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Hilton CIO: Mobile device use in hotels is skyrocketing

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Hilton's owner--who all received iPads last year--have seen how the devices are changing their industry. Now the company has to keep up with the changes, from in-room entertainment to the virtual concierge.

At the Hilton Worldwide owner’s conference in Orlando last fall, each owner was given an iPad with some customized applications. “The devices were ripped out of our hands,” says Hilton Chief Information Officer Rob Webb. “But what was a bit overwhelming was they were asking for even more.”

So with owners and guests both wanting more—more apps, more speed, more ways to use mobile devices in the hotel industry—what is the corporate office doing to keep up? I recently talked with Webb about the role of these devices and Hilton’s new Innovation Collaborative, the company’s forward-thinking approach to technology.

At your hotel owners meeting in October, you handed iPads to each of your 2,500 owners. Why do you think mobile computing is so critical for the hotel industry?

Clearly the consumers, the guests we serve, are increasingly on the road and increasingly connecting to us through mobile devices, and there’s a tremendous pace of innovation on these devices. We don’t talk about smart phones now as much as we talk about super phones.

We’ve already launched applications for the iPhone across our brand, but we’re also building out applications for other mobile devices--a whole host of location-based services. You could imagine a time when a guest wants to find things around the hotel, or even within the hotel they’re at—if they need to find a coffee shop or a clothing store because they have forgotten something for their trip.

We rolled out 2,500 iPads—the largest one-day rollout of the iPad ever. We included on those iPads a couple interesting applications—a conference application, which put all the materials you typically get at a conference on the device, but also a directory of all the other people at the conference, with photos. We could push video and photos to the device during the meeting and update things real time as the conference was happening.

The other application we piloted was the beginning of a virtual concierge idea. It allows our guests to order room service from the device, find out more information about the hotel, see all the information that is typically in a booklet on the desk in the hotel room—with rich video and audio and linked right into the property management system at the hotel.

The owners must have been pretty happy with their iPads.

They loved it. The devices were ripped out of our hands. But what was a bit overwhelming was they were asking for even more. They want analytics on these devices. They want a sense of community among the owners. So on one hand they absolutely loved it, but on the other hand they want a lot more.

You probably have read that we were one of the first hotel companies to implement free WiFi in all of our hotels in all of our brands for our Hilton Honors Gold/Diamond customers. The use of these devices inside the hotel is skyrocketing. Guests are increasingly bringing a tablet or a super phone and expect high-speed access that is consistent. They want to be able to watch their Netflix movies in their rooms.

Which area of the industry—corporate, owners or guests—is driving the innovation?

It’s all three. But there’s a pull from the guests. We have to be ready for guests bringing mobile devices into our property. Bandwidth utilization has skyrocketed. And the traditional on-demand format—hotel movies—has decreased.

Does a reduction in fees from in-room movies and WiFi represent a significant loss in revenue?

It’s a very significant shift in guest expectations. It’s like when telephone calls used to be very expensive. There are some hotel organizations that are still enjoying those profits, but the vast majority of guests say they expect [WiFi] to be included in the room rate just like they expect clean sheets. It’s becoming a base expectation around the world.

What are you doing internally to keep up with the industry?

We have an online group that is really taking the lead to develop the next generation of website architecture and to develop a mobile strategy.

The other thing we’ve done over the last year is we’ve developed the Hilton Innovation Collaborative—a partnership between the best in class technology companies around the world. The firms we’ve selected for our ten brands are IBM, which runs our data center core reservation system and email system; Accenture, which developed and runs our property management system; Tata Consultancy Service, which is assisting with back office areas such as property information management, quality assurance, business intelligence and financial systems; Microsoft, which will provide its collaboration and productivity tools to Hilton’s worldwide employees and business partners; and AT&T, for its suite of WiFi and Internet services.

This is a big shift in the way we deliver technology services across the company.

It seems pretty natural to have this kind of collaboration. Are you saying this is new or unique in the industry?

If you go across the major hotel companies, there’s a high level of fragmentation. Most hotels are dealing with a great deal of legacy complexity. It’s also a very complex ownership model. So most companies have some owned assets and some franchised assets, and it’s been a homegrown industry where a lot of the people who have been in the technology side have come from the hotel industry. We’re doing it differently--I came from the financial services industry, and we decided instead of doing a lot of these things internally, we’d do it with partners.

Tell me how, in a typical day, you use technology to keep in touch with people and to do business.

We’re a big Microsoft shop, so we’ve enabled an employee choice program, so we can choose between an HP laptop and an Apple laptop. I use the new Macbook Air, but I use Microsoft's latest version of Outlook and Office on the Macbook.

I also use an HP product--their Project Management Center--to track all our major initiatives across the company.

We’re also a PeopleSoft shop, and we’re reinvesting in PeopleSoft financials to standardize our financial reporting platforms across the globe.

We’re investing pretty heavily in business intelligence. We want to really have more time to work on the business, versus assembling and aggregating data. That’s a big focus for us.

What mobile devices do you use?

We have the iPhone and Blackberry device and iPad device. I use an iPad and a Blackberry.

How do you personally keep up with the latest technology, news, innovations?

I read a lot of different things. Economist, Wall Street Journal and Bloomberg are the news services I use the most, and I’m increasingly using them from my iPad device. Then there are some online forums that I’m part of—especially CIOs sharing best practices. The good news in partnering with folks like IBM and Accenture and Microsoft is that all those companies have CIO forums, and there is so much to learn.

What have you learned recently?

There’s a couple areas where we have a strong focus on information security, so that’s one area where I’ve learned a lot from my peers. And then questions around innovation: How do you make room for innovation?

What’s else should we know about tech at Hilton?

Hilton Worldwide is a very fortunate company in that we have invested in technology. Tech innovation is not new to us. We have a single image of our inventory globally, unlike several of our competitors, and this has been a huge advantage for us. We can take a snapshot of what rooms are filled tonight globally.

The other thing is [yield management]. If there’s a secret sauce in the hotel business from the technology perspective, it’s the analytics to offer the right price for the guest so we can maximize yields on the room. The same kind of thing that other industries, like the airlines, are already doing.

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Melanie D.G. Kaplan

Contributing Editor

Melanie D.G. Kaplan is a Washington, D.C.- based journalist. She is a regular contributor to The Washington Post and National Parks Magazine. Her website is www.melaniedgkaplan.com. Follow her on Twitter. Disclosure