Roundtable: The IT experts
We meet the leading hospitality IT experts in the Middle East
Meet the experts:
VP of Information Technology, Jumeirah Group
Floor Bleeker joined the Jumeirah Group in April 2001 and currently holds the position of vice president of information technology, reporting to the chief information officer. In his role, he is responsible for the company’s IT projects portfolio, business systems, software development, data warehousing, digital strategy and global expansion.
Bleeker holds a Masters degree in Business Administration (MBA) from the University of Colorado at Colorado Springs, and a Bachelors (BSc) degree in Hospitality Administration from Hotelschool The Hague.
Prior to joining the Jumeirah Group, Floor worked as the director of IT for the Emirates Academy of Hospitality Management in Dubai as well as also working as an IT manager for the Radisson SAS Hotels & Resorts in Belgium.
Middle East regional director of IT, Starwood Hotels & Resorts Worldwide
Nigel Hattersley joined Starwood in 1993 at the Sheraton on the Park, Sydney. After moving to the UK in 1996 and holding several management positions in hotel operations, Hattersley moved into hotel IT and relocated to Dublin as part of a pre-opening team.
In 2002, he joined the Starwood divisional office as senior manager of IT EAME and completed several large projects, including a network & communications restructure and the Le Meridien brand integration.
In 2006 he relocated again, this time to Dubai for his current role as regional director of IT for the Middle East, where he has opened more than 15 hotels, manages a team of 70+ IT associates and has more than 30 concurrent hotel opening projects.
Samir Abi Frem
Corporate vice president – Information Technology, Rotana Hotels Management Corporation
Samir Abi Frem has held executive IT positions within the Middle East region and has more than 15 years of experience in Information Technology for the hospitality industry.
With an extensive background in hotel and Information Technology management, he enforces high IT standards that are essential to successful hotel management. Frem graduated with a BS in Computer Science and a Master’s degree in Hotel Management from “Institut de Management Hotelier International (IMHI)” in France.
Senior VP Information Technology, Kempinski Hotels
Jeremy Ward was appointed as senior vice president of IT for Kempinski Hotels in 2008, bringing more than 17 years of experience in the IT industry to the position. Prior to his appointment, he was the CIO for JJW Hotels and Resorts.
At JJW Hotels and Resorts, Ward was fundamental in establishing and expanding the technology used throughout the group’s hotels, including applications and solutions used across the back-office, and the emergence and convergence of technologies used for guest facing solutions.
At Kempinski, Ward is tasked with aligning the business requirements of the group with the IT strategy and steering the group through a rapid expansion process as they look to double in size over the next three years.
Managing director, E. Horner & Associates Pty. Ltd.
After graduating with formal qualifications in Catering & Hotel Management from Victoria University in 1976, Ted Horner was involved in the establishment of several companies specialising in supplying technology for the hospitality industry.
In 1989, he launched a consulting practice specialising in technology consulting to the hospitality industry which is now recognised as the leader in the Australian market.
In 1995, he launched the first newsletter dedicated to technology in the hospitality industry, which was replaced in 2002 with the launch of Australia's first hospitality technology portal site.
In August 1996, he launched the first dedicated Australian Hospitality Technology Conference and Exhibition held in Sydney. In 2004, Horner was the first non US person to be elected to the HITEC Technology Hall of Fame for his contribution to the advancement of technology in the hospitality industry.
You’re all part of some of the largest hotel groups in the region, but how big are your IT budgets?
NH: I don’t think it’s any surprise to say that a hotel of average size, of let’s say around 300 rooms, probably has an expected IT spend of somewhere between US $300,000-500,000 a year.
FB: I like to express it as a percentage of revenue, and if you look at all other industries then we are right at the bottom. Take banking for example; I think they typically spend 6% of their revenue on IT, while the hotel industry is around 2%.
JW: I think you’re lucky if you’re at 2%.
IT is involved in every aspect of a hotel, from HR to booking engines to in-room tech, so are hotels spending enough on IT?
NH: Well it all depends on the type of company you mean. For example, at Starwood we’re a global organisation with a technology infrastructure made up of hundreds of people delivering a central reservation system worldwide to up to 1200 hotels. This won’t be the same for every hotel group and how much money is spent and what they are able to do is going to be different for everyone.
Considering the type of emerging technology, such as cloud based systems, how much should hotels be looking to increase their budgets?
FB: It’s interesting to think that around 85% of online security threats occur in our industry, much higher than say banking or insurance. And if you look at how much we invest in IT security and what the banks invest, you will see a huge discrepancy.
