of certifications doesn’t make an ideal team member.

STUCK IN THE MIDDLE WITH YOU

The next session was a panel moderated by Greg Duff, Foster Garvey. The panel was comprised of vendors and IT leaders trying to identify what creates a good partnership. The panel worked with several themes but the most time was spent on integrity and how relationships change.

Aimbridge Hospitality’s CIO Andrew Arthurs started off recognizing how these relationships are symbiotic and beneficial to each side. Relationships develop over time; they are built on trust and achieving cultural alignment. There is a difference between a vendor and a partner that goes beyond the transactional nature of business. Commercial terms are ‘table-stakes’ needed to focus on the intangibles that make great partnerships.

Mary Gerdts, POST Integrations, summarized that partners are in the trenches together, and that each side gets what they give. Partners have each other’s backs and uphold the written and unwritten contract. A true partnership is not just a list of bullet points on an RFP.

Jady West, Blueprint RF/COX, feels that sometimes way too much time is spent on contracts to have the word ‘partner’ come up when it is convenient to one side. Partnerships need to be more than just convenience for one side.

Canyon Ranch’s CIO and SVP Scott Nunn discussed what happens when relationships change, or ‘go south’. Companies evolve, and as that happens, often the right parts and services aren’t part of the contract. Further, key people leave, change positions or responsibilities. If the ‘champion’ in a partnership leaves, this can cause issues with the agreement or the faith in the partnership.

Mike Dickersbach, Infor, talked about his experience ‘firing’ a customer, that no one is looking for a divorce, but companies are often left taking hit after hit, and they need to take the contract off the shelf. At the point you start talking about the contract it is catastrophic to the partnership.

Hyatt Digital and Technology VP Rohan Jani mentioned that for many companies, partners provide up to 70% of solutions, and it isn’t easy to walk away from any relationship.

Many pointed that the more you can do to keep the partnership under constant evaluation, and remove emotion, the better things will go but, it is also normal for partnerships to separate over time. It takes integrity on both sides to realize what the partnership entails and what must change as needs change. This takes communication.

The discussion went on to lingering post-COVID challenges. The group consensus was that Zoom and Teams meetings don’t compensate for organic communication. On both sides of the partnership, everyone is struggling with labor. Many key personnel from 2019, haven’t returned, and likely won’t. Many partners feel that there is still a lot of one-sidedness, that there are responsibilities on both sides, owner and vendor, that make partnership successful and each have to hold the other accountable.

Companies are looking to be more responsible post-COVID, with issues such as ESG (Environmental, Social, Governance) principles becoming more important in the decision-making process. The vendors in the room pushed back that this was important, but often a tick-box that may or may not be referenced at decision time. The group questioned if decisions are being made solely based on ESG or is it something that is a new line requirement.

Mergers and acquisitions cause stress in partnerships but also creates challenges and opportunities. Vendors feel that when there is overlap in services that the selection process feels unfair, and not everything is considered. Customers feel that making a decision and moving forward is critical, that there isn’t always time to fully reevaluate every partner. The best transactions move and fail fast. Vendors see the most success in being retained after M&A activity when they have contacts at multiple levels of the organization. This fosters better communication and advocacy from multiple viewpoints.

THE RISE OF DIGITAL TIPPING

Senior Director at Visa Jakub Petri started off day two with a very informative session on digital tipping. While digital tipping is already here, we are seeing a huge lift in services because fewer people are carrying cash, business are no longer stocking cash, cash management is ineffective and wrought with ‘breakage’, and compliance to municipal regulations regarding tracking payments and taxes is difficult. There are currently more than 30 hospitality brands using some form of digital tipping, looking for products that are inclusive and have diverse tip eligibility for hospitality teams. Digital tipping has proved to increase W-2 wages, hopefully helping to keep key front-line staff in place. Companies using this technology see it as an advantage to employee retention, as digital tipping is often double cash tips, and more people will tip given the option. Credited as getting its start with the emergence of the GIG economy, the technology is designed for instant payments. The technology allows users to pay from their digital wallets, or through services like PayPal, Venmo or a debit\credit card. The key is to pick a solution that gives the user options. This includes:

• Easy to use (App, QR Code, NFC)
• Easy to understand
• Easy to select amount
• Allowing a guest to tip a specific person easily
• The ability to leave a message or comment
• Ability to rate the service provided
• Secure (not PCI or PII Data is shared)

Solutions that make sense to employees need to be easy to use, easy to accept payment, easy to tie to their digital wallet or to their banks. Petri said that instant access to tips is critical to the system being accepted, and mentioned that waiting on a payroll process is not as rewarding.

