Latest / The Modern Hotelier / #308: Hospitality Roundtable: Shannon McCallum, Anthony Melchiorri, Dmitry Kroshka & Henrik Shimony
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- The Modern Hotelier #308: Hospitality Roundtable: Shannon McCallum, Anthony Melchiorri, Dmitry Kroshka & Henrik Shimony === David Millili: Welcome to the Modern Hotelier Round Table. Steve, who's with us today? Steve Carran: Yeah, excited for this fun conversation. We have Shannon McCallum, the VP of Hotel Operations of Resort World. We have Dima Kroshka, CEO of Phunware. We have Henrik Shimony, CEO and co-founder of Reeco, and Anthony Melchiorri, the co-founder of Hospitality Creator Summit. Welcome, all. We're excited for this great conversation. Henrik Shimony: Thank you. Steve Carran: Thank you. I'd love to get everybody's background a little bit more, how you got into hospitality and how you got into the role today. Shannon, I'm gonna start with you. Shannon McCallum: Well, I grew up in Canada. I lived a mile down the road from a luxury hotel, and to keep me out of trouble on the weekends and in the summer, my parents sent me up the road to work at the property. Who knew at that time that it would lead me to a career in hospitality? My travels took me to Scottsdale, Arizona, and then I was recruited to come to Vegas. I've been in Vegas for 16 years and am so thrilled to be at Resorts World Las Vegas. Anthony Melchiorri: That's great. Dmitry Kroshka: Well, I started in the startup world, and a buddy of mine and I tried to build an OTA. It was gonna revolutionize everything, like everything I do, and then the Great Recession happened. So I came back around to it about 12 years ago, came out of Oracle, saw an opportunity to connect a lot of data and do something interesting with it. Here we are today, essentially the same concept, but now with the means to deploy it. Henrik Shimony: I spend every day of my life in hotels. I grew up in a hotelier family. My grandfather built a chain of hotels in Israel 50 years ago. Then I found that this is my dream: to live, work, and build a company in the hospitality industry. I studied hospitality management in Israel, and then I figured out that there is a huge need for tackling the purchasing side of the hotel. My partner is the tech side of the company, and I'm the hotelier that came with the idea of transferring the entire purchasing process in the hospitality world in the US. Then we founded Reeco. This is the way that I grew up in this space. That's great. Anthony Melchiorri: I'm Anthony Melchiorri, and David told me to go into the hotel business, so I did. I've been operating hotels for over 40 years, and I'm the co-founder of the Hospitality Creative Summit. Our first summit was yesterday at HITEC in San Antonio. David Millili: Now we want everyone to chime in. Shannon, what's the best piece of career advice you've ever received? Shannon McCallum: Work hard, put your hand up and do the difficult things, and really try to get to know your team and build a great team. Anthony Melchiorri: Who told you to put your hand up and do the difficult things? Shannon McCallum: It was one of those things that I saw other people doing. My father worked in hotels, and he worked very hard. I think I learned a lot from him. He was more on the facility side of things, always fixing things, and he ended up leading a team in Canada with Canadian Pacific Hotels. I saw what he was able to make with his life, and I think I came by it through watching his example. Dmitry Kroshka: I'm kind of the opposite, right? I do the easy things first. Again, startup world. Everybody hesitates. They think about this big concept, how are we gonna execute, but they don't do the basics. So it's get the basics right. Then my approach is either somebody's in this journey with me, and they're really into it and really psyched about it, or they're in the way. Henrik Shimony: Sure. Dmitry Kroshka: For me, it's move those people away from you quickly. David Millili: How about you guys? What's the best piece of advice? Henrik Shimony: When we started the company, we met with many investors, and I pitched them the idea of Reeco. One of my friends told me, "When you're going to meet with investors, try to ask for advice and not for money, because then there is less resistance from their side." I did it, and it changed everything. Then we raised a lot of money after that. David Millili: That's... It's funny, because the first money that I ever raised for my first company, what we did is exactly that. We wrote out our executive summary, and we sent it to all the VCs we could, and we didn't ask for money. We just said, "Would you give us feedback on this? Because we're thinking about raising money." From that, one of the companies came to us and said, "Well, here's some things we think you should change, but we'd like you to come into our office and talk to us." We raised a million dollars from not asking for a million dollars, just saying— Henrik Shimony: Talk to me. David Millili: For asking for advice. Henrik Shimony: That's beautiful. People are more open to a discussion with less resistance when you come to ask for advice, and that's helped a lot. Dmitry Kroshka: Are you guys now nicer VCs? Henrik Shimony: We met more than 15 that said no before that advice, so maybe it helped. David Millili: How about you, Anthony? Anthony Melchiorri: In the Air Force, General Kenny, my boss, told me, "Do a little more and you'll go a lot further." It is so frigging true, especially nowadays. You don't have to do much more than most people, especially the younger generation. I was an honor guard. I went to college in the Air Force, and before I knew it, I was winning a lot of awards, and things just started moving. So do a little more, you'll go a lot further. Again, the Hospitality Creative Summit came out of Anna Bluhm calling me on a Saturday. I called Shannon, I think, on Saturday or Monday. Was it Saturday? Shannon McCallum: It was a Saturday. Anthony Melchiorri: Yeah. Within 24 hours, we basically had a place to go at HITEC and do our Creative Summit. So it was just doing a little more, saying yes, calling a friend, making it happen, calling you guys. Before I knew it, I'm sitting in the middle of the Hospitality Creative Summit, and it's exploding instantly. We worked hard, but it wasn't that hard. Steve Carran: I love doing a little bit more. You could've been like, "Oh, it's Saturday." "I wanna spend time with my daughters and my family." But you picked up the call and made it happen right away. You didn't sit and wait till Monday or the next day. Anthony Melchiorri: Yeah, that's not my nature. I talk about it in my book, Show Up. I talk about moments. I'll never forget when I was coming up, I was like, "I'll do it tomorrow." Then all of a sudden that person's not around anymore. That moment's gone. So the moment happens now, so do it now. Maybe sometimes I get accused of overdoing it or going too quick, or, "Why are you so intense?" It's because I don't know if that's gonna stand still for me. Steve Carran: Mm. Anthony Melchiorri: Because if I said no or hesitated with Anna Bluhm, there are a lot of other people she could've called. Steve Carran: Right. Anthony Melchiorri: She could've called you directly, right? So do a little more, you'll go a lot further. Steve Carran: I love that. Dima, you and I had a chance to chat last night. We had a fun time. Anthony Melchiorri: Was alcohol involved? Steve Carran: I think yes. Anthony Melchiorri: Yes. Dmitry Kroshka: Without it there is... Only for him, though. Steve Carran: Yeah. You didn't have any. The tequila was fantastic at that location. It was pretty good. We had a chance to talk about your background a little