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Hospitality’s Digital Reset with Ulrich Pillau (Apaleo) · Pillow Talk Sessions

• 0:02
  SPEAKER_00: Welcome back to Pillow Talk Sessions with your host, Jessica Gilliam.
• 0:06
  SPEAKER_00: In today's episode, Jessica is joined by Willie Palau, founder and CEO of Apple Ao, to discuss how hospitality is being transformed by digital first thinking, AI, and open technology platforms.
• 0:16
  SPEAKER_00: They'll explore why legacy systems are struggling to keep up, why cultural mindset shifts are essential for successful digital adoption, and how API first infrastructure is enabling new operating models across hotels and hybrid hospitality.
• 0:59
  SPEAKER_02: Sure, absolutely.
• 1:00
  SPEAKER_02: So I'm Uli Pillau.
• 1:02
  SPEAKER_02: I'm one of the co-founders of Apalio, a tech-based company in Munich.
• 1:07
  SPEAKER_02: We are doing a technology platform for the hospitality industry, a PMS platform where actually modern hotel groups can run their digital tech stack on.
• 1:18
  SPEAKER_02: So it's a it's a company we founded.
• 1:20
  SPEAKER_02: It is seven years old and it's growing very quickly around the world.
• 1:24
  SPEAKER_02: Personally, I'm actually originally from the hospitality industry.
• 1:27
  SPEAKER_02: So I've been working for some of the big hotel brands around the world.
• 1:31
  SPEAKER_02: And then very early on switched to technology, so started to do a couple of software companies in our business, different segments, different types of software, and that's what we have been doing for the past uh 20, 25 years.
• 1:45
  SPEAKER_02: They do startups in hospitality that focus on tech, on modern tech, um, and new ways of running hospitality businesses.
• 1:53
  SPEAKER_01: Brilliant.
• 1:53
  SPEAKER_01: Uli, can we go back to your beginnings in hospitality actually?
• 1:57
  SPEAKER_01: So, what did you do originally in hospitality when you worked for the hotel brands?
• 2:01
  SPEAKER_01: What was that part of your career before you moved to tech and before you moved to startups?
• 2:07
  SPEAKER_02: So, very originally, actually, I was doing a hotel school and a hotel apprenticeship, as so many people start in our industry.
• 2:14
  SPEAKER_02: That's the usual or has been the usual starting point during my times.
• 2:18
  SPEAKER_02: Um, I was part of Intercontinental when they first were running their first property in Germany, which still exists today, a 600-plus rooms hotel in the center of Berlin, which it was the first property they had in Germany.
• 2:32
  SPEAKER_02: It's still being run by Intercontinental.
• 2:34
  SPEAKER_02: It's one of the famous Intercontinentals in Germany called the Berlin Intercontinental.
• 2:39
  SPEAKER_02: So I did an apprenticeship there and then started to work for them in different locations.
• 2:44
  SPEAKER_02: Also for Hilton later on, where I spent a couple of years.
• 2:49
  SPEAKER_02: First on a hotel level, mostly in operations, rooms division, reservation, front desk, but then also went into technology.
• 2:58
  SPEAKER_02: So at the time, only the big brands were using some kind of property management system and other software.
• 3:04
  SPEAKER_02: Then it got more popular.
• 3:06
  SPEAKER_02: So we introduced PMS and other technology into many hotels of those brands, including revenue management at some point.
• 3:13
  SPEAKER_02: So very exciting times, uh very different to today.
• 3:16
  SPEAKER_02: Today, pretty much every hotel has a property management system and some other apps and modules around it.
• 3:23
  SPEAKER_02: But at that point, it was really the starting point of IT and technology in hotel business.
• 3:28
  SPEAKER_01: I mean, if we think about how far we've come in that period of time, for going when it really was very, very analogue to where we are today.
• 3:36
  SPEAKER_01: You've seen and been part of such a shift in tech adoption across hospitality and sort of seen the impact it's had as well.
• 3:44
  SPEAKER_02: Yeah, absolutely.
• 3:45
  SPEAKER_02: And I think when I look back at the past half year, year, it has been going even faster than ever before, obviously, doing between AI coming into the industry, travel hospitality, and lots of shifts there.
• 3:59
  SPEAKER_02: At the same time, the digitalization, which was also partially driven by the pandemic over the past five years, also was undergoing a lot of changes in hospitality.
• 4:09
  SPEAKER_02: Ways on how hotel groups and operators are running, were running their hotels.
• 4:14
  SPEAKER_02: It all became more mobile, mere digital.
• 4:16
  SPEAKER_02: The guests did expect a different guest journey compared to what existed before.
• 4:21
  SPEAKER_02: At the same time, it's still very much a legacy technology in the entire industry.
• 4:27
  SPEAKER_02: I mean, some of the big brands, like Marriott, are running their core systems, which are partially 30, 40 years old.
• 4:34
  SPEAKER_02: It's still the old, very old technology infrastructures that exist in those brands.
• 4:39
  SPEAKER_02: So it's two-sided.
• 4:41
  SPEAKER_02: A lot of new operators, owners, management companies that are doing it more modern ways and are expanding very quickly based upon tech models.
• 4:51
  SPEAKER_02: And you have still the existing brands, which partially are very much legacy in how they operate and run their hotels.
