Why should hoteliers embrace technology? How can it help provide a better guest experience? And what are the most essential technologies for modern hoteliers to implement today?
Max Starkov joins us and shares us to share his insights on all things tech. Max has a wealth experience with technology within hospitality. He is currently a professor of hospitality technology at NYU and has founded and served as president and/or CEO for numerous online travel startups such as: NextGuest, Travelbreak.com, and WhaleMedia Technologies.
In this episode you'll discover:
- Why hotelier need to embrace technology
- What the most essential technology to implement right now is.
- Max's background and growing up in Bulgaria.
- Max's advice for aspiring hospitality professionals.
The Modern Hotelier is presented by Stayflexi
Produced, edited, and published by Make More Media
Quotes
"It's not for us in hospitality to decide which technology we should implement. The marketplace has already decided this for us." - Max Starkov
"Hospitality is a technology-enabled service industry" - Max Starkov
"Technology is the only way going forward in our industry and until we realize that, we'll be paying the price." - Max Starkov
Episode Links
Max Starkov
David Millili
Steve Carran
Transcript
Automatic Transcription - please excuse any errors
Max Starkov: Technology is the only way going forward in our industry, and until we realize that, we'll be paying the price. Welcome to The Modern Hotelier, presented by Stayflexi. I'm your host, David Maloley.
Steve Carran: And I'm a co-host, Steve Carran.
David Millili: Who do we have with us today?
Steve Carran: Yeah, David, today we have on Mr. Max Starkov. Max was formerly the CEO and co-founder of Travelbreak.com and Whale Media Technologies. More recently, Max was the CEO of Hebs, which became Next Guest and eventually merged with Cendyn. Currently, Max is an adjunct professor at NYU, a professor of digital strategy at LaRoche Global Hospitality. Max, did I get that right?
Max Starkov: Yeah.
Steve Carran: Good. And he's also an online contributor to quite a few hospitality outlets and an advisor to BookOutdoors. Welcome to the show, Max, we're happy to have you!
Max Starkov: Well, it's my pleasure. So what shall we talk about?
David Millili: So we're going to go through three areas. I'm going to ask you some quick questions, you're going to answer them with short or longer answers, just so the audience gets to know you a little bit better. You're the hardest working man on LinkedIn. You know, you're posting every, it seems like every 10, 15 minutes, which is great. And you always give great perspective that I think is really appreciated by the hospitality community. The second part, we're going to ask you some more professional questions about your career. And then finally, we're going to try to get some insight into what's going on in hospitality, the industry, and trends. So with that, I'll kick it off. So, Max, what was your first job in hospitality?
Max Starkov: Listen, I come from Bulgaria. Actually, I was born and raised in communist Bulgaria back in the day. So international tourism is the number one economy in the country. So it was very natural for me to gravitate toward tourism in general and hospitality in particular. I did my undergraduate hospitality studies and my first master's degree in hospitality studies again at the largest university in the country, Sofia State University.
Max Starkov: And then I worked for a British tour operator on the Black Sea, ski resorts up in the mountains. I was a general manager of a club hotel and so forth. I worked as a professional meeting planner for the main international events company in the country, including the UNESCO General Assembly, 5,000 people, including the World Tourism Organization, again, 3,500 people and so forth. I was a chief organizer of those events. I worked for the main hospitality chain in the country, which was basically a government monopoly that owned all of the international hotels in the country. I worked in corporate, and I worked at the Ministry of Tourism, which was basically the government body that dealt with international tourism in the country. And actually, I came to New York City as the director of the Bulgarian government tourism office back in '89. So in this sense, my whole career, since my undergraduate degree, has been in hospitality and tourism in general.
David Millili: What line of work do you think you would have been in if you didn't get into hospitality?
Max Starkov: It's very interesting because, you know, my father was a professor in journalism and literature. When all of the other kids enjoyed the company of their fathers, who took them to the games, soccer games, or they played with them, my father was reading and writing. And, you know, when I was a kid, I said, I would never write, and I would never teach in my life. And actually, that's what I've been doing for the last 30 years, at least. I mean, you mentioned that I teach at NYU. This has been since 2001. And David, you know that you also taught at NYU, the Tisch Center, since 2001, so it's 21 years now. I'm an adjunct professor at NYU, and in the last three years at LaRoche. So, never say never, that's the whole point. And by the way, there comes a time when you simply want to share your experience with the next generations of hoteliers, if you will. So, that's why I'm doing this. It's not the monetary rewards or anything like this. I don't need that. It's just that I want to share with the next generation and hopefully help them avoid some of the mistakes that I've made when I was building my career.
