HOTEL CONCEPTS, BRILLIANT USER MEETING

28 MARCH 2012, HOUTEN NL

Nick Price

agenda

2

2000 – 2010 – Review 2010 – 2020 – Opportunities

distribution in-room infotainment mobile cloud

3

2000-2010incremental or dramatic change?

IP & internet

application integration at low cost

internet as a product

distribution opportunity or threat?

indispensable asset, yet to be monetised

4

HSIA usage

5

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100%

5%

10%

15%

20%

25%

30%

HSIA Usage Rate / Occupie...

source: Mandarin Oriental

HSIA device usage

6

source: Mandarin Oriental

2006 2007 2008 2009 2010

Wireless Devices Wired Devices

HSIA device utilization / 1m room nights

4

2

6

8

10

internet distribution

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

10

20

30

40

50

60

70

trends in overall online travel market: europe 1998 – 2008 .. 2009

7

Source: Carl H Marcussen, Centre for Regional and Tourism Research

Bill

ion

Eu

ros

p.a

.

internet distribution

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

trends in the european online travel market – by channel

Direct Sales

8

source: Carl H Marcussen, Centre for Regional and Tourism Research

internet distribution

2002 2004 2006 2008 2009 20100.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

mo.com revenue growth: % total leisure room nights

9

source: Mandarin Oriental

2006

2007

2008

2009

2010

0%

2%

4%

6%

8%

10%

12% Adult Take Rate Hollywood Take Rate

10

source: Mandarin Oriental

tv infotainment

telephony

11

(the great tech FAIL)

source: Mandarin Oriental

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20% % Rev/Occupied Rm

US$

100,000

200,000

300,000

400,000

500,000

600,000

700,000

few if any examples of success most are now regarded as legacy

applications most are US-centric none are positioned for global deployment

12

DIY application development

application software

rise and fall of application suites

applications, lots of them what happened to ASP?

13

PMS

POS

Rev MgtAccounts

S & C

INV

Accounts

Appication Suites

networks everywhere

14

Reservations

Front Desk

TV

Internet

HVAC

Audio

Phone

Door Lock

Lighting

Rm 108

Rm 118

Rm 128

Rm 138

Rm 148

Rm 158

Rm 168

Rm 178

Network365 / 7 /

24

hotel global networks

15

Hotel Data Centr

e

NEWYORK

LASVEGA

S

GENEVA

BEIJING

PARIS

HONG KONG

from under the stairs to a modern hotel data center

16

17

1995 1998 2001 2003 2004 2005 2006 2007 2008 2009 2010

com

ple

xit

y

year

PMS

CRES

HSIA

IRES

VOIP

smart room

skills gap

# of technical staff

on property skills gap

challenges of data privacy & security

18

never a consideration in the age of brass keys and CRT’s

PCI born in 2004, same year as Facebook

green initiatives

19

asset-lite business models

20

21

international chain expansion

22

2010-2020change is here

agenda

23

2000 – 2010 – Review 2010 – 2020 – Opportunities

distribution in-room infotainment cloud

24

distribution

25

How can I help?

26

1990

customertravelagent

GDS

CRS

CRS

CRS

CRS

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

27

poor representation of product to customer GDS Green Screen

ADS selling unapproved inventory

loss of price/rate integrity

customer information unavailable to 3rd parties (travel agent/representation company)

poor representation of customer to hotel GDS PNR difficult to link to guest database

reduced ability to cross/up sell

contributes to low repeat guest ratio

Hotel room

Golf

Meeting / conference

Transport

F & B

Entertainment

28

2000’s

customer

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

CRS

CRS

brand.com

OTA

GDS

CRS

29

2000’s

customer

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

CRS

CRS

brand.com

OTA

GDS

CRS

30

distribution

31

10 years fighting the wrong enemy enemies are not the OTA’s

Expedia booking.com Travelocity etc.

(fr)enemies are: Google - mapping and search excellence Microsoft - global presence and cloud Facebook - 800m users Apple - 30% iTunes commissions Amazon - Internet merchandising and pricing

32

33

34

35

2015

fulfilment

Facebook800m+ users

customerknowledge

iTunesAppStore

CRS$10 Billion

$50+Million $50+ Million

$20 Billion +

$20 Billion +

$10 Billion

in-room infotainment

36

VoD utilisation 2006 - 2020

37

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200%

2%

4%

6%

8%

10%

12% Adult Take Rate Hollywood Take RateContent Utilization / Occupied Rooms 2006 - 2010

38

leading hotel companies will build hotel rooms without TV’s within 5 years

21st century in-room entertainment

StoredContent

OnMobile

)) )))) ))))))Wi-Fi

NetFlixHulu

YouTube

StoredContent

OnMobile

)) )))) ))))))Wi-Fi

21st century in-room entertainment

))))))

$100 minimum wage forces labour efficiencies

41

Department Head: 20

Supervisor: 16

General Staff: 717

EXCO: 8

42

cloud

43

by 2015 75% of successful hotel

companies will have migrated core systems

to “the cloud”

explosion of technology

emerging markets

opportunity

CAPEXVS

OPEX

deployment velocity

ecosystems

global reach

http://hospitalitytechnology.edgl.com/top-stories/Are-We-in-the-Cloud-Decade-66712

cloud rationale

global reach velocity to new markets (asia/e-eu) agility capex -> opex pci compliance / security addresses property skills gap

44

application software

rise and fall of application suites

applications, lots of them what happened to ASP?

45

PMS

POS

Rev MgtAccounts

S & C

INV

Accounts

Appication Suites

cloud fragmentation danger

46

SalesForce

RackSpace

PMS

Sales

Catering

Amazon

Réservations

Door Lock

HVAC

Phone

Google

Azure

Accounts

POS

“ How do I integrate my systems now? “

HOTEL

WANTED TO BUY: cloud ecosystem

47

“ the battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem “

Stephen Elop CEO Nokia (feb 04 2011)

Azure hospitality services ecosystem

48

PMS SALES ACCOUNTS …………

access controlservice bus caching

geo-replication / CDN

northUSA

southUSA

northEMEA

south EMEA

south eastASIA

eastASIA

paymentidentity /

SSOhotel media

vaultdistribution others

hospitality services layer

hotel companies are architecturally complex and need quality solutions

globally available 365/7/24 availability hosted by trusted partners Microsoft / Google opex acquisition model Office 365 or Google Apps migration is a good first

step towards an ‘above property’ cloud future

49

thank you

Nick Price nickprice@netsystechnology.com