IT TRAVEL 2000
Crowne Plaza Brussels
22-24th May 2000
CHAIRMAN'S INTRODUCTION: PAUL RICHER, Partner, Genesys - The Travel Technology
Hope all is well? Did anybody win anything there yesterday? Well then what did you win?
Well we will share it later - thank you.
We will enjoy that - I left before the end, I got to hungry so I was doing really well.
There is a slight change to our program today, unfortunately, Terrell Jones of Travelocity as you probably
know, can't be with us today, which is a real shame, cause I know quite a few of us were looking forward to
hearing him speak but, well that's the way it is. We have to live with that. In the afternoon the Panel
Session, the Last Panel Session, you can see it there on your programs. Battle of the Portals. GARRY
RYAN, is that right, GARRY RYAN from Travelfinder.co.uk can't be here, so we are going to have one
final session at the end. E-commerce's in your current Business Model, where we are going to look at
what seems to be a sticky problem, certainly in this CRM Stream yesterday we identified this, that is if
you've got an existing business, it is actually harder to change it and move it into the world of e-
commerce's, than having the luxury of start ups. And being a start up and being able to do something
completely new with your technology, there's these problems if you are in existing business you might have
some money to spend on e-commerce's but you've got a really legacy old fashioned I15 structure to deal
with. If you will start up you can be completely Green Field and do something really slick if you can only
raise the money, so problems there. So maybe none of us will actually get into e-commerce at all because
of that. So that last Session, E-commerce's and your current Business Model, will be holding that up stairs,
in the Conference Room up stairs, on the eighth floor and perhaps we will just have a cup of coffee before
then as well. So after the 14.40 session everybody up stairs, quick cup of coffee for 10 minutes and then
we will have that last session all together up stairs.
Any questions? No. Good.
PAUL: I am delighted to now introduce our Key Notes Speaker of the morning. It is BRIAN PRATT
and he is Vice President E-Business Europe of the Worlds largest Hotel chain, Star Wood Hotels &
Resorts, world wide, who like many Hotel chains, now having to take e-business very seriously indeed and
I don' think there is a major of minor Hotel chain in the world, that isn't now selling online on the Web and
indeed doing more imaginative things, clubbing together to form either E for cumin portals or form
Business to consumer Portals and trying wrest away business from as many as intermediaries as they
possibly can, that seems to be the name of the game, saves some commission cost, so Ladies and
Gentlemen, please welcome BRIAN PRATT. Thank You.
Keynote speech Ecommerce in the worlds largest hotel company. BRIAN PRATT, Vice President E-
Business Europe, Star Wood Hotels & Resorts
BRIAN: Morning everybody. Is the mic on? There it goes. We're attempting to do first of all, to tell
everybody who Star Wood Hotels is - we were talking just prior to coming up this morning and very few
people realize that we are the largest owner and operator of Hotels in the World. There are a lot of brands
out there with more Hotels than ours, Marriott, Best Western and Forte, but we are the largest owner
operator. We own about 140 of the 720 Hotels that we have through out the World. In Europe we have
about 114 Hotels in 22 countries. And I just moved over here about 8 months ago from the US where I was
in our Co-operate Headquarters and my job was actually developing Web Sites for the companies so
Western.com. Sheraton.com. As well as a sort of strategy to develop the purchasing companies or PECO as
we call them, as well as some of the other aggregating companies with together Hotels companies.
So one of the problems that I didn't realize when I was in the States, was surrounding the EU and I am sure
that most of your companies, as you are developing Web sites the way that you are collecting your data,
that's the biggest problem we're facing today in Europe, is actually developing our Web Sites, of that when
we're gathering customer data, in the States we can gather anything and everything we want. But here with
you - you can gather pretty much of everything but you need the informative consumer. So, we are in 22
countries, the problems that we are having in Poland are small compared to the EUR'S.
Europe is about 15% of our total number of properties as well as our total revenue, in about 15% of our
associates. I am not going to get too technical but what I want to do is show people our existing info
structure today, in sort of Waymans terms, this is our main frame in the Center, which serves our marketing
daily base, as well as through Ultra Switch or Travel Web, it is how we are actually interfacing to our
consumers today. We have actually started writing a product that we call Webby, which allows us to go
direct to Sheraton or Western.com. Directly from our main frame to the Web instead of going through Ultra
Switch or Travel Web. The reason that we are doing that is not necessary to save the transaction fee, which
I know everybody has been talking about, but really the functionality. Ultra Switch is so generic by
definition because everybody is trying to interface with one Switch, that we can have a lot more
functionality so a lot more different rates and for one really sell packages, which is really a big part of the
Web, what our consumers are asking for. Obviously all the GDS'S, most of them go through Ultra Switch,
the larger ones like APOLLO and SAVER, we actually go direct with, the amount of volume that we do
justifies that. Throughout the daily network, we actually interface through something that we call IPS
(INTERGRATED PROPERTY SYSTEM) which interfaces into our PMS'S as well into Delphi. When we
say IPS, one of the problems that we've had over the years was, we had a different PMS (PROPERTY
MANAGEMENT SYSTEM) in every hotel. So we might have 40 different PMS'S which we will then
have to interface with. We've backed off from that and we now have 2 as a standard, one is Phildaoe and
one is Geeack, which makes it a lot easier for us to communicate back and forth with hotels.
