ALICE thinks hotel operations could learn from innovation in other industries

ALICE is a New York-based startup that says it has built the first hotel operations software that can handle front-of-house and back-of-house operations along with guest interaction in a single platform.

Its $9.5 million Series A investment led by Expedia, which is also a close advisor, has given it industry buzz.

An example of one of the tools on ALICE’s system is one that helps concierges track guest requests and vendor information, with electronic reminders, saved itineraries, and the ability to exchange text messages with guests. Launched in the spring, the tool is used by about 100 hotels in the US.

We recently sat down with the company’s founders, Alex Shashou (president), Justin Effron (CEO), and Dmitry Koltunov (CTO), who come from the financial industry (Goldman Sachs, hedge funds, Morgan Stanley, Wharton School).

We asked how they are attempting to bring to bear the efficiencies of customer service delivery practiced in other sectors to hospitality. The interview has been edited for clarity and brevity.

Tnooz: What’s the story behind your company name?

Alex: ALICE stands for A Life Improving Customer Experience, but it also gets its name from the Brady Bunch housekeeper.

Tnooz: If ALICE is about improving how a hotel operates, how does your service improve guest satisfaction?

Alex: Have you ever sat in a hotel when they get a bad review? What happens is suddenly all hell breaks loose. Because you’re trying to figure out for two hours how did it come about. No staff member’s going to put their hand up and say, “I did it.”

Then when you think about Uber, when you give a one-star review instantly five minutes late the driver’s either kicked off or they’ve resolved it. Because they have full transparency into what’s happened.

We hope that by building an infrastructure that allows you to understand what’s happening, one day we’ll be able to tie that to a review and it’s not going to be a 2-hour exercise, you’re going to be able to understand what went wrong and fix the process to fix that.

Sean: So ALICE accomplishes something of what Uber accomplishes in a different vertical?

Alex: Uber doesn’t need to worry about its drivers, thanks to the transparency of its feedback system…. This will come to hotels. They’ll be able to react in the moment.

Justin: Guest satisfaction is the undisputed king of metrics in the hotel industry. Yet no one understands what it is.

Alex: Have you ever given a TripAdvisor review?

Tnooz: Yup.

Alex: Did you write about your booking experience?

Tnooz: No, I wrote about the service at the property.

Dmitry: There’s no way to capture that, there’s no way to value that.

Tnooz: Operational excellence should be self-evident, right? But it can always help to have KPIs or metrics, especially for an internal champion to make the case that something’s working. What are the metrics you offer or collect?

Alex: It really depends on the product we’re looking at because we have products that span guest, concierge and really our staff solutions.

On the staff side we’re looking for efficiencies in communication which brings down service times.

What we can observe is from the moment we launch to three months in, what is your new long-run average norm for delivering towels, for maintenance. By finding your average norm, you now know what time you have to beat and what your standard is.

So we’re able to provide that transparency into what’s happening that never existed before and now you can understand it.

When you think about the concierge, it’s more about how engaged your guests are, what are you doing in the local area, which restaurants are more popular and what do your guests like.

Then when you think about the guest side it’s about engagement, how are they engaging with you, how often, how much are they spending.

Because we’ve crossed the ALICE suite of products, we’re able to look at different efficiencies but ultimately the core metric is what are my guests doing, and how long does it take me to address their issues, irrelevant of channel.

Dmitry: A lot of our background is actually financial analytics, so we build a lot of these tools that allow you to examine your data.

The unique part here is, because your guests and your staff are communicating on the same platform, you can do an end-to-end analysis from the point that somebody requested something to the point that it was fulfilled maybe even the messaging after, not only the times but how many touches did each person have, every single things that happens on ALICE is a recorded event.

We know where it happened, when it happened, who did it, in what context they did it, we collect probably thousands of data points per hotel a day.

Tnooz: That assumes most of the hotel guests are using the ALICE app, which probably isn’t happening right now.