bit, so I'm interested to start with you on this one. Who really influenced your leadership style? When you think about being a CEO of Phunware, where does that come from? Dmitry Kroshka: I got really lucky. I was working for a completely unknown startup building an ad platform using Twitter, and Twitter shut down all third-party stuff, and we were kind of hosed. Along the way, I met a guy who was building a similar business at a company called Responsys, and I just helped him with his agreements, figuring out how we build this type of relationship with this type of provider. I walked him through it as a courtesy. Long story short, I'm meeting the CTO ostensibly to help him. It was an interview. The CEO was a guy named Dan Springer, and Springer went on and took DocuSign public. Steve Carran: Wow. Dmitry Kroshka: He was the guy that... I don't know if it's true, but it always feels this way. When you go to California and it's 5:01 PM, sometimes the office feels empty. We were there till like 5:58. I always left late because I'm from New York. I'm still up. It's like 3:30. The only guy in that office was Dan, and he just had such a great approach. I joke with him—I don't think he finds it funny—but I'm like, "Dude, you gotta write a book." He just ignores that. Maybe I got that face. He really showed me that you put the right pieces together, and this is what he was brilliant at. He was brilliant at saying, "This is the guy, and now he's running his piece, and I'm not getting in his way. I'm just helping him." There's this concept—I don't know if it's Jewish or if it's Russian—but there's a concept of a roof. Steve Carran: Mm-hmm. Dmitry Kroshka: Somebody provides a roof over you. I should've said Ukrainian, because now my mother will kill me. We were Russians for a long time until you had to explain. The roof is somebody that covers you, protects you from getting rained on, protects you from stuff hitting you in the head. He was very good at being a roof, and it taught me a lot. Henrik Shimony: As I mentioned, my grandfather was my inspiration in life. He was an entrepreneur. He came from a different country to Israel, built a chain of hotels without any knowledge about the country, no language, nothing. He was very tough with me. He had me clean rooms, work in housekeeping and maintenance— Anthony Melchiorri: An Israeli was tough? Get out. Henrik Shimony: Yeah. Never happened. Very tough. I worked in maintenance, reception, reservations. I worked in every role in the organization, in our chain. That was one of the biggest lessons that I learned in life, that there is nothing better than growing from the bottom. I appreciate that a lot, and he's my inspiration in life. Anthony Melchiorri: The first people I worked for were a family out of New York, an Israeli family. What they taught me was... People sometimes say people aren't fair, they don't treat you well, and they had a tough reputation. What I learned was if you work and show loyalty, at least in all my experiences with Israelis, they will take care of you. Henrik Shimony: That's right. Anthony Melchiorri: They will absolutely take care of you. When my kids were born, the owner came to my office and said, "White or blue?" I thought maybe it was a suit, so I didn't want a white suit. I said, "Blue." He goes, "Oh, good." Then he gives me keys to a Volvo. He leased a Volvo for me. Did you know that? David Millili: No, I didn't know. Anthony Melchiorri: Sorry. He didn't lease one for you. But he leased a Volvo for me, and I was like, "Wow." He always took care of me. David Millili: Piggybacking on what you said about leadership style, we both worked for the same hotel group, and I was running a different hotel. It got busy, and I left my office and went to the front desk to help with check-ins, and I forgot my jacket. One of the owners was there. We had security cameras. He saw it, went to my office, got my jacket, came through the front desk, and handed it to me—basically put my jacket on me like a man would put a jacket on a... Henrik Shimony: Like a real hotelier. David Millili: Really. Yeah. It was that leadership, in my mind, that stuck. He was right. He's 100% right. I should have had my jacket. So my mindset became, I always have to think, what is somebody else on my team missing that I've got to point out to them to make them better? Because that did make me better. I never forgot my jacket at the front desk again. Shannon McCallum: I was just gonna add, you can really learn so much by watching someone else. Anthony, you know my boss that I used to have when I was working in Las Vegas at my prior property, Paul Berry. Shannon McCallum: He was a casino guy, grew up in the business, and what I loved about him was when he was with the team, he was so self-deprecating that he made the team laugh. It made him approachable, and it made you realize that you could truly be yourself. People appreciated that more than if you were trying to be someone else. So I feel like just watching him interact with the team and how he connected with them made me a better person by learning that from him. David Millili: We talked about leadership styles, but what was something early in your career that you learned and have kept with you your entire career? Anthony Melchiorri: You're gonna be an example at the end of this. The first one was Eric Long at the Waldorf Astoria. I interviewed for the number two job at the Waldorf Astoria. Do you know this? At 29 years old, I went through 17 interviews over the period of a year to be the number two at the Waldorf Astoria under Eric Long. Eric Long has a reputation. Either you love him, or if he's in the middle of the street, you're gonna hit him with your car. During this process, I fell in love with the guy. I was like, "This guy is my type of guy." One day we were going to an interview, and there were 50 people in line. He looks at the front desk and says, "Susan is on lunch. She's not supposed to be on lunch." I was like, "You're the president of the Waldorf Astoria with 1,200 rooms." He had 200 events going on that day, and he knew that Susan at the front desk wasn't supposed to be on lunch. That blew me away, and I was like, "How do you know that?" He looked at me almost like, "What do you mean, how do I know this? I'm the president of the Waldorf Astoria. It's my job." That was probably the greatest lesson. Another lesson I learned, similar to Eric Long—the Forbes event is going on at your hotel, Resorts World in Vegas. I'm coming in, and I'm praying to God she's asleep. I'm like, "I hope Shannon is asleep," because I know how busy everything is. What was it, 3:00 in the morning? Shannon McCallum: Probably. Anthony Melchiorri: Three o'clock in the morning, she's standing there with a big smile on her face in the middle of the lobby, and she checked me in. She has to be up at 5:00 in the morning because the event's happening, and it's the Forbes event—the biggest event. Those are the people we need to impress. That, to me, stands out. To your point, you have to do the hard work. You have to push. Those two examples really stand out. David Millili: You touched on your family a lot. What are moments early in your career with your family that still pop back into your mind? Henrik Shimony: In the hospitality industry, there is seasonality, and there are times when there are problems with tourism. It's harder, and you need to find a solution and be a quick reactor. It's not easy because the rent is high, and we need to pay salaries. During COVID, I had a great lesson that I learned from my family that I can't forget. I saw how much they appreciated the employees, and no matter what, they couldn't let them leave. They kept paying their salaries. They