GCP Hospitality's VP of Strategy on Automating Revenue Without Losing Control
The independent and small hotel groups have got an edge. And when it comes to embracing tech and being first movers into that space, you just need the right owner or the right group that has the appetite for embracing innovation.
Speaker 2:From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them. Today on the show, we have Michael Bollinger, the VP of commercial strategy at GCP Hospitality. GCP operates well known properties like the Four Seasons Bora Bora, Hollywood Roosevelt, and Standard Highline New York, as well as popular hostels throughout the New Zealand area. Michael's seen every different tech implementation that you could imagine and really understands the nuances between different tools and how they're used at different properties. So I'm really excited to have him on the show today.
Speaker 3:Michael, thanks so much coming on the show today. We appreciate you dialing in from Bangkok.
Speaker 1:Thanks for having me, Jordan. It's a pleasure to share some insights and to be with you on the podcast today.
Speaker 3:Absolutely. I'd love to get started by just talking about the history of the business and just generally the portfolio construction. What types of properties do you guys manage? And how have you been growing lately? And just start from there.
Speaker 1:Sure. Great way to start. So GCP Hospitality is a management company. We're looking after a portfolio of about 35 accommodation providers, which ranges from luxury all the way down to hostels. So we've got a portfolio of properties across Asia Pac, Europe and US.
Speaker 1:And we're quite agnostic in terms of both the brand structure or independent type of accommodation we're working with, but also again in terms of the scale and size of the properties. So, for example, we've got 14 hostels in New Zealand, but we also have flagship hotels like Regent Hong Kong, which is under HMA with IHG and Four Seasons Bora Bora or Standard Highline in New York. So that's, you know, diverse portfolio of hotels. And obviously our involvement from a management perspective will differ, you know, quite greatly in terms of what we can and cannot do depending on the structure, depending on the brand as well and depending on whether it's an HMA, a franchise or independent. And especially in the tech perspective, I'm sure you can understand that some of the properties are a little bit more, keep their cards close to their chest when it comes to their black box and what we can and cannot do with their systems while other brands and companies we work with are a little bit more open and have allowed us to play a little bit more and have a bit more say into the tech and obviously the independent properties that we're working with, we have more leeway and more flexibility to implement different tech or to make some adjustment to how we can deliver, you know, both top line and bottom line optimization.
Speaker 1:That's a little bit the portfolio in a nutshell. Quite a diverse one, very brand and structure agnostic, and at the same time it makes it very tech agnostic in a sense.
Speaker 3:This is a really cool case study, right? Like the diversity from a geographic perspective, from a chain scale perspective, from a brand independent perspective, from even hotel type, like hostel versus a resort. I mean, they're like complete opposites. It's really, really cool that you're getting to see all of those different angles. Can you talk me through a little bit about your role and kind of what you're overseeing day to day and how you interact with the portfolio?
Speaker 1:Sure. And again, it's gonna differ greatly from a hotel that's under an HMA where it's gonna be more advising, following up on strategies, making sure that the tools that are in place from the brand are well utilized because, you know, hotels that are under HMA, we have very little influence over the day to day operation. It's a little bit more, you know, hands off type of implication. Where most of my work is done, however, is our franchise portfolio. So hotels that franchise under either Hyatt or Accor for instance, where obviously we're a little bit more involved on the day to day strategies and where my involvement is a little bit more substantial.
Speaker 1:And obviously the independent where I'm responsible for establishing strategies, putting systems in place. So, in some cases getting our hands dirty and playing around with the tools, setting things up in case of a new hotel opening or if we're taking over a new project, really looking under the hood of what tech was already there and making some recommendation as to what can work, what doesn't, and ultimately the ultimate goal of improving top line from a commercial standpoint, but also with a great focus on GOP because that's what we want to deliver for the owners that we work with.
Speaker 3:Is there an example of a hotel that was pre opening where you put together the entire tech stack for them early on or had a big influence in that?
Speaker 1:Yeah. The portfolio in New Zealand was a reopening or basically all of the hostels were closed during COVID and we started working on that project in 2022, so about four or five months before the property started to reopen. So it gave us a lot of flexibility to decide what tech would go in. The challenge I think in that particular space is the hostel market I feel is very underserved from a tech perspective. So there's a couple of key vendors and pieces that are working really, really well, but there's a lot of other components that haven't been really developed for Hostels and therefore has required us to look a little bit more closely as to what was going on.