David Millili: I agree. If you could trade places with someone for a day, who would it be?
Max Starkov: My goodness. I mean, one of my absolute idols today is Elon Musk. I think that he's the only living genius on this planet today. So I would like maybe not to replace him, but just to spend the day with him and see what his line of thinking is and how he spends a typical day.
Steve Carran: Are you going to be on one of the first trips to Mars with Elon Musk?
Max Starkov: I would love to do it. I mean, I have always been fascinated with technology and space, and I would love to do it, even at my age. I'm willing to go.
Steve Carran: All right. Well, if you do make it to Mars, you have to be on our podcast on Mars.
Max Starkov: I will.
Steve Carran: You heard it here.
David Millili: Max, do you have a secret talent that nobody knows?
Max Starkov: I don't know about secret talents. I mean, I'm extremely self-disciplined. I spent five years in a boarding school, one of these elite schools in Bulgaria, in my native country, and then two years, 25 months in the military, which was mandatory back then. So in this sense, it instilled discipline, which I think is very beneficial. So I'm very self-disciplined, and maybe this is one of the things that helped me in life. I'm organized, I would say. I like to take a deep dive into any subject matter that I touch. And so in this sense, I go above and beyond what your job requirements are, if you will, just to see how things connect and to be able to see things in 3D. I have always wanted to go and find all the connections and the bigger picture, if you will. So maybe, maybe that's what's helped me in my life.
David Millili: Great. You've been in New York many, many years. What's your favorite restaurant? If you had one restaurant you could go to?
Max Starkov: I have so many restaurants. I mean, I love, I'm a foodie. I love, you know, the restaurant scene in New York City; it's always changing. I mean, I lived 16 years on the Upper East Side. And actually, I was there a few days ago, visiting an appointment there, and everything has changed. I mean, there's only one store that remains from my time on the Upper East Side.
Max Starkov: So here in the Upper West Side, where I live in Manhattan, restaurants have changed even in the last, I mean, 10 years. New restaurants are coming. All of my favorite restaurants, especially now during the pandemic, have been decimated, if you will. So a lot of good restaurants closed because of the pandemic and because of completely random and irrational mandates that were imposed on our industry. No, we can—anyway, don't start me on that about the irrationality of many of them in our industry. So, many good restaurants and many stores, but it's not only restaurants. I mean, you can see empty storefronts with "for rent, for rent, for rent" all over New York City. It's...
David Millili: Yeah, it's unlike anything I've seen. I mean, I was just there last week, and we were talking before we got online, and, you know, it's amazing, having seen the city change, like you said, it perfectly that you've seen the rise and fall of the city and hopefully the rise comes back because it's really a shame.
David Millili: All right. Last question for you, then I'm going to hand it over to Steve for a bit. If you could have a superpower, what would it be? You could pick one superpower.
Max Starkov: In the last—superpower today would be to deal with, I would say, a megalomaniac that is threatening the whole world.
Steve Carran: That's a fair answer right there.
Steve Carran: I got a couple of questions just from your more personal side. You grew up in Bulgaria. You mentioned you were in the military. How did that shape the person that you are today?
Max Starkov: I mean, listen, even in a communist country, which centralized the government and the economy, it was a dictatorship. Though in Bulgaria, because, you know, we have a saying that nothing works well in Bulgaria, including dictatorships don't work well in the country, simply because the Bulgarians don't care and everybody's following their own private interests. And it's very difficult to combine the power of the individuals for the common good. So we are individualistic. We're like a small business owner-minded people in Bulgaria. So communism never worked to the extent it worked in East Germany, for example, or in the Soviet Union, and so forth.