• 4:57
  SPEAKER_01: So it really is like a two-player race in a way, or a two, you know, a two different worlds.
• 5:03
  SPEAKER_01: That real, real legacy towards now what we're seeing.
• 5:06
  SPEAKER_01: And I know, Uli, today you're in a hotel that I believe it's not quite opened yet, did you say?
• 5:12
  SPEAKER_01: Or did it has it opened the hotel that you're in?
• 5:14
  SPEAKER_02: It's in the pre-opening phase, so they are only selling or giving the rooms to friends and family and partners, uh, but they are not officially open yet.
• 5:22
  SPEAKER_01: So I'm gonna I'm gonna make the assumption that they're very much in the new breed of hospitality operator that is tech forward.
• 5:32
  SPEAKER_02: Yeah, it's actually a very uh exciting combination here at this property.
• 5:36
  SPEAKER_02: It's in London, Central London, a 43 rooms property next to the British Museum, so just two minutes away.
• 5:43
  SPEAKER_02: Very well located.
• 5:44
  SPEAKER_02: It's a very nice boutique hotel, great rooms, great lobby, only 43 rooms.
• 5:50
  SPEAKER_02: So to the outside world, to the hotel guests, it appears uh more a boutique-style hotel with a lot of personal service.
• 5:57
  SPEAKER_02: But what they are doing is everything behind, so all of the operations, the procedures, wherever they can, they automate those through technology.
• 6:07
  SPEAKER_02: And so this is really something which we find very exciting because it's the combination of delivering personal service to the guests, so being a host.
• 6:17
  SPEAKER_02: And they are really hosts here to the hotel guests, and at the same time, they use technology wherever they can to become more digital, more mobile, um, faster, more efficient.
• 6:28
  SPEAKER_02: And this is what we are seeing.
• 6:30
  SPEAKER_02: And I think Citizen M from Amsterdam was one of the first hotel chains that that started that 15 years ago, where actually their staff on site was shifting to be ambassadors rather than to be front desk clerks.
• 6:44
  SPEAKER_02: So they got rid of the front desk completely at Citizen M, different type of hotels.
• 6:49
  SPEAKER_02: And because technology was supporting them in most of their procedures, including registration, check-in, room keys, and checkout, and so on, the people they have there could do many other things servicing the customers better than ever before.
• 7:04
  SPEAKER_02: And this is a model which um is still um in the early stages with most of the hotel brands where you come.
• 7:12
  SPEAKER_02: Lots of them operate very traditionally.
• 7:14
  SPEAKER_02: But we have a fluke few players in Europe and other areas which do it in a much more modern way.
• 7:21
  SPEAKER_01: I mean, Citizen M was so ahead of its time doing that real kind of service model of staffing or using staff in a in a very non-traditional way feels so sort of ahead of its time.
• 7:33
  SPEAKER_01: But we're seeing more and more of this, aren't we?
• 7:36
  SPEAKER_01: That sort of it's that what you call the autonomous hospitality where you've got a lot of the operations now automated, but then that does free up the staff.
• 7:44
  SPEAKER_01: And we talk about it a lot, don't we, in hospitality that it frees up the staff to then do the human-centered stuff.
• 7:50
  SPEAKER_01: The um what you called hosting, that making sure that people have a good stay and comfortable and welcomed and that kind of thing.
• 7:58
  SPEAKER_02: And I see, I do see the technology support there in in different ways that kick in.
• 8:04
  SPEAKER_02: One is obviously everything which has to do with guest facing things.
• 8:08
  SPEAKER_02: So the guest journey.
• 8:09
  SPEAKER_02: When we traditionally look at hotel groups are running that, it's very old-fashioned and it's not a nice experience.
• 8:15
  SPEAKER_02: So you go to some website, then you compare prices because they are cheaper on booking.com or Expedia.
• 8:22
  SPEAKER_02: You do research, then you book on one site, then you have to enter your data there, and then you have to enter it again when you come to the hotel, and when you come to the next hotel of the same brand, they ask you for the same information again.
• 8:34
  SPEAKER_02: So I think because a lot of the technology today is operating in silos, different systems, data is not crossing, it makes it very hard to provide a good guest experience.
• 8:44
  SPEAKER_02: When I look at some of the more digital players, actually their guest journey is very impressive.
• 8:50
  SPEAKER_02: And the the when you look at what the hotel guests say is they rate often those groups and those operators higher because the experience they have in a digital, more mobile way is far better from what they know from the other operators and groups.
• 9:05
  SPEAKER_02: So I think this is one side.
• 9:06
  SPEAKER_02: The guest journey can be working throughout all touch points in a very nice way, including payment, by the way, because this is what lots of people forget about.
• 9:16
  SPEAKER_02: The payment needs to be part of the core guest journey.
• 9:19
  SPEAKER_02: And then when you arrive at the hotel, you're pre-registered, you don't need to give all of the information anymore, you don't need to stay in line to check in, to get your room key.
• 9:29
  SPEAKER_02: Um, all of that is possible via a great guest journey today.
• 9:33
  SPEAKER_02: So this is one side of it.
• 9:34
  SPEAKER_02: That's really when it comes to the guest.
• 9:36
  SPEAKER_02: And the other thing is when you go to a typical hotel and take a serious look and how much manual procedures are still existing in the back office of uh such a hotel, it's incredible.
