Latest / The Modern Hotelier / #296: Giving Hoteliers Flexibility to Build Their Ideal Tech Stack | with Philip von Ditfurth & Florian Montag
Transcript
- The Modern Hotelier #296: Giving Hoteliers Flexibility to Build Their Ideal Tech Stack | with Philip von Ditfurth & Florian Montag === David Millili: Welcome to a special high-tech Modern Hotelier, the most engaged podcast in hospitality. Don't forget to subscribe, like, and follow, and let us know in the comments what you think about today's episode. Steve, who do we have on the program? Steve Carran: Yeah, David, we got the Apaleo team with us today. We have Philip von Ditfurth, one of the co-founders, and also Florian Montag, the SVP of revenue. Thank you for sitting down with us, gentlemen. How are we doing today? Philip von Ditfurth: Pleasure. It's a great show. Great to be here. Steve Carran: So Philip, we're gonna start with you. You built a market leading platform in logistics and real estate before hospitality was really even on your radar. What made you look at the hotel industry and think, "This is where I wanna do it again"? Philip von Ditfurth: Yeah, I think all of these industries they have in common that they are highly fragmented, that they are lacking a bit of the digitization compared to other industries, and that they are great industries. So all of them were intriguing to me to serve with open platforms and to support the digitization of those industries. Steve Carran: That's great. And Florian, on the other hand, you come from the hotel world. You studied hotel management, worked in hotels, and then sold hotel software review platform before joining Apaleo. That's not the typical path in the tech world, especially in hospitality. How does having that background as a hotelier really change the way you not only talk about technology but also sell it? Florian Montag: Yeah, for sure. I mean, I think it changes the complete essence, right? I am in the hospitality space because I love hospitality, and I love this whole offering experiences, and I think the industry is just an incredible industry with an incredible amount of people in there which have great stories. And technology and why I came into it was we saw that a lot of hotels and operators are struggling to run their businesses because they didn't have the right technology. So when I started my first company right out of hotel school, it was all about enabling hoteliers to find the right software solutions. And today at Apaleo it's the same story. It's enabling hoteliers to leverage the new technology trends, and we're at high tech, so we see a lot of new evolutions. And so when I sell software, it's not about, you know, just growing the company, but it's really seeing how can I help the hoteliers to reach their goals because at the end of the day, we all want to grow as an industry, and if we see our customers being successful, we as a company at Apaleo, we're also successful, and we're growing. So it's a win-win, and it's all about the passion for hospitality. Steve Carran: Sure. And I love that you're ... the hotelier is top of mind for you, not making that sale. You wanna help the hotelier. I love to hear that. Philip, David Millili: citizenM is known for operating at a level of efficiencies that many traditional hotels struggle to match. When you worked with them, what did you understand about technology and operations that the rest of the industry is still missing today? Philip von Ditfurth: I think citizenM is a perfect example how you can leverage guest experience and operational efficiency by the use of technology. Right. So the guest experience and the operational efficiency, they always came first. And then with a relatively tech-savvy team, citizenM really questions what can we do to make those the best experiences both for the guests as for the staff. And in that sense they are pretty unique. And I would even say it's a good role model how to think of technology and how to leverage your business using technology. It's not technology for its own sake, it's rather how can you intelligently use it and then leverage on your core business KPIs. David Millili: So Florian, you came up through hotel operations before moving into tech. When you talk to hoteliers about agentic AI, what's the question they're really asking versus the conversation the industry thinks they wanna have? Florian Montag: I mean, we could have a whole podcast and multiple sessions talking about AI, right? And I think the big development from when you talk about agentic is also it's not just about getting data and getting a quick insight of all of the generative insights which you see, but it's about how can you leverage autonomous agents to support your operations, to really take out in certain processes the human interaction to make sure that the human can focus on something different. And where I look at it and when we speak with hotel operators, it's all about, okay, where do you really support us in taking out the mundane tasks or enable our staff to offer a better service? But the second point as well, and this is the question a lot of people are not asking enough, but is the blocker for real adoption, it's all about governance. It's compliance. It's a topic about AI is cool, agents are cool, but can I actually implement them in my business so that they can actually work and it's not just a nice demo at the high tech trade show? And I think this is the stage where we are in the industry. It's like, how can I convince my C-levels that we can implement this and start leveraging it? Steve Carran: Yeah, absolutely. And Philip, I'm excited to ask you this because you built Apaleo a little differently than most companies. You built it with open APIs and composable architecture while most companies were being built all-in-one systems and closed... not as open APIs, I'll say. What did that cost you more in the early days, but what did it make possible now that wouldn't have been possible if you went the other route? Philip von Ditfurth: Yeah, good question. It's definitely not the fastest track to work with such a consistent and clean architectural approach. It takes longer. It allows almost no shortcut, and it poses the utmost discipline to follow your path because there are a lot of attractive shortcuts on the way where you could do things a bit in the background and then so forth. But we truly believe that an open platform is the right recipe to let hoteliers at the end compose their ideal tech stack, even develop own components if they wish, and be flexible over time so that whenever there's a new technology and they want to exchange a piece in their tech stack, that they have the liberty to do so. So at the beginning, it really cost time and discipline to keep the architecture as clean as it is today. It radically pays off today as the flexibility is even more demanding than we thought. With the rise of AI, new technologies come even faster, and hoteliers want to switch to new technologies, want to try out things even faster. At the same time, they need a truly reliable platform to build upon. So all the flexibility is fine if you get consistent transactions below in the backbone, and that's what we allow hoteliers to do. So the payoff is truly big. And I think on the long run, we couldn't have thought about it when we founded Apaleo. There was no such thing as conversational AI back then. And now we see that the payoff is even greater because of the architecture that allows LLMs to