Companies looking to enact digital tipping have many other items that need to be addressed:

• Who pays for the service — is the hotel absorbing the fees, the client or the employee?
• How are fees calculated? Per transaction? Per withdrawal? Percentage? Minimums?
• Tip pooling and splitting based on hours, shift, position (business initiated)
• Tip sharing (employee initiated)

The discussion led to taxes and comparing direct to employee tips to cash ones. To be clear, it is the employee’s responsibility to report all earnings to the appropriate tax authority. When talking to attendees, it was nearly unanimous that the appropriate solution for hotels would be a system that integrated with a payroll solution so that taxes could be remitted through the payroll process.

ADAPTING TO SUPPLY CHAIN UNPREDICTABILITY

A blast from the past, Sally Kelly, joined the CIO Summit to help unravel the challenges related to supply chain disruptions post pandemic. She started with some startling industry statistics

COVID-19 was the catalyst, as manufacturing anticipated a slowdown and decreased production, but as part of the workforce shifted to home-based, the demand for laptops and outfitting home offices skyrocketed. The pandemic also reduced the ability to unload container ships, there were few drivers to move products around the country, and with gas prices increasing, it became expensive to deliver goods to stores. Trade sanctions with China also impacted speed to delivery. There is good news — the end of the year is coming, and staffing levels are starting to return. Kelly feels that there will be more shipping containers, more semi-conductors, that the beginning of supply chain stabilization has started, though there will be continued uncertainty for a while.

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Fund, the CHIPS Act, will pump $50 billion into strengthening American chip production and lowering US dependence on foreign suppliers (one company in Taiwan currently produces 56% of semiconductors, while the US produces less than 10%).

A key post-pandemic take-away for hoteliers is to inventory what is mission critical and develop realistic contingency plans.

Going forward Kelly points to leveraging standards when evaluating partners and strategies as we navigate this post-pandemic world. She pointed to these four standards to focus on:

• ISO – 90001: Risk & Quality Management
• ISO – 27001: Information Security Management
• ISO – 14001: Environmental Management
• ISO – 5001: Energy Management

Lastly, Kelly shared the overall increase in energy costs hitting the industry. By way of example, seeing 6% or more overall expense going to energy costs, Hilton has launched sustainability goals including reducing its environmental footprint by 50% by 2030, and a light stay initiative that will save more than $1 billion by reducing energy consumption.

PERSONALIZATION IS THE NORTH STAR

The hotel industry invests a great deal in guest experience and when the investments don’t provide the promised value, IT always seems to get the blame. Our next session, led by Kelly McGuire, ZS, challenged the technologists in the room to require their counterparts to provide a clear definition of personalized guest experience (AI, Cloud, Digital\ Social, Personalized, Customer Experience, etc.) not just theories and desperate solution vectors with each group creating their own goals from their internal definition.

The first step is to define what the personalized experience means to the company, a holistic, overarching definition, not just a buzzword-compliant project. McGuire said, “Using guest insights and preferences to design, deploy and optimize personalized experiences across marketing, sales, property and other guest facing channels, deliver improved guest value and value for owners.”

Once established, this must become your company’s North Star, or it will fail. Taking direction from your star, evaluate how many guest experiences can you personalize. Just like the Holy Grail, the “marketing segment of one” is a myth. Your team’s vision must be agile; the perfect guest journey is not channel based, it is trigger based — it is based on where your guest is in their journey and what personalization you can deliver at that point.

This is really about segmentation, and most hotels have a handful of segments. Individualize within the channels as a guest uses them — message them based on where the guest is in the journey, not on their segment. Message based on what they are likely to engage — for example, Jeff might like email or SMS, while Rich loves video content.

There are eight capabilities essential to success and they can’t be delivered in isolation

To be successful a team needs to be empowered to make change, has to have a mandate to make change, it needs business process to make change and owners to support change. This allows all of the moving pieces to be stitched together, maybe not seamlessly, but close enough to impact the guest’s journey. We already have the tools, we are already spending on digital, we are already collecting data, we already have the key people.