Here is our current environment as I mentioned earlier. In Europe because of the size of our Hotels, we
standardize on Phildileo. In the States where we have what we call the Super Tanker, we get 2000 room
Hotel. We use another PMS called Geeack, which is actually much better for these larger Hotels. Dalfy is
our Sales and Catering software. Again we have 55 installations of that. Nortatel and Ercissons have
worked for our phone systems. Compact is our, you can see that we have 3900pc just here in Europe. Just
so that you understand, 3900pc's, our Office for Europe, our Headquarters are just across the street,
Sheraton Brussels. Our staff is actually only 29 people that run Europe for us. So we do a lot of out
saucing. E-quant for our network and you can see down at the bottom, some of our standards on the
individual PC'S. The Hotel industry is nitrously bad for investing and technology, which we feel is the
reason why we have not necessary the highest level of vendor service. The Hotel and Travel Industry is
basically home grown, so a lot of times we are investing in our own technology and not necessarily going
out and buying the best technology.
Here is alist of our major suppliers today. One of the interesting ones is as you look through this; it is sort
of the household name of everybody and sort of a typical list, until you get over here. Nagrophy, a couple
of years ago, nagrophy was something that everybody went out and bought just to make sure you know,
just another tool to play with, but from a virus offense, it saved us. Love Bug didn't get us. Which was
fantastic, we have vendors, we are partner actually in owner Last Minute.com. We were doing some
business that day and we ended up doing all of our business over the phone that day because they got killed
by the Love Bug virus. So I think that it is an interesting sort of paradigm shift. Here's where we're
moving to, before you saw that a lot of our Data was basically or the main frame base and what we're doing
is trying to develop a client server environment and move away from this main name base.
The long-term goal is, today we have about, on a typical day, and maybe 1000 reservations Agents sitting
in large call centres, taking calls. We pay them an hourly rate, we also pay them based on a conversation
rate, and we’re paying for their desks and their chairs and everything else. By going to this archritical, we
can actually utilize the phone system and using the webs, we can have agents sitting at home, in their
pyjamas, if they want. We can root calls to them and just pay them on cells. So first, we think that our
agents will be happier because they don't have to drive to work. They can sit at home and do their business
and Two, for us, we can just have a core of agents, sort of a Swat Team sitting in there, that we're paying
for all their desks and chairs and everything else. This will use the internet to it's fullest capability and
what I'd like to do, is part of my presentation is to show you the way that we're using the internet internally
as well as externally but I'm not going to go into Sheraton.com and Western.com because quite honestly
there're not a whole lot different than Marriott and some of our competitors. So I assume we're all very
familiar with all of the public Web Sites.
Hot Spot is our internal Intranet and what we've done is we've developed it all on NT and what we've done
is set it up so that, it is mission critical. Today we have about 540 of our employees using what we call
Hot Spot on a daily basis. And I am going to go through a little bit of what is in there. But all departments
are represented in this, from the counting to Sales, to Marketing, to development, to E-business, to HR and
you'll see how we're using it. And one of the more interesting things is what we call is the Shedders Team.
This is the infrastructure for us to become a payableless environment. In the past for Star Wood, for an
individual Hotel to buy a PC, the sign off process was like working for the US Government. You had to go
through about 10 different levels of signatories just to buy a $ 2000 PC. This process here, the signature
level will just be one person.
In Room technology is big for us, we have on a yearly basis, about 45 million customers in our rooms. We
see a huge opportunity for, not only for us to use the TV or some other portal for E-commerce but the same
time it is a fernominal platform for advertising. We're in the process today of developing a product with a
couple of partners, that the biggest reason to do this in Room Access, is the home page because that home
page is going to be 45 million people just like you and I, everybody has got a credit card, everybody 's
pretty much expensing everything that they do. It's a very high profile group of people that we want to start
serving. Today we're missing that. Today all of that advertising money is going to CNN and CNBC and
the BBC and everybody else. A big part of doing that is, in the past Hotel companies, when we build a
Hotel, or when a Hotel is built for we take one over. There is existing cable that is pulled into Hotel
Rooms. That existing cable is typically copper wire. And what we've had to do, is find partners that will
help us take that copper wire, spilt it in two, so that we can continue to serve people with their typically
phone calls but also still have that high speed access. There are a lot of different pros and cons to all the
different options of technology.
