Scheduled for: February 8th, 2024, 10:00 am PT / Category: Interviews
After the worthwhile process of empathizing, defining the problem, ideating, and prototyping it's time to implement your AI solution. Should you build or buy? What implementation challenges can you expect and how can you overcome them? What are some real-world examples of AI implementation in the hospitality industry?
David Chestler
President, ProVision Partners International [Linkedin Link]
David Chestler is recognized as an icon of the global hospitality and travel industry, having forged a successful career in hotel technology that spans over three decades. He currently serves as President of ProVision Partners International, Inc, a hotel and travel consultancy and marketing firm that he co-founded in 2019. Since beginning his career in hospitality in 1989 with Utell International, Chestler has held leadership roles with some of the industry’s most prominent organizations, where he consistently delivered global scale and growth by developing high performance teams focused on complex technology solutions.
Martin Chevalley
CEO & Co-founder, InnSpire [Linkedin Link]
Martin Chevalley serves as CEO of InnSpire – the Digital Guest Journey, a global hotel technology company he co-founded in 2012 that is dedicated to developing and delivering hospitality-specific technology systems and integrated solutions for streamlining the guest journey and creating maximum efficiency for hotel operations. With a comprehensive suite of intelligent solutions, InnSpire helps hotels around the world to sell more, entertain better, analyze data and optimize results, with a prestigious clientele that includes such brands as Hilton Grand Vacations, Virgin Hotels, LVMH Cheval Blanc, LUX Hotels and many others. In addition to his role at InnSpire, Chevalley is a global business catalyst with over 10 years of experience in successfully conceptualizing, launching and commercializing electronics and software-oriented brands, products and companies in multiple business sectors worldwide. He holds a Master’s in Business Administration from Stockholm University‘s School of Business, as well as Harvard University.
Podcast
Transcript
Kim Lantis: Hello and welcome to dojo.live this February 8th, 2024. This is our third part of our five-part series collaboration with ProVision Partners, “Do More in ‘24.” My name is Kim Lantis and it’s my pleasure to be joined today by David Chestler, President of ProVision Partners, and Martin Chevalley. Did I get that right? CEO of InnSpire. Thank you both for joining us today.
David Chestler: Thanks for having us.
Martin Chevalley: Yes.
Kim Lantis: Yes. It’s my pleasure. You know, we’re going to get to know you a bit better here, Martin, in just a moment. But before we do, I would like to recap for the audience what we’ve done in our first and second segments of the series so far. This is all about how we’re identifying to take the next step with AI and thus far we established that it really is necessary for AI Technologies to be implemented in pretty much any organization, but our focus here is particularly in the hospitality industry. And the real “why” is because if we don’t the competition who is, is basically going to do what we do only better. And then we also understood that because AI is a technology, and as with any technology, we have to have a plan, right? A planned approach to deploying it.
We want to avoid this term “AI washing,” which we might touch on again later down the road today. But in the last segment Sally Kelly pointed out that with AI there’s this temptation, right, to look at every possible problem to solve with AI. And we don’t want to take this shotgun approach, as she said, we really want to have this target pistol, this the sniper pistol, and home in on something, right? And to do this we need to break down silos. We need to start at the C-suite, bring in all constituents, whether that be our clients as well as our colleagues, and a really great way, maybe the best way, to do this is with Design Led Thinking. Of course, empathizing, defining the problem, ideating, prototyping and implementation.
Which brings us to what we want to talk about today, right? The theory of this time investment, this hard work is done, now we get to implement it. It’s going to be easy, easier anyway, right, is the theory. So, we’re going to talk about implementing AI, talk about real world solutions, build versus buy, and a whole a lot more.
But before we do, we do want to get to know you better, Martin. And David, I know that you hold Martin in the highest esteem.
David Chestler: Truth. I think he is an exceptional leader and a fine character as well. Thank you for summing it up, Kim. I think you’ve got us right to where we need to be and talking about implementation and how we’ve defined how we want to use AI within the business, identifying the businesses and how they’re going to support the actual commercial as well as operational needs. And I think it just came out this week, AHLA did a survey and 67% of the hotels are saying they’re short staffed. So, when you have that type of pressure on the business, how do you deliver to the guest at a level that is meeting their expectations and that allows you to charge for the services and thus pay for the development of these new technologies? And I think bringing Martin on is a perfect opportunity as he’s been leading his company both in how they designed and implemented with this new technology and how they found the actual domain need for that but then fulfilling that expectation through the zombie apocalypse. That took great stewardship and leadership. And I think that’s the story that we’re interested in getting him to share.