TH: That’s partly because the hackers know that hotels haven’t invested in the same levels of security as other industries, which is why we are being targeted more.
JW: There’s also been a significant shift from CAPEX models to OPEX models, with cloud and infrastructure software services coming on board, which obviously impacts P&L for a management company. Where the owner would normally pay the CAPEX cost, it’s now coming out of an operating expense which hits your bottom line. So yes we need more budget but we also have to see how that’s allocated against the old model of capital expense.
FB: We have this management company structure where we don’t own the asset but get a fee for managing the hotel, and where before the owner would pay for systems, now that actually come out of the operating budge, which puts pressure on our profits.
As hotel systems continue to move into the cloud, will that have any effect on your spend and will it give you the opportunity to outsource more of your operations?
TH: I think the same amount of money is going to be spent, it will just be a different commercial model. From an owner CAPEX up front, it will change to where there is a monthly fee, and maybe, depending on the relationship between the owner and the operator it could have a big impact. In other cases where you have an owner-operator, that won’t really matter, but I don’t think costs will reduce, it’s just a different commercial model.
NH: There’s a perception that costs are going down because technology is getting cheaper. In fact, we spend a lot [more] today than we ever have before, but that’s only because there’s so much more to spend money on, but it also helps us to increases productivity and enhance revenue and we’re using technology a lot more today than we ever have in the past.
How big a problem is bandwidth in hotels, and with the growth of the hotel industry in the region, is it going to become even more of an issue?
TH: There’s never enough!
NH: And it always costs too much.
TH: It’s a huge issue in this country, because here there are only two suppliers, while in other regions there is more competition in the market that is working to drive the price down. But beyond price the really essential problem is that the more bandwidth the market is given, then the more it will consume.
FB: Internet access is a major cost, and just like we pay a lot for electricity and cooling our rooms, bandwidth has become another utility of the hotel.
NH: It all depends on the amount of money you want to spend. But I think the important question is how to manage the bandwidth we have more effectively. Yes we need to buy more, but we also need to buy tools that ensure people get what they need rather than just flooding each department with extra bandwidth.
FB: Suppliers have just started to introduce reversible bandwidth and billing on a consumption basis which is a huge revolution in our industry. Before you would just buy your 100MB or whatever you needed, and if you didn’t use all of it you would still pay for it. However, now when we have a big conference on and we need more bandwidth then we can just buy it on demand from the carrier.
SAF: This gives you the possibility to provide a better service because to pay a higher amount of bandwidth for the whole month is quite expensive, but if you need it for one-off events at the hotel that flexibility is very beneficial.
FB: For example, from six o’clock in the evening in business hotels the demand for bandwidth is huge. From then until around midnight is when 80% of a hotel’s bandwidth gets used, but you may only need a fraction of that for the rest of the day.
Will running more applications through the cloud affect the amount of bandwidth that hotels need to pay for?
NH: That isn’t a problem that is normally an issue, because the bandwidth that you require for the business comes through a separate cable than the internet required for the customer.
SAF: It really depends on the types of services and applications that you hope to run, because certain applications can’t be run through a public cloud, for whatever reason, so you will need to get a private bandwidth line.
JW: There’s plenty of supply, that’s not the problem, it’s just the amount that you are prepared to pay.
TH: I think the hospitality industry has to work with the internet carriers to help lower prices, because Dubai is currently one of the most expensive markets for bandwidth in the world.
NH: What we must do as hoteliers is be smarter as well, as you can get aggregated devices now which can help to lower your prices enormously.
With all the talk about new technologies and developments in IT, how do you spot what the next big developments will be, and how do you know you’re investing your money in the right place for the future?
NH: We already know that the internet is going to drive everything, both in our ability to operate our hotels and in our ability to supply quality experiences to our customers. How that will develop I’m not sure. Yes social media is going to play a big part, connectivity in rooms will be a big thing, but beyond that it is difficult to say.
TH: It’s always difficult to predict the future, but through networking, travel and seeing what others are doing, we can make it easier. A lot of us go to the big consumer electronic shows to get an idea of where things are headed.
JW: The advantage for us is that, with the speed of advances in modern technology, we know that any new developments and trends are going to hit the consumer market first before we’ll get a chance to implement them. We have to accept that we’re going to be 12-24 months behind any new developments. But that helps give us a bit of warning about what is popular and what works. We just have to make sure that we’re flexible enough to adapt to those trends.