Dmitry: We’re getting adoption levels up. The problem we’re trying to solve is we want a full, holistic, transparent, view on what is happening with guest requests. Not just what’s happening with housekeeping or with concierge or with valet.

What is engagement? Well, engagement is how I interact with the hotel, in terms of the things that I would like the hotel to do for me. But there’s no central repository for that right.

Tnooz: Your suite costs typically about $8,000 to $15,000 a year for a subscription. What is your response to the hesitancy among hoteliers to add yet another system to the 70 other systems they are already managing?

Justin: One of the things we focused on early on that has paid dividends is we focused on building a system that is flexible enough to encompass a lot of different needs.

Whereas a lot of these products out there are kind of off-the-shelf, single-tasked. Our vision has always been to create one connected system.

Our pitch is: Come to one vendor, get your entire operations from one place, you have the guest piece if you want it, and then you just need your PMS and POS and you’re good to go.

It was probably about a year ago that our product finally caught up to the vision. Since then that’s allowed us to really differentiate ourselves.

We also have significant funding, so hotels are not worried that we’re going to disappear like a fly-by-night operation.

Tnooz: You recently released the API. You’re working on new modules. What else?

Dmitry: We have the ability now that you put all the data into one place for you, at a hotel, to say, “What makes me profitable? What makes me actually lose clients? Where is guest happiness coming from? And where is guest dissatisfaction coming from?”

Now let’s trace that back to the actual work that’s being done in the hotel. Am I undeserving a particular community? Am I too slow to react to certain things?

By actually putting a technological measurement tool in everything that you operate, you allow your staffs, your management, and all your operations to be thoughtful about how to run that hotel.

The by-product of having ALICE in all your departments is you’ve now installed a massive measurement tool that can allow you to gauge your quality of hospitality. That’s where we want to be, we want to allow hotels to be smarter, not just to operate faster.

Alex: We’re calling it, ‘Operations is the new black’. That’s going to be our way of trying to get operations to be a little bit more spoken about then just always the marketing side of it.

Dmitry: Right, because the marketing team, they’re focusing so much on getting heads in beds and their entire job is to sell a brand promise but then they’re not following the brand promise through the execution.

Justin: Bigger picture: You want proactive guest satisfaction managers, not reactive.

When you do reactive guest satisfaction you’re already digging yourself out of a hole. When you’re saying we need to improve our service because we’ve seen ten bad reviews, your ADR’s already dropping. … Allow guests to tell you what’s happening and make that information transparent.

If guests tell you and you fix it quickly while they’re still on-property, maybe they won’t tell TripAdvisor. (laughs)

Justin: That’s happening, but only OTAs, it’s not happening by the hotels themselves. And they’re the ones that are the highest recipients of both the bounty. Why let the OTAs be the only ones that evaluate guest satisfaction?

Dmitry: It’s a framing question. A lot of times when people look at innovative technology the first question is, “what’s the risk of putting it in?” And I think you could also say, “what’s the risk of not putting it in? What’s the risk of not innovating.”

Alex: It’s personal professional advancement, too. ALICE gives hoteliers who are rising in their careers an opportunity to grow themselves in their company.

Dmitry: What you find in the hotel space is that there really isn’t a good operations integration. All integrations are about the property management system, which is not a smart way for you to manage the work that happens in a hotel. It’s not a route to operational excellence.

Say a request comes in from any source, it could be an email, it could be a phone call, it could be through an app, through an SMS. But now work needs to get done. How do you route that work? How do you route it between departments? How do actually ensure that it gets done?

There isn’t even agreement on best practices yet. If you ask a hotel how many rings they need before they pick up the phone the answer is three. Because that’s a Forbes tech standard.

But what’s the standard for how long it takes for you to answer an SMS? What’s the standard for how long it take for you to answer and app? Those standards don’t exist yet.

Tnooz: Is that correct? It’s not so much the timing as the message that hoteliers are worried about, right?

Alex: What kind of voice do you take, yes.

Dmitry: If you look at a lot of the technologies that hoteliers see today, they’re coming from the perspective of individual departments.