• 9:49
  SPEAKER_02: The hotel front desk and reservation people and revenue people are spending often hours and hours on manual procedures that can be easily automated.
• 9:59
  SPEAKER_02: So for me, autonomous hotel is not don't serve the guests with good service by people.
• 10:05
  SPEAKER_02: It is more how you can free up hotel staff and employees to serve the guests better in all areas of a hotel business.
• 10:15
  SPEAKER_02: So that's the two areas efficient back office automation through technology, and then guest-facing um guest journeys that work much better.
• 10:23
  SPEAKER_02: And I think this is actually going nowadays even much faster than ever before because AI is kicking in, so people are shifting the focus on how they search for travel, search for hotels, destinations in a completely different way than it happened in the past.
• 10:41
  SPEAKER_02: And this for me will be a big disruption in the entire travel and hospitality industry because people are getting used to have confidence in ChatGPT and the alikes rather than how they traditionally looked at hotels.
• 10:55
  SPEAKER_01: I really want to come back to that point, Uli, because I think it is such an important shift that's happening in that discoverability and how we buy, you know, hotel the hotel product.
• 11:06
  SPEAKER_01: But I just want to come back to something that you said and then reflect something to you.
• 11:11
  SPEAKER_01: So traditionally, you know, because staying in a hotel is such an analogue experience, it's a physical experience, the guest journey typically would just be about the stay.
• 11:21
  SPEAKER_01: But really, today it's being seeing that whole everything from search and discoverability right through to thinking about before you come the relationship that a hotel can have with a guest before they even arrive to checking in to the stay and payment to postday as well.
• 11:40
  SPEAKER_01: Like a guest journey is much more like a digital customer journey today than it ever has been before, which is important.
• 11:47
  SPEAKER_01: Now, something else I want to talk to you about, Uli, is in writing my book, Tech Enabled Hospitality, you were one of the kind of the core voices that I that I interviewed for it and and gave some great insight.
• 11:59
  SPEAKER_01: And you talked a lot to me about culture and the culture shift that is required for tech adoption and becoming really tech enabled from that operation side and the experience side, and around how important it is for leadership to really buy into it and seeing technology as a strategic play, not as a sort of tactical tool play.
• 12:25
  SPEAKER_01: And I wonder if you could talk a little bit about that and how important that is today to see technology strategically as a and as a cultural business thing.
• 12:34
  SPEAKER_02: Yeah.
• 12:35
  SPEAKER_02: And actually it's the same thing when you talk about us about tech companies.
• 12:39
  SPEAKER_02: What initiatives you want to drive, you have to drive them with the full team and make sure everybody is on board.
• 12:46
  SPEAKER_02: And for the hotels, one of the challenges is that hotel business was always operated the same way.
• 12:52
  SPEAKER_02: You know, the same thing hotel groups and hotels have been doing for the past hundred years, uh, 50 years, whatever it is, that still exists today.
• 13:01
  SPEAKER_02: And that makes it really hard for the people to think differently.
• 13:05
  SPEAKER_02: So, from our perspective, when you look at modern hotel chains that do it in a different way, they they would always go and say the top has a different strategy, the management, the creators of that concept, and they have this in mind on how they want to service the guests and how they want to operate the hotels.
• 13:25
  SPEAKER_02: And if that vision is being set correctly and is adapted throughout the organization in all parts, then it will work.
• 13:32
  SPEAKER_02: Otherwise, it wouldn't work.
• 13:34
  SPEAKER_02: If it's just um for a hotel chain to replace their old on-premise PMS by a more modern uh cloud PMS, that wouldn't change anything.
• 13:44
  SPEAKER_02: It's the same type of procedures, processes they'll still try to use.
• 13:48
  SPEAKER_02: You have to have a mind shift in being more digital and saying, I want to run it in a different way.
• 13:54
  SPEAKER_02: I want to provide a different guest experience, I want to allow this and this and this to happen, and these things should not take place in my hotel anymore.
• 14:02
  SPEAKER_02: And often that comes to the point where you say, What is actually the product you're having?
• 14:07
  SPEAKER_02: So it starts with a vision and a strategy, and then you go and say, This is the accommodation product you want to place in a market, and it has to look like that.
• 14:16
  SPEAKER_02: The rooms should be looking like that.
• 14:18
  SPEAKER_02: The guests, which I expect should be those guests to raise the right expectations with these guests.
• 14:24
  SPEAKER_02: Because still today you have lots of people that want to go into five-star deluxe properties, and then they are better off to go to a Manner in Oriental or Ritz-Carlton or whoever that is, and the expectation is being set differently.
• 14:37
  SPEAKER_02: When people go to a more modern hotel chain like Citizen or Numa or Lime Home, they know what they expect.
• 14:44
  SPEAKER_02: They expect a product which is completely set digital.
• 14:48
  SPEAKER_02: They will have to do everything in a digital way.
• 14:51
  SPEAKER_02: I think this mind shift is important to put it as part of your strategy, then communicate it throughout the entire organization.
• 14:59
  SPEAKER_02: And when you look at, for example, what Citizen Dem did since day one is they said actually the guys we want to work with in our properties as ambassadors, they won't be hotel people.
