Millennium Hotels CIO: Eli Salant

The Millennium & Copthorne Hotel chain has operations in Europe, Asia-Pacific, the Americas, Middle East and North Africa. In 2005, the group reported 595 million pounds in revenue.

In this Vision Series interview, Millennium's New Zealand-based vice president for IT, Eli Salant, tells ZDNet Australia managing editor Fran Foo how he's convinced board members to spend on technology instead of refurbishments, achieving savings of nearly US$800,000 a year with Voice over IP. Below are excerpts from the full video interview.

Q: If you could nominate one innovative project driven by technology to fulfil your business needs, what would that be?

Salant: I'd have to say Voice over IP technologies. Traditionally in hotels, when the guest checks in, they're used to either bringing their own cell phone and using that, or picking up the phone and ringing downstairs to reception and asking them to place the call for them. Voice over IP technology enables guests to make a free phone call anywhere in the world seamlessly. The quality is exceptionally good, and it can only go from strength to strength.

Is that the new money maker for the hotel?

Salant: We're experimenting with the technology at this point in time. At this stage we're giving it away free. What that means is a guest can check into one of our hotels and make a call anywhere in the world for free. How that will transpire in the future remains to be seen. Will we build that into the room rate? Perhaps. Will we charge a flat fee for the guest making the call? Who knows.

Internally, do you use Voice Over IP?

Salant: Not as yet [but] we're about to launch the facility whereby all our hotels and our staff can ring each other through our wide area network.

And do you expecting huge cost savings from that?

Salant: Absolutely. To give you an example, we have 19 hotels in New Zealand linked by our wide area network. We expect to save in the order of NZ$1.2 million per annum (US$800,000) on inter-hotel phone calls through Voice over IP technology.

The Internet has helped revolutionise the hospitality industry. People can make bookings online versus the old days of fax or telephone. Can you take us through your experience of moving the business to the Web?

Salant: Certainly. Two things are very obvious with Web technology. The first is people are becoming a lot more sophisticated in using the Web to make bookings. And the reason they are doing that is because they can achieve last-minute, extremely good deals.

What I can see in the future is travel agents becoming redundant, because at the end of the day what does a travel agent give you? What value add do they give to the end user? At the moment, very little. They can't achieve the price point that an online booking agent can. And we've seen that in our reservation systems, more and more reservations are in fact coming through the Web, rather than traditional channels -- wholesalers, or retailers or travel agents.

If you look at hotels around the world, and the evolution of Internet access, from dial-up to broadband, how have you convinced the board that you need X amount of dollars to install broadband solutions to increase revenue?

Salant: That's a good question because traditionally hotels are reluctant to spend money on IT. They would rather take the money and do a soft refurbishment in the room.

We've seen a huge increase in sales since we've installed broadband in our hotels. So all our hotels currently have wireless and most of the corporate and conference type hotels have broadband in every room. The revenues are good, people are using it, and they're using it for all kinds of things.

It was initially a hard sell to our board because we installed it probably three years ago, and certainly New Zealand was a little bit ahead of the rest of our competition. We went out with a huge marketing campaign in Southeast Asia, and that's paid off.

On Wi-Fi, what kind of security challenges have you faced?

Salant: A lot. There's reluctance amongst guests, or there was reluctance amongst guests, to use Wi-Fi mainly because of media hype, dare I say, about the insecure nature of wireless. I think with the latest innovations in security, that's a moot point, and I think people who know Wi-Fi and the way it works, understand that in today's times Wi-Fi is just as secure as a wired connection.

If you could nominate one of the technologies you see becoming especially important in the coming years, what would that be?

Salant: I think, without doubt, in-room entertainment, and specifically, digital video on demand, a similar technology to what you see on most modern airlines today. You sit down in your seat; you watch a movie from the beginning; you can stop, rewind, pause the movie. Guests are more and more demanding in terms of what technology is in the room, and we like to think -- certainly, it's our philosophy -- that our hotels offer a home-away-from-home environment.

Have you done any focus groups into the kind of demand for these services?

Salant: We have. Not so much in New Zealand, but certainly throughout our other hotel chains. We have lots of properties in the United States and in the UK, and a few in Singapore. And we've done market research in those three areas, and I think the guests are telling us that they would use the technology.

Earlier, we talked about justifying to the board ... what are your KPIs as VP of IT?

Salant: Return on investment. My mandate falls into two areas -- the first being to equip all our hotels in New Zealand with state-of-the-art technology that gives us a return on investment. But, by the same token, also set ourselves apart from our competition, not necessarily to make money, but to provide value-added services, Wi-Fi being one of those services. So at the moment, in all our hotels, our guests can use Wi-Fi hotspots for free.

Hotel management would rather spend money on refurbishments than new technology. That must be a huge challenge. Do you have any tips for your peers?

Salant: I think the only advice I can give is do the homework. Invariably, the people who make decisions are accountants; they're not IT people, and IT people tend to be very passionate in what they do. Within IT, we might think it's an extremely good idea; when it hits the board level, they look at it, they look at the return on investment, and decide it's not such a good idea. So the advice I can give is do your homework in terms of the return on investment for the group.

Any other technologies that you're excited about on the horizon?

Salant: We're looking at different ways to allow our guests to check-in quickly into our hotels. I'm not at liberty to discuss some of the technologies, but one we are looking at is having hotel terminals at airports, whereby guests can use their cell phone to make a reservation and get the confirmation.