E-Business is affecting everything we do here. One of the things that are really starting to really hit us
strongly are our existing Sales channels. I started in the Web about 5 years ago and about 5 years ago, we
were afraid, we actually had long discussions,"should we build a Web Site." Because we didn't want to
upset our Travel agencies, which account for about 50% of the total revenue to start with. Now is it kind of
funny that we even had that debate. Travel agencies are using our Web site. But the issue that is coming
up today is now we have to tell our people in the Hotels, when you're selling a room that might cost, say it
is a $ 200 room. That room is sold through a Travel agency; you're only receiving a $ 180 because of the
commission. You could sell that same room through the Internet, you might be able to sell it for a $ 185,
driving the consumer to that and receive a $185 but not have to pay the transaction fee or the commission
fee. So looking at the difference between a gross sale and a net sale, is something we're just educating our
hotels on. Restructing all of our processes, you saw earlier what we're doing with our call centres and
infact our organizational structure. One of the issues that we've had, we've just had a large Sales and
Marketing Conference down in Teneriffe last week and one of the problems we're having is our sales
people, which are typically younger than I, these people are 30 years old, they don't understand the web.
Which I find kind of amazing but one of the problems we're having is educating our Sales people so that
when they make a Sales call on somebody they can actually talk to them intelligently about e-business
instead of just saying, You can book it on our website. You know there are just so many different ways to
do it, do our Sales people actually try to get on the Intranet for siemens and have their travelers actually
book on line. So there a larger educational processes and building cosencors are our existing standards.
One of the things that I'm very fortunate about is our chairman is only 39 years old and he eats, sleeps and
drinks the web. He does home work with his kids on the Internet. So when we have to build consensus it
is very easy in our company because our chairman is talking about the web every day, which means that
everybody who works for him, is talking about the web everyday.
This is one of the more progressive things that we have done at Star Wood, it's what we call Team Hot and
Team Hot is part of the Internet that would have been cost prohited to us. What this does, it allows a Sales
person to log onto the internet and have a lead that maybe their hotel can't serve us, so say there is a
meeting this size and the hotel finds this meeting this size by a sales call but the don't necessary have a
board room this large. They just can't take the business. What our'll people can do is they can go online
into the internet, they can build the whole profile of the meeting which might say, class room seating for
400 people with podium and break outs and send that lead to our sister properties. Now that sister property
has now find business through the Internet from a sister hotel, that in the past would have just gone
completely unstraced. The hotel that couldn't serve it said, well I can't take it, so they wouldn't do
anything. Now our associates are actually insented being their pay or disensented because if they don't
meet the criteria, we actually deduct from them to send, be the web. Once we have this in place for sending
leads over the web, we then figured out there is a lot more opportunity for us to communicate with our sales
people. And to be honest with you, it was not our strategy; we just sort of uncovered it. And I am not sure
if you can read it in the back, but all of the components here on the left, this one rights here, this GLS key
account and offices and property directory. Since we have 730 or 40 hotels, it changes every day. Our
sales people can't be familiar with every hotel. So they can come in here and get a list of properties in
China, which changes often or if they want to find out who's the key sales person at our sales office in
Belgium. This is how they go in and do it. What I'll do is show you a few of the items that are here.
On this Team Hot website, what we are doing is we're actually allowing our sales people to view video's of
hotels. In the past a lot of times, if somebody wanted to see a video of a hotel, they would call the hotel.
Hotels would stick it in the mail and send it to them. If they sent them a video from the US to Europe, it
would be in a different format and they couldn't play it, so there is long long aredue process that was not
very productive. Now what we have done, is we actually digitalis these video's and put them online and
depending on somebody's connection we tell them how long it would take to either down load or play that
video. And what we are having is we're having sales people down loading these videos onto their hard
drive and taking it and showing it to customers.
Here is another example of what we call value dates. This hotel right here, the Sheraton Tower South Gate
in Australia Melbourne, actually for some reason or another, they maybe lost a big piece of business like a
meeting like this or maybe one of their corporate customers has decided that they don't want to use this
hotel anymore. They put in value dates and if I hit the view button right here, it will explain to our internal
sales people why is this a value date and what is it I can do to help. In the past this was all going to faxes
and the faxes were falling on the floor and nobody would pay attention to them and they would be on the
roll paper. So it is actually a great way to communicate.
