HT - May 2019

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EXCLUSIVE EVENT COVERAGE! 2019 MURTEC INNOVATION REPORT

PLUS! + How the PMS Solves 4 Common Business Challenges + 3 Loss Prevention Must-Haves

+ SPECIAL REPORT:

Building a Restaurant of the Future

MOD PIZZA VP ON HOW THE FAST-GROWING CONCEPT FOCUSES ON SCALING AN INTELLIGENT INFRASTRUCTURE

Robert Notte, VP of IT, MOD Pizza M AY 2019 VOL. 23.4

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editor’s note Benchmarking Familiarity How well do you know me? That’s the question today’s customers put to businesses on a regular basis and it’s a valid one. With so much data available and a willingness of customers to share personal insights in exchange for personalized service, brands that don’t make sure to optimize customer data will flounder. If anyone still thinks this is an overstatement, consider a query submitted to the New York Times’ “Social Qs” column on March 17: “In the last six months, I have dined at a particular restaurant about 10 times, including one pricey business dinner and several dates. I usually book my reservations through OpenTable. I’d like to think I’m a regular, but every time I arrive, it’s like starting over. The manager never recognizes me. Shouldn’t OpenTable data let them know a valued customer is coming? Am I being fair?” — Timothy The response from Philip Galanes, purveyor of answers, basically advised Tim to calm down and take the time to introduce himself to the manager. I take a contrary point of view. Hospitality is built on human connections, but those opportunities can be amplified by leveraging the appropriate tools. In this month’s cover story, I spoke with Robert Notte, VP of IT for fast-growing fast casual chain, MOD Pizza. The brand’s cloud-based infrastructure has enabled the company to scale quickly (80% of the company’s growth has happened in the last three years). Notte shared with me that one piece of MOD’s success has been the ability to leverage integrations between all the brand’s systems to have a 360-degree view of customers whether they are in-store or using online ordering or delivery. To achieve that holistic view of guests may require ensuring third parties provide access to data and demanding certain integrations from technology partners. The endgame must be the tactical optimization of data, because the “Timothys” of the world expect it.

VICE PRESIDENT/GROUP BRAND DIRECTOR Abigail A. Lorden alorden@ensembleiq.com EDITORIAL EDITOR-IN-CHIEF Dorothy Creamer, dcreamer@ensembleiq.com SENIOR EDITOR Anna Wolfe, awolfe@ensembleiq.com SENIOR EDITOR Michal Christine Escobar, mescobar@ensembleiq.com SALES SENIOR ACCOUNT EXECUTIVE Leah Segarra, lsegarra@ensembleiq.com SENIOR ACCOUNT EXECUTIVE Katherine Ware, kware@ensembleiq.com ACCOUNT EXECUTIVE Noell Dimmig, ndimmig@ensembleiq.com EVENTS EVP, EVENTS & CONFERENCES Ed Several, eseveral@ensembleiq.com DIRECTOR, EVENT PLANNING Pat Benkner, pbenkner@ensembleiq.com DIRECTOR EVENT CONTENT John Hall, jhall@ensembleiq.com AUDIENCE ENGAGEMENT DIRECTOR OF AUDIENCE ENGAGEMENT Gail Reboletti, greboletti@ensembleiq.com AUDIENCE ENGAGEMENT MANAGER Shelly Patton, spatton@ensembleiq.com ONLINE MEDIA DIRECTOR, PRODUCT DEVELOPMENT Jason Ward, jward@ensembleiq.com ONLINE EVENT PRODUCER Whitney Gregson, wgregson@ensembleiq.com PROJECT MANAGEMENT/PRODUCTION/ART VICE PRESIDENT, PRODUCTION Derek Estey, destey@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro, cmagliaro@ensembleiq.com PRODUCTION MANAGER Pat Wisser, pwisser@ensembleiq.com ART DIRECTOR Lauren DiMeo, ldimeo@ensembleiq.com

EDITOR-IN-CHIEF SUBCRIPTIONS 978-671-0449, ensembleiq@e-circ.net

EDITORIAL ADVISORY BOARD Steve Brooks Dir., Purchasing & IT, Tumbleweed Restaurants Maryann Byrdak SVP & CIO of IT Potbelly’s Mike Dickersbach Director of IT Capital HEI Hotels Simon Eng VP of IT, CTF Development Brian Garavuso CIO, Diamond Resorts Intl Nelson Garrido Senior VP Information Technology, Thayer Lodging, Brookfield Hotel Properties Michael Hassel Dir. IT, Momofuko Holdings

