Summer in the City

Yes, it’s summer but you might be outside a city. Either way, enjoy the remainder of revenues if you are in a strong market or the opportunity to position yourselves for a strong fall season if you are in Phoenix like we are with some of our properties. We are excited about the growth and changes at RAR Hospitality so if we might toot our horn for a short paragraph, we will appreciate it.

First, we are now recognized for our growth in San Diego, Phoenix and finally the U.S. Inc. 5000 will be recognizing us this fall for being one of the fastest growing companies in the country between 2014 and 2016. Recently, in addition to growing to nearly 20 hotel properties, we have added a 30 Under 30 award recipient, Chief Development Officer, Cameron Lamming (also my business partner), a highly talented and acclaimed VP Operations in Janet Fioriti, two rock stars, Director of Accounting Doug Ficke and Marketing Manager Sheryl Paulino and a phenomenal supporting team.

We are poised to handle the changes that are happening in our exciting and noble profession of hospitality. These include but are not limited to Artificial Intelligence and Robotics, OTAs and Airbnb, personalization of vacation experiences, international travel and the ban, information and cyber security, personal training 2.0 and more.

Artificial Intelligence and Robotics

In 1982, Time Magazine declared the personal computer the “Machine of the Year.” Prior to that, Isaac Asimov coined the term “robotics” in 1941, with three easy rules: Robots may not injure humans, must obey orders and must protect their own existence.

I try to avoid negatives but after getting bloodied by unions, robot deniers and even a Chamber of Commerce for employing a robot, I must defend myself. Robots are small, portable, easy to train and reasonably priced. Our robot, acquired from Savioke for our Fairfield Inn & Suites by Marriott in San Marcos, CA, delivers various supplies and products to guests quickly and has tripled our sundry shop sales. Moreover, guests love interfacing with a robot as it is still a novelty. It allows us to let our night auditor stay at the desk rather than abandon the lobby. And perhaps most importantly, “smart machines will replace some jobs, but they will create many more,” according to Jerry Kaplan in last week’s Wall Street Journal article, Don’t Fear the Robots.

OTAs and Airbnb

Online Travel Agencies (OTAs) and Airbnb have awakened today’s hotel community and we are committed to creating loyalty among our guests. The truth is, these companies, who own no real estate yet benefit from our guests, are ahead of us technologically and have come closer to the personalization that we need to provide to keep our guests coming back. And with the growth of travel and tourism, hotels must assume that the competition for our guests will continue. Hence, we need personalization that keeps our guests loyal to us and booking directly with us. According to my colleague and friend Peter Yesawich of MMGY Global, “Guest satisfaction tends to rise with personalization, and service providers enhance their pricing power when they are able to deliver bespoke experiences.” Proudly keep those rates up but do provide very personalized services and embrace technology! If you have not tried Airbnb to see how the communication works, give it a try in the name of awareness—you might see the good and the bad.

International Travel

The international travel market is one that was predicted to fall apart due solely to Donald Trump. Well, I am not here to opine on President Trump, but international travel is up despite the strength of the dollar. Attending a panel discussion at the Arizona Governor’s Office of Tourism Conference in Phoenix last week, I heard from representatives of Germany, China, Canada, United Kingdom, Mexico and France. The panel was moderated by Brand USA executive Mike Fullerton. Mexico’s biggest concern was a laptop ban, Germany was concerned about Trump’s policies, China was fine with our policies and talked about Chinese spending 25 percent of their annual income on travel. France and Canada were also fine with Trump’s policies and the U.K. had their own house to deal with post-Brexit. The travel ban itself did not come up much in conversation. This is clearly a growing market and we must support Brand USA.

Information Security

Information Security is never a fun topic for hoteliers but the Verizon Data Breach Investigations Report (DBIR), Intercontinental Hotels Group Update on Data Breach and other travel industry breaches are becoming more frequent. In the 2017 DBIR, Verizon indicated that over 80 percent of the breaches involved weak, default or stolen passwords. It is critical that we adopt the Secure Payment Solution (SPS) and point to point encryption (P2PE). Ransomware attacks have doubled this year and while I am not assuming that Moore’s Law (every year it will double) is the rule here, be aware that this is serious and that most cyber security and risk experts believe this will worsen.

Personal Training 2.0

As a Faculty Associate at Arizona State University and former corporate hotel training executive, I am very excited about Personal Training 2.0. No, gym workouts are not involved here. This is about taking the manual systems that we used in the past and using a technology solution now. In reading my favorite technology publication, Hospitality Upgrade, I noticed that 93 percent of Millennials say they crave lifelong learning and are willing to spend their own time and money on extended training. 39 percent of Millennials say that they had an opportunity to learn something new that would help them do their jobs better in the last month. Lastly, development opportunities and potential to grow are top factors for them when considering a new job. I am currently exploring these solutions from Amplifire, Axonify, Degreed, Udemy and NovoEd.

Service Animals and Lodging Associations

With the end of summer in sight, I leave you with the Service Animal Dilemma – many of our guests are falsely claiming to have service animals, expecting us to accept “comfort pets” or just plain violating our no pet policies. Just last night, I observed three dogs on a leash barking loudly and being led by a family of four, walking in a back door to our hotel. It is important to know the laws and industry colleague Jim Abrams, California Hotel & Lodging Association has done a superb job of laying out what we can and can’t do. See your hotel association website for details and make sure your guests read their rights—and yours. Speaking of hotel associations, I am an active member of the American Hotel & Lodging Association, California Hotel & Lodging Association and Arizona Hotel & Lodging Association and encourage you to take an active role in supporting this industry.


Have a great August!

Robert A. Rauch, CHA


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