He could go on for hours, but we’re limited to a short time, so I’ll also be brief and just again reinforce that Martin started the business with some friends, focused on an industry that he loved, and it’s to support the digital guest journey. But you can’t do that alone and that takes an army, both inside the camp and outside on the customer side and the colleague side. So Innspire really helps hotels around the world sell, entertain, and analyze data. And I think with the customer base they have like Hilton, Virgin and a few other very signature ones, Martin will share, it’s exciting to hear the story from the ideation phase through to implementation. So, I’ll back out of it and ask Martin to share a bit more of your journey and the story of how you bring AI into the industry, Martin.
Kim Lantis: Mmm, hmm. Thank you.
Martin Chevalley: Well, yeah. Thanks for a very good summary and thanks for the introduction. I am more than humbled. It’s been 10 years in the making that we work together, and I have the pleasure of working with a fantastic team who I think are very focused on pragmatism and bringing solutions to life and rather than overanalyzing and trying to make the perfect plan we try things. And we try them together with our customers and with the end customer which means that we need to iterate and keep improving which, I think, helps us get very short cycles so that we can start getting something out there that is tangible that people can test, that people can feel.
So, the reason why we started to implement AI is just that it’s certainly, of course, the next wave of innovation and it will help every single company on the planet be more efficient in what we do. And when it comes to hospitality, we think that, and I think the general consensus is that, if we can automate some of the tedious tasks of entering names into a database or checking people in, checking people out, and we can automate that, we need less staff for those type of things, then we can put staff forward where they can really help. They can talk to guests, they can help them in the city, they can show what’s going on in New York City or wherever they may be, and that’s the true value of us humans when we communicate, right? So, automate things where technology can really help and put humans first where humans do best, that is we communicate, and we help each other.
David Chestler: That’s great. And when you engage with your customers, whether it’s an enterprise or a single entity one of the LVMH properties, how do they engage with you? Is it seeking your wisdom or is it, “How do I apply said science into my environment?” What’s that engagement really like?
Martin Chevalley: I think that’s also a very step-by-step process where we help each other. I mean nobody has all the answers at this time and that’s why it’s great that there’s so many players out there that are testing the grounds and working together. I think that either the hotel group, in this case, or us, come with the seed, with an idea where we think the future is. And it’s not necessarily the future in three months or six months. We try to put the flagpole down maybe three or five years ahead and then we have to work our way there. And the only thing we know is that that path is going to change. It’s not going to be that path, but at least we have something to work towards and test.
So, we are very much intertwined, I would say, with operations in hotels and we see the pros and the cons, and the battles, and the problems, and the positive aspects, of course, too. And that’s where we try to come in and use technology to alleviate these pain points and basically use digital tools to make every single step of the journey a little bit better in whatever terms that is.
And it’s beyond the guest experience, it’s really the hotel experience because now what’s happening is this huge convergence of technologies and add integrations and platforms. Everything should start to speak, to some extent, the same language so that the hotel operates as one. It’s not a siloed front desk and the back of house and different functions; we all speak the same language and I think digital tools can help us do that.
And what we’re really trying to do is to get the front end married with the back end so that it’s the same information that flows so that if there are experiences on the front end where guests are using television or app or voice control or Apple’s new goggles, who knows? That should translate all the way back to staff and all the way back to management so that whatever is promised does happen and whatever is requested does happen. So, being in this landscape is extremely exciting because there’s so much going on right now and, again, we don’t have all the answers so that’s why we’re discussing with hotel partners, getting their feedback, feeling their pain points, and trying to work together to mitigate those.
David Chestler: Brilliant. And, oh sorry! I was just going to ask about the build versus buy conundrum.
Kim Lantis: That’s exactly my question! [laughs] That is exactly my question as we’re bridging this front end with the back end. Do you build it on your own or do you buy it? What has that conversation been like in your experience? And maybe if you have advice for people who are wanting to implement these AI Solutions, pros and cons on how to go about making that decision.