Ted Hopcroft Vice President of Technology and Professional Services, Americas iT, Marriott Corey Kline VP IT, Noodles & Company Rocky Lucia Dir. IT, Fireman Hospitality Group Brian Pearson CIO, Stacked R. P. Rama VP Technology, JHM Hotels David Starmer CIO, Sonesta Hotels Joe Tenczar VP, Information & Technology/CIO, Sonny’s BBQ Marcus Wasdin CIO, Atlanta Hawks & State Farm Arena

RESEARCH ADVISORY BOARD Mike Blake CEO, HTNG Natasa Christodoulidou Associate Professor California State University Cihan Cobanoglu, PhD School of Hotel & Restaurant Management University of South Florida Daniel J. Connolly Ph.D. Professor of Business Administration Drake University Russell Dazzio Chairman, R&R Hospitality Mehmet Erdem Assistant Professor, UNLV Hotel College

Lee Holman Lead Retail Analyst, IHL Consulting Jason Lambiris CEO, Apex Digital Jungsun (Sunny) Kim, PhD Assistant Professor, William F. Harrah College of Hotel Administration, UNLV Fred LeFranc President & CEO, Results thru Strategy Barry N. Shufeld Interim CIO, ECP-PF Holdings Group Rohit Verma Associate Professor, Cornell University

8550 W. BRYN MAWR AVE. STE. 200 CHICAGO, IL 60631 PHONE: +1 773-992-4450 FAX: +1 773-992-4455

CORPORATE OFFICERS EXECUTIVE CHAIRMAN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF FINANCIAL OFFICER Dan McCarthy CHIEF OPERATING OFFICER Joel Hughes CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

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news & insights

By Michal Christine Escobar, Managing Editor

Hospitality Puts its Face On The rise of biometrics within the hospitality industry may be happening faster than previously anticipated. Hotels have generally associated artificial intelligence (AI) with data/analytics processing or with voice-based technologies. In fact, when asked about augmenting customer service with technology, 50% of respondents classified as data leaders in Hospitality Technology’s (HT) 2019 Lodging Technology Study said they were prioritizing AI/ voice-enabled devices in 2019. Biometrics is one facet of AI-powered technologies, and facial recognition is beginning to emerge in hospitality verticals from airlines to restaurants. A Vietnam-based resort with 43 locations implemented facial recognition technology that allows the guest to open doors, check-in within three seconds, and pay for services on property with just their face. Royal Caribbean Cruises partnered with IDEMIA and U.S. Customs and Border Protection to speed up debarkation using IDEMIA’s facial recognition technology. IDEMIA compares the

Security robots surveil guest faces for persons of interest.

facial identities of individuals disembarking with the identities of those who boarded at the start of a cruise, matching against images in the U.S. Customs and Border Protection’s Traveler Verification Service. Pechanga Resort Casino in Temecula, Calif., is using security robots from Knightscope Inc. that surveil guest faces for persons of interest. While this technology is mainly meant to prevent workplace violence, the robots will also be used to maintain the well-being of the hotel’s guests as well.

Danger, Will Robinson? According to HT’s 2018 Customer Engagement Technology Study, 28% of hotels (57% of data leaders) plan to offer some form of robotic technology to guests by the end of 2019. Some hotels have already begun to roll out robots such as Chicago’s Hotel EMC2. Leo and Cleo, pictured, its concierge robots, can deliver guest amenities and a limited menu of food and beverage products. The Mandarin Oriental Hotel in Las Vegas offers guests access to Pepper, a humanoid robot, which can provide answers to property-specific questions, give directions, tell stories, dance and even pose for a selfie. However, is this really what guests want? According to “Hotels’ Digital Divide,” a research report from ALICE, more than half of consumers (56%) said they did not want to interact with robots during their stay. This raises the question: Are guests simply wary of the unknown or do they continue to prefer human interaction over mechanical? HT’s 2018 Customer Engagement Technology Study also reveals that when it comes to requesting service, 28% of consumers report that their preferred method of interacting with a hotel is with a person. This leaves a good portion that are open to requesting service through other technological channels and indicates that hotels must find a balance to offer both high-tech and high-touch options in seamless ways.