• 15:10
  SPEAKER_02: They won't be people that have had a traditional hotel education, but they can come from any industry.
• 15:16
  SPEAKER_02: Because their focus is not on trying to type in a million things into a PC or into a laptop, take credit cards, run the credit cards through point-of-sale machines and so on.
• 15:27
  SPEAKER_02: But their purpose was to say technology has to do everything in the background, and the people have to focus on the guests.
• 15:34
  SPEAKER_02: And if that's the case and the technology is easy enough, then actually you can use people from any industry to run your properties.
• 15:42
  SPEAKER_02: You don't need hotel-educated people anymore, which is actually another challenge a lot of hotels and hotel groups are experiencing in Europe, UK, Germany, France, pretty much everywhere throughout.
• 15:57
  SPEAKER_02: You don't find the people anymore that want to work in hotel business.
• 16:01
  SPEAKER_02: Just in German um hospitality, you've had 800,000 people that left hospitality during corona because the hotels were closed and they had to find a different job.
• 16:12
  SPEAKER_02: And they are not coming back into hospitality.
• 16:14
  SPEAKER_02: So I think the mind shift needs to be there on what I what when I do in three years, five years with my hotel or my accommodation business.
• 16:24
  SPEAKER_01: It's interesting that shift because it forces disruption, doesn't it?
• 16:28
  SPEAKER_01: It sort of forces change, but also bringing new and different people in that may not have ever done hospitality also brings opportunity of different thinking and different ways of approaching things, different ways of looking at processes as well.
• 16:42
  SPEAKER_01: I have a question for you.
• 16:43
  SPEAKER_01: That mindset shift that that an operator needs, where do you think we are at as an industry in terms of that mindset shift?
• 16:52
  SPEAKER_01: And is it accelerating at the pace it needs to be?
• 16:55
  SPEAKER_01: So if we're seeing on one level we've got the Marriott's with 40-year-old tech, and then, you know, where we are today, do you think it's accelerating at the speed that it needs to, that entire shift?
• 17:07
  SPEAKER_02: Partially, yes, partially not.
• 17:09
  SPEAKER_02: I think the existing brands are so old-fashioned in the way how they run their businesses.
• 17:15
  SPEAKER_02: Whatever they do, they are trying to operate all hotels in a standardized way, which works in their model.
• 17:22
  SPEAKER_02: But actually, it's far away from offering modern hospitality products.
• 17:27
  SPEAKER_02: The most exciting and most successful businesses we see that do it differently, those are the ones that actually are either not from the hospitality industry, they are from other industries, e-commerce, digital, whatever, that are uh bringing new products onto the market, or it is people that say, you know, we start from zero, we have no hotels, we have a white piece of paper, we design our product, the strategy, the guest journey, the stay in a completely different way, and then we apply it from day one to what we are doing.
• 18:00
  SPEAKER_02: Some of the existing brands, the bigger ones, have tried to bring new concepts onto the market that are similar to a Citizen M and others, and lots of them actually have not managed to do it in a very progressive way.
• 18:13
  SPEAKER_02: So, this is also the reason why Intercontinental has acquired the Ruby brand, why Marriott has now acquired the Citizen M brand earlier this year.
• 18:22
  SPEAKER_02: These are brands that are operating completely differently, and when the Rotel groups, the existing ones, bring new concepts on the market, they run them exactly the same way as they run all of their other brands.
• 18:33
  SPEAKER_02: And that makes it really hard.
• 18:35
  SPEAKER_02: So the most successful and best businesses, digital-wise, we have seen with new people coming into the industry and say, you know, we have we will run it digitally, we create a new product, we create a new strategy with it, we create the expectations for the guests, and then we operate it in our way.
• 18:52
  SPEAKER_00: Just a quick pause in today's conversation.
• 18:55
  SPEAKER_00: This episode of Pillow Talk Sessions is brought to you by Abode Worldwide, the strategic communications and public relations agency partnering with ambitious hospitality tech brands to build brand authority and create category leaders.
• 19:07
  SPEAKER_00: From thought leadership to global media relations, Abode helps the companies transforming how we stay, operate, and experience hospitality to tell their story with impact.
• 19:15
  SPEAKER_00: If you're a tech company shaping the next era of hospitality, learn more at abodeworldwide.com.
• 19:21
  SPEAKER_00: All right, let's get back to the conversation.
• 19:24
  SPEAKER_01: Can I can we go back to another disruption topic that that you talked about just a bit earlier?
• 19:29
  SPEAKER_01: And that is around LLMs and how it's impacting how people search and buy travel.
• 19:35
  SPEAKER_01: And we're seeing a lot of this now.
• 19:37
  SPEAKER_01: And I think my kind of feeling is there are a lot of people a little bit asleep or certainly have been a bit sort of in denial about this, about how LLMs are changing consumer behavior.
• 19:50
  SPEAKER_01: And um, you know, whether that's guests or whether it's you're buying a pair of shoes or you're you're even, you know, other things you might buy, how you're looking for them, the way you're doing your research, but then also how you're actually purchasing.
• 20:04
  SPEAKER_01: So, in terms of for the hotel sector, it's obviously we've got the OTAs there, we've got the call for more direct bookings, and we also maybe have an unknown about how things will change.
