President of Plusgrade on Agent-Ready Hotel Revenue
Instead of searching and browsing 40 websites, to book a stay, you would go to your own agent that you train on, like, this is what I like. This is my credit card. This is my budget. And you just tell them, hey. I wanna go to Florida.
Speaker 1:I'll let all these dates. And it will basically book it for you.
Speaker 2:From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them.
Speaker 3:Today, have Eric Tangan, the president of hospitality upselling at Plusgrade. If Eric's name sounds familiar, it's probably because he co founded Ogee more than eleven years ago. In our conversation, Eric shares actionable best practices for hotels aiming to increase total revenue, create a frictionless guest journey, and he reveals why now is such an exciting time for hotel technology. Let's dive in.
Speaker 4:Well, thank you so much, Eric, for being on the podcast today. Really looking forward to chatting with you. To kick things off, please go ahead and introduce yourself. Tell us a bit about your career journey and where you are now.
Speaker 1:Thank you so much, Adrianne. Great to be here. Thanks so much for the invite. My name is Eric. I'm from Sweden, South Of Sweden.
Speaker 1:I started my early adult career as a professional poker player, took me to hotel school, and have never had a normal job in my life. So I started Oki as a very young guy. About 11 later, two months ago from now, very very fortunate to have sold Oki to Plus Grade. I'm now serving as the president for the hospitality business unit at Plus Grade, where effectively what makes me so excited about it is we take the same vision and largely the same things that we were thinking about day and night at Oki, but are able to execute that on a much, much larger scale and think a lot bigger, which is very exciting.
Speaker 4:Very cool. And for those who aren't familiar, could you give a quick summary of what is OKIE and what is Plus Grade and what is the niche that you sit in in the hotel tech space?
Speaker 1:Yes. We are all about upselling. So effectively, you can think about it like anything and everything that happens after a guest books a room. But Plusgrade also is very active in other verticals, very big in airline upselling, cruise line upselling, and rail. Will operate for us the same.
Speaker 1:You book a seat, and then you get a chance to bid or place an upgrade to a larger seat or from standard to a premium economy business class or cabins in cruise, for example. And of course, in hospitality, a lot of things are related to upselling and optimizing not just for the guest experience, but also this shift towards total revenue management that we're seeing across the board.
Speaker 4:So you obviously have a really interesting perspective on the hotel tech space, having worked with many different hotels across the world. What would you say is the most critical piece of technology for a hotel to use?
Speaker 1:Every time I speak to hoteliers now over the past, say, eighteen months or so, everyone is focused around, okay, we have owners owning the buildings and they require bigger and better results every year. Revenue managers have been very much reliant on driving ADR and RevPAR over the past, say, whatever, five, six years. I was doing OKIE, like I said, for almost twelve years and RevPAR was almost always the metric to follow. And I think what happened after COVID and a couple of years after, so now up until maybe two years ago, that revenue managers found it very hard to rely on driving RevPAR as the only metric to continue achieving growth for their owners. And so a very natural migration towards another KPI was toward total revenue or TrevPAR, with a weight towards RevitPAR still because obviously it needs to translate down to profit.
Speaker 1:So on that lens, how TrevPAR is is now the metric that truly matters and to drive profit and growth from a hotel, I would say as long as you have your fundamentals in place, the most important system that you would need is a revenue management system coupled with a system that is talking to the guest that is seamlessly integrated to the RMS. So why is that important? An RMS in isolation would only optimize for RevPar, like a guest booking an actual room. But when you couple an RMS with, for example, upselling technology or guest visiting technology, you're able to leverage dynamic pricing and the revenue management strategy into the full guest journey. And there's so much untapped potential for many hotels to drive more profit thanks to total revenue management, upselling room upgrades, etcetera, but also upselling anything, f and b, spa, transportation, third party services, things like that, to basically yield the entire guest journey.
Speaker 1:And that is only really possible in a proper way once you layer on upselling on top of the revenue management strategy. To give an example, we have research that shows that about 70% of all travelers are willing to take a room upgrade as long as the price is right. Okay, so what is the right price? Most hotels would rely on just having flat prices. We're seeing most hotels having the same price for parking, whether it's on a Tuesday or a super packed Sunday afternoon.