42

%

of hoteliers plan to upgrade guest WiFi in 2019. SOURCE: Hospitality Technology’s 2019 Lodging Technology Study

Management Moves • Heather McCrory Named CEO North & Central America for Accor • Caesars Entertainment Appoints Tony Rodio as CEO • Mike Macrie Joins Subway Restaurants as CIO • Red Robin Announces Retirement of President and CEO Denny Marie Post • ACON Investments names RMH Franchise Corp. CFO Mitch Blocher President • RLH Corp. Names Vinod Sankar Senior Vice President and CDO • MGM Resorts International Appoints Digital Business Leader Atif Rafiq as President of Commercial and Growth • Darla Morse Joins CKE Restaurants Holdings Inc. as CIO

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new horizon

By Sarah Alter, President & CEO, Network of Executive Women

The Invisible Woman Women are out of sight, out of mind of senior executives There is a growing realization that flexible work arExecutive Women by the National Association for rangements are key to attracting, keeping and adFemale Executives have sponsorship initiatives. vancing talented women. But how Companies can support more important is facetime in the office sponsorship with these five acvs. job performance results when tions suggested by Working Mother “WOMEN HAVE it comes to career advancement? magazine: Expose senior leaders to highUnfortunately, facetime with senior FEWER leaders persists as one key to caOPPORTUNITIES potential talents from different groups, especially underrepresentreer advancement. Employees who TO MAKE ed populations interact regularly with a company’s STRATEGIC Link sponsorship to senior execusenior leaders are more likely to ask CONNECTIONS.” tives’ goals, performance reviews for and receive promotions, accordand compensation ing to McKinsey & Co.’s “Women in Have clear objectives for sponsorthe Workplace 2018” report. They’re ship and communicate to everyone involved also more likely to stay with companies and aspire Use employee resource groups to find to be leaders themselves. high-potential women worthy of sponsorship However 33% of the women surveyed for “WomMeasure promotion and retention rates en in the Workplace” said they’d never had a sig of those who are sponsored versus people nificant discussion with a senior leader about their not sponsored in similar roles work (compared to 27% of men). For some women The NEW Blueprint for Gender Equality lays out of color, access is even more limited. Forty percent best practices for companies who are working to of black women reported never having a substancreate a gender diverse and inclusive workplace. tive work-related conversation with a senior leader. J.P. Morgan’s Women on the Move initiative’s Women are also less likely than men to social30-5-1 campaign brings women and men together ize with managers or other executives outside the for 36 minutes each week to supporting women’s workplace. Nearly half of women surveyed said growth and development. Participants commit to they have never had an informal interaction with a spending 30 minutes having coffee with a talented senior leader, compared to 40% of men. Meanwhile, up-and-coming woman, five minutes congratulat54% percent of Latinas and nearly 60% of black ing a female colleague on a win or success and one women said they’ve never had an informal interacminute talking up the woman who had that win tion with a senior leader. with other colleagues. At all points in their careers, women have fewer “At JPMorgan Chase, we have a truly amazing opportunities to demonstrate their skills, show off group of female colleagues,” said J.P. Morgan’s their work results or make strategic connections Asset and Wealth Management CEO Mary Erwith career-opportunity gatekeepers. When mandoes, co-sponsor of Women on the Move. “It’s up agers are considering candidates for stretch asto each one of us — men and women alike — to signments, leadership development or promotions, ensure they have the support mechanisms they they’re more likely to choose a man. need to succeed.” Seeking Sponsors Formal, structured development programs that One way to level the playing field is to encourage support facetime with senior leaders benefit talentsenior leaders to sponsor women. A full 70% of the ed women and men, but especially those who may 70 organizations named 2019 Top Companies for otherwise be unseen — or overlooked. HT

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Sarah Alter is president and CEO of the Network of Executive Women (newonline.org), a learning and leadership community representing 12,500 members representing 900 companies and 22 regional groups in the United States and Canada.

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vantage vantage point point

Andrew Rubinacci, SVP, Revenue & Distribution, Omni Hotels & Resorts Andrew Rubinacci, SVP, Revenue & Distribution, Omni Hotels & Resorts

Driving Driving Revenue Revenue with with Science Science

How Omni Hotels & Resorts applies data analysis to distribution strategy and challenges How Omni Hotels & Resorts applies data analysis to distribution strategy and challenges What was your first What wasjob? I wasfirst a paperboy. your job? I was a paperboy. What are your hobbies? What are your I love to cook and hobbies? Iwatch love tofootball. cook and watch football. Sage Advice: Prioritize – so many Sage Advice: things go Prioritize –unfinished so many or too slowly because things go unfinished we refuse to prioritize. or too slowly because we refuse to prioritize. What is one other job that would likejob Whatyou is one other to try? Secret Hotel that you would like Shopper to try? Secret Hotel Shopper What three people wouldthree you invite What people to lunch? would youGeorge invite Washington, Patton to lunch? George and my grandfather Washington, Patton and my grandfather What is your favorite book? What isShantaram your favorite by Gregory David book? Shantaram Roberts by Gregory David Roberts Favorite vacation spot? Anywhere Favorite vacation I’m with family and spot? Anywhere friends not and I’m withand family working! friends and not working!

