Episode 1: Steve Lowy

This is the very first episode of the Venue Viewpoint, a regular podcast for those working in hospitality industry. You will be able to find these here on the Venue View website every week.

We are really happy to have started with a bang by having Steve Lowy on as our first guest. Steve is currently the chairman of the Hotel Marketing aassociation, and is Managing Director and Co-Founder of Umi Digital, a company specialising in digital marketing for the hospitality industry.

In this episode Steve talks about worldwide hospitality service levels, the threat of Brexit and GDPA, and provides tips on the use of social media, AI, and chat functions to help you grow your business.

Can’t listen just now?

Don’t miss out, see the transcript from the podcast below.

VV: Hello and welcome to the venue viewpoint, your 20-minute glimpse through the windows of some of the UK’s most successful hospitality establishments, and into the minds of some of the people responsible for driving business in them.

My name is Keith McMahon and over the next 20 minutes we are going to talk about hospitality, we are going to look at current trends, we are going to talk predictions for the future, and more importantly you are going to get tips, tools and resources to help you no matter what business you are in.

This is the very first episode of the Venue Viewpoint, a regular podcast helping those working in hospitality. You will be able to find these on the Venue View website every week (www.venueview.co.uk).

One of our core objectives when we first set out was to bring you really good quality guests that would be able to help you understand more about your business, and be able to give you one or two ideas to help you take it forward.

We are really happy to have started with a bang by having Steve Lowy on as our first guest.

Steve is currently managing director of Umi Digital (www.umidigital.co.uk ) and is also one of its co-founders, and he is also the chairman of the Hotel Marketing Association (http://hotelmarketingassociation.com).

VV: Morning Steve, how are you?

Steve Lowy: I’m good thanks, Keith how are you?

VV: Yes really good. How are those offices overlooking the park?

Steve Lowy: Lovely, the sun has just come out and all is good. Hopefully all set for a sunny Friday

VV: Fantastic. So Steve, for anyone that doesn’t know you can you just tell everyone a little bit about you, your background and what you currently do in the hospitality industry

Steve Lowy: I studied hospitality at University and after travelling decided I wanted to run properties. I ran a 550-bed backpackers hostel in central London and then set up my own hotel brand which we expanded to London, Brighton and Moscow.

Following on from that I now run Umi Digital which is a digital marketing agency which helps mainly independent hotels and travel businesses with their online presence and marketing.

VV: From your time spent travelling, obviously you spent extensive time in other countries, did you bring back anything that you were able to implement in this country?

Steve Lowy: In terms of the hotel management side it was all about service, Umi, which is also the name of the hotel, means ocean in Japanese, and what I found in Asia, particularly South East Asia was that service was natural and one of the things I brought from that was to employ for personality and train skills, rather than employing people for their CVs. I really changed the way that we employ people, it made a big difference in terms of our service quality.

This actually helped our digital marketing because our customers were happier and subsequently talked about us more so we got more direct bookings for that reason.

I also learned a lot in Australia about how backpacker hostels work in Australia versus the UK. They were a lot cooler at the time (2003 / 2004 ) and a lot funkier with really cool bars and that wasn’t really happening here. Obviously now in Europe, you have big chains that do that but I learned a lot about how that works and how successful hostels can be as a business if they are run properly.

VV: With regards to hospitality, in general, how do you see the state of the industry in 2017 in the UK?

Steve Lowy: It’s challenging. Not so much for today but over the next couple of years regarding what could happen with Brexit. I think the biggest issue for hospitality businesses, particularly in London, is the level of EU migrant workers that work particularly in restaurants. 92% of the staff working at Pret A Manger in London at the moment are migrant workers.

The current predicament for them is that the government are saying that if you have not been here for more than 5 years you don’t have a right to remain which means that will probably be the majority of Pret A Mangers staff. So that breeds uncertainty in the staffing pool and therefore has caused issues regarding front of house but also with chefs I know they have been issues too.

Today it is positive because of the weakness of the pound. London is busy and I know that Manchester as a city is doing well. Brighton is a but tougher but I know that a lot of UK residents are staycationing which is great for the coastal resorts, and you have also obviously got people from all over the world because it’s just 10 or 20% cheaper than 14 months ago before the Brexit vote. So it’s a bit of a mixed bag at the moment.

VV: With regards to the Brexit concerns have you heard of any innovative solutions, or is anyone talking about how that challenge can be overcome?

Steve Lowy: Well with one of my other hats on I am chairman of BETA, is the British Educational Travel Association (https://www.betauk.com) and we lobby government along with another association called Tourism Alliance to ensure that as an industry Tourism has the best possible conditions to flourish.

For the first time in the history of politics in the UK, every single party had tourism as an agenda item on their manifesto in the last general election. That is the first time ever – considering tourism it is the 5th largest industry by GDP and the third largest employer by numbers of staff employed in the UK so its kind of crazy that it’s taken this long. I think there is a realisation in government that we need to make sure that conditions are positive for tourism.