Speaker 1:But that's probably the biggest, you know, influence in terms of tech stack that we've had and really going from all the way from PMS to keycard, mobile check-in and so on. Because it's also the interesting part about Hostels is that it's a product that lends itself so well for tech innovation because both the products and the demographic of the customers are very tech savvy. You know, the demographic is Gen Z, they're not afraid of a check-in kiosk or mobile app. They're actually quite happy to do everything online. So we had a large focus on automation and making sure that the entire tech stack was as optimal as possible.
Speaker 1:So, that's probably the biggest case study that we've had in the recent years.
Speaker 3:Why do you think hostels are underserved? Just the biggest players don't have as much incentive because it's a more niche and very different use case by selling kind of multiple beds in the same room?
Speaker 1:I think it's lack of understanding first and foremost, and the tools were just not built for that specific purpose. So beds versus rooms is probably the biggest hurdle that we're seeing from a BE perspective, for instance. So we've really struggled to find booking engine that would actually allow us great merchandising of beds versus full dorm versus private rooms. PMS, obviously there's been a lot of development in that space, so we're using Muse for those properties. So, it's very agile, very flexible, and I think that's been probably the best use or one of the best decision for the PMS that we've made because it is very flexible at least from a user standpoint.
Speaker 1:Probably from a financial standpoint, it's a little bit different in terms of financial report I'm talking about, and I think the team at Muse is recognizing that now. But, you know, we had a few heated discussions with our finance team early on because the financial reports is a little bit different with Muse. You know, the absence of a night roll or night audit was something that was a bit of a shock for seasoned hoteliers like ourselves. We're used to a very different way of working, so it took a little bit of adaptation early on from more of the back of house operation. The front of house was very easy, very seamless, very easy to use.
Speaker 3:And what other tools do you love for hostels that you feel like have developed the capabilities necessary to make life easier?
Speaker 1:We're not working with them yet, but we're excited about what Flyer is doing, so PACE revenue. So they're tackling the hostel space and the more flexible revenue management side of things. So that's probably something that we're looking at. We're working with it's not necessarily specifically to hostel, but we're working very well with treatise just generally across our portfolio as well. It's been really good to optimize the web and the direct performance of those hotels or hostels.
Speaker 1:And again, because it's a little bit more BE agnostic, it's been a little bit easier to implement as well across not only the portfolio in New Zealand but elsewhere as well. And we feel that we're getting a lot of value for money in terms of the meta search as well because their algorithm or the way they do meta search is using the pricing parity tools that they've got, which is basically informing the meta search bidding process. So, if your rates are not in parity, then there's no point in bidding on meta search, which makes our, you know, budget go a long way. So that's been quite a good tool as well. Revenate is another tool that we're using for the hostel, although not necessarily hostel native, but they've been quite flexible in terms of, you know, the segmentation and the room type setup in the CRM was actually quite seamless.
Speaker 1:So it wasn't as difficult to implement. And then finally, SiteMinder was also another big component for us to implement. So very flexible channel manager, easy to use, so you don't need a PhD to make it work. So, it was quite intuitive and even for a hostel where we have very lean team, SiteMinder also was actually quite key in that rollout.
Speaker 3:I'd like to double click into Triptease. So the meta search is the main component that's adding value for you guys. And were you guys using a meta search tool at your properties when you switched to Triptease? Or was that really like your first foray into like meta search bidding with a third party tool?
Speaker 1:So we had tried different tools, more traditional Metasearch vendors before, and that was back in 2017, '20 '18, and we didn't really get much ROI. Or it was very difficult to get proper ROI on those meta search. And, obviously, the technology and the landscape has changed quite drastically in those last few years. And it's just the use of that rate parity over the meta search is what we felt was the game changer because even or especially in Asia Pacific, rate parity is still an issue in some places. So there's really no point in bidding for metasearch space if you don't have rate parity.
Speaker 1:So that was really the big game changer.
Speaker 3:I'd love to talk about, from your perspective, what it's like to work with a branded versus independent hotel. Is that a more attractive asset for an owner? Or do you feel like the brand value proposition is shifting and maybe in favor of independence these days?
Speaker 1:It will depend on the location. I think there are still some markets where the brand name and value brings a lot to the table in terms of, you know, the loyalty programs and so on and if the market isn't saturated with existing branded properties. So that's certainly something that can't be replaced. You know, the loyalty and the distribution power of a brand certainly makes a lot of sense for multiple markets. I think what's shifting is the HMA to franchise.