I’ve been involved in hotel revenue management since 1993. I’ve seen this I’ve been involved in hotel revenue work done thesince manual, management 1993.old-fashioned I’ve seen this way, done and I’ve more work the happily manual,watched old-fashioned and more advanced sysway, and I’ve happilytechnology watched more temsmore comeadvanced on the scene to makesyslife and technology much come easier.on the scene to make life tems While revenue managers occupy much easier. important roles, at the end of the day, While revenue managers occupy the humanroles, mindat is the limited ability important endinofits the day, to assess the ever-swelling theeffectively human mind is limited in its ability sea of data and arrivethe at the best posto effectively assess ever-swelling sible decisions. At the same time,posthe sea of data and arrive at the best potential for computer programs to sible decisions. At the same time, the analyze all the available data and potential for computer programs to provide decision outputs is analyze valuable all the available data and virtually limitless. The choice to impleprovide valuable decision outputs is ment software and virtuallydata-analytics limitless. The choice to impleautomate a hotel’s revenue management data-analytics software and ment and adistribution processes is a automate hotel’s revenue manageno-brainer. ment and distribution processes is a In recent years, Omni has focused no-brainer. on increasing its portfolio of city-cenIn recent years, Omni has focused ter increasing hotel properties in places like Aton its portfolio of city-cenlanta, Dallas, Nashville and projects in ter hotel properties in places like AtBostonDallas, and Oklahoma Cityprojects opening lanta, Nashville and in in 2021. and These hotels areCity adjacent to Boston Oklahoma opening major centers and are loin 2021.convention These hotels are adjacent to cated right in the middle of these major convention centers and aredeslotination hotinspots. cated right the middle of these desWith thisspots. strategic market expantination hot sionWith came thestrategic need formarket more effective this expanways to manage and grow oureffective diverse sion came the need for more revenue streams. Being located next ways to manage and grow our diverse to a convention center, for instance, revenue streams. Being located next hasa driven up group business inquito convention center, for instance, ries as well up as group bookings of meetings has driven business inquiand as events space. As the evolution ries well as bookings of meetings occurred, revenue and eventsa space. As management the evolution system (RMS) was needed that could occurred, a revenue management fully account that. We also wanted system (RMS)for was needed that could to ensure thatforwethat. hadWe a partner who fully account also wanted to ensure that we had a partner who

could grow and evolve with us. IDeaS RMS allows group could growG3and evolve with us. pricing evaluation ofRMS the impact and possible IDeaS G3 allows group pricing business displacement any group evaluation of the impactofand possible booking as well as agile, business displacement of room-type any group pricing functionality and market-debooking as well as agile, room-type mand insight integrations. The team pricing functionality and market-deat IDeaS describes this comprehensive mand insight integrations. The team approach as revenue at IDeaS describes thisscience. comprehensive With IDeaS Smartscience. Space, we can approach as revenue standardize theSmart process of managWith IDeaS Space, we can ing our event business revenue across standardize the process of managmultiple departments. We look foring our event business revenue across ward to having a better handle on multiple departments. We look forbooking patterns and an increased ward to having a better handle on understanding of and overall demand. booking patterns an increased This will allow us to sell more instead understanding of overall demand. of locking things down, and that will This will allow us to sell more instead ultimately help drive up the revenue of of locking things down, and that will our meetings and events business. ultimately help drive up the revenue of 2019, we’ll roll IDeaS ourThroughout meetings and events business. outThroughout across our portfolio of 60 2019, we’ll roll luxury, IDeaS North American properties out across our portfolio ofto 60enhance luxury, profitsAmerican of moreproperties than 21,000 guest North to enhance rooms and nearlythan two million profits of more 21,000 square guest feet of event space.two million square rooms and nearly feetEqually of eventimportant space. is the flexibility of the partnership. TheisOmni system Equally important the flexibility will continue to grow and as it does, its of the partnership. The Omni system revenue streams will continue to both will continue to grow and as it does, its increase and diversify. Maintaining a revenue streams will continue to both technology edge that facilitates what increase and diversify. Maintaining a we are doingedge today, also permits technology thatand facilitates what flexibility tomorrow, is key. we are doing today, and also permits In short, like our is roles flexibility tomorrow, key.on property, the Infield of like revenue strategy is fastshort, our roles on property, evolving. It isrevenue also the discipline that the field of strategy is fastdrives hotels is mostthat dievolving. It isforward also theand discipline rectly responsible for aand hotel’s top line. drives hotels forward is most diTogether with IDeaS, are happy to rectly responsible for awehotel’s top line. bring a new setIDeaS, of tools Together with weand are technolohappy to HT technologies toa bear task.and bring new on setthe of tools gies to bear on the task. HT

