Big Interview: Kempinski’s vision of hotels’ technological future

Kempinski’s new Vienna hotel is a high-tech marvel. Lee Hayhurst spoke to the man responsible, Jeremy Ward

The two most-asked questions about hotel technology are probably these. Will all hotels one day offer free Wi-Fi? And will guests be able to avoid those interminable check-in queues and get into their room using just their mobile phone?

One of the best people to ask is Jeremy Ward (pictured), senior vice-president of information technology at Kempinski Hotels and Resorts.

In March the chain opened what is reputedly the most technologically advanced hotel on the planet, the Hotel Palais Hansen in Vienna.

Ward set out the thinking behind the technology that Kempinski – which operates a managed services model and so does not own hotels – increasingly demands of its properties.

“In 2010 we had a look at our five-year IT strategy. We made a number of changes and put together a new detailed five-year plan under new guiding principals,” he says.

“The first of these was that where possible technology should be moved ‘above property’, in other words to the cloud. And secondly, we wanted to give owners the opportunity to look at Opex (operational expenditure) models rather than just pure Capex (capital expenditure) models.”

With the opening of the 151-room Vienna property in 2013 then looming, Kempinski decided to ensure this hotel would embrace this plan.

“What Kempinski is offering is a five-star experience so we want to make sure, from a technology point of view, we are bringing that experience to our guests,” said Ward.

“It was also clear we did not want to blind them with technology – this is not technology for technology’s sake.”

One of the customer-facing innovations Kempinski has implemented is iRiS Software Systems’ virtual valet, with in-room iPads effectively replacing the hard copy guest directory booklet.

In fact, the directories remain to meet industry standards, as do the room’s light switches even though the iRiS software enables guests to control these via the device.

Ward said the idea is that the technology should add, not detract, from the experience.

“We were keen to make sure we have a fully converged IT network. A lot of the systems – the keycard solution, the room management system, the telephony, the TV system, internet access – all sit on the same IP network.

“We have even got controls that sit on the IP network so maintenance can tell the temperature in the fridges and know if a door’s been left open. We wanted to make sure we can take control of that converged network.”

To achieve this, Kempinski pioneered systems integration with IT provider Hewlett‑Packard.

“We have quarterly payments for the hardware and costs for the managed service elements provided by Fourteen IP (a systems integration specialist in the hospitality sector) go up and down based on occupancy,” Ward said.

Ward admitted the system for just one hotel like the Palais Hansen was “very complex”, adding: “We have 32 Vlans (virtual local area networks) on one physical network.”

As well as sensible customer service advances like hotel information in multiple languages the iRiS virtual valet also offers the Vienna Kempinski a wealth of other opportunities.

It’s still too early to assess upsell options through targeted marketing and potential new revenue streams such as sponsorship and sales of off-site attractions and entertainment. But Ward said this is only part of the benefit of using the technology.

“I’m keen to make sure anything we do is about the guest experience first. They have much more interaction with the hotel than they would have previously. We are working with iRiS on adding content – the more content, the more value to the guest.

“The challenge our industry faces is technology is moving so fast. Back in the 1980s and 1990s hotels needed to be ahead of the technology you could get at home. Hotels had the first flatscreen TVs and movies on demand – things people had never seen.

“But technology moved on and suddenly there was no way a hotel room could offer more. Then we had the challenge of internet bandwidth.

“We now say let’s make sure we are enabling guests to use the devices that they want to use and access the content they want to access.”

To meet this challenge Kempinski Vienna has plugged a one-gigabyte pipe into the property. So does this herald the dawn of free Wi-Fi in all areas?

Probably, says Ward, although he rebuts any negative comparison with the free Wi-Fi services already offered by high street chains such as Starbucks and McDonald’s.

Due to the Kempinski Vienna’s industrial-strength bandwidth, free Wi-Fi is available. But Ward says this is likely to remain unusual for some time due to the sheer logistics involved. Future openings in China, Saudi Arabia, Ghana and Kenya, and existing properties in places such as the Seychelles, are in locations where similar innovation is simply not possible.

The current Kempinski model is to make limited bandwidth accessible for free but to charge for anything above and beyond that.

“In a 400-room hotel even with a 300-megabyte pipe that bandwidth disappears quite quickly,” says Ward.

“There is not a clear answer to this ’pay or not pay’ question. I expect in the future it will be free in every hotel, but to offer high-speed internet access with good bandwidth is quite a cost.

“For a Starbucks or a McDonald’s to offer free internet they have to cost of one or two access points and a 10-megabyte ADSL (Asymmetric Digital Subscriber Line).

“A 400-room hotel offering 100% access in public areas needs 200 access points and a 300-megabyte pipe minimum, plus the network infrastructure. This is the challenge for the industry.

“Hotels have rolled in revenue from internet access to help support those costs, but in a lot of instances it does not cover them.”

So what about the thing that none other than Priceline’s head of worldwide strategy, Glenn Fogel, urged hoteliers to implement last year at a Travel Weekly Business Breakfast: mobile phone check-in and door entry?

Ward says this is coming but that the technology at present is not appropriate. Options currently include dialling a number outside the room and the phone plays a tune the door recognises; another involves downloading an MP3 file.

“A lot of what we do is all about service and interaction with the guests. We tend to walk them to their rooms and ask if they need anything or take their laundry.

“There is a lot of person-to-person element around the service a five-star Kempinski offers. If they just walk into the hotel and go straight to their room they won’t get that benefit.

“There’s a lot of talk about NFC (near-field communication) and RFID (radio-frequency identification) room keys using mobile phones.

“At some stage you will see a ubiquity of devices that are NFC-enabled and as an option we will be able to send messages to the NFC chip on the phone, but until that tech is a little bit smarter and available I do not see us using that.”

In general, Ward expects to see hospitality businesses looking to exploit technology more, particularly in areas like card payments regulation compliance, reliability and system integration, which can save costs.

He is the current president of global trade association Hotel Technology Next Generation (HTNG) which is seeking to spread best practice and agree industry standards.

“It’s our job to make sure owners understand if they join Kempsinki there are certain standards they must adhere to and help them understand the commercial value of that,” he says.

“With HTNG, and hotel chains working together to agree standards that benefit the whole industry, that’s a lot easier when you are looking at the bottom line figures.”

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