And then on the other hand, we're talking about a country of 7 million people that is visited by more than 15 million foreigners. So, even the propaganda couldn't work because we were receiving, when I worked at the Black Sea Ministry of Tourism in Sofia, a ski resort, we were receiving British newspapers, German newspapers, French newspapers in the morning before the main government newspapers were available in the provinces. So, the centralized government couldn't even distribute their main propaganda daily in the provinces and the big cities. So, in this sense, we were never deprived of news and from knowing what's happening out there and how the whole world is reacting to certain events and so forth. Nobody could fool us. So, this is something that... But other than that, I mean, people tried to live a normal life. Both of my parents were teachers. You know, we were middle class, if you will. So, I had, I would say, an extremely happy childhood, simply because we didn't know what we were missing. That's another story. But under the circumstances, I had a great childhood and upbringing and went to the best boarding school and the best university in the country. The whole point is that even in such dire circumstances, you can make a living, and you can build solid, I would say, moral foundations.
Steve Carran: Absolutely. Absolutely.
Max Starkov: But I was an anticommunist from day one. I mean, I couldn't stand... First of all, when people obviously saw that the black was black, but they were forced to say that it was white simply because, you know, they were afraid for their families, for their careers, and so forth. So I have never, I have always been outspoken and I have always said what I thought was appropriate at the time.
What I'm noticing right now is another thing, you know. Back in the day, simply because people were afraid, once again, you had to be in line. You have to, on the surface, pretend at least to support what the Communist Party or the government decrees, whatever. So there was a certain language imposed on ordinary people, and you had to develop an unofficial facade, if you will, which was all pro-government, pro-Communist Party. And then in your private life, your very intimate private life, you could share what you really thought. So people developed this double-faced, the famous Janus personality, which led to a lot of mental issues for many people. And, you know, what I see happening right now in the United States with all of this political correctness and all of the wokeness is exactly what I experienced when I was growing up in communist Bulgaria.
Steve Carran: Wow. Wow.
Max Starkov: It's exactly the same. There's no difference.
Max Starkov: And why should we? We were joking with my wife, "Is it time to immigrate back to Bulgaria?" Which is very interesting.
Steve Carran: Was there something that, when you were growing up, maybe didn't go your way or went differently than you wanted to, that really kind of changed or shaped you? And did you really learn a life lesson from it while you were in Bulgaria?
Max Starkov: Well, I wouldn't say life lesson. I mean, it came naturally. I mentioned that Bulgaria's international tourism is the number one sector of the economy. Major highways west-east pass through the country, millions of foreigners. So, since day one, I wanted to travel. And in order for you to travel, there were only a few options that you could travel abroad because, I mean, even if you wanted to travel to a Western country, you needed an exit visa. So not just the visa of the country, let's say Germany or the United Kingdom, if they gave you a visa or the United States, but you needed an exit visa, which was given by the interior ministry, which means that people were not simply allowed to travel abroad. It's simple as that.
So only a handful of people were allowed, and these were like foreign trade people working in foreign trade and people working in tourism. Well, this was one of the maybe eye-opening things is that when I went to this boarding school and we met with somebody who was a tourism professional at the time, and the guy was telling us about his stories from Greece, from Latin America, from the United Kingdom, and he had traveled all over the world. And we were fascinated. We were 13, 14-year-old kids. And that's what I wanted to be. So that's basically, if there's a life-changing moment, maybe that was it when I really realized that this is what I want to do. I want to travel the world. And, you know, I have traveled. I mean, I've been to hundreds of countries around the world. I've lived in four countries. So, in this sense, perhaps this shaped my desire to be in this industry. That's a fair assessment.
Steve Carran: That's awesome.
Steve Carran: Question for you as a professor. Do you have an example or do you have one story of a student that you really felt like...? Because again, like you, when I taught, it was always great when you saw somebody, you know, get a job or take something, you know, when they would present and you could kind of just see that you had an impact on them. Is there a story or an individual that you feel like was one of the best moments of your teaching career?
