Interview: Starwood CEO on Using Technology to Improve the Guest Experience

Editor’s Note: Skift is starting a new series of interviews with hospitality CEOs talking about the Future of the Guest Experience and the evolving expectations and demands of hotel guests. Check out all the interviews as they come out here. This continues our series of CEO interviews, the previous series was on the Future of Booking, with online travel CEOs.

With international tourist arrivals reaching a record 1.087 billion in 2013, travelers from emerging and leading nations are crossing more borders more frequently than ever before.

Global hotel brands are tasked with responding to these increasingly sophisticated guests no matter where in the world they are or where they’re from. Today that means acting as a portal to a destination’s local culture, arming travelers with technology to make smart decisions quickly, and creating a company culture that encourages staff to step outside their defined roles.

Starwood Hotels and Resorts Worldwide, in particular, is leading the hospitality industry in technical innovation, constantly taking its place as one of, if not the, first hotel brand to introduce a Google Glass app, an Apple Watch app, a robotic staff member, and stellar social customer service.

The brand is also rapidly expanding overseas, meeting the needs of its increasingly global guest, with plans to double its presence in India and China, add up to 20 properties in Africa, and expand throughout South America.

Skift spoke with Starwood CEO Frits van Paasschen to learn more about the ideology behind its industry-first innovations, challenges to meeting guests’ expectations, and thoughts on attracting the best talent.

An edited version of the interview follows:

Skift: What are the biggest challenges you face to improve the guest experience today?

Frits van Paasschen: The biggest challenge today is making sure our brands stay relevant and ahead of people’s changing expectations. Between new generations of travelers people coming from and going to new destinations around the world and experiencing the benefits of technology in other facets of their life, we need to make sure that we move 1,200 hotels and a couple of hundred thousand people as quickly as possible to meet those changing expectations. This isn’t just the biggest challenge facing me; more importantly, it’s the biggest challenge facing our organization overall.

Skift: Let’s touch on some of those changes in guest expectations and demands. What are some of the broad changes that you’re seeing? Are any of them unexpected?

van Paasschen: The fundamental thing here is that most of the change will happen in the coming years will, in fact, be unexpected. Internally, we talk in terms of agility being the new smart and that it’s far less important to have a long-range plan or strategy and far more important to decide what you want to be good at and how you can recognize good ideas and change and respond to those as quickly as possible.

For example, the shift that everybody is seeing from a PC-based search engine transaction view of the world to a mobile-based dialogue, app-based way of relating to brands, fundamentally opens up new possibilities for how we can have direct conversations with individual guests, how we can anticipate their needs, how we can make sure their room is ready when they get to our hotels.

These are all things that I think are really exciting and represent, yes challenges, but, more importantly, opportunities. The next phase of where this evolution is clearly wearable technology. How do you go from dialogue to real-time functionality? In a mobile environment people interact with their phones every six or seven minutes, but with wearables, they’re essentially always online and their devices have the potential always to be doing things in real-time for them.

Skift: What role does technology play in improving the guest experience?

van Paasschen: If we have state awareness in our app like we do, then that means we know when you’ve arrived in a city and we can make sure that we’re ready for you. We can ask you whether you know how to get to our hotel. If you’re on property, increasingly, we should be able to deal with you through our mobile app in case there’s something you need or want.

There’s so many more touch points now where we can learn from you, and it’s not just by the way of “big data.” One thing is having a lot of analysis to be able to identify what people want or what they may have wanted in the past. If we know you’re in touch with us and there’s something about your room that you don’t like then we want to hear about it.

We’ll pick it up on social media through what used to be a call center and is now increasingly a social media nerve center. Or we may hear about it on property and there are certainly ways that our associates know close to immediately if you’re having an issue or a problem. It’s as much about being able to anticipate as it is the all-important other phase of hospitality, which is responding and recovering to a need or something that may not have gone the way it should have the first time.

Skift: Is consumer-facing or back-end technology more important/effective? Is there a particular aspect or feature in all of this technology that has improved the guest experience in particular?

van Paasschen: Honestly, I think they are kind of one in the same. Here’s why I say that: You’re able now as an associate to know who’s coming into your property. We used to have a print daily pre-arrival report identifying what people want and all kinds of information about their stays. What we were finding was that it was really hard for our properties to absorb and respond to that. What’s happened is that we’ve gotten better at highlighting the information about who’s coming, but also putting it on tablets and putting it in the hands of our associates so that they can see, up to the moment, what’s going on.

Likewise in measuring guest satisfaction, we used to look at a 30-day window for what people were telling us and between social media and now looking at feedback in real time, our general managers or heads of housekeeping can talk to our associates each morning about what’s happened in the past 24 hours and things to look at and focus on. In many respects, we’re responding to things that people have said but we’re also avoiding issues that people might have that day if we hadn’t had the information more quickly.