Andrew Rubinacci is a 30-year veteran of the hospitality industry, with extensive experience spanning sales, revenue management, guest services, hotelisoperations e-commerce. Most recently, he served as seniorexperience vice president, distribution & revenue management Andrew Rubinacci a 30-year and veteran of the hospitality industry, with extensive spanning sales, revenue management, strategy, responsible for all facets of e-commerce. IHG’s channel strategy, pricing, and revenue guest services, hotel operations and Most recently, he served as senioroptimization. vice president, distribution & revenue management strategy, responsible for all facets of IHG’s channel strategy, pricing, and revenue optimization. 7 • MAY 2019 • W W W.HOSPITALITY TECH.COM 7 • MAY 2019 • W W W.HOSPITALITY TECH.COM


innovation council

By Dorothy Creamer, Editor

Going Beyond Dashboards Restaurant finance executives discuss best practices for improving efficiencies and empowering employees with actionable insights The second meeting of the 2019 Restaurant Accounting Innovation Council took place during MURTEC (Multi-Unit Restaurant Technology Conference) on March 13. The group discussed a few key ways that back-office systems can enhance operations from managers’ access to actionable data to potential customer-facing impact. The group reviewed several data points from an exclusive Hospitality Technology research report, underwritten by Restaurant 365, “Integration & Visibility: Keys to Future-Ready Restaurant Accounting.” The Council considered musthaves for accounting system buys. The report found that the majority of restaurants are focused on a clean view of data with robust dashboards. The council weighed in with Bill Valentas, vice president of finance, Freddy’s Frozen Custard & Steakburgers, noting, “[People] don’t need crazy dashboards with tons of charts, they want something simple that they can look at and see exactly what they need to see and take appropriate action.” Other members agreed, adding that teaching associates how to take action based on business data is an issue. They need to be able to easily make a decision on what to do with — or about — specific data points. Brandon Keith, CFO, World Famous Fare, explains that with the BI platform his team uses, managers have the ability to pull reports in realtime, every 10-15 minutes or as often as every three seconds via mobile. “More often GMs will just do an end of the day pull of data and use their mobile devices to micromanage,” he adds. Of course, ease of getting data is only a benefit if associates know how to use it. “It doesn’t matter if it’s fast,

but not actionable,” Mark Quandt, CFO, Wood Ranch BBQ & Grill, says. “We want to get data into one system and get it out, but then we want managers to be able to drill down and understand where specifically there are problems and what action to take to solve for it.” Steve Song, CFO, Luke’s Lobster says managers become desensitized to data when they receive it in a constant stream and that the flow of small incremental changes doesn’t always register concern for employees, as much as the shock of seeing a larger change. “They become okay with a trend and don’t take action fast enough,” Song notes. “It’s psychological.” Valentas notes that there is often a disconnect between what the executive team wants versus the teams on the ground. Managers might not have a sense of urgency for looking at and analyzing data, which results in a lack of action. “They want to run full speed with the guest, and we want to run full speed with the things we’re analyzing,” Valentas says. “They can’t make a change that’s impactful to the business because their priority is spending more time with the guests and not running a report.” Nova Hospitality Group addressed this lack of employee investment in business numbers. Instead of pushing numbers to managers and telling them where they were over or under, they offered a bonus to all managers related to six specific data points tied to P&L: sales, labor with benefits, food, alcohol, direct ops and end of line. “In one year we took operations guys and taught them to operate financially,” Bruce Nelson, CFO, says. “Now they call me and say: ‘This isn’t right.’ We added $1 million in profit.” HT