Max Starkov: Actually, I have a... Well, maybe not one story that stands out, but I have had a lot of students that were doing... I mean, David, similar to you, I teach graduate courses. So, you know, why do people need a graduate degree? Quite often, it's because they want to advance in their careers or they want to change careers. For example, I've seen a lot of people who simply did not belong in hospitality studies. Let's put it this way. They, you know, they say, "Oh, my parents, you know, we traveled when we were young, and we stayed at this beautiful hotel. So that's what brought me to hospitality." I said, "What did your parents do at these beautiful hotels?" "They were guests." So they paid a pretty penny to stay at those hotels. Go and find work that will reward you monetarily so that you can afford to go and stay at beautiful hotels—you don't have to work at them. You'll be underpaid and overworked. So that's my... So my first question is, why are you here with all my students? What are you doing here? And I'll tell you, very few of them have a meaningful, even at the graduate degree level, have a meaningful answer. And quite often it's very naïve beliefs that, "Oh, it's a very fun industry," which is true. I mean, I have been in this industry for 40 years now, so I would not change our industry for anything on this planet. But it's a tough industry. It's a tough industry. You know, you really need to have the passion for this industry. And ultimately, you need to find your niche. You need to find your avenue there and pursue it. But come to the industry believing that you will be... that it's like a fun industry and all the travel and this and that. That's a different story. I mean, travel means money. You need to earn a lot of money in order to travel. So in this sense, if you work as a front desk clerk, which is overstressed, overworked, and underpaid, where are you going to travel? But I'm helping all of my students find jobs after they graduate and so forth. I'm in touch with many of my students, and I've seen some very, I would say, good students of mine who have become entrepreneurs, who have become general managers of hotels, who have become owners of hotels, even. So, you know, I'm very much pleased, and I'm in touch with a big chunk of my former students from the last twenty years.
Steve Carran: That's awesome. Do you have any specific advice you give to your students as they leave the nest of college? Do you have any set of advice that you give them as they start their career in hospitality?
Max Starkov: The advice that I would give is the following. Traditional hospitality, and this is what Lausanne is teaching in Switzerland, and this is what many of the traditional hospitality schools are teaching. Cornell does this. That's fine. This is the fundamentals, but this is traditional hospitality, which has nothing to do with the future of hospitality. So that's why, what is it now, four years ago, I met with the Dean of the Tisch Center at NYU and we discussed what was needed in our industry, what skills our industry is lacking today. And, you know, we both agreed that it was technology. So that's why I developed this whole current and future hospitality technologies course, where we're teaching graduate students that hospitality is a technology-enabled service industry. It's not a real estate industry. And I would say that many of the issues that we have in our industry, the fact that we are technology-backwards—David knows this extremely well—the fact that our guests today are far more technology-savvy and digitally savvy than us in our industry. And basically, we have... Back in the day, I would say until maybe 15-20 years ago, we in hospitality always provided a better, I would say, environment from a technology perspective, even the bed. And you remember the heavenly bed, Westin, and so forth. So basically, off that TV, oh my God, it's something people didn't have at their homes 20 years ago. So basically, we really provided a better home away from home. Fast forward to today, we offer a sub-par home away from home. We are behind the curve. Our guests are much more forward-thinking and tech-savvy, digitally savvy than us in hospitality. Then when they come to our hotel room, they look around and say, "That's it? All the smart TV is the latest thing that they have? Where is the voice assistant? Where are all of these IoT devices that can help me manage the temperature, that, you know, can open the shades in the room, and so forth?" Stream... try to use your own Netflix in a hotel room. It's a nightmare. Try to delete your login. It's impossible. What I mean is that we have fallen so far behind. And if you look at the pandemic, the pandemic further, I would say, further decreased our abilities to serve the new type of digitally savvy traveler.
Steve Carran: Okay.
Max Starkov: I mean, hospitality slashed IT spending, which is all the technology spending, by 50% during the pandemic—five-zero. And then, you know what, hospitality spending, 2.5% of room revenue goes to technology. That's it.
Steve Carran: Do you...
Max Starkov: So what I mean is... and then, and then slashed by 50%, and then slashed the payroll for IT personnel by more than 50%. So basically, you have left the hotel with no investments, with no personnel who understands technology, and you're trying to service travel consumers who are 100 times savvier than the most tech-savvy person at your property. I mean, come on. That's where we are. We are falling further behind. And the main thing is, it comes from treating and this real estate mentality in our industry because the same REITs, the real estate investment funds who own the hotels, most of the hotels, they own office buildings, they own big shopping malls. So, and they treat hotels in exactly the same manner as they treat an office building. I mean, if you own an office building, what kind of technology do you need? Each company takes care of their own office. All you have to do, even the internet access, is every company chooses from, let's say, five or six preferred vendors that have lighted the building. So all you have to do is take care of the elevators. That's your only technology. And this is the same mentality that applies to hospitality.