Speaker 1:So we do have a little bit more flexibility when it's a franchise, even in the tech space. So if it's an HMA, we're really not involved in the whole day to day and any tech decision. However, franchise, we do have a little bit more flexibility. And in many of our franchise hotels, we were able to implement tools such as Avalon to get visibility over the property because it's less intrusive, I guess, on the brand system. It's not changing data on the brand system.
Speaker 1:It's just extracting the data. So we were successful in doing that for the franchise property, but not for the HMA. So that's where we're seeing that shift. So shifting hotels from HMA to franchise where it makes sense. And in some cases, you're absolutely right.
Speaker 1:Going from franchise or branded hotel to an independent, in some market, it makes sense. There are some markets where there's either oversaturation of brands or because you're in such a unique space that bringing a brand isn't necessarily gonna make a whole difference. And obviously, there's the cost component as well. You know, there are some owners that are getting more and more savvy and critical of the cost that they're paying to brands. And when you add up the franchise fee and the management fee and the distribution fees and you stack that up against the OTA commission, there's in some cases, they're almost equal.
Speaker 1:So then owners are fairly asking, what's the point of working with a brand if, at the end of the day, after I pay my franchise fee and I pay the distribution fee and the commission to the brand and the marketing fees and so on and so forth, is there really a value? So those are real conversations we're having. And in some cases, you know, independent makes sense. In other cases, franchise or HMA makes sense. And I think, you know, the HMA model and white label management companies are starting to thrive because of that space that is being left a little bit untapped, where independent or franchised operator need expertise and need people to guide them and to help them either through, you know, the commercial strategy or the tech strategy, and some management companies are coming in to fill that gap that the traditional hotel brands are not necessarily delivering anymore in some cases.
Speaker 3:And would you say, obviously, this is very opinion based, but from your experience, do you feel that large chains or independents tend to be more innovative on average or even if you're looking at kind of best of breed for both?
Speaker 1:I mean, in terms of innovation, it's a bit of a catch 22 because on the one side, the brands have got the money and the resources to fund r and d and to look into, you know, different tools. However, they are too big to shift and be agile the way an independent hotel can be. So I think the ones that are really thriving are these small, mid sized hotel management company or brands. You're looking at anywhere between even an independent hotel, but a brand that's got five to 15 hotels, for instance. They can be agile.
Speaker 1:They can trial and AB test very rapidly and then implement best in class products much more rapidly than a large brand would. Same thing with a management company, we'll be able to, again, play across different tools, different hotel style, and then make recommendation in a much more agile and rapid way. So I would probably tend to say that the independent and small hotel groups have got an edge And when it comes to embracing tech and being first movers into that space, you just need the right owner or the right group that has the appetite for embracing innovation. And we're seeing a lot of that in Asia. You know, there are some groups that are doing some pretty interesting stuff as well, and they are first movers in different space.
Speaker 1:And because of, again, the size of their operation, they're a lot more agile to try things and and roll it out to the few properties that they've got. So, innovation and all of that space, I think, is a lot more attractive from an independent or small group of hotel versus brands.
Speaker 3:You mentioned considering Flyer potentially for your hostels because you like how they approach revenue management on a Beds basis. Are there other tools or big strategic initiatives you guys are diving into right now that come to mind?
Speaker 1:I mean, the big priorities that we're looking at is BI, but for the entire hotel financial performance. So total revenue management and financial performance. So that's basically one of the key focus that we're looking at. So that beyond just the top line revenue of rooms, we want to make sure that we have visibility over basically all of our hotels across total revenue management and also expenses. So that's one of the area that I'm focusing on.
Speaker 1:Some other areas that we're obviously keeping an eye out for is cybersecurity. I think, you know, we're not talking about it enough, but there's still some tools and vendors that don't have multifactor authentication or don't have PASCII. So that's definitely something that either weed out early in the stage in the exploration stage with a vendor if they don't have that level of security, that's basically just a no go. And over the last twelve months, we really went hard on the existing vendors to make sure that they're implementing that. And that's been successful across all of our partners.
