Since the start of 2016, Lee Horgan has been chief executive of Amadeus Hospitality, the hotel software division of Amadeus, the Madrid-based travel technology behemoth.
But Horgan is an old hand. In 1994, he joined Newmarket International -- the hotel specialist technology company that Amadeus acquired in late 2013 as part of its growing interest in subscription-based, cloud-based enterprise solutions for hotels and hotel chains.
Six months into his new gig, Horgan sat down with Tnooz to give us the lowdown on what’s up with its new business unit, officially rebranded last month as Amadeus Hospitality.
His unit includes other hotel technology companies that Amadeus and Newmarket have absorbed in the past five years, such as Hotel SystemsPro, Itesso, MTech, MeetingMatrix, and Libra.
Horgan talked about what hotel customers say they're worried about and what Amadeus’ overall game plan in hotel IT is.
Tnooz: What’s your five-year vision?
Horgan: If I look 5 years down the road, more and more people will want to gravitate towards having more and more of the elements we offer on our platform working together. Because it's just going to be easier to deal with a single vendor.
That's really where the community model that Amadeus pioneered in the airlines comes in and how it can be applied to hospitality.
The nice thing for us is that we can always look to the airlines and what Amadeus did with Altea, as a really nice way of, "Okay, this is how they approached the market." They've been really successful on the airline side, obviously, in upgrading clients to the full suite of products.
We're focused on a handful of key elements: a central reservation system (CRS), a property management system (PMS), sales & catering, and hospitality operations.… Underneath that, each product will roll up into those domains.
Tnooz: What kind of traction have you had with the top-20 global chains? Are you more focused now on mid-tier instead?
Horgan: We’re actively in conversations with everybody, from an individual hotel up to a brand. The biggest brand we've announced has been IHG, as the launch partner for our CRS. If you think about what else we have in play on our platform, we have installs one of one kind or another with almost everyone.
Our strategy isn't, “Let's just go after the chains."
Our strategy is, "Let's figure out where people have a need, and how can we help them fill that need.” If we have the right solution for them, let's be a great partner and easy to do business with. If they have an existing solution, and they want us to integrate with it, then we need to be very open to that, as well.
That's probably where we're really focused on saying, "Let's understand a customer's needs. Let's understand where the value proposition, where the market is. And how can we make sure that we tailor our solutions to what they're looking to accomplish?”
We'll be really upfront about where we think we can create value and where we don’t.
Our new CRS is getting a lot of positive feedback. Guests want to interact with the staff, so the more we can do to create efficiency so the guest can have more touch points with the staff, that's better off for us as much as it is for the hotels and for the guests.
Tnooz: What are you hearing back when you talk with customers? What are their needs?
Horgan: Hoteliers want direct bookings above all else. That’s what we’re hearing.
Working back from that logically, they think they want new technology to be able to deliver personalization.
Some hotel owners have legacy backends, which means their data is in silos, and the siloing prevents them from achieving the personalization they’re looking for.
But what's in the mind of the hotelier? Do they want to tear up their entire tech stack and do one big change, or are they just trying to incrementally simplify across the board?
It varies. With our community model approach, there is going to be commonality between customer A and customer B, and they want that because they get leverage.
We really want to make sure that we continue to focus on how we make sure that we can provide technology that can be tailored to that customer and what they're looking to do.
Do they want to be able to create specific workflows and different configurations to create a competitive advantage in productivity? Somebody may have their own CRM system, for example, and be really happy with it. Someone else may be desperate to get off of their CRM system.
Tnooz: You mention operations solutions. But how does Amadeus Hospitality help hotels meet their distribution channel mix goals?
Horgan: That is the wave of the future. The hoteliers want to control their distribution and figure out how do they maximize all channels.
Our strategy is really making sure that people understand where is their business coming from, but then, especially on the direct channel, which is what you'll hear people talking about a lot is, if we have a strong central profile and we know our guests, how do we create that connection where either we're packaging something personalized to them, we hit them with an offer before they're shopping.