appreciated them a lot because there is something that doesn't exist in this generation. The employees that worked for my family stayed with us for their entire careers, and that doesn't exist anymore. That's a lesson that I learned—how to try to give your employees the best experience, keep them through the hard days and the good days, and make them happy. I try to take that as a great example. It came during a bad time for our industry, and it's a lesson that I can't forget. Anthony Melchiorri: That's more valuable than money to the employees—that loyalty. Henrik Shimony: One thousand percent. They never forget it. I promise my employees that in the bad days and the good days, I'm gonna be with you. That's important. Dmitry Kroshka: Not to rip off The 40-Year-Old Virgin. I don't know if you remember the scene where the guy's like, "You see this? None of it is an accident." Well, you see this? None of this is an accident. I like to eat. A lot of my friends are chefs, and one of my friends came to the country in the mid-'90s. He ended up working for a really famous restaurant called Da Silvano. Da Silvano in the West Village used to be like the Cipriani of its day. It was where all the movie stars went all the time, day and night. What he told me was, "Know every position in the kitchen." A good restaurateur knows every position in the kitchen. He knows how to wash dishes, line cook, prep—everything. That always stuck with me. You have to know every position in the kitchen. So wherever I've worked, I'm always really nosy. It's really a flaw, not a feature. But I dig in. That's really helped because, similar to the Waldorf Astoria manager, when I look at something, I already know because I've done it a thousand times myself—unless it's programming. Anthony Melchiorri: Okay, we're fucked. You know, to get back to it, I almost finished that story. When he finally offered me the job at the Waldorf, I said no. I made the excuse that I couldn't take it for personal reasons. I knew at that age I couldn't handle the stress because the people interviewing me—imagine 17 executives interviewing a 29-year-old. They were asking me things like, "What's EBITDA?" I had no idea. I'm 29 years old. I just got here. I asked Eric Long, "Why would you offer me that job?" He said, "You're the most resourceful person I've ever met." That stayed with me. Shannon McCallum: I would say always be approachable. Always have your door open. Stop and talk to your team because your team sees things that you don't always see. They're on the floor, they're talking to the guests, and they can share the things that need to be fixed unless you're able to see it yourself because you're busy and in meetings. Our property's huge. We've got 3,506 units with three hotels and 5,000 team members, so I can't be everywhere all the time. You need to be able to count on your team and be approachable because if you're not approachable, they won't tell you, and things will go sideways quickly. Anthony Melchiorri: And you're the most approachable executive I've ever met. Aw. I've been to her property hundreds of times. You are the most approachable person. I came here before this. No, you really are. You're the most approachable. Anybody want water? You're the most approachable executive I've ever met. It's true. Shannon McCallum: Thank you. Steve Carran: That's awesome. Well, it's great to get to know you all a little bit more. Now we're gonna get into the industry questions. We've come up with questions. What we're gonna do here is have each of you pick an envelope, open it up, read the question, and then pick who you want to ask. Dima, we're gonna start with you. If you want to pick an envelope, then you get to ask whoever you want. Dmitry Kroshka: Does he get a handicap because his whole family's been in the industry forever? All right. Ooh, this is tough because I kind of want to answer this one. Steve Carran: You can answer it as well if you want. Dmitry Kroshka: You know what? I'm gonna pick on you. Shannon McCallum: Okay. Dmitry Kroshka: What's one thing another industry does exceptionally well that hospitality should be learning from? I actually just want your answer, to be honest. Anthony Melchiorri: That's a good question. Shannon McCallum: What industry does something well? That's a tough one. You know what? I would say the technology industry because the technology industry provides you with data to analyze your business in a more detailed way and make good decisions with a sound basis. I think for a long time we managed our hotels with our gut or our thoughts. Having data from technology has really helped us to hone our craft. Dmitry Kroshka: I love that answer. Anthony Melchiorri: I'm so glad you didn't ask me that because that is the greatest answer ever. Steve Carran: What about you? You wanted to answer it. You were chomping at the bit. Dmitry Kroshka: Shannon really said it well, because that's why I got into hospitality. I think it's really about expectations. If you're coming out of a technology startup, you have expectations for what you can do with the data. You have expectations around the reliability of that data. You have expectations around what you can take action from. What I found in hospitality is a lot of incredible people who have been told not to expect very much out of what's going on. You run a property today, you have 28 different technologies in your stack. They're all telling you they're the best ones. None of them talk to each other. That's expectations. I came out of ad tech, where if you didn't all speak to each other, you couldn't do business. Henrik Shimony: Mm-hmm. Dmitry Kroshka: So I think, in general, it's tech, and more specifically areas like AI and MarTech. All of these industries are really mature now, and they're used to a certain level of interoperability, a certain level of experience that hospitality has been without. I'm really excited that there are other startups coming in and that expectations are moving up. Steve Carran: That's great. Henrik, we're gonna have you pick the next one here. Henrik Shimony: So I will go with you, the tech guy. Oh. So if you could solve one challenge facing the hospitality industry overnight, what would it be, and why? Dmitry Kroshka: I think we kind of answered the question a little bit. Until the industry begins to expect from its partners that they can work together and move the customer forward—not just themselves as a business—it can't be done alone. It has to be done together. That's what I would change. I walk around and talk to a lot of companies that do integrations. I'm not gonna say who, but I talked to one customer that does a lot of business with one particular 800-pound gorilla. They said, "Oh yeah, it's fine. We get charged $10,000 per integration." I just looked at it and thought, building walled gardens—people in tech learned long ago—is fatal in nature. I'm really hoping to tear down some of these walls because everyone in the chain benefits. You're collecting data. You're a PMS. You benefit when... I'm gonna veer off for one second. In technology, we used to call it customer service. Then 15 years ago we said, "No, we're gonna call it customer success." Why is it customer success? What we learned was that the more a customer activates on your product, technology, or whatever it is, the stickier you become, the better it is for your top line, and the better it is for that customer's performance. Now the idea is, how do we take that to hospitality? Where it's really about success. The more guests engage with your property, the more they do on your property. Henrik Shimony: More opportunity... Dmitry Kroshka: Upsells and cross-sells. You're capturing that revenue, but you're also making