Steve Carran: Right. Right.
David Millili: Well, it's very funny. I was going to say real quick, I know one of the running jokes I have with a couple of friends of mine is that every year you go to Hi-Tech and you see they have this hotel room of the future, but it never actually... it's been... the hotel room of the future has been coming for 20 years.
Max Starkov: Yeah, it's the same. It's the same. Uh, yeah.
David Millili: Yeah, it doesn't happen.
Max Starkov: I know. I know.
Steve Carran: So, Max, independent hotels and resort collections seem to be on the rise. Why are they gaining traction now? And two-part question: how are we going to keep this momentum going?
Max Starkov: I don't know. Why do you think that independent hotels are on the rise? Because there is a definite move toward branded design in global hospitality. I mean, in the United States, already 70% of hotel rooms, not properties—70% of hotel rooms—belong to a major hotel brand. In the United Kingdom, it's 50%. In Europe, it's anywhere between 40% and 45%, depending on which side of East, West Europe, and so forth. Asia Pacific, 35% to 40%. In this sense, rooms, we're talking about. So, in this sense, I believe that, especially now with the pandemic, which first of all requires huge investments in technology, contactless experience, mobility, IoT, and I'm not even talking about robotics and AI and so forth. Independent hotels have no bandwidth, have no knowledge, have no skill set, and, of course, don't even have the money to invest in all of these new technologies that are needed, and the best practices, of course, and so forth. I think that the randomization will continue, and actually, the major hotel chains will be one of the few, you could call them, winners of the pandemic. There will be a lot of independent hotels that will join the soft brands of the major hotel chains. So they will not go the franchise way and so forth. They will go like the Autograph Collection of Marriott, the Luxury Collection, formerly of Starwood, now Marriott, and so forth. So we will see a lot of those. And the main reason is the best practices, technology, whatever the technology is. So the bigger hotel chains are becoming even bigger, and the independents are being squeezed out.
Steve Carran: Okay. Okay.
Max Starkov: And especially when you look at... I mean, if you're in the Autograph Collection by Marriott, you've been independent. You pay 25% to Expedia, OTA commission. You pay 18% to Booking.com, but another 5% for the Genius members. And then they have a preferred, you know, preferred type of positioning in the search results on Booking, which is another 5%. So it's already more than 30% commission. You become part of Marriott. You pay 11. Those are the differences. So what I mean is that I expect that the brand-ization will continue. Especially the small, the true independents like single property independents will be squeezed out. And I agree that there will be... like Viceroy, for example, provides different value. They provide best practices. They have the technology. Loft Hotels, for example, and so forth. So there will be such independent chains, if you will, luxury and boutique hotel groups, which will survive. But again, they will survive only because they know technology, they know digital marketing, they have a brand presence, and they can still best practices and so forth.
Steve Carran: Sure. Sure, absolutely. So having that kind of comfort of the brand behind you, first of all, and then not having to go choose all your technology, it's just kind of there for you. If you're moving to a brand, instead of just being independent. Got it. Got it. Next question for you, and I read your recent Hospitality Net article, and you mentioned in there, I believe it was a study, but the pandemic accelerated digital transformation by 10 years. What specific technology in the hotel industry needs the most improvement, or have you seen a technology that you are super impressed with?
Max Starkov: Well, I mean, it's... I think that it's not for us in hospitality to decide which technology we should implement. The marketplace has already decided this for us.
Steve Carran: Right.