MEMBERS: Scott Gillman, Chairman, Mascott Corporation Melissa Haman, Finance, Broadway Restaurant Group Steven Song, CFO, Luke’s Lobster Mark Quandt, CFO, Wood Ranch BBQ & Grill Michael Lubitz, CFO, Wolfgang Puck Fine Dining Worldwide Christi Hing, CFO, Kona Grill Inc. Brandon Keith, CFO, World Famous Fare Bill Valentas, Vice President of Finance, Freddy’s Frozen Custard & Steakburgers Bruce Nelson, CFO, Nova Hospitality Group John Moody, Co-Founder, Restaurant 365 Abigail Lorden, Vice President,Group Brand Director, Hospitality Technology magazine Dorothy Creamer, Editor, Hospitality Technology magazine

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H T NG

checks in

By: Emily Wilson, Marketing Manager, HTNG

Securing the Future of Travel Information Sharing and Analysis Centers (ISACs) help owners and operators in a specific sector protect data from security threats The cost of data breaches continues to skyrocket, resulting in an extremely competitive employment market for cyber security professionals. In fact, many open positions are taking months to be filled. Additionally, technology tools are evolving rapidly, making it harder to find the best solutions. Meanwhile, attackers are working together, selling or trading information to gain illegal access to hospitality systems. It’s time the hospitality industry comes together to collectively defend against these common threats. What is an ISAC? Information Sharing and Analysis Centers (ISACs) help owners and operators in a specific sector protect their data from security threats or hazards. ISACs started with a U.S. Presidential Executive Order in 1998 mandating major infrastructure sectors create specific organizations to share security information between companies inside that specified sector. There are now many industry-specific ISACs including the Electricity ISAC, Financial Services ISAC, Information Technology ISAC and more. These organizations focus on curating and sharing critical information around cyber and physical security to their respective audience. Value of Threat Intelligence Sharing It’s difficult to understand and track diverse threats through a single source without collaboration. Silos of security information include exercise responses, readiness levels, decision making, budget priorities, alerts and warnings, monitoring network activity, situational awareness and more. The collaboration of all of this information ultimately allows companies in the same space to collectively defend customers, staff and assets against the constantly evolving threat landscape. Organizations are also given the ability to multiply their knowledge and mitigate risk at a much higher speed. HTNG CISO Forum | Travel ISAC Prior to the Travel ISAC, Hospitality Technology Next Generation (HTNG) had a CISO Forum with the participation of many Chief Information Security Officers (CISOs) and representation from

more than 25 major global hotel brands. For seven years, this group discused confidential security topics through a private communication channel. However, there grew a broader need to dive further into the overlapping travel industry as a whole. In late 2018, HTNG’s CISO Forum evolved into the Travel ISAC to grow and strengthen this relationship across the travel ecosystem. Participants include security professionals from the CISO level to the analyst level. With a traveler’s journey possibly including rail, rental cars, hotels, cruise lines, travel management companies and more, these sectors need to work together to secure the entire travel experience for their guests. Travel ISAC Overview The Travel ISAC focuses on four main components: • Sharing relevant and critical information on security issues as quickly as they happen in a trusted, confidential manner • Coordinating response to achieve best-inclass capabilities • Developing executive-level strategic security best practices, architectures and other materials that mature security posture in the travel industry • Engaging law enforcement and other governmental agencies The Travel ISAC is NDA bound, and sometimes may even leverage HTNG staff to share anonymous information within the group. Continuing the structure of the CISO Forum, this group will have at least two in-person meetings each year. The first meeting of 2019 was held on April 9-10 in New Orleans at HTNG and Hospitality Technology’s joint industry event: HT-NEXT. What Does the Future Look Like? Moving forward, the Travel ISAC platform is expected to grow exponentially. Industry-level cyber security analysts will continue to generate threat intelligence for and on behalf of Travel ISAC members. In addition to current efforts, the Travel ISAC will build cyber security workgroups around pressing issues to create solutions and deliver improved and rapid responses to the industry. HT

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BUSINESS SOLUTIONS BRIEF

4 Business Challenges the PMS is the Solution B ROA D E R V I E W O F P RO P E RT Y M A N AG E M E N T S Y S T E M S Y I E L D S M O R E P RO D U C T I V E , S AT I S F I E D E M P L OY E E S A N D E F F I C I E N T, S E C U R E O P E R AT I O N S