However what the treasury want and what the border agency want, because let’s remember that Brexit was a vote against migration over anything else, could be an issue. And they were potentially talking about installing something like the US ESTA for European citizens coming to the UK which would just be another barrier people would have to come here which is not good.

VV: So there are plenty of challenges. How about on the other side, are you seeing anything with regards to current trends that are really helping to move the industry forward at the moment?

Steve Lowy: I think generally there is a lot of automation and machine learning tools coming out on the market, at the moment being aimed towards the bigger brands but eventually the way that technology works will be that it filters down to more independents. Particularly around revenue management and so forth which will be particularly interesting for smaller hotels that at the moment can’t afford proper revenue management tools.

If you can improve your yield by 5% over a year and you have 50 bedrooms, even for a 2 or 3-star hotel the difference that makes to your bottom line is huge.

VV: So with regards to AI and timeframes, how far away do you think we are before there are viable products that smaller hotels can utilise?

Steve Lowy: I would say a couple of years. The growth of AI and machine learning, if you think about the first mobile phones – the first proper mass produced phones were around the mid-80s and it took around 20, nearly 30 years for them to become this mobile computer. AI, the developments you have seen in the last 2 years has been phenomenal.

Bear in mind you have a lot of open source platforms such as IBM Watson, Google etc allowing people to tap into big computers so it may be sooner than you think. I have seen automated tools already but they are price prohibitive for smaller hotels, but even a 2 or 3 star 50-bed hotel can afford a proper automated revenue management tool now.

VV: AI stands for Artificial Intelligence, for those that are not aware how can this benefit the hospitality industry?

Steve Lowy: Hospitality is one of those industries, hotels in particular, that that has huge amounts of data on its customer base.

Basically, it doesn’t use it very well.

One of the biggest uses of machine learning, and artificial intelligence is the ability to crunch huge amounts of data very quickly and give a result. You can take from that what you will but it’s ultimately thousands of people crunching data versus one machine doing it. That’s where I think it will be quite interesting.

There is also dynamic personalisation, which is a big thing in web design at the minute, where you make a website look different from one person to the other because of their reason for being on the site or the way that they found you or what device they were on. If you could do that with your outbound marketing material to previous customers that would be a hell of a lot better than your bog standard newsletter that a lot of people send out which is just very uninteresting to most people.

So that’s where I think it could be very interesting.

Obviously, there are data protection issues but I’m not sure how that is going to pan out.

VV: Yeah that was one of the things I wanted to ask you. Obviously, there are big changes to data protection next year, so for those people that are not aware could you just explain what those changes are and how they could impact marketing efforts?

Steve Lowy: Yes there is an EU based rule coming in next year called GDPR, and it is a new regulation put in place to strengthen and unify data protection in Europe, and to cut a long story short if you don’t abide by the rules the fines can be mind blowing.

If you think about a lot of hotels, PCI or whatever they are doing at the moment is quite basic. It’s quite scary because if you think about hotels as part of their property management systems will have peoples names addresses, birthdates, email address and sometimes even scans of their passports.

There is a huge amount of sensitive data that could be used by not so nice people to do all sorts of stuff so I think the hotel industry is going to find it very very difficult.

VV: How many hotels do you work with at the moment Steve?

Steve Lowy: We work with about 150 across Europe, ranging from backpackers hostels to 5-star hotels in London

VV: And what sort of services do you provide to those hotels/hostels?

Steve Lowy: We build data driven websites and support them on a monthly basis with marketing advice or implementation, technology integration, data analysis and marketing plans.

Strategic support really to help them drive direct traffic and therefore direct business.

VV: What sort of things do you see on a regular basis and how can people stop making those same mistakes?

Steve Lowy: I get very annoyed with people when they say that they don’t understand the internet, I’m too old. When in actual fact they have an iPhone, an iPad, a mac and they are always buying stuff online, so they do understand it, it’s just an easy excuse, especially when people have a bad website.

I think a lot of people get a lovely website but don’t link a good booking engine to it, they say they are not on Facebook but they have a Facebook profile that a customer set up and they are just not managing it and there are loads of complaints on there that they are just not dealing with.

I think just seeing a website as a one off investment but it needs to be a constantly evolving development that allows you to grow it alongside the business. I think because of the way that hotels run their management accounts that is probably why that happens but you need to be long term about it and see your website as a central point of a full 360 online and offline marketing strategy

VV: So what in your opinion are the staples of an effective website? What should every good website have?

Steve Lowy: Great photography, easy calls to action – so if it is a brochure site, Enquire Here or Call Here, it needs to be easy and simple. Not too much content and just that everything links up – if you want people to book a wedding give them a way of booking a wedding, or enquiring about it, or get on live chat about it. You need lots of calls to action because ultimately if you are a hotel website you want people to use it like an e-commerce platform and transact with it, and it doesn’t have to be a booking, it can be a phone call it can be an enquiry, it can be a live chat transaction….just make it really easy for people to get where you want them to go.