Max Starkov: So, in this sense, I believe that the most pressing need in hospitality right now is to provide a full contactless experience at the hotel. I mean, this is the most pressing one. And that's why, if you see the NYU Tisch Center survey that they did with hoteliers, the vast majority of what hoteliers are planning in 2022 is connected around a contactless experience. So, in this sense, I believe that this is something that our guests require, that our guests like. I mean, I'll give you one example. If you are a guest at the hotel, first of all, you hate touching the room phone. Nobody wants to touch the room phone. You don't want to touch the remote. So, how do you communicate with the hotel? And of course, using your own smartphone to communicate with the hotel is... I mean, it's a no-brainer. Everybody wants it. Everybody... it's much easier. So, having such a guest messaging system in place, an application in place, issue resolution via text messaging, for example, is... they're connected, of course. So it's quite often the same application that recognizes what kind of requests you have and then directs it to the relevant department—housekeeping, engineering, or whatever it is. So this guest messaging issue resolution, I mean, the application costs a dollar or two per room per month. That's it. But you save on labor costs at the front desk because when somebody calls the front desk via the room phone, somebody has to pick up the phone. Who will do that? You have to provide, and you have to invest in bandwidth for your front desk clerks, you know, to be able to answer the phones. So if you have guest messaging, all of this is automated. But not only automated, it's that, for example, if you have a hundred-room hotel and you call because you need an extra pillow, the current arrangement that most of the hotels have is that the front desk clerk will take a note on a little piece of paper, "Room 405 needs an extra pillow." Then, if they have the time, if they remember, they will call housekeeping and say, "Hey guys, bring a pillow to room 405." So all of this involves a lot of people, and guest messaging and issue resolution can solve this, and not only solve this, but provide the analytics. So at the end of the week, at the end of the month, the general manager can see, "Oh my God. I mean, last month we got... we're a hundred-room hotel. We had 150 requests for extra pillows. So let's go and buy the damn pillows and put extra pillows in every room."
David Millili: Yeah.
Max Starkov: Problem solved. That's my point. Technology is already pretty sophisticated. It's already available. It's cheap. That's my point. It's reasonably priced. And when hotels say, "Well, we don't have anybody here to manage this, or we don't... we cannot invest in technology," it's just an excuse. It's just an excuse for people who simply do not want to change their ways. That's what it is. So, I mean, I gave this as an example, but for a few dollars per room per month, you can solve a major issue of, I would say, a reasonable contention with your guests and improve customer service big time.
David Millili: It's actually amazing because when you look at the way our industry is slow to adopt new technology, there's also an issue, I think, not only with hoteliers but with some of the tech companies. So, I just advised Go Moment, which was acquired by Revinate, and what I really liked about Go Moment was that they had the AI component. So there was the whole idea: do you really need to personalize what's the Wi-Fi password or what time is check-out? And in doing my research, there were some of the—I won't name them, but competitors—that they said, "Oh, no, hotels want it so they can actually personalize and communicate with their guests." And it was just very funny how, you know, I was listening, and it was two separate companies, and you're thinking, well, yeah, how's it any better if somebody types in the Wi-Fi password and actually makes a mistake versus just the AI knowing? And Go Moment was pretty cool because they actually had the Ivy persona, and guests actually thought it was a real person. They sent thank-you cards, thanked Ivy on TripAdvisor. So I guess, you know, you and I know how it is dealing with ownership groups, you know, the REITs and... One piece of technology that, you know, if you were running a hotel and you were part of the management company, is there one piece right now that you would kind of be banging the table for, that we have to spend money on this? Because it just seems like they're not adopting, you know, just like you said, text messaging or voice assistants.
Max Starkov: I mean, I already mentioned the full contactless experience, which includes, of course, the mobile check-in, mobile keys. I mean, there's some very nifty, very reasonably priced solutions to adapt your existing locks to become mobile-enabled locks and so forth, or open keys. But the one thing that I would really, really try to invest in this year would be a cloud PMS, to move away from an on-property PMS to a cloud PMS. And the main reason is that all of the cloud PMS systems come with integration hubs and other marketplaces with API marketplaces, where, quite often for free, you can connect to any third-party vendor that you want. Because if you don't have that, we have been through integration processes, you know, with old—I wouldn't name the PMS—with old on-premises PMSs where even a luxury hotel group with 35 properties couldn't get a date that was closer to, "No, we need to do an API." And the first available date that was given to us was like nine months into the future. "That's it, guys, but we are, whatever is the name, we are a world-famous brand. You know, we are one of your best clients." "Okay." So they moved it to six months, you know, that was the concession. And then $2,000 a day for the engineer to come—$2,000 a man day. That was the first time in my English vocabulary I included a new term called "man day," not "man hour," "man day." It's a $2,000 per man day, two days. And yeah, we did the... you know, the job was done. But my whole point is that our client was, I would say, reluctant to go through the same exercise after this experience. And what happened is that they saw the need to adopt third-party technology. Their guests demanded certain services provided only by third-party technology vendors, yet our client, the hotel group, was reluctant to go through the tourist experience simply because it was painful, it was very expensive, and, you know, they didn't adopt technology that was available at the time, that would have made guest services much better, simply because integrations were such a pain in the neck. So in this sense, that's why if you adopt a cloud-based PMS with open API with an existing marketplace, I would say that this is really the biggest achievement that any hotel can do in 2022.