Speaker 1:So very, very, like tons of opportunities where basically profit is being left on the table because only the part around pricing is not managed. Pricing, I think, is still one of the most important aspects when it comes to upselling and conversion because I can give you, like, the best offer looks amazing, it's super easy for you to transact with. But if the price just doesn't make sense, you're not gonna go ahead and buy it. So I think if it all comes down to just one thing, it's usually pricing that's very, important to get right.
Speaker 4:So you mentioned parking as an example. Many hotels are charging a flat fee for parking whether it's like a random Tuesday or like New Year's Eve. What data do you need to set the right price at the right time for the right guest? How would you even start that calculation?
Speaker 1:The most important thing that you would need is inventory. You need to know how many parking spots do I have available. That's also how you see typically revenue management systems or just revenue management works in terms of room types or like, you know, you're selling out, there's not many room types left. If I want that last one to be sold, maybe that goes to at a higher rate. But it also depends on the demand that you think that you have.
Speaker 1:So there are two things that I think are very interesting. RMSs typically have an idea about forecasted occupancy. That can give an upselling engine an idea around, okay, how many guests are going to be staying in this hotel at a certain given point in time and in what room types will they be staying. That's less so relevant for parking deals specifically, but just knowing how many guests will be arriving is, of course, important. And then it's about the inventory itself.
Speaker 1:Those two components would be very important in order to dynamically price and yield such a deal. Basically figure out scarcity.
Speaker 4:Technology is obviously so important to hotel operations and strategy today. And it can be an intimidating process to find the right vendor and find a vendor that aligns with what you're looking for. So do you have any best practices on finding a vendor and partnering with that vendor long term? Like, how do you get the most out of that relationship?
Speaker 1:Maybe it's not so different from like me and my wife or like me and my friends or like how we have vendors and partners here at Plus Grade. Everything in the end, if it's a really like a tight partnership, it really is like a partnership. Do you feel like both sides are really giving it their all to make this fly? Does the outcome of what this partnership produced like remove friction from like my operations or from a hotel, from my guests, or if I'm like me, like for my team? I think it's really important at the gist of it all to just have an idea if we're both successful, is this a win win at the very end?
Speaker 1:Sometimes business models or something, like, makes it so that it doesn't make sense. And then do you believe that the vendor is really good at solving the problems that you have? If we think about the hotel industry, I can tell you, like, we are not the best for every single hotel type that there is in the world. We're very, very, very good for those that we have, like, identified as our ideal profile to work for and really be super obsessed about being the best for. And I think that type of if you're in a very, very big market that will exist everywhere, and you have players for, like, all kinds of different profiles, I think it's important to find a player that is really obsessed about the problems that you have.
Speaker 1:And ultimately, that you find that it's a win win. It should never be a in my view, like, you choose PlusGrid and then you never look back again. A good partnership is, where we go and meet, we get challenged, but we also put in work, both of us, to make it a success and together kinda drive upselling forward.
Speaker 4:So just thinking of a hotel's tech stack, there are obviously so many different components now. Is there anything that you've seen on the market recently that seems really innovative or something that hotels should be looking at in the future as an addition to their existing tech stack?
Speaker 1:So like when I think about what is like mind blowing right now that is so fascinating to me is like maybe not a single company, but it's the fact how we're moving from generative AI, like, which is so amazing for so many, many things, to now like agentic AI where actually AI can take action for us built on whatever LLMs and like Gemini and all kinds of things. And it's so fascinating because it will so drastically change everything that we do. Where like instead of searching and browsing 40 websites to book a stay, you would go to your own agent that you kind of train on, like, this is what I like. This is my credit card. This is my budget.
Speaker 1:And you just tell them, hey, wanna go to Florida, la la la these dates. And it will basically, in the end, book it for you even. Like, how crazy is that? But we're not there yet. Like, I tried to do it for a family holiday we did a while back and it was really bad.
Speaker 1:So I went back and did, like, the normal way. But I don't think we're, like, far away from this actually happening, which is so astonishing. And it really makes you understand, and I see this very clearly and I hope that vendors and hoteliers alike see it too. If you're not, like, quote unquote, like, agent ready in, like, 2026 and onwards, then you will lose out on an ever growing kind of a population of travelers that will literally be searching and booking their full experiences through AgenTik, which is crazy. I like, would never have thought that, like, even, like, a year and a half ago, I think.
