Latest / Hospitality Daily Podcast / Moneyball Meets Hospitality: Unlocking the Power of Data - Steven Moore, Actabl

Transcript

Moneyball Meets Hospitality: Unlocking the Power of Data - Steven Moore, Actabl · Hospitality Daily Podcast

• 0:24
  Steven: If you look at industries and their adoption of technology, hotels are typically near the bottom, and I think there's good reasons for that when you think about the fundamentals of the hospitality business and person-to-person interaction and making people feel welcome and there's no substitute for face-to-face.
• 0:43
  Steven: So I understand why those trends were there.
• 0:49
  Steven: But then COVID hits and all of a sudden it's like, well, we have to use technology.
• 0:53
  Steven: It's not an option for us.
• 0:54
  Steven: And so you almost just poke the technology bear and all of a sudden everything was possible And you realize, oh wow, there is a ton of fragmentation.
• 1:03
  Steven: But even through COVID you see which technology is actually mission-critical.
• 1:08
  Steven: So that kind of disrupts the market in a certain way.
• 1:12
  Steven: Where the tide goes out, in a sense, you can see what is a truly enduring, attractive asset.
• 1:19
  Steven: And then we started building our strategy.
• 1:22
  Steven: So in 2020, we added Profitsword or Kept it Independent for the time being.
• 1:28
  Steven: I mean, we worked closely together but kept it independent And then we added ALICE in 2021.
• 1:35
  Steven: And there's just clear product synergy opportunity there with housekeeping engineering.
• 1:42
  Steven: So you have these two very large labor pools at your hotel and a large portion of your expense that don't always collaborate well, and not only are they not collaborating well.
• 1:53
  Steven: There's not a lot of love there all the time, and so it's like a housekeeper goes and cleans the room, then an engineer comes and does preventive maintenance and ruins the room and the housekeeper has to come back And so it's like man.
• 2:08
  Steven: Is there an opportunity to just not only improve the coordination but improve the culture of a hotel by helping those two departments work better together?
• 2:19
  Steven: And I think we can get into this later.
• 2:23
  Steven: But that's especially true today when you have so much turnover in the industry.
• 2:28
  Steven: There is a high turnover industry to begin with, but then the people that were career hoteliers then you lost a lot of them through COVID, and so you're trying to attract a new generation of hotelier And you're also trying to retain that new generation and provide the same level of expertise that you were providing, the same level of service when you had people that had been doing this for, you know, 20 plus years.
• 2:56
  Steven: But now this person is a, you know, rookie GM or rookie pick your function and it's it's harder to do that.
• 3:04
  Steven: So how can we use technology to actually attract and retain a new generation of hoteliers?
• 3:09
  Steven: So, anyways, there were clear product synergies there And then you know, as we emerge really from COVID.
• 3:16
  Steven: We just had this idea that, hey, something has fundamentally changed.
• 3:23
  Steven: And I think, coming out of COVID, everyone's very eager to like say this is what's changed, or this is what's changed, or that's what's changed.
• 3:32
  Steven: It's kind of like yeah maybe I think it's more realistic that, like we don't know what's going to change, like this next decade is going to define what's going to change, and so is there some way to have visibility of what's going on, so like you're confident in what's going on in your operations and hotels and you can measure that.
• 3:51
  Steven: But also, you know what if you could manage that quickly too?
• 3:55
  Steven: And so it wasn't just hey, i see everything and now I have to make all of these connections to go over here to make changes.
• 4:01
  Steven: But what if we could bring that together in one platform?
• 4:04
  Josiah: Yeah, piece is really interesting to me and I believe about a year ago you Glenn Hausmann on the No Vacancy Show about the opportunity that provides of rolling it into one platform.
• 4:14
  Josiah: We have data in one place and I guess it'd be curious and it's interesting because it moves away from you know it makes a great article to have this is the end of this or this is the end of that.
• 4:24
  Josiah: But what I understand about what you're building is you're building data and you kind of come to your own conclusions on what that data is telling you And be curious what are some of the most interesting data sets to you among all this data that you're collecting?
• 4:38
  Steven: Yeah, i mean, i think it's the way.