their life much better, and PS scores go up. All of this happens. If anything could change overnight for me, it would be everyone opening up their APIs. Look, we're all gonna operate under data privacy. PII is PII. It doesn't matter what industry you're in. Other industries are just used to it. In hospitality, we've been told that it's bad. It's not bad. It helps the guest, and it helps us. That's what I'm hoping for. Anthony Melchiorri: This industry is so penny-wise and pound-foolish. Out of every industry, they will nickel-and-dime a vendor to death for a penny, knowing they're gonna hurt the vendor and that vendor's gonna go out of business because a hotel or a major resort can really change the fortunes of a technology company. Dmitry Kroshka: Well aware. Anthony Melchiorri: Or destroy a technology company with one deal. David Millili: But those same tech companies—to your point—I won't name the companies, but I was running a revenue management company. I signed a deal for a seven-property hotel that was on a legacy PMS, and I was trying to explain to them that they needed the integration. If they couldn't get the integration, it was gonna frustrate their client even more and push them to move to the cloud or another platform. I was told, "We'll maybe let you in. This was in January. We'll probably get to you in the third quarter when we can tell you if we can do the integration. It's gonna be $30,000, and the hotel's also gonna pay." I'm sitting there saying, "You don't get it. It's your customer. You're gonna become so sticky." Once that integration is done, they're not gonna look to move off your platform if they've just integrated their first revenue management platform into that system. You just bought yourself another two years. I think you said it well. Henrik Shimony: When we signed a partnership agreement with M3, the accounting platform, last year, I sat with my partner and we tried to think about the motivation behind it from their side. We figured out it's not the money, because there is a revenue-share component. It's the stickiness between the products. The stickier we are together, the more customers are gonna stay, keep using us, and continue using both products. That's important. Thanks for the answer. Steve Carran: I think sometimes we forget it's all about the guests. We want to create the best guest experience possible. Making money is great, and everybody needs to make money, but maybe that's not the right way to go about it when we're impacting the guest experience. Anthony Melchiorri: But you know who's more important than the guest? The employee. Steve Carran: Absolutely. Anthony Melchiorri: I just took a picture of somebody's shirt, and it said, "When your turnover rate is higher than your occupancy, you have a problem." Shannon McCallum: Mm-hmm. Absolutely. Anthony Melchiorri: I took a picture of that shirt today. I saw the guy walking around and thought, "I gotta take a picture of your shirt." I don't focus on the guest. I've never focused on the guest. I focus on the employee. I was just at a hotel that I used to work at, and somebody I was with said to the server, "Oh my God, what was it like working with Anthony? He really focused on customer service." The server said, "He focused on us." This was a union delegate who said, "He focused on us." I think the employee gets lost because everybody's focused on the guest. You focus on the employee, you make the integrations easy, you make the systems easy, and the guest is taken care of. You frustrate the employee with the technology, and then they have to deal with the guest. We all know people can be frustrating. So now I'm dealing with a frustrated guest and frustrating technology. Too many people focus on the guest and not enough on the employee. Shannon McCallum: Mm-hmm. It's the service-profit chain. You take care of the employees, they'll take care of the guests, you'll make money, and the guests will be happy. Anthony Melchiorri: Right. There were times when I went months without talking to our guests, and I didn't care. I'm not supposed to talk to guests. I'm supposed to talk to my employees. Steve Carran: Shannon, anything to add from the hotel side to this question? Shannon McCallum: I would just say the ability to get better at bringing the data together so we can personalize the guest experience. Again, I work in a high-volume environment, and it's really challenging to capture that data. I think now we're finally getting to a place where the technology is catching up and we'll be able to do that. I remember even 10 years ago having my team members write down information from the guest rooms, and then I had someone else collecting all the slips and entering them into the guest profiles. It's not easy, and you have to be consistent to create that guest experience. Henrik Shimony: If I could solve something overnight, it's that I feel like I'm the only startup in the world getting subscription payments on checks. We're the only industry in the world that's sending checks to a tech company. My entire office is filled with envelopes containing checks. I'm showing that to investors every quarter. I bring pictures of the envelopes full of checks, and I say, "This is our ARR number. We have it right here." I hope that changes very soon. Anthony Melchiorri: So hospitality is the only industry that still sends you checks? Henrik Shimony: I think so. I'm sure this is the only industry sending checks in such high numbers. David Millili: I never even thought about that. It's insane. I know a company... Do you want to talk about funny? I was advising a company a couple of years ago, and the guy said, "We're so excited." This was about two years ago. He said, "We just got direct deposit." I said, "What?" He goes, "Direct deposit." I said, "Is it a different type of direct deposit than getting your paycheck into your bank account?" He said, "No. We used to have to go pick up our checks in the office." Shannon McCallum: Oh my gosh. David Millili: I was like, "What year is this?" Shannon, where will you go next? Pick a card. Shannon McCallum: Okay. I feel like I'm gonna win a million dollars by opening up this envelope. What conversation should the industry be having that isn't happening often enough? Anthony. Anthony Melchiorri: We promote people who are on time, friendly, and easy to work with too quickly because they're on time, friendly, and easy to work with. Then, as you and I know, they go into a business meeting—because a hotel is a business—and they're overwhelmed very quickly. They don't know how to read a P&L. They don't know how to speak to an owner. They don't know how to speak to their boss. But because they were on time, friendly, good to their staff, and good with the guests, they get promoted too quickly. Do you see that? Shannon McCallum: I see the hardest step is going from an hourly position to a supervisor job, when they start to oversee other people. We do that just like you said because they're good at their job and they take care of the guest, but they don't necessarily have the skills to supervise other people. They're not always successful in that role, even though they were successful in their hourly role. Anthony Melchiorri: That's the hardest skill in the world. I think a lot of independent hotels promote people too quickly because they aren't prepared. Managing your staff is the most difficult thing you'll do. Being a supervisor and being a front office manager is different from running an entire property. Telling a director of sales... This is another thing. They go in, and they have the director of sales or the director of food and beverage beat them up. The reason I didn't take the job at the Waldorf was because I had a food and