We're spending a lot of time figuring out how do we help hoteliers make those connections, but we also understand that online travel agencies [OTAs] will certainly have a place. A lot of the conversations we have is hoteliers are like, "Of course, bring OTA as a lead channel for me."
Once they bring them in my job though is, the second time they book, I want them to book directly with me.
Omni, Marriott, Hilton, everyone has a book direct strategy now, it seems.
We just want to make sure that our technology is flexible, allowing the hoteliers to put their inventory where they want to put it, at the price point they want to put it.
We think that that's really the whole message of where we're going forward is flexibility. It's never for us to decide. It's all about how do they want to decide. Of course, we like the Amadeus GDS channel.
Tnooz: What’s the biggest change you’ve seen in attitudes and behaviors among hotel companies regarding tech deployments in the past couple years?
Horgan: Specifically around Newmarket, I can say that more and more customers are focused on change management…. There's more of a maturity in the hotel business now, as far as the importance of change management goes.
We're hearing a lot of customers that are saying, "Technology is great, and it's important, however — how do I make sure that I implement that to really maximize my investment, to make sure that my employees are fulfilled by whatever I'm purchasing?"
There's been a big focus on, when I'm moving from system A to system B, what does the change management look like? How do I make sure that I have a measurable outcome?
That's how we've made the biggest change that I've personally seen, and the latest shift where people are really spending the upfront time to understand how that's going to work.
Then, if we shift over to Amadeus’s airline side again as an analogy, they've migrated folks off of airline systems before, so they understand, like with IHG, what it's going to take to migrate from their heritage CRS to the new CRS. We really get to tap into a lot of that expertise.
Tnooz: Is there a risk of blackouts during a migration?
Horgan: To minimize that, it comes up to really making sure that you have a proper sandbox, and that you have a sequence that you're going to run through….
You'll run parallel systems for awhile. The risk of blackouts is very low, and that's another thing where we're talking about, there's got to be a lot of planning and a lot of thoughtfulness…. The days of old where you have this power down, power up, are gone. We have seamless switchovers that come in stages.
Tnooz: Why did Amadeus want Newmarket?
Horgan: Several things that others have discussed before. One of the things that Amadeus liked about Newmarket was that they felt like we brought an existing platform around customer service in hospitality. That was something that we always wanted to compete on, was having the best customer service in hospitality.
The way we have done that is we measure and monitor everything. For more than a decade we've won the Confirmit ACE (Achievement in Customer Excellence) Awards, and so that's something we're very proud of.
We’re continuing that under Amadeus Hospitality. It’s important for us to be scoring very well on the surveys. …
Hospitality is all about having good interactions. When you call somebody on the help desk, you want them to understand what you're dealing with. We really invest a lot in the training of our employees, to make sure that they can be helpful on those calls. That's a critical point to our go forward strategy as well, is to never take our eye off the importance of customer service.
Tnooz: Hotel SystemsPro was a recent acquisition. Can you tell me a bit about that?
Horgan: Hotel SystemsPro was an interesting acquisition for us because Delphi had really become known as somewhat of the industry standard for full service sales and catering.
Certainly in the focus service market, Hotel SalesPro had done a really nice job having the product right size for that market.
Our strategy is, again, we want to make sure that we're always putting the right product in the right market. We continue to have SalesPro customers today adopting that platform, and we continue to have Delphi customers adopting that platform.
Eventually, they will move towards more of a single platform, but because of the flexibility in the configuration, we make sure that we always put the right product in the right hotel, based on the customer's needs.
That's really where you'll see the movement of that solution set, and everything will be under Amadeus Sales & Catering.
Tnooz: Is there anything in reputation management that's a part of the Amadeus Hospitality community model?
Horgan: There’s really two ways to help influence the reviews. One is on the preventative maintenance side…
So our tools to help hotel operational performance have a trickle down benefit of helping with review scores — through our service optimization products…
An example would be, we have software that allows you to put in when you need to do preventative maintenance, like on a treadmill, let's say. If you had three treadmills, you know when you have to tighten the belts and do the maintenance on them, because if a guest comes there in the morning, and he or she wants to run and there's two taken and one out of order, they're bummed, so all of a sudden they're on their Twitter, or their on the guest review, "Hey, couldn't run this morning. My day didn't start well." That's a bummer for the hotels, so the first thing is really trying to prevent those things from happening.