Martin Chevalley: Yeah. I think for most groups it’s obviously a very big decision in what direction to go in and there’s a lot of help needed in terms of defining that process, defining what’s needed, and defining those points in the future that we were discussing. We try to be, again, I mentioned the word pragmatic before, we try to be very pragmatic in how we deliver things. We want to have short cycles and we want to have something in the market quickly that can be tested and iterated. So, I personally think that it’s great to rely on the true giants in our tech space, you know the Googles and the Amazons and probably Apple soon too, and OpenAI, of course, who are doing so much work and investing so much money that, you know, we never could. So, leveraging those tools that they are creating to create ecosystems that we can put to use in a certain space, and in this case hospitality, but then there’s so many players around us to help this come true and to realize this. So, it’s a mix. I would say you have to build, you have to personalize it to your own needs, but I think that buying the building blocks makes a lot of sense rather than trying to build those.
Kim Lantis: Right. And then utilizing perhaps partners or someone to help do the implementation as well of those amazing building blocks. Very smart.
Martin Chevalley: Exactly. That’s where you really need to help in consultancies to bring it all together, but a lot of the pieces are out there so that makes it so much shorter to get to market for all of us and I think that’s a huge benefit.
Kim Lantis: Thank you. You know, I was also curious about, you know, we wanted to take a deep dive in some of these practical cases we’ve been talking about, these building blocks so to speak, in implementing AI in hospitality, I understand – and I’m going to do this shameless plug for you so you’re not embarrassed to do it on your own – I understand that one of your solutions, Review Magic, was an HTNG TechOvation winner. Fantastic. Congratulations, by the way. So, let’s dive into this example of bridging the front end with the back end and then maybe a few more that you’re familiar with.
Martin Chevalley: Yeah. Well, first of all, HTNG and AHLA have been great partners for many years and great places to be visible and get to know people and be a part of the network. So having been part of TechOvation, I think we actually have three winners there and one runner up, so it’s been a really good platform for us.
Review Magic was an early stab at AI, I would say. I think it was about three years ago and what we really wanted to do was to use all the information that’s out there in guest reviews and make that actionable so that it benefits the guest, kind of like a cycle. The feedback from the reviews should benefit the guests when they come back again. So that was an AI tool that we built that read, understood, and analyzed every single review on every single review site in every single language, basically, and then put that together so that the metrics would be extremely easy to read.
Because one thing that a lot of hoteliers don’t have is time to sit around and read thick reports with data. It’s very action oriented, operational parts of hotels. You’re always somewhere so you need actionable data. And so, what we did is that we brought that down to the three main pieces that could help you solve problems. So basically, the three main things that were bringing your reviews down were this, this, and this. And the main three things that were helping your reviews get high were this, this, and this. So basically, do more of “that” and fix “this” is the short.
And we made that into just one, two, three: These are the things you have to fix. But the way to show how you had to fix that was that we took all the reviews, and we weighted them so that was all equal on a scale, which meant that Google reviews and Trip Advisor and Facebook, wherever the reviews came, were all comparable on the same scale. So, from a zero to 10 and not thumbs up/thumbs down, or one to five, or happy face/sad face. One to 10. And that made it possible to say that your cleanliness is costing you 0.3 or three decimals. You could go from a 9 to 9.3 just because of your cleanliness. Or, your front desk they’re costing you, unfortunately, two decimal points. So, fix these two and according to the data you will go from a 9 to 9.5.
And then the next step in that would be to compare all of that to your comp set. So, if you’re in New York City and you’re a four-star hotel, let’s say, and you’re charging let’s just say $300 a night, but actually the guys that are doing 9.8 on average, they’re up at $400 a night. So, by not being up there you can’t charge the same, but if you fix this, each of these steps will be worth X thousands of dollars per day times 365 times rooms. It’s huge money.