Speaker 1:And what's even crazier is, like, where I see a really cool opportunity for PlusSpring, is that you book your stay like this, Then it's also the agent will effectively have an idea. Okay. You're traveling in by flight. You're late. Okay.
Speaker 1:But I know where you booked. If we can act as an agent ready sort of, like, upsell layer between the hotel and the agent, then the agent can even call on us and say, hey, guys, my guest is late by two hours. Let's make sure that she has a late checkout tomorrow morning and a dinner prepared in her room for when she arrives. Like without even touching it potentially, which is mind blowing. But I think something that we will see sooner than we think.
Speaker 4:So you mentioned being agent ready. How can hotels start preparing for this new type of transaction today?
Speaker 1:Yeah. There I think they have to rely on the vendors. Like it's vendors that needs to be agent ready effectively and the hotels to choose vendors that are. And like I said, I think we're early. But what it means is effectively that the vendors have clean and structured data and APIs that agents can call to, and will work sort of like the glue between the hotel and the agents so that when the agents call an API and does something that the in Plusgrades case, for example, would then actually handle the fulfillment on the back end, just like we would have of an upsell from like a normal guest.
Speaker 4:So I wanted to shift gears a little bit and learn a bit more about what you're doing at Plus Grade now. Could you share a couple of high level business objectives and what your priorities are now that OKIE is part of the Plus Grade portfolio?
Speaker 1:My pleasure to do that. My main objective is very simple. Help hotels drive profitable travel. That's it. I will do that through two main objectives.
Speaker 1:Number one, monetize the customer journey or the guest journey. And number two, enable what we call like frictionless loyalty that we do through paying with points, which is something completely unique to Plus Credit. So monetizing the guest journey, okay, what is that? When we think about we're so nerdy about upselling, like most people would look at the customer journey and say, okay, you book something, then you arrive, and then maybe you leave, and like those are your touch points. But when we look at the customer journey, we'd look at it as like a long life cycle of like micro moments.
Speaker 1:And basically, you can look at it like, I like to look at it from a guest perspective. So from a guest perspective, depending on why they're traveling, who they're traveling with, etcetera, they have a lot of needs of things that they need to figure out along the stay. And if the hotel can proactively answer those needs, and this is very important, remove friction, That is like, in my view, what personalization is. And at PlusGrid, it's really like it's our objective to be the engine that constantly removes friction. If we do that through upselling, then it will never be like, hey, I'm nickel and diming you.
Speaker 1:It's always gonna be like, hey, I'm very, very relevant and I'm allowing you to do something now so that it allows you to have one less worry moving forward. So like, for example, I travel with my family a lot. I love it. I love it when hoteliers contact me proactively and say, Eric, we noticed you're traveling with your kids. Do you want to sign up for this movie night?
Speaker 1:Or we have a nanny service, blah, blah, blah. So I can already like, okay, I'm less concerned now about entertaining my kids or actually have some time with my wife. Or, like, someone traveling with their dog is, like, you don't wanna offer them, a business class, whatever entrance ticket. You would rather have something bespoke for the pup, like a puppy package. Here is how you can walk your dog in the area or, you know, whatever.
Speaker 1:Like, things like that that is just across the guest journey, proactively trying to reduce friction, the very much relevant depending on the needs of that traveler. If we can do that really, really well and yielding on all of those things, including room upgrades, early check-in, late checkout, all these kinds of things, then we're really turning the guest journey into this continuous revenue stream that is so so powerful and that's basically monetizing the guest journey. And like that includes a lot of things. Communicating on the right channel to the right guests. But it's very important that it's not about more offers.
Speaker 1:It's just it's about the right offers at the right time.
Speaker 4:Sometimes that can be a challenge for hotels to know what is the right offer. So do you have any advice or best practices on gathering that data? How do you know if the guests just bring a dog or kids? Or how do you gain insight into that sort of personal information about the guest?