• 20:16
  SPEAKER_01: But I'd love to hear your thoughts on the disruption that we're going to be seeing here.
• 20:21
  SPEAKER_02: I think when you talk about the unknown, this is something where nobody can really predict where this whole thing is moving.
• 20:27
  SPEAKER_02: I mean, we are seeing lots of trends, new things coming onto the market.
• 20:32
  SPEAKER_02: We see that especially the younger generation are shifting their trust.
• 20:36
  SPEAKER_02: And when I say shifting their trust, that means our generation and some other generations were still looking up hotels in a different way.
• 20:44
  SPEAKER_02: They were planning their their travel in a different way.
• 20:47
  SPEAKER_02: There are travel agents formerly, which existed where people were going to travel agents, then it was shifting to digital research, comparing prices and travel on websites, booking.com, Expedia that went in that went into flights and other things than just hotel rooms.
• 21:06
  SPEAKER_02: But nowadays, actually, especially the younger generation, they are getting used to consult ChatGBT and their likes for anything.
• 21:14
  SPEAKER_02: They go there and say whatever they want to do, they ask ChatGPT, and they trust the responses.
• 21:21
  SPEAKER_02: So some of some of these will also have a huge impact on how quickly the research for travel, trips, holidays, business trips, um whatever is is uh is shifting, and that will go faster than everybody might think.
• 21:37
  SPEAKER_02: I mean, we uh I'm I'm in technology, have been in technology for the past 30 years, but the the what I've seen happening over the past year and then over the past six months and now over the past six weeks has been faster than anything before.
• 21:52
  SPEAKER_02: I think um when you look at MCP servers and how that's all uh coming on board, that will cause a huge disruption.
• 22:00
  SPEAKER_02: Disruption because the models will change completely.
• 22:03
  SPEAKER_02: Suddenly you won't have data sitting in silos anymore, but agents are starting to talk to each other.
• 22:09
  SPEAKER_02: And when agents are starting to talk to each other, that means actually any information you want to get as a hotel guest, as a traveler, but even as a hotel employee, you can get much faster and in many different ways.
• 22:23
  SPEAKER_02: So for me, that will be a big uh shift which is already ongoing.
• 22:29
  SPEAKER_02: And we see some people that are again front on us and lots of people that are standing still and don't know what to do.
• 22:35
  SPEAKER_02: And I think that's the worst at um at this case, at this place.
• 22:40
  SPEAKER_02: But also, which is actually interesting is that a lot of the accommodation businesses in our industry they don't have the technical infrastructure to even support or try or test or pilot MCP or agents or things like that.
• 22:54
  SPEAKER_02: They are still stuck in old infrastructure technology with different software pieces in silos.
• 23:01
  SPEAKER_02: So for those operators, it will be very hard to move forward faster.
• 23:06
  SPEAKER_02: A good infrastructure and open systems and platforms will allow to move much quicker in this area as well.
• 23:14
  SPEAKER_01: So it sounds like the the most important thing then is to make sure that the infrastructure is there and you've got that those systems there to be able to do it.
• 23:24
  SPEAKER_01: Otherwise, and also it's it's overwhelming, isn't it, for hoteliers to be thinking about right, how do we move forwards here?
• 23:32
  SPEAKER_02: That's that's definitely something, but it's actually more than that.
• 23:36
  SPEAKER_02: It's also with the current technology and AI available, you can actually try out many more things than you could ever before and much faster.
• 23:46
  SPEAKER_02: So for me, it also means that it's not only having the right infrastructure in place, but don't stop.
• 23:52
  SPEAKER_02: I mean, really test things, go to people that are innovative, younger people, developers, AI developers, see how those agents or whatever it is can be combined with your current tech stack and how you can use it much faster.
• 24:07
  SPEAKER_02: Obviously, if you have closed systems in place, it's very tough to rely on those to put uh more modern agent technology or AI technology in place.
• 24:17
  SPEAKER_02: That in many cases will not work.
• 24:19
  SPEAKER_02: However, there are still ways available to make it happen, but people that have an open infrastructure, open platforms can move much faster there.
• 24:28
  SPEAKER_01: They can always talk to Apaleo as well if they're looking for a solution as well.
• 24:34
  SPEAKER_02: I think there are a few players that that have the are offering the right platform approach.
• 24:40
  SPEAKER_02: But when it comes to AI, we are not the AI developers ourselves either.
• 24:45
  SPEAKER_02: We have an AI group within our development team, but what we do is we enable anybody in the world to put AI agents, um agents on top of what we have.
• 24:55
  SPEAKER_02: And that way we can be much more innovative and our clients can try and test things much faster than with any other platform.
• 25:02
  SPEAKER_01: And another disruption or change that we're seeing in hospitality is that kind of convergence of asset classes as well.
• 25:09
  SPEAKER_01: And that sort of we're not seeing we're seeing a sort of a move away, maybe it's less a move away, but a move towards something different.
• 25:17
  SPEAKER_01: So sort of different types of hospitality offering that may look a little bit more like a co-living blend or a built-to-rent blend or a service department blend or a you know, different types.
• 25:31
  SPEAKER_01: And I'd love to hear your take on that.
• 25:34
  SPEAKER_01: And then how, where you see that going as well, these different types of lodging types.
• 25:40
  SPEAKER_02: So, first of all, I think there are obviously new ideas coming all the time.