A

ccording to Hospitality Technology’s 2019 Lodging Technology Study, roughly onequarter of hotel software budgets (26%) go to property management system (PMS) software. With that rather hefty investment, the PMS is often expected to solve for a broad scope of business challenges. As the hotel systems landscape has evolved, outdated PMS software may not be designed to solve for the problems of a modern infrastructure. HT’s research indicates that more than one-third of hotels may be grappling with this as 30% are planning on changing PMS suppliers and another 8% say they will upgrade existing systems. In this Business Solutions Brief, HT details how the PMS can resolve common business issues including ineffective employees and operations as well as unprotected guest data. PROBLEM: Under-Achieving Workforce SOLUTION: A Cloud-based PMS with

Responsive Tech Support Happy employees are often the most productive, which has a direct impact on bottom-line profits. Providing staff with technology that can make jobs easier will not only increase productivity but also employee satisfaction as well. “More employee productivity enables us to have happier employees; happier employees treat guests better — and guests then remain loyal to our brand,” says Chris Biggers, CIO of the Boutique Hotel Collection (www.boutiquehotelcollection.com) in San Luis Obispo, Calif. “Satisfied guests spend more … which translates to higher revenue to ownership.” Biggers goes on to note that greater employee satisfaction results in less turnover, which can also positively impact revenue.

One way hotels can make employees more productive is by upgrading to a cloud-based PMS. This is particularly useful for smaller hotels where employee jobs encompass multiple roles within the organization and need access to the PMS at a moment’s notice. Grant Parent, guest services manager for the Santa Barbara Inn (www.santabarbarainn.com) in Santa Barbara, Calif., says he can access his hotel’s PMS, provided by AutoClerk (www.autoclerk. com), from his smartphone or laptop whether he is at work, home or on vacation. This allows him to view current check-ins, check last-minute bookings, identify VIP guests, read notes to see if there are important guest preferences, and contact employees to monitor and ensure tasks are being executed appropriately and in a timely manner. “From a managerial perspective, it’s very powerful to have a cloud-based solution. I know what’s going on at the hotel before I even walk through the door,” Parent notes. Employee productivity is also directly affected by the customer service support they receive from the PMS provider. No employee wants to spend hours or days on the phone with unresponsive PMS tech support, explains Biggers. After switching to Maestro PMS (www.maestropms.com), Biggers found that his company had to retrain employees to use the Maestro customer service. With its prior PMS, employees were accustomed to the vendor never fixing broken PMS functionalities. “Maestro has multiple methods of communication — including live chat,” Biggers says, while also noting the engaged support agents. PROBLEM: Lackluster Customer Service SOLUTION: Employee Interface

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By Michal Christine Escobar, Managing Editor

A property management system that offers little or no guest history profiles can have a negative impact on how customers feel they were treated by front desk personnel. When a guest is waiting for a staff member to search through three or four menus to find a specific section in the software, customer service can become strained. A PMS that offers a simple, easyto-use interface becomes very important. One thing Parent enjoys about AutoClerk is that it uses the F keys on keyboards as shortcuts to navigate between sections in the PMS. Batula Grant, director of technology innovations, Pearle Hospitality (https://pearlehospitality. ca), says Oracle Hospitality’s OPERA cloud PMS (www.oracle.com) has streamlined her guest service agents’ jobs. “Our guest service agents no longer have to jump through multiple screens, making our booking and billing options much easier and more efficient,” she says. “It has also streamlined checkins and check-outs, guest requests, housekeeping statuses, and room maintenance.” Additionally, a simple-to-use interface means that training staff members becomes much easier

and can reduce onboarding time. “We can take an employee with literally zero hotel experience and put them on the front desk in three weeks’ time, less if they’re particularly adept at the system,” Parent says. “Within two months they’ve mastered the PMS.” Washington State-based Loge Camps (www. logecamps.com), a lodging experience for outdoor lovers and adventure sports enthusiasts, has four locations and an additional five scheduled to open in 2019. It uses the Frontdesk Anywhere (www. frontdeskanywhere.com) platform for its PMS. “The easy-to-use interface allows our team to understand the back-end administration with relatively little training, which enables us to flatten the organization and not have that expertise rest in any one person,” says Cale Greenbacher, cofounder and president of Loge Camps. “In a small company like ours that redundancy in skill sets and ability to make changes to the PMS is critical.” Additionally, a PMS can contribute to a positive customer service experience when it allows staff to quickly and easily see information on repeat or VIP guests. Parent finds the guest profile feature of

Pictured: The Cliffs Hotel and Spa appreciates that its PMS embraces industry security standards and integrates with the hotel’s own internal IT systems for backups, security and monitoring.