Training again is a big, big issue for us and what we're done is put all of our training classes, for our sales
people up here and in some cases these sales productivity maybe a video or it maybe a step by step process,
where somebody actually fills in a questair on the web so it actually educating them and the nice part about
that is we are now aggregating the data, so when a sales person actually tries to educate themselves through
this process, we can then look back and look in the data base and see how good are our sales people
performing. Obviously the currency converter, not many times, do we convert from US dollars to Afegany
what ever that is, but it is there if they need it. Here is the Team Hot section, this is really the guts of it,
where somebody puts in a new lead or they put in a lead and they haven't sent it yet. Then the status on a
lead, one of the biggest problems we had when we developed the process here was that our sales people
were sending leads but they didn't realize, they didn't know when somebody had actually looked at that
lead. So they ended up making a phone call and it was becoming more of a pain than it was actually planed
to be. What we did, since we had all this data in orecull and we were serving up all of these e-mails. We
can actually figure out when somebody has actually read the lead. So now our people can actually go in
and see if somebody's read it and then if that business for example, if this meeting was sent to another
hotel, then that business was then consumed, me as the sender of the lead, I am now going to get a
commission based on the total revenue of that.
Another way we use the web very strongly for our frequency program. Fortunately our website was voted
the best frequency program website in the industry last year, which we are very proud of. And the reason
that is, is not necessary the look and feel because everybody can do look and feel now days. The reason it
was voted the best in the industry was it was the first website where you could actually go online and
redeem your miles or your points online. The way we did that, was we worked with IBM and through MQ
series we actually sent secure transactions from the web, through MQ series into our CICS DB 2 data base
and post these transactions and then send a message back to the consumer, that yes, your miles have been
deducted and you now have a 3 nights stay at the Sheraton Brussels for the cost of your points. It was
progressive at the time and when we went live, we had a big press conference at the ST Regents, which is
sort of our flight ship hotel in New York City and our chairman was there. I was up all night developing
this, I did not actually write the code but managing the process and it didn't work. And we had press there
and it was a big deal and fortunately I had cashed everything and while the press was looking, it looked like
it was working, it actually didn't work until later that day but nobody really knew. Another thing we do is,
this is me, this is my home page, and everybody has his or her own home page because when you log in we
now know who you are. Consumers can actually come in and tell us, what hotels do you want to watch the
most frequently. And what they're doing is, this maybe a business travel, it says, here are my 10 favorite
hotels and we put on their home page the list of the hotels and then the weather, right over here. Which is a
lot of information for the consumer, but what we now know about the consumer is, the 10 hotels that they
now want to watch, in the past we have only known where customers have traveled too. Now with the
web, we know where customers want to go, so somebody might have on this list, a print in Miliran, cause
that's where they always wanted to go, they always wanted to go to Miliarne, maybe to go and see some of
some of the…………whatever. Now we understand that. In the past we would never know, so now if we
have a need, we can market to this customer, effectively.
Here's a list of transactions, you can see all of mine are debits because we were allowed to participate in the
program up until this year. Then they told us that employees could not participate so I had to get all my
miles out of my account. Basically what it shows, if where people are staying, I actually don't have any
stays, these are actually all deductions from my account. I have moved all my miles over to United and
Secspeth Ave, but I did it all online. Here is an example of the redemption's where people can actually go
in and redeem online. Here is another powerful piece of the Internet is, consumers actually enter in their
own name and address. Which is big for us because being in 74 countries, I think we are, having
somebody; hard data entry companies actually a small company in West Virginia. Not necessary very big
Metrapal area and when somebody sends in a form to enter our frequency program and that person is
actually maybe from Thailand, our people are not used to entering in a Thai name or a Thai address. Now
we have a much cleaner database because consumers are doing it on line and obviously they can spell their
Another example, which is great for us, we have 28 airline partners. Here is where a consumer can come in
online and tell us all of their frequency numbers. What this has allowed us to do is actually go to the
airlines and say I have a customer of American airlines, here is his American airline number, and can I now
market to them. In the past the airline companies would say no because they owned that consumer. Now
that we can show that we have the same consumer on our database, it's allowed us to do direct marketing.
And obviously the invariable e-mail addresses, one of the problems we noticed very quickly was, about 3
years ago, it was ok to have a 24-hour response time on e-mails. Customers today don't want 24 hours.