Kim Lantis: Wow. So, it’s like you automated Design Led Thinking! [laughs]
David Chestler: And more than that, he’s optimized the operation, right? And here’s where owners, because you have to think in Design Led Thinking across the organization, and the owners probably have the hardest job in trying to discern all of the requirements of being a brand or being independent or being guest centric at a high level or not. And I think when you’re trying to find that ROI in the investment in technology, here’s a perfect case where I’m implementing a technology, I’m implementing some of the latest in technology that others are investing in, especially billion-dollar companies that they’re aligning with, I’m able to take advantage of that in my own organization, optimize my business and now I could point to an ROI on that investment because I can increase my yield. I make my assets have a creative value because of the investment in the technology and that investment in technology helps me when I’ve got 67% of the market saying I don’t have enough staff.
So now I can make these processes more effective, efficient, and profitable and that helps all the parties. That’s why the plan helps having the C-suite to the operation aligned and having the right partners identified and then working with an award-winning company also helps. But I mean those are the things that I think you start to see the longer journey that’s available to the enterprise or the asset class, right? And I think that’s the important thing to start thinking about. Sorry.
Martin Chevalley: No, and you’re absolutely right. And I think what we’ve also seen over these 10 years is that technology as a field, which is a huge field, it touches everything that we do basically, has moved up in priority in organizations. It is a C-suite question now. It’s not just, “Oh, I need to buy 10 more access points. That’s a cost,” where it used to be 10 years ago. And it’s not just a nice-to-have. It’s, really, the synergy of the entire company relies on tying it all together. And I think that’s the next evolution. That’s where AI comes in because AI can handle huge amounts of data, right? And siloed is something that has come up a few times here, and we have to get away from the silos both in operations, we mentioned before front desk and back of house, for example, being siloed or different parts of the organization. But also, technologies.
There’s no point that there’s all these different technologies where hotels and companies invest huge amounts of money to get them going and those are siloed. They don’t speak to each other. So, then you’re not leveraging the benefits of having those solutions because you need to re-enter all the data, or this doesn’t work with that, or whenever you say something here nothing happens on this end. So, I think what’s really going to happen now is that we’re going to see platform thinking and there’s going to be some sort of universal language, more or less, so that data can flow. Because every hotel group wants to understand and own their data, but they just don’t have a repository for it, really. I mean there are CRM companies, of course, but then making all of that speak together, that seems to be one of the Holy Grails right now and I think AI is going to be monumental in driving that forward.
David Chestler: Agreed. The collaboration, interoperability, that we talked about, right? And I think Kim will touch on that, but you mentioned AHLA and HTNG, and I think that’s another prime example. There are associations, HFTP, HSMAI, HEDNA, that are all focused on trying to enable that collaboration and some standardization, right, so that we can have these interoperable systems without thousands of companies making it very fragmented and cluttered. I think making sure that they work together in harmony is going to be a critical path and it sounds like it was for you, right?
Martin Chevalley: Yeah, correct. Definitely. And we didn’t invent all of these solutions. I mean we definitely did not invent AI in any shape or form, so being able to rely on both the industry giants but also our colleagues in the industry, that’s how we synergize because there’s a CRM company, and there’s a GRMS company, there’s a PMS system, there’s a POS system, and it’s when we all work together that we can create this really seamless environment for hotels.
And I think that rather than technology companies fighting a turf war, I think there’s enough to go around, first of all. But second of all, I think it is our responsibility together to bring solutions to the hoteliers so that they know that they have a path forward and that that path forward is also flexible. You don’t want to be locked in. Making these decisions will be paralyzing if you think that the decision you make now will affect all the decisions and all the money for the next 10 years. But that’s not really the case. If we can keep things open, then you can plug things in, remove them if they don’t work, try something else. And so this process of ever constant change that is the reality, nothing is going to be stagnant.
David Chestler: Iterate. That was your word.
Martin Chevalley: Iterate. Yeah.
David Chestler: Yep, yep.