All this nuanced guest feedback is helping us work with the owners of our hotels to identify those things that would be the biggest improvement in guest satisfaction at their own properties. We can begin to show our owners where, if they put capital into their properties, guest satisfaction will improve and the financial performance of that property will get even better.

Skift: How has the hiring experience changed or evolved to match changes in the guest experience?

van Paasschen: It starts all the way from the beginning. We do much more hiring now online and through various forms of social media that didn’t exist not that long ago. In addition to that, we’re hiring people around the world for different functions.

One of the great things about the hospitality business is that we generate and create opportunities in the 1,200 locations and the 100 countries where we operate. It’s important to find people who have that balance between technology and design and brands and operations. Talent pools are getting more and more challenging to tap into. I think the real opportunity to set ourselves apart is to make sure once people get to our company that they stay and grow.

People love coming here and being able to stay at our hotels. Having more luxury hotels in more destinations is a great opportunity. Joining Starwood in one place and being able to move and work in different properties around the world is another one. We also make investments in tuition reimbursement or online learning, which about 30 percent of our associates take advantage of.

I would layer on top of that the fact that if you create a culture that values people from different backgrounds and different functions coming together then they get really excited about this change that they can make. For example, at StarLab we have 200 developers or people with technical skills, but those people are sitting right next to our brand and design teams.

We make sure that we have folks from our operations around the world come and interact, because the best ideas and the best things that we end up creating are those that come from these disparate groups of people working together and feeling empowered to come up with new ideas, make changes, and propose things that might be a little different from how we did them yesterday.

What has stayed the same but just gotten bigger is working directly with universities. We work with the classic hotel schools and hospitality learning organizations, but what’s really changed is that we now also work with 17 different local universities in China, universities in the Middle East, and around the world as another pool for talent.

Skift: What are your views on the increase in hotel fees levied against guests?

van Paasschen: First of all, the most important job that we have is to make our guests feel like they want to come back and feel connected to our brands and giving them great experiences. The other side of our business is making sure, in doing that, we create great returns for the investors that own our hotels.

From our perspective, we’re always trying to find the balance between giving people great experiences and making sure that our hotels get the financial credit for doing that. Having said that, I think the other thing that we’ve learned is when it comes to our loyalty program: The people who are most loyal to us will get more and more preferential personalized service and treatment. For example, if you’re a member of SPG and you stayed with us loyally over time, if you show up at one of our hotels at seven in the morning you can get something that we call Your24. You can get the room that you checked into for a 24-hour period and not have to think of it as two days.

Skift: Starwood has been an early adopter when it comes to new technology including rolling out a Google Glass app, room keys right on guests’ mobile phones, or the Apple Watch app. What’s the thought process and stance behind this early adopter mindset that you’ve taken on for SPG?

van Paasschen: I think it goes back to the DNA of our company. We believe that people want a better way to experience the world and that bringing new things to our guests and bringing innovation to hospitality is part of that relentless desire to find a better way to experience the world. The different ways that technology intersects with SPG is creating a whole bunch of new ways for us to think about giving people those better experiences.

Here’s a live example of what I mean: In the last few months, we’ve gone through our 350,000 rooms and given our associates an app to record about 80 different features of those rooms. We brought those together in such a way so that if you book through our direct channels and SPG.com, we can start to record what kind of rooms you like and which of those rooms are available at the properties you’re looking at. We’re making our associates’ lives easier because if you don’t adjoining rooms or if you want to be farther away from the elevator, now our associates aren’t picking up the phone to check whether Room 217 meets your preferences. You can do all of this automatically.

Technology is a great way to get rid of pain points in the hospitality process. You stay with us 50 times a years, why should you have to show up, wait in line, identify yourself, pay in advance, get a key, walk to your room. We should be putting that same amount of energy that we’re putting into a pain point into meeting you at the door, giving you the drink that you want, helping you with your bags and doing all the things that are actually hospitality.

Skift: How has content and social media changed Starwood’s conversations with customers?

van Paasschen: I look at it in this simple way. In the end, you can’t download a hotel or outsource a butler. The hospitality business, in the end, is going to be about you going somewhere and having an experience and seeing people face-to-face. All of what we’re talking about in respect to technology is trying to make that trip a better experience. In a funny way, the technology matters least. Technology is best in all of this if it kind of disappears.

What social media and the availability of information does from my point of view is, look, the more you know about my hotels and what you can do there, the better chance we have of you coming and seeing us. It’s the same reason we put ratings and reviews on SPG.com. We’re not 100 percent correct every time, but I’ll put us up against the reality anywhere else any time. I think in a lot of respects, the more information that’s out there, the better we look.