• 4:40
  Steven: So then we get into, you know, hotel effectiveness.
• 4:43
  Steven: It's like we got the visibility, we have the ops tools and then can you plan the labor.
• 4:46
  Steven: And so I think, bringing all those things together and I think I mean there's all sorts of interesting data sets when it comes to just what we have affectionately coined the original dashboard, like the P&L, is kind of like your original dashboard I mean, that doesn't lie, like that's your financial statement.
• 5:10
  Steven: So I think there's always interesting data sets there.
• 5:17
  Steven: And getting more detailed in what's driving the P&L and looking at it in a different way, so you know, for a while we were really driving after this idea of playing moneyball with hospitality.
• 5:31
  Steven: So, like, what is that on base percentage number?
• 5:33
  Steven: You know, can we identify something in these data sets that we have that says, hey, everyone's focused on like height or weight or power, whatever it may be that equivalent for a hotel, but it's just like, hey, what really matters getting on base, like, is there something we can discover in our financial data set that hotels are not focusing on but that they can focus on?
• 5:58
  Steven: And so we're still looking at that.
• 6:00
  Steven: Right, we're bringing all of this data together.
• 6:01
  Steven: We have a data science team.
• 6:03
  Steven: We're looking at usage data and financial data and labor data.
• 6:08
  Josiah: It's fundamentally the opportunity with data, right?
• 6:10
  Josiah: big data oing in with these assumptions, you're collecting all of this and almost becomes like exhaust off of all the work streams that we have Right, and that's where machine learning and data science can provide new insights that we didn't have before.
• 6:23
  Josiah: We didn't even have questions.
• 6:25
  Steven: Right, right, exactly Well, and I think, especially with you know, ai, which has been amazing just to see how quickly that's come onto the scene and improved even since it's come onto the scene and then you know the competitive advantage is going to be the inputs Right, like, do you have the data that you can analyze to your point and that can guide you to ask the right questions?
• 6:48
  Steven: And so that's one of the things that we're really excited about is we feel like we're sitting in the sweet spot where, you know, you look at technology adoption across the hotel industry and you have some incumbents that have been doing great things for a long time, and then you have some really innovative startups that are doing interesting things.
• 7:09
  Steven: But some of those startups, you know, go into a meeting with a blue chip brand or management group and it's like, well, we don't want to be the guinea pig, but we love what you're doing.
• 7:19
  Steven: You know, get a thousand hotels first and then come back and we'll talk.
• 7:23
  Josiah: You know, and so that's like hand-to-hand combat.
• 7:25
  Steven: That's really hard And we kind of sit in the middle of, you know, we're not a startup, we've got 12,000 hotels, but we also have this credibility of, you know, being an incumbent and are innovating.
• 7:40
  Steven: So we're right in the middle there.
• 7:42
  Steven: So it's like we have credibility and we're innovating by bringing these data sets together, but you're not taking a huge risk, because all of these products are proven and you use them already.
• 7:53
  Steven: And so the beauty of this is that you get a bet on very reliable, industry-leading products and then you get this added benefit of how do we bring the data together?
• 8:02
  Steven: And then I think, going back to like what is going to happen, you know we have no interest in coming out and saying like this is where the industry is going to go.
• 8:11
  Steven: You know like we have ideas, but it's just like we want to equip you to do that.
• 8:15
  Steven: So we talk about can actable, be this GPS for you?
• 8:20
  Steven: right, like put in your destination, and then you know, let us help you figure out how to get there.
• 8:27
  Steven: And you know like we'll reroute you if there's an accident, you know, or if something comes up, we can elevate.
• 8:32
  Steven: Hey, have you checked this?
• 8:33
  Steven: Have you tried that?
• 8:34
  Steven: Have you looked at this?
• 8:36
  Steven: you know item expense, item when it comes to F and B or whatever it may be and reroute you.
• 8:43
  Steven: So I think that's what's really exciting to us.
• 8:46
  Steven: It's just all the data that we have at our disposal, and that's what we're doing right now is bringing it all together.