We didn’t. We looked at it much more holistically. We didn’t build a system for house-keeping, we built a system for request management that can handle housekeeping.

We didn’t build a front-desk system, we built a system that can handle the front desk’s needs.

Once you build a really strong internal infrastructure, then you can tailor the views and the interaction patterns to the specific needs, but your core remains the same….

Tnooz: I heard that within the ALICE tool you have an opportunity to have packages tracked and how they arrive in your room…

Dmitry: We’re innovating in that space right now. I’m really excited about it, the module’s going to be coming out this quarter. What we did is we said, “How is a package like a regular service request, what common attributes does it share?”

It needs to be owned, it need to be associated with a guest, it needs to be commented on, it needs to printed. But then how is it different? It needs to be scanned, it needs to be displayed in a grid.

And that’s how we approach everything that we build, we first start with understanding a problem deeply. We deploy a user research team, they go to the hotel and they spend an entire month speaking with people, observing them, doing deep research.

Tnooz: So that’s why they call it the ‘5 Why Process’…

Dmitry: Yeah we try to ask at least 10 why’s.

Tnooz: Overachievers. You guys don’t come from a travel background. Has that hobbled you?

Alex: My family owned hotels. As a team, we’ve been able to bring insights from other industries into the hospitality space. We’ve had to educate our team by spending hours and hours with our hotels. It’s predominately why we focused on New York at first.

Justin: Our non-travel experience has actually been more of a positive than a negative.

Dmitry: It’s been the foundation of our success, in my view. There’s this thing called Conway’s law which basically says that systems are generally built based on the ways that organizations operate internally.

If you look at how a hotel operates, departments are pretty segmented, the revenue managing department doesn’t even speak to the operations team and that is fully representative of the systems that we have right now, because we didn’t come from the industry, we looked at it from a holistic perspective.

You have one guest, you have one operation, how do you centrally operate that in a transparent way. It has allowed us to take a look at the whole thing without the bias of thinking how everything’s been done before.

Tnooz: So ALICE is about hotels achieving operational excellence. Do you rely on partnerships with PMSes to get the word out to hotels? Are there other partners in the chain that can help you?

Dmitry: Yeah so we’ve started a lot of conversations with other synergistic products.

The issue is if you’re dealing with a really big company they don’t care enough, and if you’re dealing with a really small company they don’t have enough breadth so it’s about finding the sweet-spot of a partner that actually has enough to actually help.

With our investment from Expedia, that’s certainly helped to open doors. We’re talking with a few other players in the system. Its not necessarily PMS-driven it’s a lot of the other things around it.

For instance CRM is really interesting, they’re able to get all the information about guests and their booking information.

Once that guest arrives on property it all falls off. What are they requesting? How often they engaging? How much are they spending with you?

Certainly avenues for growth that we can pursue are talking to some of those types of systems and seeing if their synergy is to re-sell the products, but we’re still early in that and figuring out what the best partner might be.

Alex: The other partnership is not so much a vendor to vendor partnership. So, recently we opened up our guest API and if you are a hotel chain and you have this loyalty in your booking that you manage to get your guests on the discovery phase but then the booking phase and you lose them.

We can take our guest’s API and put it into your booking platform, right? Into your loyalty program and allow you to continue your guest’s journey but without it being fragmented, it feeding back in into the ALICE staff side on your hotel side.

And so we may also find a lot of successes and when we’re exploring, Dmitry’s been working heavily on it, where can we find partners that aren’t so much only vendors but actually are hotel companies that want to complete their guest’s journey.

Dmitry: And that simple thing of opening up the API, it’s so prevalent in other industries but not really here. We don’t charge for certification, we don’t charge for access.

We think that if somebody wants to integrate with ALICE in order to fulfill a better guest experience it’s a tide that lifts all ships, we want to support that.

And so we’re actually really big on asking other people to open up their API and to not just be hiding everything. Innovation can only grow from openness. We need that in hospitality.

Earlier: Startup pitch: Alice wants to answer your hotel stay needs

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Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.



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