Speaker 1:So great to see that all of our partners have jumped on board and provided us with, you know, that level of cybersecurity that we need. And obviously, the adoption of AI, whatever way, shape, and form that's gonna take in terms of, you know, automation, I think there's still a lot of misunderstanding as to where that's gonna land for hotels because there's so many ways to adopt that, whether it's revenue generation, revenue management systems, or whether it's guest facing technology through chatbot and more personalized guest experience. So, obviously, we're everyone's talking about AI, but I think up until now, it hasn't been the tangible silver bullet that everyone was hoping for. And I think we still have a little bit of a way to go. I think from my side, maybe selfishly, what I'm waiting for is for a channel manager that will use AI to do rate mapping and room type mapping across all of our channels.
Speaker 1:It's such a redundant and easy low hanging fruit from a technical standpoint. You wanna create a new promotion, you create it in your PMS, you create it in your channel manager, you create it in your RMS, and you have to recreate it in all of the OTAs as well. That's, you know, very redundant. And when you start doing that across, you know, multiple properties or multiple times of year because you've got new promotion popping up or maybe you're changing your room configuration. That's, you know, one area that I'm waiting for either a PMS or a channel manager or RMS to really grab that automation of mapping.
Speaker 1:You know, it's such a again, to me, a a menial redundant task that could be automated that would save revenue and distribution managers a lot of time everywhere.
Speaker 3:And are any of your existing vendors, do you feel like they've built any tools where you know, like, us, we have customer support on our site through Intercom, and it's like Intercom launched their chatbot and it was like, we have 700 plus customers around the world, all different time zones. And it was like, we turned this on. It's called Fin. Oh my god. Like 80% of our support tickets are gone.
Speaker 3:Have there been any moments yet or it's still early? Like, know Lighthouse launched smart summaries. It's more of a explainer around different rate environments and competitive rates and everything like that. Have any of your tools launched anything that really gave you an moment?
Speaker 1:Nothing yet. I mean, chatbots, we're working with Hijipi, and obviously, they've been gradually improving their chatbot functionality from an AI perspective. So that's been helping in reducing the number of conversation that need to be handled by human. So that's obviously one of the, again, low hanging fruit. But beyond that, I still haven't seen, again, that silver bullet of a system that will make our lives, you know, a lot easier or that will translate in great savings or effectiveness across our portfolio.
Speaker 1:We've been talking again, Flyer, their BI is quite interesting because you can prompt the BI to write the reports. We've been very interested in Avio and Alora dot ai from a BE perspective, so the whole personalization of the booking journey. We haven't been able to work with them just yet, but those are definitely some areas that we want to spend a bit more time on. So, personalisation of the booking process. So that's linking CRM data, that's linking guest persona information as well so that we can provide more tailored offerings.
Speaker 1:And then all of the back of house, you know, can we automate more of our weekly reports? And, you know, you talked about Lighthouse. So that commentary about what's going on in the market. So instead of having a revenue analyst having to write a PowerPoint about market performance and market outlook, that is the kind of thing that, again, you know, giving Lighthouse example, then the context of why rates are changing, the context of what is happening in the market is something that will also help in terms of the efficiency of our team, just to do commentaries about what's going on so that in our weekly and monthly reports and monthly meetings, we don't have to write the whole deck. An AI can do that based on the data from our BE and our BI.
Speaker 1:So an an AI can basically crunch all of that. What was happening in OOTA? What's happening in our b BI? What's happening in the PMS. And, therefore, this is the three or four page summary that we can share with owners or that we can share with GMs.
Speaker 1:So those are certainly some areas that we're hoping that the few partners we're working with are gonna develop and launch very soon.
Speaker 3:Why don't we think the CRM guys have done this? Seems crazy to me in the world of AI to have a marketing manager on property drafting an email for families. To me, the AI should be building hyper personalized segments and then sending hyper personalized messages. Have you seen any developments on the CRM side in that direction?
Speaker 1:Not to the level that you're describing. So there is some improvement in that segmentation where the CRM can build different, you know, AB testing or different messages based on the segments that you're creating, but not to the level that you're describing. And, you know, I would take that a bit further. And I think at some point, the CRM needs to be a little bit more the focal point of the tech versus the PMS. For me, the PMS is a transactional piece.
Speaker 1:It's the cash register. The CRM is where I think there's a lot of opportunities, whether it's, you know, that EDM creation or personalization on the BE and the guest journey. But I think for decades now, the central decision making process has been around the PMS. And I think that needs to shift to the CRM. And once that happened, once we're shifting the customer as the focal point, as opposed to the transaction as the focal point, then that's really where we're gonna start to see greater opportunities.