beverage director—a French guy—turn his chair around, sit like this, and start yelling at me. I said, "I'm sorry. Excuse me." I was very intimidated. I asked, "Did Mr. Long ask you to interview me?" He said, "Yeah." I said, "Did I ask you to interview me?" He said, "No." I said, "Well, I'd appreciate it if you went to Mr. Long and said you don't want to interview me, but please stop yelling at me." He turned his chair back around. I didn't take the job because of that. I was like, "I'm not ready for that." I wasn't prepared. He was right. I wasn't ready to do that. I would've been promoted too quickly because I'm resourceful, but I wasn't ready for that position. Steve Carran: Dima, Henrik, what about you? What conversations should we be having in the hospitality industry that we're not having enough? Henrik Shimony: AI. AI. I'm joking. Oh my God. Every conversation is AI now. Shannon McCallum: Every conversation. Henrik Shimony: That was funny. People are getting tired of it, and that's sad because there are some good things with AI, but there are a lot of people just name-dropping AI all over. First, we need the digital data to be in place. Second, we can do AI. There are many areas in hotels that are still using very traditional methods, and we can't really do AI there. I hope to see the industry move further in terms of technology, and then we'll be able to... Anthony Melchiorri: When do we get to the point where you can guarantee to the hospitality industry that we can protect guest data safely through AI? David Millili: So... Henrik Shimony: Can you... Anthony Melchiorri: Right now, the biggest thing I hear from hoteliers is, "I'm not using a lot of AI because I don't feel safe giving my customer information to AI." Do you hear that or not? Henrik Shimony: We're not hearing that on our side because we're in the back of the house. There is compliance that we go through with companies that take care of the data we're collecting. We're not dealing with guest names or customer information. We're dealing with tomatoes and cucumbers for purchasing. Anthony Melchiorri: That's $9... Is that a challenge you find in your hotel, in your resort? Shannon McCallum: We do digital check-in. We also do facial recognition for ID verification. It's amazing to see that the younger demographic is so much more willing to do that. I think it may be a generational thing. With younger people coming up, they like the convenience that allows them to get their key on their phone and go straight to their room. It's worth the trade-off. There are still some people who aren't comfortable doing facial recognition because we do get some abandonment at the point where they have to take a picture of themselves. But it's becoming more common. You go on a cruise ship, and you do facial recognition now. That's how they identify you throughout your journey. I think, over time, it will become more natural for people who aren't used to it. Anthony Melchiorri: What percentage of people are actually using automatic check-in? Shannon McCallum: Oh my gosh, it's so crazy. With our groups, we're getting over 52% conversion with our digital key, and it's going into Apple Wallet and Google Wallet. It's easy. It's something that's more familiar to them as well. I think the convenience is so great, especially for business travelers who are very comfortable traveling. They're used to providing their ID during check-in. For us, it's been fantastic to move to that. And that's just been the last couple years, 'cause, like, a couple years ago. Yes, we converted last year to that. And people don't wanna download an app anymore. Mm-hmm. And in Las Vegas, I like to say our guests are promiscuous. They'll stay with us one time, then they'll go across the street and stay at the Wynn, or they'll stay at Bellagio or Aria, and it's because they're looking for their best rates, but they don't wanna download an app for every single property that they stay at. So not having to download an app is really a benefit for us as well. Anthony Melchiorri: Somebody asked me today, "How many branded hotel apps do you have on your phone?" I said, "Zero." I don't download apps, to your point. Dmitry Kroshka: What you're’re talking about—the data privacy piece—was figured out in ad tech over a decade ago. I think it's just getting used to it. A friend of mine put it this way, which I found interesting. He said, "Who cares if a marketer has your data? I care if the government has my data." I care if they know what I'm doing all the time. That freaks me out. Marketers are gonna get that data. Your data is no more insecure if you're using AI to do something with it than it is sitting wherever you have it stored. Everybody has a data breach. It happens, and you mitigate it. You get the email saying your information was part of a security breach. I've changed my password 500 times because of that. It's going to happen. You have to do the best you can to protect it, but it doesn't matter whether you put a label on it like AI, email, or whatever you're doing with it. It's all the same. AI is interesting. I saw Scott Galloway—I don't know if you know who that is. Steve Carran: Mm-hmm. Dmitry Kroshka: He does a Pivot podcast, and the last episode was taped in New York. A buddy of mine invited me, and it was fascinating. I forgot her name—I think it was Joan or Joanne—who runs The Daily Beast. She was in the audience. She asked him, "What about AI taking jobs?" I'm not gonna put it as well as he did, but what he said was he thinks this whole conversation about AI taking jobs is essentially an investor pitch. You can't go out and say, "We're going to create $5 trillion in new value," because everyone will say that's BS. So instead you say it's about efficiency. "We're gonna save you money. You're gonna cut jobs." He said, "I think it's BS." It's just the way they explain the value AI brings to the table today. Anthony Melchiorri: That's the best thing I heard all day. Dmitry Kroshka: You know? Anthony Melchiorri: That just blew my mind because that's probably accurate. Dmitry Kroshka: It messed me up too when I heard it. It put a lot of things into perspective. We're actually the opposite of some of what you're saying because we make hospitality apps for individual properties. For multi-property groups, it's one app. One of the things when I came in was, "Let's talk about efficiency." Everybody said, "No. In hospitality, people want to protect their employees. Hoteliers want to protect their employees." I said, "It's not about getting people off staff. It's about giving them breathing room to do their job better." Anthony Melchiorri: Mm-hmm. I told the college kids today, "AI isn't gonna take your job. The person who knows AI is gonna take your job." I can't imagine interviewing a general manager five years from now and asking, "How are you going to use AI to do payroll? How are you going to incorporate AI into my hotel?" If they don't know, I'm not hiring them. Dmitry Kroshka: But do you know who the best AI developers are? Everybody who can speak and write. That's all it takes to program now. Anthony Melchiorri: Hmm. Dmitry Kroshka: The more you know your business, the more you know what to ask for and how to ask for it, the better the results will be. Yes, jobs will be lost. Jobs are always lost. But it's not going to be what people think. Anthony Melchiorri: When I first came into the industry, if you didn't know food and beverage, you didn't get the job. Then it became, if you didn't know revenue management, you couldn't become a general manager. In five years, it's gonna be, if you don't know AI, you're not gonna be able to be a general manager. It's just another skill. Remember revenue management? I didn't know what