The other aspect of that is, if the guest does have an incident, being able to react quickly to that incident.
One of the things that we found is that if a guest does have an issue but you can recover that while they're on property, sometimes that can actually turn into a positive. "Hey, can't believe how quickly they were able to fix my TV," or whatever it was.
Then the other aspect of that is also, we have our Room Expeditor, to really help with room attendance, getting rooms ready so when people are checking in, because that's another pet peeve. I go to check in, my room's not ready? Being able to really optimize how we get the rooms ready is a big part of that whole operations technology.
Even though we're not specifically targeting a reputation management solution, we're saying, "Look, preventative maintenance tries to help stop something before."
While guests are on property, we really try and take care of them with that, and then also with the room attendance, we not only give them the ability to assign them, but also if a room attendant's in a room he or she notices a light bulb is out, or a leaky faucet or something, they can put in a ticket right there and dispatch to maintenance to come up and fix that, so hopefully the guest never even is impacted by that.
Those things coupled together, we think is how you help your TripAdvisor scores, and overall guest satisfaction index (GSI) score.
Tnooz: Is the rise of millennials a real change or just something that’s overhyped?
Horgan: The millennial trend is potentially overplayed in some aspects, but it's real.
There was a study done that 76% of the workforce will be millennials, I think, by 2025. So companies need to adjust to this generation’s preference as always connected business travelers who want personalization.
There was another study that said a loyal millennial will spend something like $41 per night more, and drive 15 minutes farther out of her or his way, if they can have a personalized experience, on average.
To that point, we're hearing a lot of our partners saying, "I need to be able to create loyalty within the millennials, because they will pay a premium. They will go out of their way."
Tnooz: Are hoteliers worried about Airbnb and short-term rentals?
Horgan: Every day there's an Airbnb discussion, yes…. I'm not sure what the Airbnb impact is as of today. What we’re hearing is that maybe there's some compression in major cities especially when events are happening in town.
I expect to continue seeing major hotel brands like Marriott recognize more and more that Airbnb is in their comp set as much as, say, IHG is.
Tnooz: How well has Newmarket’s staff handled the switch to new ownership?
Horgan: Sometimes you hear what goes on in other companies where people don't get on board with the strategy, and there's a lot of positioning, and we just haven't had that. We've really had everybody feeling like, "Hey, we like the message. We like where we're going. Plenty of opportunity for everybody."
Now that we're a much bigger company, opportunity for people that we could never offer before is out there. Literally, I've got one of my managers that is very interested in moving to Europe, and we have an opening for him. We've had people from Europe move over to the States. There have been several really neat moments like that in the past six months.
Tnooz: What are you really focused on as a CEO?
Horgan: I'm focused on making sure that I have the best team that is well educated on best practices and the latest research and technology and that has the right tools to work in a very agile way.
We want to be very market responsive. We don't want to say, "This is the way we're going," and miss the market one way or another. So we're constantly looking at what's going on with the market and adjusting course accordingly.
The market isn't inside our building. We've got really smart people in our building, but the market is what's going on at a trade show. It’s what's going on with our customers that we find out by visiting our customers. It’s also what's going in parallel industries, like general software, SaaS and consumer tech.
Obviously there's starting to be a blend with consumer tech and business tech, if you will. There's a lot of discussion on messaging platforms now. Facebook Messenger, the WeChats of the world. How does that play a role in the technology of the hotel of the future?
We want to be experts to help interpret things for our clients who may not have time or the broad networks to discover this themselves.
We believe that the CRS that we're coming to market with them is really the core foundation of a lot of the future that we're building towards for the full industry.
That integration is tracking really well. As far as I know, it’s one of the largest partnerships in hospitality right now, as far as something new coming out, replacing the CRS in all their hotels. We've got a lot of people focused on that.
Earlier:Tnooz's 2014 interview with the global head of the Global Hotels Group at Amadeus, Jeff Edwards.