• 25:45
  SPEAKER_02: So there are people out there that say, you know, this is the type of accommodation product I want to bring into hospitality because I haven't seen it.
• 25:52
  SPEAKER_02: I don't know, it doesn't exist, but I have a specific idea.
• 25:56
  SPEAKER_02: So you have entrepreneurs that start with fresh ideas and they bring then products to the market and concepts which are really unique.
• 26:04
  SPEAKER_02: And this you see happening in different places throughout Europe and internationally already.
• 26:08
  SPEAKER_02: And come back to a few of them just to mention them.
• 26:11
  SPEAKER_02: And then obviously, there's also the legal aspect.
• 26:14
  SPEAKER_02: So you have some laws that are kicking in in different countries and in the EU, which is driving innovation in hospitality.
• 26:22
  SPEAKER_02: I'll also mention a product, um, a new product there in a moment.
• 26:25
  SPEAKER_02: And then obviously, a lot of the existing operators are becoming more hybrid.
• 26:29
  SPEAKER_02: And when I say more hybrid is the concepts are changing, it's not fixed hotel rooms anymore.
• 26:35
  SPEAKER_02: It could be a combination of hotel rooms, you might have student accommodation, you might have in the same building rooms that are being rented out for three days or a weekend, you have rooms that are being rented out as the same room as an apartment over three months or six months.
• 26:50
  SPEAKER_02: So, what we have seen over the past 10 years that those hybrid business models are coming more and more onto the market.
• 26:56
  SPEAKER_02: And there are lots of operators that um that actually manage different types of properties that serve different segments.
• 27:04
  SPEAKER_02: And this is something we are seeing more and more.
• 27:06
  SPEAKER_02: And I just mentioned a few.
• 27:07
  SPEAKER_02: I mean, hostel market is becoming increasingly interesting.
• 27:11
  SPEAKER_02: There is a luxury camping segment which is taking off in many European countries now.
• 27:17
  SPEAKER_02: You have senior living, not senior living like we know it today, but really campus-style senior living where people that have money can um can spend uh years and years, and they will have an offering which ranges from restaurants, bars, cinemas, sports facilities, anything you could imagine.
• 27:36
  SPEAKER_02: So it's a different type of senior living we are seeing coming on board.
• 27:40
  SPEAKER_02: And uh coming back to the legal side, I mean, one good example would be in Germany or in the EU.
• 27:46
  SPEAKER_02: Actually, as of January, a new law kicks in that truck drivers that are driving throughout Europe all the time, they are not allowed to stay in their cabins more than one night.
• 27:56
  SPEAKER_02: So before they were spending weekends in their cabins where they couldn't drive through on the roads.
• 28:01
  SPEAKER_02: And nowadays the new law says they have to spend more than one night.
• 28:05
  SPEAKER_02: If they stay somewhere, they have to spend at a hotel room.
• 28:08
  SPEAKER_02: And so there's a new model coming where along the highways in Germany, operators are putting kind of luxury cabins or reduced hotel rooms, whatever you want, with a complete digital guest journey where truck drivers can book the cabins online, they pay them online.
• 28:26
  SPEAKER_02: It's not very luxurious, but they have everything they need.
• 28:29
  SPEAKER_02: And for those businesses, for example, truck driver or transportation business, they couldn't afford to pay hotel rooms for their truck drivers because it's such a small margin.
• 28:38
  SPEAKER_02: So this type of thing is coming all over the place, and we see lots of exciting developments.
• 28:43
  SPEAKER_02: There is a there's a German operator called Leif Dot Raus, an ex-Airbnb guy who founded it a couple of years back, and they are putting individual luxury cabins into the nature.
• 28:54
  SPEAKER_02: So you go to somewhere, to a lake, to the mountains, to wherever, and you find one luxury cabin which you pay a good price for, but it's very nice bed, very nice living room.
• 29:06
  SPEAKER_02: Uh, you have anything you need, a bathroom.
• 29:08
  SPEAKER_02: You'll be served actually food from some of the partners they have that that are doing um kind of the service there on site.
• 29:16
  SPEAKER_02: Um, and it's taking off extremely quickly.
• 29:18
  SPEAKER_02: So, this type of new development um we see in different market segments.
• 29:23
  SPEAKER_02: It's in many cases hybrid.
• 29:26
  SPEAKER_02: Um, and uh I was meeting a CEO of uh of a new uh concept here in London today.
• 29:31
  SPEAKER_02: They are putting right in the center of Covent Garden, they are putting 560 pots into a building.
• 29:38
  SPEAKER_02: Wow with Japanese-style pots, yeah, which are in a very central location.
• 29:44
  SPEAKER_02: People, younger people will go there to party, and they pay just then a reduced price per night for a nice cabin.
• 29:51
  SPEAKER_02: So different, different ideas that are coming onto the market.
• 29:55
  SPEAKER_01: Yeah, no, that's interesting.
• 29:56
  SPEAKER_01: And almost all of those, well, actually, all of those work perfectly very, very well with the autonomous hospitality as well.
• 30:05
  SPEAKER_02: And they have to.
• 30:06
  SPEAKER_02: I mean, there's there's no way you can do it differently.
• 30:09
  SPEAKER_02: And when you look at our children, they they wouldn't do the old-style hotel travel anymore, anyway.