And also think about the traffic, where do you want people to come from – just having a new website will not change your world but having a good marketing plan around it will, so it’s very important to think of it in that way

VV: Do hotels use their blog very often? Is that something that is common or is that underused tool to try and reach the customers they want to attract?

Steve Lowy: It all depends on the size of the hotel and the size of their marketing team.

It is a good thing to use, particularly if people don’t know what things are going on around the hotel, and it can certainly draw people, but it all depends on the specific hotel and how it works for them.

VV: And how about Live Chat? I’m sure lots of people see Live Chat as something that takes a lot of resources, is that something that is quite time-consuming?

Steve Lowy: It’s the same as having someone on your reception desk if you can afford to have someone on your reception desk you can afford someone to monitor live chat. I don’t actually think it’s that time consuming, I think it’s a good excuse to say that it is.

VV: So we touched on AI, but what else does the future hold in your opinion with regards to technology in hospitality. What are the potential game changers?

Steve Lowy: I think automation will be big, I still think that Airbnb and the shared economy will be substantial.

I think people will want and crave experiences more which is a challenge for budget hotels that have taken the experience out of the whole process – you are already seeing real growth in things such as afternoon teas.

The brands may struggle a bit in terms of their basic deliverables as I think people are confused about what these brands really mean.

I think you will see consolidation of brands, either within big brands consortia, or big brands buying up smaller brands.

Also from a hospitality perspective, we will see huge growth in the number of people becoming vegetarian because of the impact of meat on the environment.

VV: You talked a little about brands – looking on from afar which brands are really setting the pace at the moment, who is really bringing the experiential element to the fore?

Steve Lowy: There are challenger brands such as Yotel, Ace Hotel, Citizen M who are pretty cool. Within certain brands such as the Marriott and the Sheraton who have the W brand which is pretty funky that I have stayed at.

Some of the hostel brands like Generator have a good vibe and experience level to what they do. I don’t think any of the brands have nailed it consistently, because it’s very difficult. It is a people game and it is a challenge. Some of the big brand consortia will get there as they will really focus on amazing service.

I still think some of the independents we work with like the Stafford mean you always feel really welcomed even if you are just there for a meeting and I think that’s the benefit of independent over the chains to keep things consistent and fresh

VV: The term millennials is often bandied around, but do you think that millennials want something different from their hotel experience versus hotel users of 20 years ago?

Steve Lowy: They don’t want to be called millennials! They don’t want to be patronised with the marketing we use to reach them.

I don’t think they are much different from anyone else, it’s about making sure the basics are there like Wifi as they consume vast amounts of content, whether it be videos, picture, music etc in very different ways to other generations. I know lots of people in their 50s and 60s who use their phones as much as a 25-year-old.

I think millennials are better termed as ‘digital nomads’ where people are working from home or remotely and still have a successful career.

This changes what you need in a hotel room as you need lots of plug sockets, some of them next to the bed and the desk, you need really good wifi for Skype etc. You may not even need a large TV but if you do make sure it has bluetooth so it can connect to the laptop so you can use the screen as a dual screen.

That’s where hotels have to think about it rather than patronising people just trying to make it funky with their street art – if people want street art they will go out into the street and find street art!

I think a lot of big brands and marketing people are missing a trick in how they treat younger people. I was born in 1980 so in theory, I am a millennial but I think Im pretty different to a 22-year-old.

VV: Do you work with younger people a lot Steve?

Steve Lowy: Yes, we have an apprentice and have had apprentices before.

Harry, a co director started as an intern so yes promoting young people and getting them into the hospitality industry at a senior level is really important for the sustainability of hospitality moving forward.

As you see from Brexit we are a very fragile ecosystem because of the reliance of migrants.

VV: So what projects are you working on at the moment that are exciting you

Steve Lowy: We are working on some big website projects, one for a travel company and one for a luxury hotel which are pretty exciting.

We are constantly looking for cool bits of technology that we can integrate into websites to help people with their direct marketing.

VV: Do you have any resources or tools that people could use to help with their marketing efforts?

Steve Lowy: If you don’t have Live Chat I think you should try it – if you do weddings, events or groups it’s a really powerful tool. There are some really interesting chat bots coming out soon that you can plug into Facebook Messenger to give instant availability to customers.

And set up Google Analytics properly – a lot of people don’t set it up properly and don’t track all parts of the site, which can play a massive part in analysing conversion and performance.

VV: Steve thank you so much for your time. I have learned a lot from just this 20 minutes with you.

Can you think of anyone else our listeners would like to hear from?

Steve Lowy: Cassie Delaney-Brown, the Marketing Manager at the Stafford Hotel has just won an Acorn and would be a great guest.

Also Martin Evans, who runs the National Hotel Marketing Conference – he has seen a lot of changes in the industry over the last 10-20 years and would be really interesting regarding his take on the changes have taken place in that time.

VV: Steve thank you for your time and the best of luck with Umi Digital

Steve Lowy: Thanks. Bye

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