• 8:52
  Josiah: What's it really interesting opportunity because these brands or portfolio companies have, i would say, sort of escaped or reach escape velocity where they're being used by operators at scale.
• 9:04
  Josiah: And you think about kind of innovative management companies like Remington, if you profits or, for example, is integral to their BI strategy, right, and so you kind of have I feel like people like them out there talking they're talking to their owners is they're trying to make their case to get more management contracts.
• 9:21
  Josiah: But then it's sort of like we're powered by actable products And I think that's a really interesting way to go to market too, right, well, and.
• 9:30
  Steven: I mean, i think, at the end of the day, like we are trying to drive profitability and there's lots of different ways to do that, and so we're not doing that at the expense of the guest experience, we're not doing that at the expense of the associate experience.
• 9:44
  Steven: Those things are complimentary to ultimately driving profitability.
• 9:47
  Steven: But at the end of the day, we do want to be able to go to a management company and say, hey, you will be able to better make your case for taking on more contracts because you're using actable and you're generating more NOI.
• 10:02
  Steven: At the end of the day, and then I think to go even further, at some point owners will be asking management groups are you using actable to better drive NOI?
• 10:13
  Steven: Because that's gonna be when they're modeling an acquisition or a development or something like how great would it be if there's an actable line and Excel?
• 10:21
  Steven: and it's just like oh, plus 5%, plus 10% on your NOI because you have actable.
• 10:30
  Steven: And that's just gonna to our earlier conversation when there's so much dry powder.
• 10:33
  Steven: Now I mean, i think over time that's true, i think now it's kind of like hey, rates are rising, like what's going on in the financial markets, like what's going on in just the demand market in terms of the potential recession.
• 10:47
  Steven: But over time, i think there's a lot of capital.
• 10:49
  Steven: When you're thinking to how to put that capital to use and still generate a great return, you're going to have to operate better so that you can be more competitive in deploying that capital and still generating that return, and so that's the ultimate long-term goal for us.
• 11:07
  Steven: We were at the Hunter Conference and there was this panel and one of the panelists was like look, there's always three types of risk when you're in hotels.
• 11:15
  Steven: There's the market risk, like, are people gonna travel?
• 11:18
  Steven: Are they gonna show up?
• 11:19
  Steven: There's the financial risk, and so what are the debt markets doing?
• 11:23
  Steven: And then there's the operations risk.
• 11:25
  Steven: And I think right now it's kind of like hey, the market risk is high, the financial risk is high, and so it's not like you don't care about operations risk.
• 11:36
  Steven: You know before this.
• 11:38
  Steven: But now it's like, oh, what lever do we have at our disposal Or what dial do we really have to?
• 11:44
  Steven: like, turn up and focus on right now?
• 11:47
  Steven: And it's your operations.
• 11:49
  Steven: And so we see this as a moment for, hey, you know, there's different variations of how you generate your return, but over the next, you know, six to 12 months at least.
• 11:59
  Steven: You really need to be thinking about profitability and driving returns through your operations, maybe more than normal.
• 12:06
  Steven: I'm very aligned with you on just the increasing importance of operations.
• 12:12
  Steven: So I think you're really on to something, and I think we're on a similar thought path when it comes to how we should be spending time helping hoteliers.
• 12:24
  Steven: And I think the other thing when it comes to technology, yes, you want it to make people more effective, yes, you want it to drive efficiency, but at the end of the day, i think a lot of people get into hospitality because they want to interact with guests and provide hospitality, and it feels like you get into the business and you just get burned out because it doesn't end up being maybe as idyllic as you originally thought, and so it's like how can we maintain some of the magic for people that are in hotels and even create that through our technology?
• 13:05
  Steven: Because again it's just a wonderful industry.
• 13:07
  Steven: It goes without saying.
• 13:10
  Steven: Covid was catastrophic in more ways than one, but you think about all the experience that has left and we've got this opportunity to bring a new generation and retain that generation.
• 13:22
  Steven: It's like how do we maintain that magic that originally inspires people to go into hospitality?
• 13:27
  Steven: And you can do that through technology And I think, with people that are more and more tech natives, it's just going to be a necessity going forward.