• 30:15
  SPEAKER_02: They want to have everything online, they are used to it from all of the tools they are using.
• 30:20
  SPEAKER_02: So unless they they actually don't want to speak to people at the hotel anymore.
• 30:24
  SPEAKER_02: So unless they can do their whole travel differently.
• 30:26
  SPEAKER_01: You don't want to speak to anyone.
• 30:28
  SPEAKER_02: Yeah, that's another problem.
• 30:30
  SPEAKER_02: You have some.
• 30:31
  SPEAKER_01: I'm actually taking my daughter to Japan next year, and her wish list is to stay in a pod hotel.
• 30:38
  SPEAKER_01: So we probably don't have to go there.
• 30:39
  SPEAKER_01: We can just go to London and stay in Covent Garden.
• 30:42
  SPEAKER_01: But just back to all of this changing the the business models, if you like, and having kind of complex different business offer offerings makes it extremely complex, especially if you are looking at different market segments.
• 30:55
  SPEAKER_01: So if you're looking at senior living for a later living product, but then you're also looking at short stay or hospitality kind of offering, it's far more complex in a way than it might have been if it was just like we're a hotel, here we've got X amount of rooms, and we do this type of customer.
• 31:15
  SPEAKER_01: So, how do you see that complexity being operationally simplified going forward so that it is a growth model?
• 31:24
  SPEAKER_02: Yeah, um, so one example would be short-term rentals.
• 31:28
  SPEAKER_02: I mean, uh in the past you had Airbnbs and others, and you were able as an owner to rent your apartment out individually or one, two apartments.
• 31:39
  SPEAKER_02: We see this industry also changing quickly.
• 31:42
  SPEAKER_02: So you have more and more people that are actually growing by operating not one or two apartments, but or by operating 20, 50, 100 um apartments.
• 31:52
  SPEAKER_02: And in order to do this in a in a sustainable way, be profitable and have a good model, they actually need to streamline their processes.
• 32:00
  SPEAKER_02: So uh those operators actually are looking at technology, um, digital technology and AI on how they can actually offer the guests a very good journey, a very good experience, but at the same time have the processes in place that's that support this.
• 32:16
  SPEAKER_02: NUMA, um, as an example, they are operating in Berlin and other cities quite a number of properties without staff, so it's entirely staffless.
• 32:25
  SPEAKER_02: Um but the guest feedback is very good because the guest journey is so good.
• 32:30
  SPEAKER_02: Um, and the guest journey has to work 100% reliably because there are no people on site that could help you if something goes wrong.
• 32:37
  SPEAKER_02: So I would say the standardization of processes through technology and supporting the digital guest journey is a key for those.
• 32:45
  SPEAKER_02: Otherwise, their concept wouldn't be working.
• 32:47
  SPEAKER_02: They would be switching back to the more traditional type of hotel style operations, and that is not part of their business model.
• 32:53
  SPEAKER_02: At the same time, they are then targeting specific customers.
• 32:57
  SPEAKER_02: So they say, I don't want to be a product for everybody.
• 33:00
  SPEAKER_02: If you want personal service, uh if you want to have a front desk, people to talk to, then go to a more three-star, four-star traditional hotel where you can do that.
• 33:09
  SPEAKER_02: But be prepared that the guest journey is not that nice, that you have to queue in line for check-in and checkout.
• 33:16
  SPEAKER_02: Um, the whole experience is completely different.
• 33:19
  SPEAKER_02: So, again, putting the right expectations in place on what your product offers in accommodation is very important and very critical.
• 33:27
  SPEAKER_02: And if you are an apartment or renting out a short-term rental or whatever it is, you have to clearly position yourself so that everybody from day one, minute one, sees where I where what I am I buying.
• 33:40
  SPEAKER_02: And this we have learned from e-commerce, which exists in other industries, other verticals, has been existing there for quite a while.
• 33:48
  SPEAKER_02: In hotel business, e-commerce is still not fully understood by many people.
• 33:53
  SPEAKER_01: And actually, the the sort of the big wraparound of that is know your customer, isn't it?
• 33:59
  SPEAKER_01: So make sure that you've got the right product for the right customer.
• 34:03
  SPEAKER_01: Uli, where do you see things going?
• 34:06
  SPEAKER_01: So I know that especially today we can't have that magic crystal ball.
• 34:11
  SPEAKER_01: But over the, I guess the short term, because again, long term it's difficult to sort of see, but where do you think things are going for hospitality?
• 34:19
  SPEAKER_01: So if you had to sort of guess what net this time next year would be, what do you think we'll be seeing more of?
• 34:26
  SPEAKER_01: And maybe what we're also we might see less of in hospitality?
• 34:30
  SPEAKER_02: I think the existing hospitality businesses operating in a traditional way, they will be all struggling.
• 34:36
  SPEAKER_02: So I think you still have the luxury segment of five-star properties and chains that have their room.
• 34:43
  SPEAKER_02: There's always an audience, there are always people, guests that want to spend their money, lots of money for that, and they want to stay in those properties.
• 34:51
  SPEAKER_02: So I think they definitely have room.
• 34:53
  SPEAKER_02: Everything below, they will be struggling because the old way of operating is not efficient anymore.