They want instinctance responses. They want a response to their question within a few minutes. Half an
hour might be ok. What we have actually done we have actually gone out and bought some soft ware,
bright ware, which has some artificial intelligence in it but when a consumer sends an e-mail, the e-mail
might be, do you have the phone number of the Sheraton Brussels. We can go through and pass that and
send an armouratery response and based on the success rate of that response, we can either have that
response sent to an agent to approve it, just to make sure it gives them the correct answer, or we can just
send it automatically. The phone number for the Sheraton Brussels probably have a 100% hit rate. If
somebody says, I would like to go to the Sheraton Brussels can you tell me more about the number of suites
and do the suites actually look out over the front of the hotel or over the back over the air conditioning
vent. We probably couldn't answer that automatically, so that you go off to an agent but now what we're
done is we've just lowed the numbers of responses of that those agents need to look at.
This fax on our Hot Spot, I am actually going to show you some examples of it. It's live in 87 hotels and it
actually rides on our existing network. So it is not necessary using the public web. 85% of the PC's
actually in our division, actually have access to Hot Spot and there is 520 people a day that use it about 4
times a day and these are the hotels that are using it most often. This is what the Hot Spot looks like and I
am going to go through some of the individual sections of the Hot Spot. We do, not necessary a lot of
presentations like this but in many cases again for training, we might want to educate our people on a
change to our frequency program or if we buy a chain of hotels, maybe a chain of 18 hotels in Spain. We
want to educate our sales people on those hotels and what they actually look like. Are they resorts, are they
business hotels, are they 5 star or 3 star. So people can come in on their own and walk through a power
point presentation. Here's a list of employees, one of the things in Hotel industry, we're fairly official in,
our General Managers in our hotels, that's a big position, if you're a GM, and everybody recognizes you.
So what we've done is given all our associates the ability to go in and find anybody in our organization in
Europe. Now Jennifer's the GM of our Hotel in Lisbon, if somebody wants's to know who Jennifer reports
too, we can actually go through and direct a whole high article Relationship of who reports to whom. In
this infrastructure, it’s what's going to allow us to become paperless. In the past, unless we know that I
report to the President of the Division, we would not know who to send my request for Capital too. But
this is what is going to allow us to do it.
Human resources are a big, big opportunity for us, again we have about 100, 25 thousand employees here
in Europe, and of the 25 thousand we always have openings. Here is a list of vacancies by division for us.
For example at the Sheraton Grand there's an opening for an Executive Assistant Manager. So the
marketing News is a Hot Spot for reporting, we do a lot of reporting, not only for our own purposes but
also to the owners of our hotels. Here's an example of a report that, in the past would have had in many
cases might be in hands of one hotel, for the Sheraton Stock, for example. The Sheraton Stock might be
faxes information back to us, what happens today, they log onto the Externet, they post the individual data,
they post it into an oracle database and we just aggregate that data and produce it back up. We're actually
coming back out of Oracle into Excel to produce these reports.
Purchasing: We purchase about a billion US dollars worth of goods here in Europe by ourselves, which is
the big inpodise for us and some of, in the past what you would think of as competitors of ours, for us to
actually get together and form a new company, to actually do purchasing. What we've done actually
online, we've listed all of our agreements, so I am actually going to go through an existing agreement for
Wine's of The World which is a product for all of our hotels to actually be serving wine's by the glass,
instead of wine's by the bottle, which has been very, very productive, it's produced about 5 million dollars
of business in the last two years. One of the things we thought was not going to happen was the we would
never get Italian's in Italy to serve French wine's, but what happened was, now the consumers can buy it by
the glass, instead of having to buy it by the bottle. People are actually trying it. What this does is it
actually goes through, what is the type of contract for example, it mandatory for all of our hotels to
participate in this. When did the contract start, who created this form and who can you talk to if you have
ant questions. Also is goes through and says, what's the phone number, who do I call. And there's links
out to that Brands website, is there is ever other questions and what they've done is Mondarvy is our lead
partner there, if we have wine's that Mandarvy can't source for us, then part of the Wine's for the World
Team is actually soucing other wine's, and today we're actually serving a lot of Australian wine's.
Quality is really big for us and what we've done is we've actually used this to go out and to train all of our
folks on how to use any product that we've developed. One of the things that I mentioned earlier was what
we call Shedders, which is our paperless product. There is another one in here which is Rush Rooms and
what happens is, a Team of people in the hotel will cover up a problem in their hotel and what we want to
do is, not only have them solve that problem by creating a group of best practice, but to be able to transfer
the problem, the solution to that problem, to our other hotels in Europe. So people come in online, they
figure out, they describe what the problem is, they talk about who are the members of the team, who was
actually developing this process to solve the problem and then what is the resolution. Again resolving in
one hotel is interesting but having that same problem solved once for a 114 hotels, is the power and
Here is a list of some of the other best practices that are out there and have been transferred across the
division. And again here are the comments, the guest serve centre concept was developed in Televeve,
developed in Televeve but this product is now mandatory in all of our hotels.