revenue management was when I first came in. It was yield management. Remember yield management? Steve Carran: Yes. Anthony Melchiorri: Then it became revenue management, and we didn't really get with the program. The airlines had it way before we did. I think over the last 10 years we've become really good at it. Steve Carran: One conversation that I'm not hearing enough about is hotels as a career. In Europe, we see people join the hotel industry and make it their career. I don't think we talk enough about how many diverse roles there are in hotels. You can work in sales, marketing, finance—it's not just the front desk. I don't know. Maybe I'm wrong. But when you're growing up, how many kids say, "I want to work in hotels for a career?" Anthony Melchiorri: I think there was a really good show called Hotel Impossible that talked a lot about that. Steve Carran: Oh yeah? Shannon McCallum: I think I've seen that. Anthony Melchiorri: That was my motivation. Steve Carran: Never heard of that show. Anthony Melchiorri: Me neither. That was my motivation—exactly what you just said—to do the show. Even when I pitched it to the Travel Channel, I said, "People know the front desk and the housekeeper. They don't know there's a PR person. They don't know there's a revenue manager." Especially in a resort, most people don't know these resorts practically have their own airline. Shannon McCallum: Yes. Anthony Melchiorri: A host gets on a plane in the middle of the night, goes to China to get a guest, and brings them back. Shannon McCallum: We say we're like a city because we've got a butcher, a baker, a chauffeur. We've got security, police, lawyers, planes, and an airline division. There's almost every role you would have in a city inside a large hotel in Las Vegas. Anthony Melchiorri: If somebody came to you today and said, "We've been watching you, and we want you to run Pepsi-Cola," could you do it? Shannon McCallum: I would say it would take the same skill set to run Pepsi-Cola as it does to run a property of that size—or any property, actually. Anthony Melchiorri: Thank you. I say it all the time. "I can run anything." Because there's nothing in a hotel that doesn't exist somewhere else. Yesterday I was in a hotel lobby, and I said, "I love hotels." They asked, "Why?" I said, "Because the whole family comes home." Everybody's coming home. We don't know each other, but we're all family, and we're all going to sleep under the same roof. We're probably going to go to the same restaurant, and we're family for one night. There's something about protecting that family. You have to clean their sheets. You have to clean their toilet. You have to make sure the water's hot in the morning. You have to make sure the eggs are there. You have to make sure the housekeeper's there. There's nothing we do that another company doesn't do. Shannon McCallum: I love that analogy. We're family. Henrik Shimony: That's very interesting because the new generation gets bored very fast. They're quick in what they're doing. Hospitality has such diversity. They can move between different roles, and it'll be interesting to see how the new generation blends with the hospitality industry. Anthony Melchiorri: If you're gonna be in a foxhole, hire a general manager of a hotel. That's the person you want in the foxhole with you. Steve Carran: Okay. We have one more card left, Anthony, just for you. Anthony Melchiorri: Thank you very much. I didn't think you'd ever ask. What's the most overlooked opportunity for hotels to improve profitability today? Shannon? Shannon McCallum: I would say I have a director of EVS who's very smart about taking care of the public spaces. He looks at the amount of square footage that's cleaned and the frequency it gets cleaned. It's mostly overlooked because you don't necessarily think about it when you're walking through a property. He's able to create tremendous efficiencies while still maintaining the quality of our property by looking at the chemicals being used or the frequency of floor polishing. I think there are a lot of different areas you can examine, and that's one that people don't focus on. Henrik Shimony: This is exactly what we are doing. When I pitch Reeco to investors, they tell me, "You're fixing problems in the back of the house—in that dark room where the purchasing officer sits buying goods." But that's the reality. If you want to save money and improve your bottom line, that's where you need to look. Look at your spend. This is where hotels spend the most and lose so much money because chefs aren't getting the right recommendations on which suppliers to order from, they're not negotiating enough, and they're not using technology. They really don't know what's happening with their inventory. That's what we solve. Now that occupancy rates aren't going up, people need to start looking at the bottom line. Anthony Melchiorri: Yeah. Do you think, at least in my experience, that three-star Michelin chefs are the best at that? They'll say, "I'll pay more money for that tomato because the expectation is so high. But I'm going to inspect every tomato. I'm going to make sure it's perfect. I'm going to make sure it's priced exactly as promised." Do you find that? Henrik Shimony: When we built Reeco, we created an algorithm that compared pricing between suppliers. We figured out that price, as you mentioned, isn't the biggest factor. Sometimes chefs want the highest quality. We added another layer to the algorithm so it considers product quality as a variable. Yes, chefs sometimes care more about quality than cost because they want to provide customers with the best dish. They don't care about food cost in that case. That's a decision the hotel makes, and we're just in the middle helping them make the right one. Anthony Melchiorri: What do you think about that? Dmitry Kroshka: Funny enough, the first professional job I had was doing PR for a restaurant that was the number one restaurant in New York City according to Zagat in the mid-'80s. Anthony Melchiorri: I miss Zagat. Dmitry Kroshka: Yeah. The chef had just won a James Beard Award. It was a Relais & Châteaux property—the whole nine yards. The food was incredible. What I found was that a good chef knew the cost of every dish down to the penny. There were no wasted ingredients. Anthony Bourdain said, "Don't order the special." The reason is they're optimizing what's in the fridge. They optimize every nickel. Something you keep coming back to is either the analogy of family or talking about employees. At my company, we have people who've worked for us for 10 or 15 years. In technology, people say you get stale. When I came in, I thought, "Uh-oh." But the reality is, if you give employees breathing room and unite them behind a vision and a set of goals, then empower the right people, that's your efficiency. One of the problems you described has already been solved in the Big Four accounting firms, management consulting, Oracle, and by Dan Springer, the CEO I mentioned. If you look at the Big Four accounting firms, it's like the Marines. The most junior person learns to manage. From day one, they're taught that when they move from associate to junior associate, they manage and train the associate below them while learning to report upward. As they move up the chain, they gradually gain the experience to lead. That's your efficiency. I think it's already there. The people I meet in this industry are phenomenal. They're good people who are obsessed with making everyone happy. Now you have to figure out how to give them breathing room and make them happy. That's where you'll find your efficiency. David Millili: Anybody can jump in on this. How are you planning to use AI in your companies? Maybe