• 34:59
  SPEAKER_02: It is, it will not produce the results the owners and the people that are investing into hotel businesses are expecting.
• 35:07
  SPEAKER_02: So people will have to change drastically the way that works.
• 35:10
  SPEAKER_02: So I think we'll see a lot of consolidation in the industry where the bigger brands are buying smaller groups because they can afford it and they have the efficiencies of obviously of structured corporate administration that is in place.
• 35:24
  SPEAKER_02: So that is possible and will happen.
• 35:26
  SPEAKER_02: On the other hand, I think we see we'll see more and more new operators and ideas and concepts coming onto the market, and some of them really will be disruptive.
• 35:35
  SPEAKER_02: I mean, Citizen M as we know it today, they have been completely new in 2008 when they opened their first properties.
• 35:42
  SPEAKER_02: Nobody really understood it, and lots of people tried to copy it, but they were not successful because they don't have the Citizen M DNA or have the Citizen M DNA.
• 35:52
  SPEAKER_02: So the DNA, the passion for what you're doing and how you're putting products onto the market, will be extremely important.
• 36:00
  SPEAKER_02: And I think the direction of operating autonomous hotels and AI agent hotels, that will change a lot of things in on a hotel and but as well on a uh on a corporate level, how things are being done.
• 36:14
  SPEAKER_02: So I would expect that even still in 2026, maybe middle of 2026, we will see the first agent-operated uh hotels, properties being on the market that test on how actually can I run a hotel through an agent and no more um involvement by uh by people doing that.
• 36:33
  SPEAKER_02: Let's see how successful that that'll that is.
• 36:37
  SPEAKER_02: We already see within actually our customer base a lot of people that are moving that direction and they are piloting and testing out and rolling out actually agents in different ways.
• 36:47
  SPEAKER_01: That's so exciting to see how that rolls out as well.
• 36:50
  SPEAKER_01: And no doubt it will have a little bit of a messy beginning, but then it's iterating and learning, isn't it?
• 36:56
  SPEAKER_01: And for you, Uli, and for Apaleo, before we come to the end of the call, I'd love to know what you've got coming up.
• 37:04
  SPEAKER_01: And then also how can people find out a little bit more about Apaleo?
• 37:09
  SPEAKER_02: I mean, anybody could contact us and look us up via LinkedIn or via our website, apaleo.com.
• 37:16
  SPEAKER_02: Um, we have a lot of conferences, events where we are speaking and presenting, are being invited to talk about what is technology changing in our industry.
• 37:25
  SPEAKER_02: Also, people can get in touch with me directly via LinkedIn.
• 37:28
  SPEAKER_02: So find out.
• 37:29
  SPEAKER_02: But what's particularly interesting is when you look at the use cases which are popular on our website, you will find actually the different concepts which are there and which do support different ways of running accommodation businesses in all kinds of market segments.
• 37:45
  SPEAKER_02: So that's a good starting point to get acquainted with what's possible.
• 37:49
  SPEAKER_02: And then it's obviously for us moving the technology faster than ever.
• 37:54
  SPEAKER_02: And I think we claim at Upper Leo not to be an all-in-one property management system.
• 38:01
  SPEAKER_02: We would never develop our own apps, modules, components.
• 38:05
  SPEAKER_02: That's not what we are in for.
• 38:06
  SPEAKER_02: We we rely on the ecosystem of apps and developers and hotel operators out there to do anything on top of Apaleo, put their own tech stacks together.
• 38:17
  SPEAKER_02: And because we have a unique architecture in our industry, which is API first, very technical, but the API first means as well that we are agent first.
• 38:28
  SPEAKER_02: And that allows lots of agent developers and programmers and startups actually to come to us, develop whatever they have in mind on top of the Apaleo platform, and then start rolling it out out to our customer base.
• 38:42
  SPEAKER_02: So for us, it's more we have the transactional backbone to allow anybody to do anything they want in hospitality.
• 38:49
  SPEAKER_01: So we often we we sometimes it's said that there's not much innovation because it's difficult to do with the systems that are there.
• 38:57
  SPEAKER_01: But what you guys are offering is true innovation and um for the industry as well.
• 39:02
  SPEAKER_01: So thank you, Uli.
• 39:04
  SPEAKER_01: Thank you so much for coming on the podcast.
• 39:06
  SPEAKER_01: It's always a pleasure to speak with you and hope to have you back on maybe in six months, and we can talk about the the sort of the first agentic AI hotels.
• 39:17
  SPEAKER_02: Yeah, we will.
• 39:17
  SPEAKER_02: Thank you very much, Jessica.
• 39:19
  SPEAKER_02: It was an absolute pleasure.
• 39:20
  SPEAKER_00: And that wraps it up for today's episode of Pillot Talk Sessions with Jessica Gilliam.
• 39:24
  SPEAKER_00: Thanks so much for listening.
• 39:25
  SPEAKER_00: And if you'd like to stay connected and never miss a conversation, head over to Pillotalksessions.com to subscribe.
• 39:31
  SPEAKER_00: You can also follow us on LinkedIn for more insights and interviews with leaders shaping the future of hotels, short term rentals, and tech enabled hospitality.
• 39:39
  SPEAKER_00: Thanks again for tuning in, and we'll see you next time on Pillotalk Sessions.