Speaker 1:Well, we have millions and millions and millions of reservations of data for this. And what I can tell someone who's not working with Plus Grade is that there are about 10 categories of deals that make up about 80% of the transactions. So if you just optimize for, like, the 10 most popular categories and you try to figure out just using logic, here's what I believe makes sense to these types of travelers, but then you have to use a system or something that allows you to at least manually segment so it goes out to the right person, you're definitely not starting at zero. And those things would always be things like, you know, F and B, parking, apart from room upgrades, F and B deals, credits, transportation, like parking or to and from the airport, spa, wellness, romantic deals, things like this. We have database of more than 8,000 different types of offers.
Speaker 1:And so it's like insanely long, the long tail. But the very top, if you bundle them into categories, there are not that many that make up the bulk of it. That would be like how I would start. But when you work with an upselling platform like ours, we come to you and we say, okay, we know exactly how similar types of hotels with similar feeder markets, what they are doing and what those guests are very interested in. So you would typically couple the setup of that data, which is very data driven, and where you benefit from kind of the cumulative intelligence from, like, all of our customer base at once.
Speaker 1:And then I would say, put that and then put on your own hat as a hotelier and think about what do you wanna offer. You know your product. What is it that your guests really love to do in your hotel and to which segment do you think that makes sense? And then you build like a library, and then it's up to our engine to basically pull out the right offers and put them in front of the right guests.
Speaker 4:So a question I always like to ask everyone on the podcast, what is one thing that you believe about the hotel tech space that others in the industry would disagree with?
Speaker 1:You know, the answer to this question is like what you should start a company about. It's always like the contrarian views is where you should start a where you should start a business because no one else is looking there. So for me, I would say a thing that a lot of people think about nowadays, especially in the realm of AI, is all about data and big data, and we can gather so much data together to understand a lot of things very fast and machine learning and AI and all that. And I would say in that concept, big data is useless without small meaningful actions. And I'll explain to you what I mean by that.
Speaker 1:So a lot of people will think, okay, I need to gather data from all of these sources in order to come to some sort of an understanding of what it is that I need to do as a hotelier or as a vendor or whatever. But when we look at personalization specifically, which is I think is a very big reason for creating a data lake and, like, truly understanding more about your customers or guests or whatever it might be, is that it always, in my view, will come down to removing friction. The personalization, what it is to me, is like removing friction. And when you think about your various different types of guests, the answer in the future will never be around, okay, I'm gonna send you a curated list of 25 things, and this is what I believe is like personalization in my book. It will always come down to finding the micro moments across the guest journey when your guest is thinking about something and proactively try to solve for that problem, ideally before they started thinking about it.
Speaker 1:Like we talked about with me and my family, how am I gonna entertain my kids or whatever. Like, I'm driving with my car. I'm with or, like, I'm checking out. How am I gonna get to the airport? Whatever.
Speaker 1:So, like, all I'm saying is big data and the insights that you can draw for that can be amazing, but it's useless if you don't turn it into something actionable and into these, like, small amazing moments that I think, actually, by just using logic, logical thinking, you can get a long way. And then you just need to be very mindful into, like, how you set up your tech stack, etcetera, so that you are able to action on that so that the right guest gets that right deal for the right price at the right moment. But I don't think, like, the right place to start for many hoteliers or even vendors if I was to start a company, like, all over again, wouldn't be like, oh, yeah, let's build a massive data lake. It would be just, like, use your logical sense and you'll get far. So that will be my contrarian view.
Speaker 1:Big data is useless without meaningful small actions.
Speaker 4:And I'm also curious since you've been in the industry for a while and you have such an interesting perspective on it. Is there anything that annoys you about the current state of hotel tech? Or where would you want to make a change?
Speaker 1:Well, it's very fragmented. That's always like I don't know if that's annoying because when you've been in the industry for ten years and you've built so many integrations, it kind of becomes a part of your moat. So that's but it's still annoying. There are so many closed legacy systems that are very hard to integrate too. We build I think us and, like, most vendors in this space, you we we build our functionality and really the advanced kind of functionality on the basis of integrating to certain systems, maybe pulling certain data or enabling certain advanced things.