Steve Carran: Absolutely.
Max Starkov: And then it will be much easier to implement a full contactless experience, to negotiate and contract with vendors that can include housekeeping on demand during the mobile check-in, to implement a self-selection of rooms during the mobile check-in. So, "I want room 405 on the fourth floor, corner room." Yeah, it's 25 bucks more, but when you look at the digital floor plans, similar to how we choose a seat on an airplane, it's already existing. Hilton just implemented this across all of their 1,200 properties in North America. So, what I mean is that the technology's out there, but you cannot have this technology if you don't have a cloud PMS with an open API. Otherwise, it will take you two years to implement. And then, once you implement a mobile check-in, contactless experience, mobile key, housekeeping on demand, and a self-selection of rooms, then you can fire half of your front desk staff. Or actually, not fire them because you cannot hire them. You cannot find them because of the labor shortages in hospitality. So that's my point. And then, labor costs... you know, housekeeping on demand, if you implement a program like Hilton implemented and Marriott followed and all of the major hotel chains and many others, you don't need half of your housekeepers. I mean, in New York City, David knows unionized labor housekeepers make $47 an hour.
David Millili: You're right. I mean, I think what's funny too is that, you know, just a quick, funny story about the staffing and interaction. I was in a hotel in Miami, and a friend of mine hooked me up with a rate. And so when I was checking out, the gentleman behind the desk asked me, "Would you like an email address?" And so I thought, well, my friend booked it, yeah. So I asked him, "Do you have my email address on file?" He says, "That's a good question." He says, "Well, let me write it down for you." And he says, "What's your email address?" And I said, "It's my last name." I said, "First name." He writes down "First Name." I said, "Last name." He writes "Last Name." I said, "NYC at Gmail." Never got the receipt. And to your point, if it was cloud PMS and everything was integrated, it would have just been simple, but I never got the receipt. Not that I really needed it, but, you know, sometimes...
Max Starkov: Yeah, so this is what hoteliers should really consider as a super top priority. And there are some very shining examples. I mean, you mentioned the company that you're representing and so forth, but I mean, there are so many good examples out there. And then I would say the second thing that I would implement is a CRM.
David Millili: Right.
Max Starkov: I mean, it's all about repeat business. It's all about repeat business. Repeat business is 5 to 20 times cheaper than acquiring new guests today. And you cannot have repeat business, and you cannot increase your repeat business if you don't have a solid CRM technology and CRM program in place. It's as simple as that. So though CRM definitely, the contactless we mentioned, which includes also the mobile check-in, but again, it's not only the mobile check-in and the mobile key that the full contactless experience means that, you know, self-ordering kiosks, for example, in the restaurant and so forth, or, you know, deliveries from ghost kitchens or from whatever restaurants around the hotel or the hotel. And then, of course, in the future, and they're coming big time, we're talking about robotics that can really change the way that we operate in our industry. I mean, housekeepers, depending on the category of hotel, the housekeeping job consists of 125-175 tasks. Well, if you break down what the housekeeper does, robots today can do 75% of those. You know, we have the Rosie by Maidbot that cleans the floors, does this much better than humans. You already have robots that clean the bathrooms, and they clean them much better than humans. So, it's just as of course all of these robots move dirty linen and wet towels out of the rooms. So you can carve this today. Many of those robots are... you can rent them by the hour. And the hourly rate is much cheaper than the human rate, if you will. So the technology is out there already, and it's coming. Before you let the robots roam the hallways of the hotel, simple things: guest messaging, contactless experience, cloud PMS, CRM.
Max Starkov: These are, I would say, the top priorities that hoteliers should be considering.
David Millili: Okay, Steve, we're near the end. Why don't you ask the last question?
Steve Carran: I got to ask this: how is the metaverse going to affect hospitality?