Speaker 1:And when we're looking at other industries, you know, the Amazon, the Lazada, the Alibaba of this world, that's basically where their strengths are. It's not the transaction. It's the CRM. It's the customer the understanding of the customer journey, what they like, what they might like, what they might buy. Because if people in their area or with this a similar demographic bought such and such item, then you're putting that item in front of them.
Speaker 1:So it's the same thing, I think, for hotels. But because the PMS is a central point and not the CRM, then we have this disconnect between, you know, focusing on the transaction as opposed to focusing on the customer.
Speaker 3:Absolutely. Well, we at Hotel Tech Report sometimes invest in hotel tech companies. If there are any founders who have built an AI native CRM that does hyper personalized messaging, reach out to me. We would love to take a look at your company.
Speaker 1:Yep. I'll be happy to share that.
Speaker 3:Awesome. Well, Michael, this has been such a great conversation. I would love to do a follow-up at some point. You have so much diversity in terms of what you're seeing and experience. And hostels and ultra luxury and from Four Seasons Bora Bora to like a hostel in New Zealand to like the standard highline, we could talk forever.
Speaker 3:I'd love to do this again and do a follow-up. But for this conversation, I usually like to end with asking, what is one thing about the hotel industry or hotel technology specifically that you hold to be true that you think most people would disagree with?
Speaker 1:I mean, I touched a little bit on it earlier about payments. And I think there's just this focus on credit card and Apple Pay and Google Pay. And obviously, it's driven by where the money comes from, you know, Silicon Valley and North America and Europe, where adoption rate of credit card is a little bit more prevalent compared to the rest of the world. But I think the payment gateway and the payment processing is, I think, one area that I think is, again, undervalued. And hoteliers are, I think, misguided in thinking of the payment gateway as a A and G P and L line because it falls under credit card commission as opposed to IT.
Speaker 1:And I think that conversation is not happening enough in terms of opportunities to really look at payment, both in terms of the methods of payment. Like I said, you know, there's a lot of bank transfers happening here in Asia or digital wallets that are being used. And I think this focus on just credit card and Google Pay and Apple Pay is a bit misguided in a global industry. And I think there needs to be a little bit more innovation in that space. But also at hotel level, I think GMs and revenue leaders and FCs need to rethink the credit card p and l line versus IT and really start challenging that a lot more.
Speaker 1:Because I think there's a lot of missed opportunities. And because the credit card commission sits in one bucket and the IT sits in another, the stakeholders are not necessarily aligned or they're not realizing that there's an opportunity to do better. So I think the the payment is, I think, one of the low hanging fruit that I think more players should pay attention to. And I'm watching that space, you know, very closely. I don't know if it's gonna come from one of the existing players or if it's gonna be some of the other more fintech providers that are gonna come in and crack this case of, you know, bank to bank and cash transfers.
Speaker 1:You know, I'm thinking of Revolut. I'm thinking of Wise. Those are potentially players that can come in and help solve some of these issues where the underbanked or the people that aren't using credit card as much, I think, can be tapped into. And then there's the fee associated with credit cards that I think we're also not talking about enough anymore because it's rising and rising because there's, again, a little bit more adoption on that side. And again, because the decision making sits between different stakeholders, it's not happening enough.
Speaker 3:Well, Michael, thanks so much for making the time today. I'm glad we were able to finally make this happen given that you're traveling all around the world and I've got kids getting me sick every week. So thanks so much for making the time. Thanks a lot, Jordan.
Speaker 1:It's been a blast, and, hopefully, we can catch up again. Absolutely.
Speaker 2:That's all for today's episode. Thanks for listening to Hotel Tech Insider produced by hoteltechreport.com. Our goal with this podcast is to show you how the best in the business are leveraging technology to grow their properties and outperform the concept by using innovative digital tools and strategies. I encourage all of our listeners to go try at least one of these strategies or tools that you learned from today's episode. Successful digital transformation is all about consistent small experiments over a long period of time, so don't wait until tomorrow to try something new.
Speaker 2:Do you know a hotelier who would be great to feature on this show, or do you think that your story would bring a lot of value to our audience? Reach out to me directly on LinkedIn by searching for Jordan Hollander. For more episodes like this, follow Hotel Tech Insider on all major streaming platforms like Spotify and Apple Music.
