Salesforce-Backed Mews Shifts Hotel Tech Focus From Room to Guest

We paused the Travel Tech Briefing while I was on a leave of absence. But I’m back and happy to talk digital transformation with you. Tell me what I missed. Email me at [email protected]. To share intel in confidence, contact me on a non-work device via [email protected].

I made a “bold and outrageous prediction” back in 2019 that Salesforce would enter travel. While it didn’t happen, a recent event suggests the enterprise giant is sniffing around the sector.

Last month, Salesforce invested in travel tech company Mews through its corporate venture arm Salesforce Ventures.

• Mews didn’t reveal the size of the Salesforce Ventures investment.
• But Amsterdam-based startup said it planned to boost its “headcount by over 90 percent in the coming year across all functions.”
• The startup’s last funding round was in 2019 when top-tier firm Battery Ventures led a $33 million Series B round in the company.
• Thayer Ventures also backs Mews. The venture firm’s managing director Chris Hemmeter told me in October that Mews could become as big of a revenue-generator as Sonder, which is on course to be the fund’s biggest success to date.

Mews provides enterprise software to hotels with what’s commonly known as a property management system, or PMS. The startup has some notable customers.

• Earlier this year, I wrote in a Briefing about Accor’s travel tech plans. I revealed then that Mews is one of the PMS providers the hotel giant has certified owners to use for selected brands, such as Mövenpick, Jo&Joe, Ibis, Mercure, and Novotel.
• Kayak’s hotel partner Life House uses a “headless version” of Mews’ software to run its tech stack. 
• The Student Hotel, one of Europe’s most innovative hospitality brands, uses Mews’ tech, too.

Mews founder Richard Valtr argues that the fundamental building blocks of a hotel’s property management system can no longer be the room.

• “It made sense when the room was the main sellable unit for a hotel to have the technology systems make the room the core of their design,” Valtr said. “The fundamental structure of hotel tech systems was set in the ’80s and ’90s, when hotels basically all thought about the question that way.”
• But Valtr said that a new wave of hospitality leaders, such as ones at the Accor-owned The Hoxton brand, see guest data as the more central building block of a tech stack.
• “People always ask me why is it so difficult for hotel companies to recognize them when they return and visit a hotel or a property within the same chain,” Valtr said. “It’s precisely because of the terribleness of guest profiles which is because the tech systems are architected to care first about the reservation and a room assignment and not the guest profile.”
• “Hotel companies spend a huge amount of time trying to piece all their customer data together, but the unified view never gets delivered in an actionable way to service providers,” Valtr said. “So the receptionist still doesn’t know who I am after my fifth visit in three years.“

A segment of hotel companies is increasingly interested in the profit potential of ancillary services and amenities. That’s driving interest in buying new operational tech.

• “A guest might be someone local coming to do a business meeting in the lobby or to work in the coworking space or use the gym on some sort of monthly pass,” Valtr said. “Traditional hotel systems that associate everything with a ‘room folio’ struggle to adapt to take advantage of these ancillary sales. These systems can’t recognize me unless I booked a room and struggle to track my other purchasing behavior.”
• When engineers set systems up with the room as the core unit for associating data, it can require tricky workarounds to offer personalized service to guests. That’s because the relevant guest data is scattered.
• “It gets even more complicated when there are more than one guests in a room,” Valtr said. “If I’m traveling with my young daughter, we might be ordering completely separate services in the hotel. But in the traditional hotel property management system, we would be part of one reservation.”
• Hotels may need different underlying technology to get to a higher revenue level of tapping into ancillary sales.
• “You don’t have to be a full-service hotel to benefit,” Valtr said. “You can outsource the delivery of some functions, such as F&B [food and beverage], while taking a cut of the sale and learning about how to super-serve your customers based on their purchasing behavior. You can monetize a lot of the services a guest is likely to consume off your property, too.”

Several vendors promise to help hotels extract data from an array of hotel software systems to create “a golden record” on a customer — or a unified profile of a customer’s purchases and preferences. Valtr is skeptical of the premise.

• “At trade conferences, the golden profile is always explained as basically somebody trying to clean up data and figure out who a guest is even when a demand partner like Booking.com doesn’t share the full email or other key details,” Valtr said.
• “It feels like such low-hanging fruit to go after,” Valtr said. “Because what you really want to figure out is how to capture all of the personas or identities a person has, such as a person’s purchasing behavior and preferences on a business trip compared to a leisure trip.”
• Valtr hopes hotels can move beyond using middleware that’s translating the logic of one system to another. He’d like hotels to have clean data that can marketers can analyze via customer relationship management, reputation management, and digital marketing tools such as the travel-specific Revinate or the global Salesforce.
• “In today’s typical hotel tech stack, there’s a great mismatch basically between what’s going on in the CRS [central reservation system], the PMS [property management system], and at the CRM [customer relationship management] and loyalty system level,” Valtr said. “You don’t have that kind of connectivity you need for seamless interconnection.”
• Some hotel executives don’t appreciate the gravity of the problem, Valtr said. A hotel group’s guest experience manager might have interesting e-commerce profiles sitting in their software that they feel is fantastically informative. But if the front-line workers don’t get the information, the guest is ill-served. Plus, hotel workers miss upsell opportunities in the moment.

A closing side note on Salesforce: Whether or not the tech giant enters travel someday through an acquisition, more and more travel companies will be adopting Salesforce’s services.

• A case in point: In 2020, Mews migrated from using five systems for managing sales, support, and customer relations to Salesforce.
• The logic was simple. Salesforce’s cloud-based tools get high marks from engineers for their syncing with other commonly used software tools.
• Many hotel companies are already using Salesforce’s loyalty program management product to help power their loyalty programs.