Kim Lantis: I think that’s a really great point and I mean we already talked about the importance of collaboration and interoperability, your own experience, I think, in recognizing stellar solutions that are out there, and this, I think, fearlessness is recommending something, even if it’s not on your “highway” in this massive “interstate” of technologies. I think that’s really beautiful. And we touched a bit on this sunk cost fallacy, this idea that, “I’m on this path; I’m on this highway. I have got to keep going.” Let’s talk to that a little bit. What has your experience been with the “You know what? I’m going to exit and turn around because this isn’t working!” [laughs]
Martin Chevalley: Well, I have to say I wish I would see that decision being made more often. At least I don’t know what your experience is, but we hear quite often that, “No, you know, we spent so much on building this app now we have to make it work.” It’s like, “Okay…” So, I would think it’s probably wiser sometimes to just admit. You know, there’s always, what is it called? Like a “Y” in the road where you have to make choices and sometimes the choices aren’t perfect. So, it’s human to go back and review those. So, we see a lot of sunk costs where they seem to stick to it, unfortunately. But that’s why I think slowly that can start changing when the decisions aren’t as big, when it’s more of a divided-up process where you can pick and choose, it’s going to be easier to replace parts and start making changes, I think.
David Chestler: Well, and if I could come over the top on that, I think when you look at the technologies that are being used in our industry, you listed half a dozen of them with three-letter acronyms, ultimately, they need to be able to work in a much more open environment in order to optimize that journey for the guest. We’re seeing the struggles right now in credentialing and recognizing on the web services side and how that translates over to the brick and mortar and that’s still one journey but it’s multiple contingencies involved, from the app hybrid solution set to the connected building and then the operators and how they make it all work, right? How do I make the door lock? How do I get credentialed when I’m arriving? A lot of the concern that we’ve seen in some organizations around decentralized identity and self-sovereign identities that are they talk about the future of that, how it aligns with HIPPA and government and my own personal data with loyalty and similar. There are work groups around that. I’m interested in how you as a leader are starting to look across all of these opportunities out there and start to take the pulse of what’s going to be critical path. How do I bring in that AI piece, and I understand sunk cost in the discussion we were having, but how do I make that decision to maybe zig or pivot, as they start to say now.
Martin Chevalley: Yeah. I mean there’s a lot of different conversations around identity and who owns the data, and one that I’m quite attracted by – but it will make our work a little bit more difficult, and we have to really think how we go around that or how we utilize that – but one idea is that you use your own your data yourself and you lend it out for your four days that you’re in that hotel and they have access to your preferences during those four days but then you take them back.
David Chestler: You hope.
Martin Chevalley: Well, yeah. Which I think is an interesting way. I think it was actually Doug Rice in one of his presentations that I really looked into this and had some really forward thinking about it. Of course, everyone else in the space wants to own that data and be the one that holds on to it and can leverage it. But at the end of the day, at least from our perspective, we really care the most about the guest getting a great experience and we obviously do things using AI where we have access to data that they’ve given, or that they have given us access to, in terms of preferences so that we can create a more tailored stay and it can be as simple as if you’re a honeymooner or if you’re a business traveler if you’re a family with two kids, your stay is going to be quite different. Also, your interests and your preferences, all of that combined, we actually use AI to come up with ideas that are relevant for you and your stay while you’re in San Francisco during these dates, for example.
But as of now all of that data is stored in different sources, probably the CRM of the hospitality company. We’ve made the active decision not to own any data, just in terms of security and GDPR, so we actually only look at other databases and draw data from that, make things happen, and then we purge it so we don’t keep any data, no credit cards, no nothing because it’s just much safer, we think, long term for a company like ours. But then there’s others that have the muscle to really hold on and make value of the data.
Kim Lantis: That’s really interesting. What other challenges might you speak to in terms of implementing said solutions and other kinds of solutions to those challenges that you’ve found, similar to data privacy, the build versus buy conundrum, and what else?
Martin Chevalley: Definitely operations, I would say. It is a new mindset for employees and for staff and for colleagues that are in the field, and I think there’s definitely going to be a fear of, “Is this replacing my job?” And nobody wants to be replaced. Some of these things can make things smoother and more seamless and, you know, if a food and beverage order comes in from the guy now on the beach, because that’s possible, and you get a little map with a pinpoint on it and that’s where this is supposed to go, that creates other challenges for operations. How do we bring the food over there? We’ve seen tipping, because now when we have digital tipping, who gets the money? How do they divide that up? So, I think with technology we can always work together, and we can find solutions, but at the end of the day it also has to work for our colleagues who are actually in the field and are facing the guests.