Max Starkov: The short answer is, it won't affect hospitality, at least in the foreseeable future. The metaverse is anti-travel, first of all. If you look at... the opposite of travel. If you look at what travel achieves, travel satisfies all five human senses. I mean, you see, you touch, you smell, you know, your palette and so forth. So we have five human senses. The metaverse satisfies or can touch only two of them. You can see and you can hear. That's it. That's what the metaverse is. So, basically, it's at best, it's a very visual, and maybe, you know, it provides a visual environment, if you will. But the way that I see the metaverse in travel and hospitality in general is maybe applications to replace the flat Zoom meetings, a more 3D environment for your meeting, where you can send your avatar to sit at a table together with the other people that are having the meeting, faking, if you will, a meeting in a conference room. That's one of the applications. Or let's say conferences, you can send your avatar to a conference. I mean, we saw all of these big meetings on Hi-Tech, including online, with all of the breakout rooms. It can never replicate the real experience. I mean, let's put it this way. I mean, I attended several virtual events like this, and it's just sad because quite often, you attend Hi-Tech, for example, or any industry event, you learn more from your informal, unstructured interactions with the other participants. That's where you learn the most, even from your competitors, you know, or you meet potential clients and so forth. So this informal and unstructured type of behavior is very difficult to replicate in a virtual environment, including in the metaverse. But I would say that the metaverse may provide a funkier, more lively virtual event, but that's it. So, virtual events... nothing can replace the real human interaction and having a good glass of single malt Scotch whisky with a potential client at the bar. Come on, you've got to have this in the metaverse, or meeting old friends in the industry. You can't have this in the metaverse. So, meetings, I would say, guest speaker ships, and all... like you send your avatar to speak at the conference. Maybe, maybe sales meetings, like quick sales meetings, where you can jump and go to Singapore. You send your avatar to Singapore and present your case to a potential client. This will be interesting to see how it works out, but this is one of the options. Yes, it's all sound and visual. That's it—the two of the five human senses. So you can, you know, a sales meeting, though. There's no touch, there's no human interaction, there's no reading of your gut feeling that tells you not to go with this deal, you know, and such things are impossible in the metaverse. But this is... So, I have seen some destinations are planning to do all... "We will do a virtual metaverse replica of our destination, and people will come and enjoy it." And you know what will happen? Some people will behave in exactly the same manner as I witnessed. I was at the opening of a hotel in Las Vegas back in the 1990s. So, the Venetian hotel with the blue skies in the lobby with the canals and the boats in the lobby. And then there was this old couple—they were not that old, but they were well-dressed, obviously, you know, people with means. And she said, "Oh honey, why did we spend $2,500 last year to go to Venice, Italy, when we should have come here? The lobby of the Venetian is the same as Venice in Italy." Really? So, that's my point. Any metaverse type of a replica of a destination will satisfy some people who will not travel to your destination. You know, they'll say, "Oh, I saw it. It's fine. I don't need to go there." So that's why it's a double-edged sword if you try to go that route. But anyway, visually, to represent something or like a teaser, it will be used in marketing and all, like create a metaverse teaser about your destination, about your product, but this is it. So, and I'll tell you, at least in the near- to mid-term future, the metaverse will be more hype, like a buzzword, than anything realistic, I would say.
David Millili: Well, that is all of our questions. Is there anything that you want to plug or discuss?
Max Starkov: No, no plugs and no discussion. The only thing is that we need to address the main issues in hospitality today. And the main issues are not that people are not traveling. On the contrary, labor shortages, skyrocketing labor costs, and you can solve this only through technology. There's no other way. Of course, changing the business model—if you have room service, forget it. Room service is gone. If you have like a small restaurant in the lobby, remove it, replace it with a robot making pizza. There's plenty of those, you know, Pietro and the likes. I mean, there are some shining examples for gourmet pizza, you know, a robot and a person on call, actually on part-time, supporting person. That's all you need. So what I mean is that technology is the only way going forward in our industry. And until we realize that, we'll be paying the price.
David Millili: Uh, I've officially named you the hardest working man on LinkedIn, and I appreciate all your posts. I really appreciate it. And I think with the people that follow you and the people that I know who know you, it's the honesty. So I thank you for that, and I appreciate you taking the time to be on the podcast, and thank you very much.
David Millili: And again, let's hope that New York bounces back.
Max Starkov: Oh, yeah. Well, listen, it's a great city. I love the city. But we need better managers of the city. Let's go this way. Okay. Thank you guys, and good luck.
David Millili: Thanks. Bye-bye.