Re-branding, we recently rebranded, meaning we took the Sheraton name off of nine hotels in Europe and
re-brand them with the western name. We did that for a lot of different reasons, virtegicly but when you re-
brand nine hotels, so we re-branded about 10% of our invirtority here in Europe, it's a huge huge issue and
part of re-branding is not necessary just you know taking the Sheraton sign off and putting the Western sign
up, it's actually incorporating all of the practices that Western has and one of those for example is Western
has what is called Service Express. You pick up the phone, who ever answers that phone for you is
actually a group of people, can answer any question that you have. Instead of having to look around on the
phone and press the button for house keeping and a button for room service, is a one service express. So
actually training that across all of these hotels is really, big for us.
Another one was, The Heavenly Bed, Western has a standard of a different type of bed, which is really
fantastic and people are actually staying in hotels just for this Heavenly Bed. So explaining to people, all
of our owners not only, what is a Heavenly Bed but how do you purchase them, who are the suppliers, how
are they going to be delivered to your hotel, to just think of actually taking out 400 beds in one day and
putting in 400, so we had to explain to people that we'll deliver them 100 at a time or 200 or 50 depending
on your arcamince. And then also explaining to people, how often we expect these beds to be rotated.
Beds sort of expire every 3 or 4 years. These beds actually last a little bit longer, they are more expensive
but they last a little bit longer, so explaining that to somebody who might invest a quarter of a million US
in another 200 beds is a very important point.
Smart Rooms by Sheraton is a product that we've ruled out for again people just like us, you're traveling all
the time. You want to sit down and do your e-mail, you want to sit down in a comfortable desk without
having to go down to the bar or actually having to sit on your bed, which we have all done. It actually has
a standard of what is in each room; so do line phone, modem and jacks, fax and copying machine, so you
can just plug your PC into it. There is a business kit, which has scissors and paper clips and everything
else. It is a large desk, that desk is actually on wheels, so you can move it around, in the Lamps and desk
chair, obviously. That is an involved into smart meetings and what we've done with Smart Meetings is
around this table, there is actually jacks, phone jacks to plug in for e-mail, as well as power points. So you
don't have to worry about you know putting in your PC here and running the cord underneath and then
somebody tripping over it. And that's about the end of the Presentation, what I can't take or miss this
opportunity to do just a little bit more Sales though, so I would like to do is show you a quick video on
some of our properties in Europe and then we are going to have a little Q & A
PAUL: Does any one have a question for Brian at all? There's one in front.
Well while my friends are arriving, perhaps I can ask you a question?
Brian it's, Brian you make a real impressive use of an intranet across the organization, that was so
interesting to see, you have obviously made a huge investment in that. The two related questions - number
one - Did you have to cost justify the investment, make a business case for it cause that looks very difficult
to do and number two have you been able to measure the fine actual benefit of the investments, since then?
BRIAN: There is actually two intranets that we have, I showed you both. One is Team Hot and the other
is Hot Spot. Team Hot was, the development of Team Hot phenomenally inexpensive, it cost us about 150
thousand dollars to develop the product to the point where we could send leads from one hotel to the next.
We then starting looking at the calculation of the amount of business going back and forth and the numbers
where huge. We even starting looking at this, if you just do a simple math, five people in Sales in each
hotel times 750 hotels per day, times the number of days in a year. You can quickly get into what we
calculated to be close to a billion dollars, a quarter of a billion, I'm sorry 250 million dollars that can be sent
in leads across that system. So a quarter of billion was real easy for me to go and get another 250 thousand
dollars to make the product actually work as well as we would like. The second piece was Hot Spot. Hot
Spot as a company intranet is looked at as more of a cost savings tool and we developed Hot Spot for about
500 thousand dollars US. The …… calculation there is almost impossible to do because again it is a cost
savings tool. But Hot Spot is the first intranet, corporate Internet that we have here in Europe. We have
five divisions across the world. Hot Spot has been seen as being so successful that it is now the pilot to roll
it out across the company worldwide. In that project, it has a lot of money.
PAUL: But you can't actually measure that success at all?
BRIAN: We measure it by the number of people using it on a daily basis and actually what we've done is
we start driving more and more people there. We stop sending out reports, so that people actually have to
go to the Hot Spot to use it. Again a cost saving tool but also a productivity tool where we now can see,
who's looked at reports and who hasn’t?