easily connect with Apaleo through MCP and APIs, that you can build agents on top of our backbone more easily with a high level of flexibility, and that's one of the biggest benefits and advantages that we can offer today to our clientele. Steve Carran: Yeah. Maybe took longer, but, you know, better product and you would've had to open up those APIs now, so probably saved you time in the long run. Philip von Ditfurth: Definitely. Steve Carran: Correct. Absolutely. So we gotta talk about AI, Florian. Every hotel now wants AI, but some hotel stacks are not ready for it yet. Can you tell me a little bit more about some of the warning signs and also signs that a hotel is ready to implement AI? Florian Montag: Yeah, again, you know, there's multi-facets to it, and the number one topic is who are the right leaders in your company and where do you stand today in your positioning? If you're a traditional mom-and-pop hotel, it might be more of a transformational change than more sophisticated operators. And also here, are they from the big chains and the big brands and have a lot of requirements, or do they have smaller decision-making processes? And so the best suited to kind of adopt and move forward are the ones sophisticated enough but at the same time lean enough to take faster decisions and be able to take smaller bets and try things out. Second point is your tech architecture. If you're on legacy on-prem solutions, very difficult to be able to leverage AI and to have the right data, have the right connectivity. And as well it's where do you wanna go, right? Like we're talking about the first agent use cases, AI use cases around do you wanna have it in your closed system where the vendor owns and controls everything, or are you actually saying, "Okay, we know that AI is, in the long run, gonna be a differentiator and a very important part of our business, so do me, as an operator, want to have control of that?" So you look at an architecture and infrastructure of your systems which needs to be open, give access to the data, and enable you to have control of your AI strategy, and then work typically with the best-in-class vendors or new AI native startups to build that. Most of the operators might think about, "Hey, I'm gonna vibe code this, and I'm gonna vibe code that." I think that's cool. It's cool to try things out, but it's not where you're gonna really get operational impact and value out. And last but not least, what we hear as well is people just saying, "Get an MCP and it's gonna solve everything." But that's a dangerous path as well because if you're a vendor and the tech below is not ready for fine-grained user access controls and making sure that the agents can only interact with certain specific data and the setup is not right, then again, you're bringing more challenges on a leadership level that it will not be rolled out and not really be implemented. So the best ones who can leverage it know that AI is important. Build a small AI committee. Make sure that you have the right open infrastructure and that you then look at specific cases in your operations in the hotels, and you can start solving them and building your competence with that. And step by step roll it out, and then you'll have at some point an agentic layer where agents can communicate with one another and really support your organization. It's not something which happens overnight. It's a transformational change. And make sure you have the right tech partners on the side which can help you on that journey and give you the control and the ownership as an operator. Steve Carran: 100% agree. David Millili: So Philip, when clients are looking to work with you, what is the conversation that you wanna be having with them? Philip von Ditfurth: The clients that want to work with us, they typically face challenges in providing the guest experience and running their operations in a smooth, transparent, and consistent way. So the approach with almost every customer we talk to is less technical than truly operational, and in that sense, that is the starting point of our discussions. And shortly after, we elaborate on what it is that we can contribute to a better guest experience or to operational efficiency, and then technology follows, certainly. And yes, we are a platform provider, so very shortly after we're talking about how to compose a tech stack, how to optimize the tech stack, and so forth. But I think it's fair to say that the majority of all the conversations that we have start with a business challenge. They start with a business opportunity sometimes, and that is the starting point, and technology follows shortly after. David Millili: Okay. All right, so this one is for both of you, but Florian, we'll start with you, okay? So if a hotelier's listening to this and they're thinking about the next three years, what is one of the decisions they need to make now or they'll regret not making it? Florian Montag: I think it's definitely always about foundations. We're talking about three years, and in a tech world, three years is not a lot. But in a hotel operator world, it is a very short period of time. You don't want to make large investments just for the next 12 or 24 months. That's not how IT budgets work, and that's not how budgeting from a CFO lens works. So what is the highest likelihood that I select something which will last three, five, seven years? It's looking at an open infrastructure, the core systems where you know your partner is looking into the future and is ready, but at the end of the day you're not fully locked in, making sure that you have your control on top of that and that you can adapt and leverage innovation happening over these next 36 months and that you can make incremental changes. Because if you just buy what is the most sexy today, it might be that in 12 months' time it's not that sexy anymore, but then you have to change everything and your CFO won't like it. David Millili: So Philip, what do you think? Philip von Ditfurth: I think you should not trust those all-in-one promises that you get everything out of one hand for such a diverse industry in an environment which changes at such pace. So I think you should, as we did with our clean architecture, we talked about that before, well consider what the right foundation is, as Florian said, and rather think where you want to make the difference and then be very selective and not follow the tempting shortcut. Rather, do what you think is really supporting your business, and then you will make the right decision and it will pay off over the coming years. Florian Montag: Great advice. And one last point. We're not in a world of slides anymore. So ask your vendor, "Show me." Right? Because we're in a world where things are so easy to build and so easy to make. Don't show me a slide, show me it in action. David Millili: That is a great point. Well, that does it for another episode of The Modern Hotelier. Gentlemen, plug away. Let us know how they can get in touch with each one of you and find out more about the company. Florian Montag: Check us out on LinkedIn. Let's connect there and really look forward to having additional conversations about AI, technology, and hospitality, and thank you so much for having us. David Millili: Thank you. Well, that does it for this special HITEC Modern Hotelier, the most engaged podcast in hospitality. Whether you're watching or listening, we appreciate you and hope to be with you again soon. Thank you, guys.