So, I think it’s really, really important that all of these tools are there to enhance the stay and not necessarily take away. And there’s always going to be options where, I mean not everyone loves this, and not everyone is going to engage with automated tools, whatever they are. My parents wouldn’t, for example, so we have to completely respect that and make things function the way they are. And there’s many people that have certain disabilities or need certain help and they should get the personal help that they need. So, it’s not a silver bullet as you say, it’s not everything. I think it’s step by step and the important thing is that we maintain the soul of hospitality and keep making it human and hospitable. That’s why we keep coming back, for great experiences.
David Chestler: Truth.
Kim Lantis: I love that.
David Chestler: Can I ask one last question before you take over? But my interest is, how do you balance the desire to create new and the business need of being profitable, right? And managing your investors and similar?
Martin Chevalley: Oh, that’s a really good question. I think that we’ve really used innovation as a way of marketing, so it does add to ROI at the end of the day, being visible at HTNG and TechOvation at the end of the day gives great visibility and we wouldn’t do that if we weren’t innovating. And I think we mentioned earlier today that change is the only constant. It’s a cliche but it’s going to be more true than ever that it’s a very quickly evolving landscape. There are many technology companies that are working both against each other but also with each other, so we have to keep moving it forward, dropping some things that are getting old, and making sure that we’re bringing in new things, otherwise we wouldn’t be selling the solutions, not even the old solutions. We wouldn’t be able to just keep pushing those.
And I also think that, in terms of the conversation we’ve had a few times about platforms and integration, you know platforms coming together, it is when all this works together that the pieces make sense. Each one of their own might not be that special. I mean, we have a hotel app. There are many companies that have a hotel app. We have a TV system. There are many providers of TV systems. We have in-room-control, whatever. But it is when all of this works on one seamless platform, that’s when it starts to add value. So, the short answer for us is that innovation is critical, absolutely critical. And if we were doing the same thing today that we were doing three years ago, or God forbid five years ago, we wouldn’t be around I don’t think.
David Chestler: Excellent. Thank you.
Kim Lantis: I think that’s an absolute great way to kind of wrap up and end our show today. You know, the soul of hospitality being people. And a really great takeaway for me as well is understanding where I am just as much as that flagpole that you mentioned that we’re going to put down the road five or six years from now. It’s a lot to process, for sure. So, I guess I do have one final question. If there’s any last thing, Martin, any final words of wisdom that you’d like to share with fellow leaders out there as they’re implementing these types of solutions.
Martin Chevalley: I would say don’t be afraid to test. To try. You have to start somewhere and see what the reaction is, and see how you can improve on that, and getting the right people around the table to start delivering solutions. And it’s probably not going to be right the first time, but it is definitely a process. Even when we stake something down five years ahead in the future, we have to divide that up into very, very small incremental parts because there’s no way of just getting all the way to the five years right away. What we try to do is that we really try to, I’m trying to think of the word in English, but basically product-tify, or is that a word?
Kim Lantis: It is now! It makes sense. [laughs]
Martin Chevalley: Okay. [smiles] Instead of saying just, you know, “We have to do AI,” which is a huge thing and it’s a strategic decision for us, that makes no sense and nobody knows what to do – if you divide it up into small parts – let’s automate our chat, let’s make our review management more efficient, let’s handle our data better so that we can know and understand our customers better… those are tangible assets that are easy to start testing. So, I think that would be my advice. Don’t be afraid to start testing and make it in very, very small steps so that you can test every single step of the way and evaluate it.
Kim Lantis: I love it. And, you know, this is what we would call serendipity because this is exactly what our topic of conversation on the fourth part of this series will be, coming up on February 22nd: Testing and Iteration. So, I love it. I love it.
Martin Chevalley: Awesome.
Kim Lantis: Thank you so much, Martin, for spending your time with us today, your experience and, of course, your wisdom as well.
David Chestler: Truly.
Kim Lantis: And David, as ever, thank you also.
David Chestler: It’s a pleasure, Kim.
Martin Chevalley: Thank you both.
Kim Lantis: All right. Well, that’s it for today folks. And like I said, join us Thursday the 22nd for Testing and Iteration on this series and then our wrap-up will be on March 7th as well. 10 o’clock a.m. Pacific, right here on dojo.live with Provision Partners. Have a great rest of your week!