JIM: Jim Steinard from Planetware. You have developed quiet an interaction with in users as well and I
would just like to focus on that a second. Do you notice any significant differences in usage and your
interaction with business travelers versus leisure travelers? Can you comment on what the service
differences need to be?
BRIAN: Very much so, Leisure Travels are on unmanaged or small unmanaged corporations, are today
going into our public Websites, which is, the businesses growing there phenomenally. The managed
travelers, the corporate travelers is a very different animal and all of the corporations what they doing is,
they are actually developing their own private intranets or extranets or whatever you want to call it. And
what they've done is they don't want to necessary just link out to Sheraton.com and get their negotiated rate
because once they have allowed somebody to link out to Sheraton.com that employee can now traverse the
web and now go wherever they want. What they want to do is they want to link directly into our
mainframe database. And actually have a private connection into our database. So we're developing that
and we're alittle bit slow to be honest with you. We have big corporate customers, they largest traveling
company in the world, Sieman's has come to us and said, Here's how we want to do business with you
going forward and we are having to react to that, cause they are in the drivers seat.
Does that answer your question?
PAUL: Another question for Brian?
The Gentleman in the front there?
SPEAKER: I wanted to know what is the percentage of turnover you make on line today and if you know
it for united stage and for Europe?
BRIAN: The percentage of travel for our company today is a little less than two percent, which is being
booked through the Web today. You can back into some of those numbers, would do about 18 million
dollars in travel for our European hotels today. What percentage is that of the total, I am not sure, I will
have to do the calculation. But today that 15 million that would do for our Hotels today is all obvious to
see, very little B to B business in their. The B-to-B side is going to go through the roof, once we have
developed our connection to talk to the Siemen's of the world and to the Electrolux and to the IBM's of the
world. So the B-to-B side should put that number, our projection is that, by the end of 2001 we are going
to do a billion dollars through the web. B and B to see.
PAUL: There is a Gentleman here and a gentleman here, while the mic is moving around Brian, I'll ask
you another question.
There have been a few announcements in the last month or so about Hotel chains getting together to launch
EPQ human portals and I suppose B to C portals, have you got any thoughts or comments on these
BRIAN: Yes we do, the purchasing deal that was just announced in the UK between Quiel Forta and
Hilton International. We actually decided not to participate in that. When you look at developing one
these, what we call a newcoal, we have a bunch of Hardvid NVA's in our company and that's the term that
they call everything is a newcoal. What we look at as participating in that is, not necessary the opportunity
to just save money and the purchasing side. But what is the makeup of the new company. Is that
company, what is the charter of that company, what is it, is it intent to just save money or is it intend to
aggregate it purchasing power and then allow other independent hotels to come in and charge them a
premium for that process. For buying soap for example. Also what's the sort of, go public strategy for
those companies? A couple of them have had, go public strategy as their number one reason for existing.
PAUL: You must a huge ITT Team in Starwood; can you tell us a bit about that?
BRIAN: How strategies involved in the past, as I said, my previous job in the States was, I was actually
was incharge of the development of the websites. My strategy was, that we would never higher anybody
who wrote HTML, and the reason behind that was, who wants to come to work for a hotel company, when
the can go work for a web development shop, in Soho in New York City. Wear T'Shirt and jeans, do
whatever they want to do, work to eight O'clock at night but not get till 12. That's not us. So our strategy
has always been to out source. Now the strategy has moved just a little bit, it not as necessary lucrative to
work at a Web development company as it was maybe a year ago. And now what we are doing, is we're
highering HTL guys to actually come in and do all the maintenance. So anything in new development, as
we develop, today we are actually developing brand new Sheraton.com, that's all been done by a company
called Modemmedia in Conetecit. But the maintenance on the existing Sheraton.com is all done in house.
And we do it a lot; we have actually figured out, we saved about 1.8 million dollars by doing all of our
maintenance in house. We will save in the year 2000. If I can just go alittle further on that. Web
development is important and sort of sexy because it is what the end user can see. The major part of
website today, is that back end, the back end interfaced into a legacy system. And all of those folks are
actually in-house programmers because they understand the legacy system and in order to actually give the
consumer what they want, you need to talk to that legacy system.
SPEAKER: The question that I have is for a company as large as yours and the different countries that
you have, how do you handle the situation where you have people in Sales, people in Administration, in
pacific to pass words, pass codes and then also for the travel agency community, who might have area's on
your site that might have pro-rates or over-rides or a special net pricing. How do you handle security and
then, basically assuring the different people that have access to it, that they only have access the area's that
they should be able to see?