we'll start with you. Henrik Shimony: Okay. Our entire company infrastructure is built around AI tools. We recently announced internally what we call the Control Room. It's a place where I, as CEO, or any VP can log in and see everything happening across the organization. Everything. We connected our HR tools, CRM, every tool the organization uses, and the back office of our own platform into one control room through internal APIs. That gives us complete visibility into what's happening. That's exactly what I was talking about. Before using AI, you have to collect the data. That's what we did. We collected the data. Now we can deploy AI agents to perform tasks for us. That's how we're using AI in one of the most advanced ways. Steve Carran: That's very smart. Dmitry Kroshka: I run a technology business. Our staff has been incredible. We rolled out an AI concierge back in January, and it's surpassing all of our expectations. It's like a real human, and it works in real time—not like those frustrating chatbot experiences. More specifically, AI is part of our DNA, but we needed to accelerate. I have a very supportive board, so I hired Michael Cerda and his team. Before coming to us, they built products like Facebook News Feed and Disney+. Michael was also Chief Product Officer for Marcus at Goldman Sachs and worked with Univision. It's a long list. Even for us, where we already use AI for things like yield optimization, we protect our data and only use AI for parts of the decision-making. He introduced a completely different development process where AI is involved at every step. It's complicated because legally you can't copyright AI-generated code, so humans always have to be involved. That's part of why humans aren't going to be replaced by AI. Bringing AI into our workflow has multiplied what we're able to accomplish. We were planning to build one product in six to nine months. We already had the data foundation. We built the first alpha version in three weeks. Think about that. Six to nine months reduced to three weeks. Think about the cash burn involved. That's the efficiency. It's not layoffs. It's acceleration. That's what excites me. I want to do that, and then bring it into hospitality so everyone can benefit. That's how you give your staff breathing room. If they're not constantly checking displays because systems are balancing things automatically, their jobs become easier. Steve Carran: Sure. Sure. Shannon, from the hotel side? Shannon McCallum: Well, in a volume business, we need to find efficiencies, and we've been working with an AI company for several years. We use voice AI to answer calls from guest rooms and automatically transfer calls that come into the property. Last year, we diverted 459,000 interactions through technology. Those included guest requests from rooms, whether it was toothpaste or towels, that went directly into our housekeeping system and to the devices on the floor without anyone manually touching them. That frees the rest of our team to take care of guests or handle more complicated situations. Our next step is agentic AI. We're going to use it for direct reservations and casino reservations. That will create another efficiency. For us, it's about using our team's time for more complex tasks while also identifying what the system isn't currently picking up so we can continue improving and deliver better guest service. Anthony Melchiorri: I'm not saying this because she's in the room, but she sits on the board of HFTP, and she's probably the most forward-thinking executive in the hotel business when it comes to technology. Hands down. Nobody's even close to her, in my opinion. Shannon McCallum: Well... Steve Carran: It's true. What kind of feedback have you gotten from guests? Do they know it's AI, or has it been pretty seamless? Shannon McCallum: It's been pretty seamless. If a guest has something more complicated that Red, our digital concierge, can't handle, they can simply say, "Can I talk to an operator?" They're not trapped in an endless loop that would frustrate them. They can immediately speak with a person. We're never going to get rid of people in our business. There will always be a place for our team members to take care of our guests. It's about choosing the right path. Many of our guests in Las Vegas, after being out all night, don't want to talk to someone early in the morning. They just want things handled efficiently. Anthony Melchiorri: I was just listening to someone who said the one place AI will never take over is Vegas. Could you imagine AI taking care of a whale at 3:00 in the morning? "How can I help you?" That would never work. It's such a people business and such an energy business that I don't think AI will ever replace it or take over Vegas. Steve Carran: I agree. We're going to end with one final question. What's next? What are you excited about? If you'd like, share a little background about your companies and what you're looking forward to. Anthony, I'm going to start with you because we just wrapped up the first Hospitality Creators Summit. We attended, and I thought it was fantastic. I'd love to hear what's next. Anthony Melchiorri: We're going to do a postmortem with our Creative Council, which my friend here is part of, and figure out what's next. Our goal is to build a portal for content creators. We want one place where vendors looking for creators, brands, hotels, and creators can all find each other. If someone asks me, "Who can come to a convention and handle all of our content needs, podcasting, and summit coverage?" I'd call you guys. If I need someone to moderate a panel, I'd call another person. We're trying to create one place where vendors, brands, hotels, and content creators can connect. Right now, content creators often oversell or undersell themselves. Most don't position themselves correctly. I think you guys were among the first to really sell yourselves the right way. We all negotiate contracts, but you do it in a forward-looking way instead of a retreating way. Many content creators are afraid of losing business. In my speaking business, this is my rate, and that's what I get paid—unless it's someone connected to another part of my business. If Shannon called me and said, "Anthony, can you come speak tomorrow?" and I asked, "What's the budget?" and she said, "Nothing," I'd probably say, "Okay. Can I pay you to come?" We're trying to teach content creators that they have to stand up for themselves while also recognizing the opportunities they shouldn't pass up. The key is knowing which opportunities those are. Steve Carran: One hundred percent. We'll go down the line. Henrik, tell us what's next for Reeco, and if you'd like, give our audience a little background on the company as well. Henrik Shimony: Yeah. So we have a big day today, and the entire industry has a big day because we announced the first real procure-to-pay solution with Corpay and M3. We brought together three different companies. We're a procurement company that built procurement in a different way. We changed how hoteliers purchase goods. Until now, they first chose suppliers through a punch-out solution or by calling sales reps. With Reeco, they first choose the product on our platform, and after selecting the product, we provide the ability to choose which supplier to order from. Today, we announced our partnership with M3 and Corpay. We developed an integration that allows hotels, after purchasing goods, to press Pay. The transaction is sent to M3, which records that the transaction needs to be paid. Corpay receives the payment request, pays the supplier, and the entire transaction is managed in one solution within Reeco. The customer can see the entire process end-to-end—what