SAN DIEGO, California — Hotel asset managers say they view technology in terms of return on investment just like any other project, but it's key to find solutions that drive efficiency at the property level and that can be scaled across companies' hotel portfolios.
Maxine Taylor, executive vice president at CHMWarnick, said it's important to look at the initial costs of technology but also to consider more long-term costs, such as licenses and maintenance fees, along with the savings associated with incorporating technology into operations.
"We're looking at where we can be more efficient, especially with labor costs, looking at what our returns would be on a longer-term basis," she said during a session on technology at the fall meeting of the Hospitality Asset Managers Association.
Ken Barrett, chief operating officer for BRE Hotels & Resorts, said one of the challenges is even when new technology solutions manage to check all those boxes and drive efficiency, many hoteliers are reluctant to adopt them, especially due to the prevalence of legacy technologies across the industry.
The willingness to take on risk often comes down to the level of trust in a general manager on property, how flexible hotel brand partners are and how reliable tech providers are, Barrett said. He added vendor relationships can be a key deciding factor.
"If it's got an ROI of 18% versus 27%, I might take that 18% because I get a better partner on-site in order to be able to execute well," he said. "A lot of these technology solutions, you might get good results or bad results not necessarily because of the technology but because of the partners."
Michael Rock, senior vice president and head of asset management for Hotels Hotels & Resorts, agreed on both the value of partnerships and the key role hotel general managers play in implementation.
"One of the key philosophies that we look at when we're looking for those leaders, those general managers who are key to so much of our success, is are they [willing to] experiment, test, measure, learn," he said. "You have to do that."
Another key when measuring the viability of technology investments is how scalable it is across Host's entire portfolio, Rock said. The hotel-focused real estate investment trust will often use its independent properties as incubators for technology before trying to work with brands to incorporate those innovations across their hotels. Not all of those efforts pan out, though.
"There's a lot of great ideas for things like delivery robots and robot vacuums and all these things what we played around with on a small scale, but as we looked at it, it's about how do we propagate that and is it super material," he said. "The answer is not really. It's more of a trinket. So we can move on and keep throwing things at the wall, keep experimenting."
Rock said that willingness from general managers to "bend the rules a little bit and try something new" continues to be key.
"That's where breakthroughs come from," Rock said. "Breakthrough success comes from trying, often failing repeatedly and fast. Then all of a sudden, when somebody hits something that becomes a new brand standard."
Barrett said BRE Hotels & Resorts looks at scalability similarly. He added new tech investments and innovations have to be viewed from a lens of thinking you can "create value by doing this" and being able to do it at different types of properties.
"We have a large select-service portfolio, so every time I do something once and it's a hit, I can multiply it by 100, right?" he said.
One key technology Barrett is excited about is license plate recognition, which he believes will allow hoteliers — through the right vendor partnerships — to start charging for parking at even low-staffed suburban properties.
"There are platforms out there today where the model is they pay for all the capital and they're on a revenue share with you," he said. "Now I've got the ability to be able to charge $5 a night for a hotel that's never charged parking in its history. Multiply that by 100, and all of a sudden that sounds like a pretty lucrative business model, right?"