BRIAN: An interesting, it’s a great question, but an interesting statistic to show you how important it is to
us. We have 29 people across the street that run our European division of a 114 hotels. Every lean and that
counts the President all the way down to the secretaries. 3 of those 29 people just maintain Hot Spot. They
are maintaining pass words, they're maintaining access, perfect example is, the Sales and Marketing reports
that I showed you, those are only excessable by the GM and Director of Marketing of every hotel. So we
have to actually secure every section of the sight that people can look at. The last part of your question, I
think was, for companies that we're have existing over-ride situations with, we don't have any of those
deals, today the largest travel company in the world or the largest travel agency in the world in American
Express. We don't have any over-ride deals with them. And if we did, our back end system is, the back
end system is the database of the reservation. That actually interfaces to our commission payments
process. So if there is anything that goes on with over-rides or with commission cheques to be sent, that's
the interface between the back end reservation system and what we call our centralize commission process.
PAUL: One more question, you can all talk together in the microphone, you are all sitting next to each
SPEAKER: I am curious when your customers, business or leisure, they book on line, they are given, I
suppose a URL, that can allow them maybe to interact with that booking, do they need to modify it or
cancel it, anyway?
BRIAN: There is actually one place, there is one entry point to either book, modify or cancel.
SPEAKER: Is it just single, collectable or are they required to be presented with a name and pass word
and log in?
BRIAN: No once they're, we actually e-mail everybody, an e-mail confirmation, which has a confirmation
number, that confirmation number is what allows you to modify or cancel that reservation?
SPEAKER: Have you run an assessment or has it saved your reservation staff a lot of time and effort?
BRIAN: Absolutely. Without giving the exact numbers, it looks like a reservation that comes through the
Internet costs us about 7% of what a reservation costs that actually goes through a call center. That's the
call centre and the call centre is with no commission. If you look at what is costs to come to a GGS, I don't
know the exact number there but it would probably be 2% of what it would costs originally, yes
reservation, because of the commission.
TERRY: I am wondering do Starwood offer or are you considering offering other ancillary products and
services online? And what I am thinking about is, the online booker who's looking for Theatre tickets for a
BRIAN: The answer is yes, my strategy about two years ago was that Sheraton and Western and these
brands were large enough that they could become travel portals. And we actually, through our deal at the
time with Expedia, we actually allowed consumers to book air and car reservations at the same time that
they book hotel reservations. The success rate of that has been very small. I think that the success rate has
been very small in the way that, for two reason. One we presented it to the consumer as sort of an after
thought, book a room, and then, do you want an airline seat or a car. We could proberly do a little of a
better job of marketing that in the process. And number two, consumers did not think of us in that light.
So they always thought that, if I want an airline seat, I went to Flightfo or Exspeedo or Travel Losity or
Prelude or the other ones. The answer is yes. We are also in negotiations in booking Theatre tickets. We
own about 9 thousand rooms in New York City, of which are all 100% owned. So we wanted to have an
answered service like Broadway Place. We haven't done it yet.
PAUL: One last question. Jim did you want to say something short?
JIM: Well I was listening very carefully to what you said about Travelocity, do you foresee that they,
when an organization like yours might instead of writing the coattails of the airlines, having the airlines
writing your cattails?
BRIAN: Yes, but not before I die, but some time. The airlines, to put it in example, we’ll have 45 million
customers this year. American Airlines will have 145 million customers. So the number of customers that
we have versus...there's always going to be a smaller number. And that American, if you look at BA or
Lufthansa or United, the larger Airlines, I mean, it's just that they are so much larger than us. We do have
research that shows, the very strong sliding scale of the amount of business that will be going through the
Travel Losities and Exspeedo's, verses the branded sites. So in the past, you know about 10 years ago, the
statement was, are brands dead? When brands came back again, everybody wanted to buy it, people
bought by brand, from a marketing stand point. About 3 years ago, brand new brands were born, Expedia,
Travelocity, Preview and people were purchasing them and their revenue was going through the roof.
People stopped coming to the individual components because it was easier to go and buy in an aggregate.
We see research and it's definite that research that shows, that the business going through Travel Losity and
Exspeedo will come down and the business going through the branded sites will go up. So I don't know if
we will ever be in charge but it will be nice.
PAUL: We all thank Brian very much, thank you Brian!
A great opening to the conference, let me just talk about logistics again before we all disappear for coffee.
Stream one; CRM will be here after the break
Stream Two, which is, Let's get technical is up stairs on the eighth floor, in the conference room there.
Stream Three, Web content and The Sales Travel, will be in the back of this room. After the 14.40
sessions, we'll all go and have a cup of coffee up stairs and the last 15.20; Panel Session will be up stairs.
So we will take a coffee break now until 10.40. Thank you!