they bought, whether it has been paid, and which supplier was paid. No more dealing with checks. No more managing supplier payments separately. Everything is managed in one platform with the help of accounting platforms and payment processors. It's a big day for the industry. Anthony Melchiorri: And when they're paying, the budget is already there so they know whether they have the money to pay it. Henrik Shimony: We're also integrated with ProfitSword. We're a partner of ProfitSword and Otable, along with other platforms. Yes, we show them exactly what their budget is. Anthony Melchiorri: And can it tell me when I'm getting close to going over budget? Henrik Shimony: Yes. With Reeco, they can see their budget before buying the goods, not after. It's funny that, until today, chefs often buy the goods first and then find out they're over budget. With Reeco, they see it before. Anthony Melchiorri: You guys are saying our industry is antiquated. I disagree. I love it. We're revolutionaries. I'm with you. No—we're the most antiquated business in the world. Henrik Shimony: One thousand percent. High touch. But that's also the beauty of it. We're still an in-person industry. Relationships are the most important thing, and I hope that never changes. Dmitry Kroshka: You're high touch. That comes with the territory. Henrik Shimony: Exactly. Anthony Melchiorri: Can I ask you something I've been wanting to ask? If I'm a great salesperson who knows nothing about technology, would you hire me? Or if I'm a great technologist who knows all the technology but only has average people skills, which is better? Henrik Shimony: That's exactly the challenge I'm facing now. I'm looking for another VP of Sales, and I'm trying to decide whether to hire someone from outside hospitality—a vertical SaaS salesperson from another industry. I'm not sure. Dmitry Kroshka: We found the answer was no. Henrik Shimony: Yeah. The answer is no. Dmitry Kroshka: We found the answer was no. Henrik Shimony: Otherwise it's too hard to learn all the details of the industry. No way. Dmitry Kroshka: I'd rather have someone who knows the industry than someone who only knows the technology. Henrik Shimony: I agree. Dmitry Kroshka: All day long. I'm building a product team. Some members don't know anything about building products, but they know the industry. Anthony Melchiorri: I agree. Too many people talk to people like us without really knowing what they're talking about. Dmitry Kroshka: Exactly. You guys are great at detecting BS. Anthony Melchiorri: Oh. Yes. Very much so. Can you imagine trying to sell technology to Shannon? I'd be intimidated because she understands both the technology and the operations. Dmitry Kroshka: I'm pretty intimidated right now just sitting here. We go back a while. We were an app developer for a long time. When ESPN was my client in 2007, Phunware built the Fan app for mobile, which was a lot of fun. Over the last few years, we've focused on what we call wayfinding. If you're in a large resort and need directions from your room to one of 25 restaurants, 10 pools, or anywhere else, we've built all of that. Then we layered messaging on top. We can say, "You're close to a restaurant. Maybe you're hungry. Let's offer you a table." We can take over digital signage. We analyze traffic patterns. If we see you're stuck in traffic, we can say, "How about a dining credit if you exit now and come to us?" We're continuing to evolve those capabilities. We released the Stay AI Concierge, and it's performing far beyond our expectations. We tested it with one major resort. We expected about 25,000 questions and around 40% adoption in the first three months. Instead, we received roughly 35,000 to 40,000 questions and about 70% adoption. It's going extremely well. Now I want to connect all the pieces. We're combining movement data—where guests linger near a spa or restaurant, where they get lost, and where bottlenecks occur—with digital data from booking systems, PMS, CRS, POS, CRM, and every available source. A surprising number of properties still don't have a CRM or even know what a data lake is. Whatever data exists, it's much easier to access now. We're using it to create a completely new map of how guests move throughout a property. Anthony Melchiorri: So how do you protect yourself from someone who's addicted to Gemini and just goes into Gemini to ask that question? Dmitry Kroshka: What we're doing is, when you're on the property, let's say you don't have lunch booked and you're there with your family during peak season, we can tell you, "You don't have lunch booked. All the restaurants are filling up fast. Do you want me to book a reservation for you?" Anthony Melchiorri: So it's proactive. Dmitry Kroshka: It's proactive. Not only is it proactive while you're on the property, it's proactive before you even get there. It's built on technology that allows us to use the web as well. We can say, "You're coming to this property. It's really complicated." Instead of making you act as your own travel agent, we want to help you. Anthony Melchiorri: Could it get me from Crockfords West to Crockfords at Resorts World? I still get lost. Dmitry Kroshka: It can. I'll show you right after because that's our bread and butter. What we want to do is bring it to everyone—improve the guest experience and reduce some of the burden on employees. The next step is building agents for agents. Two years from now, it won't be a person knocking on your front door. It'll be their AI agent. It'll be Claude, ChatGPT, Gemini, or Perplexity. One of those AI agents will be doing the work, and you'll need your own AI agent to meet it and work on your behalf. Anthony Melchiorri: But how do we protect ourselves? That's where people get scared. Now we have AI supervising AI. Why shouldn't I be concerned? Dmitry Kroshka: As far as I'm aware, we're not controlling nuclear codes. We're helping people get to a great place to eat, discover experiences, and spend money in ways that surprise and delight them. That's why I said government knowing all of my intent isn't the same as a property using information to improve my experience. Shannon McCallum: We're always looking at the pain points in our business. We identify guest sentiment and analyze the information we're receiving to create strategies that improve the guest experience. Using technology, we can also use cameras throughout our property to alert us when lines are forming or wait times are getting too long. Anthony Melchiorri: I'm sorry to interrupt. I'm laughing because I filmed a show at her resort called Five-Star Secrets, and I said, "Bring me security." Shannon McCallum: Yes, that's true. Anthony Melchiorri: Remember? I didn't mean to interrupt, but this is exactly what we're talking about. This was eight years ago. I was in the operations control room—they wouldn't let me into the casino control room. I said, "The cameras aren't going to find me. I'm from Brooklyn. I know how to hide." The guy behind the desk said, "Okay." I said, "Go." So I ran. I went into the warehouse, commandeered a golf cart, drove across the property, and hid behind a plant. I thought, "They'll never find me." As soon as I said that, the guy said, "Yeah." Shannon McCallum: Wow. We do have cameras for security and safety, but the question is how we use them to improve the guest experience. That's what's important. It's about turning technology you already have into something that eliminates pain points and alerts us when we need additional staff to take care of our guests. David Millili: Great. That wraps up The Modern Hotelier Roundtable. Steve and I want to thank all of our guests. We enjoyed the conversation and appreciate you all. Thank you. Steve Carran: Thank you.