Speaker 1:Those things usually never work if it's like a very legacy one way integration or something like that. So it is annoying when we speak to incredible hoteliers that have beautiful properties where we know it would just work so well and then they are using some sort of a system that we just know, uh-oh, that connection is not gonna be good. So then it's better to say, okay, when are you moving to the cloud? And they say, okay, it's in 2028. So it's okay, let's talk then.
Speaker 1:And that happens a lot still. But I would say on the positive side, there's been a massive, massive wave. We work with some of the biggest brands in the world and one of them has like almost migrated like all of their hotels over the past two years, which is super impressive. It's looking up.
Speaker 4:To close, I would love to hear your thoughts on what skills or characteristics a hotelier should have to be successful today. You've worked with many hotels and I'm sure met so many hoteliers across the world. What do you see as a skill set that really makes a difference and helps that person succeed?
Speaker 1:Well, I first want to say that I'm not like a tech guy that is here telling hoteliers how to act. But I can say some qualities that I've seen in really successful hoteliers. The first one that comes to mind comes from one of our hotel chains in Scandinavia. They always tell me that, like, they see service as a sales opportunity. They're, of course, revenue driven, these people.
Speaker 1:But they always see service and sales as, like, one thing. And they do that with, like, the guest experience always at heart. So, like, this comes back to, like, whenever they see a guest to try and understand the needs that that guest has, similar to what I've been talking about this whole episode. It's just about how you allow yourself to figure out ways to remove friction so that you can become better at having that guest kind of spend more of their share of wallet with your hotel. I talked to one GM where they were training every single housekeeping member.
Speaker 1:They actually let them eat at all the restaurants in this resort and then they would have to remember what was their favorite dish at every restaurant. I guess they figured out that these housekeeping people would at least say, yeah, you meet a guest in a corridor and the guest say, hey, whatever. What should I do for dinner? Oh, you should go to Johnny's and they have an amazing pasta or whatever. And they usually have to try this dish.
Speaker 1:Like, that was apparently really really strong for, like, the connection and for the guests who said, yeah, of course. Yeah. That's I wanna try that. So, like, small stuff like that, which we could call, like, commercial empathy can really, really make a difference. And that's really about, like, how do you change your DNA or, like, your your way of thinking.
Speaker 1:And we work so much with front desk upselling and, like, have invested a ton into helping front desk employees through coaching, not just through technology, but also coaching in terms of, like, how to kind of come out of your shell and not feeling like it's an awkward thing to offer something to someone at the front desk. It's a similar thing there. But once you get into the groove and you really feel like, hey, I'm actually just having a conversation, understanding kind of what it is that you want or the system helps me do that, and then I'm offering that to you and I'm just charging for it. It's not so weird anymore. So commercial empathy is very important.
Speaker 1:Obviously, the most successful hoteliers that we work with, they figure out that once the upsell offer has been, like, whatever, sent and approved by the guest, they bought something, it's completely seamless all the way till, like, the guest actually receives something. Like, it will go from plus grade into maybe directly to the PMS. The PMS sends something to, an housekeeping app or, like, to another department who then gets a message, oh, I need to put, like, this happy birthday cake in Room 321 by this time. So that all of that works seamlessly. Like, if there is a gap in that, there usually will be a failure when it comes to scaling your upselling.
Speaker 1:And then the last thing that I hear more and more, also from our biggest brands, is that we went, I think, from a place like ten years ago where a lot of things would be debundled back to a place where things were packaged. And now it sounds like brands want to go back towards debundling again. We heard a lot about a couple of years ago about attribute based selling. Like, to some degree, I think there's also a para you know what the Pareto principle is? Like the eightytwenty rule?
Speaker 1:The same thing applies in ABS. So some things are what most guests are interested in. So it makes sense to, like, cut them out and maybe price those and yield those differently. But I think the most successful hoteliers have this combination of, like, commercial empathy where they can yield and basically charge for everything without the guest feeling like they are being nickel and dime. And that's like, how do you do that?
Speaker 1:Well, hotel chains just manage perfectly because they're able to really understand and the guest just feels like I'm getting value from all this. So why wouldn't I pay?
Speaker 4:Great. Well, thank you for sharing. So great chatting with you, Eric. I love your enthusiasm and your unique perspective on the industry. So thank you so much for taking the time to speak with us and hope you have a great rest of your day.
Speaker 1:Thank you.
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.