Focus on what we can do better, not trashing existing to build new

Think about your road map. Define it carefully at the task level with key milestones and ways to deliver value at each stop. This is a multiple year journey, small steps, small rewards add up. Focus on all eight disciplines.

BOUTIQUE MEETS GEEK

After a group photo at the iconic Dolby Theatre, the afternoon sessions resumed with Sage Hospitality’s Matt Schwartz interview with Vaughn Davis, General Manager at the Dream Hotel Hollywood.

The Dream is a 178-room, luxury lifestyle, design-forward hotel, steeped in the local culture, local art and local fare. A long, thoughtful walk into the hotel, the ‘Runway’ element brings guests into the experience. The Dream is very popular with area celebrities, some paying more than $10,000 in food and beverage to hang out in a private cabana.

Leveraging technology provides the Dream to create an organic guest experience, make clients always feel that when they are engaging with an associate, and talking to their best friend. This philosophy has paid dividends for Dream, fostering high scores on social media and rating sites, and driving ancillary revenues (remember the $10,000 F&B minimum).

Davis stressed what has become the overarching theme of the 2022 CIO summit — creating partnerships and improving guest experiences. Leveraging great partners to deliver a frictionless guest experience takes work from all parties. Even with this, it is important to be agile and look to new solutions. iPads in the room are great, but can a similar or better experience happen with a custom Android solution?

Davis sees success in continual contact after the guest has departed. They feel like part of the Dream family even when away. Strategic effort needs to be spent creating engaging content on social media daily, often multiple times each day.

The Dream is doing so much exciting stuff it’s too much to cover in this piece (robots, NFT Art Gallery, Crypto, Metaverse, AI, blockchain). Frankly, I should write an entire piece on all of the great stuff Vaughn Davis shared with us.

The last take away from Davis — read the whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto (search for it, it comes right up).

THE ANNUAL CIO ROUNDTABLE

One of the summit highlights is always the CIO Roundtable. This year Matt Schwartz from Sage Hospitality led the group with proactive questions leading to great, open-honest-confrontational conversations.

Schwartz started off the roundtable with the HITEC 2023 vs the AHLA 2023 conference, which somehow are both scheduled for the same week. It is not my place to tell you how people voted, but it is safe to say that the conflicting events has the group in a quandary of what to do with their conference budget and time in June 2023.

Our themes continued with a rousing discussion on the vendor, operator, customer, partner relationships. With some of the vendors present reminding us that ‘customers don’t always smell like roses’ and customers feeling like leaders are hired to make decisions, especially the unpopular ones. I don’t think we resolved anything, and perhaps created more hurdles in the process, but it was thrilling to be a part of it.

Other questions the roundtable touched this year: what does IT really own, it is the whole technology stack, the hardware and operating system, or even the solutions that other departments evaluate, source, train and purchase? The room leaned strongly into IT owning everything, even if begrudgingly. The exposure related to PII and PCI is just too large a responsibility for the IT team to not have a stake in. All technology systems are ‘co-owned’ by the IT department at the very least.

Further, IT needs to be involved to help stem the ‘Data Sprawl’ that happens when departments select solutions without looking holistically at the needs of the company and the exposure for security and system support. This just exasperates IT teams which are already spread thin, often supporting 5-10 new systems each year.

Finally, the roundtable broached the subject of the hybrid, postpandemic work environment. For corporate team members and those who can work remotely, it is driven by creating a duplication of the work environment at home. This strains budgets, as docks, monitors, conferencing, and even keyboards and mice are duplicated; it strains resources as IT teams need to support consumer grade internet, remote access to data, VPNs, and even remote set up of printers; and it strains the security exposure footprint — do we really need commercial grade managed firewalls for home users? All this technology must be managed, delivered, inventoried and (hopefully) returned when a team-mate leaves. How far are we going to take this, and how far can we afford to take this?

Schwartz also helped us discuss the disparity and often bitter jealousy of team members that can’t work remotely. You can’t make a bed or check in a guest from home. A GM is on more Zoom calls now, which takes them away from their job.

As with every year I attend the CIO Summit (15 and counting), I am left with inspiration, motivation, and a list of questions I need to answer for my team and myself. I am already counting the days until next September.

Thank you to our 2022 CIO Summit sponsors who helped to make this event a success. Premier Sponsor: Blueprint RF. Sponsors: Edge, Infor, Nomadix, POST Integrations and Visa. Our Transportation Sponsors: Cendyn, Datavision and Venza.