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BUSINESS SOLUTIONS BRIEF AutoClerk particularly helpful because it allows staff to view notes from guests’ previous stays. “The profile feature lets us record if they have a certain room preference or early check-in preference,” he says. Plus, wishing guests a “Happy Birthday” or “Happy Anniversary” at check-in can go a long way in making them feel special and appreciated by the hotel. PROBLEM: Inefficient Operations SOLUTION: Integration to Key Hotel

System Applications For Grant, a key attribute of Oracle Hospitality OPERA Cloud is that it unites booking channels, accounting features, payment methods and data tools together in one screen. “We have eliminated the need to navigate multiple applications to perform a single task or operation making finance and revenue easier to monitor,” she says. Grant has even been able to integrate the hotel’s restaurant POS and spa POS with the PMS so that when guests checkout, the guest services team can print a single final folio containing all guest charges at the end of their stay. Grant is considering PMS integration with major social media and customized

marketing strategies in the near future. AutoClerk integrates with the hotel’s housekeeping system, website and third-party management system. Housekeeping is able to mark a room as clean and ready for checkin in the PMS simply by dialing a number through the room’s hotel phone. As rooms are booked, both the website and third-party websites are automatically updated so that a staff member isn’t required to manually update the inventory. AutoClerk also recently partnered with Akia (https://akia.ai) — a technology company that leverages artificial intelligence (AI) to power conversations between hotel staff and their guests via text messages. “It’s really great,” Parent says. “It allows guests to interact with the hotel before they even arrive and without having to be placed on hold during a busy time at the front desk.” Akia can create work orders for housekeeping and maintenance, order valet service, or even call for a bellman — and it’s all integrated with the PMS. Soon Akia will be able to offer Santa Barbara guests even more personalized content. The hotel will be uploading information on its water-

Pictured: The Santa Barbara Inn integrated its PMS with AI technology to communicate with guests via text message.

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front shuttle so that guests can have their questions about the route, time and cost answered by Akia. It’s also looking into having Akia offer guests a list of amenities and attractions near the hotel. “We’ve been using Akia about four weeks now, and we’ve had some amazing feedback,” Parent says. “We’ve actually had guests come in and ask to speak to Akia.” PROBLEM: Unprotected Guest Data SOLUTION: Strict Security Measures

The PMS is also an important component to keeping guest data safe. Oracle’s PMS offered Grant PCI compliance which was “non-negotiable for Pearle Hospitality.” Grant felt that by choosing Oracle’s cloud-based PMS, her hotel would be using a system that was “more secure than the typical server-based systems located on the property because it would be hosted in an environment managed by people whose sole job is to keep it secure.” A hotel’s PMS can also prevent the company from keeping guest data secure. Biggers found this

to be the case for his flagship hotel, the Cliffs Hotel and Spa, before switching to Maestro PMS. “Our previous PMS’ underlying architecture ran on Server 2003,” he explained. “The extensive requirement of dated versions of Internet Explorer, Adobe Acrobat and Java made it increasingly difficult to support without serious security considerations.” Biggers’ IT team — with backgrounds in government and large-scale enterprise environments — appreciates that Maestro embraces industry standards, rather than trying to set their own. “This allows the IT department to maintain its own standards in regards to reliability and security,” he notes. “Plus, we can integrate Maestro’s systems into our own internal IT systems for backups, backup rotations, security, monitoring and more. We were even able to give the Maestro IT team access to our VPN, ensuring security mandates are met, instead of being met with blank stares when mentioning something other than a direct Remote Desktop Protocol connection.” HT

Pictured: Elora Mill Hotel and Spa, a Pearle Hospitality property, integrated its PMS with its restaurant and spa POS so that when the guest checks-out, the front desk staff can print out a single folio containing all guest charges.

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MOD PIZZA VP ON HOW THE FAST-GROWING CONCEPT FOCUSES ON SCALING AN INTELLIGENT INFRASTRUCTURE

PHOTOGRAPHED BY MICHAEL SEXTON

MOD Pizza (www.modpizza.com) was born out of a need to meet a very specific demand. Co-founders Scott and Ally Svenson had moved back to their hometown in Washington State and were struggling to find quick, affordable and customizable lunch options that weren’t “traditional fast food” for their four growing sons. The Svensons seem to have a knack for identifying opportunities for meeting “demand.” The cofounders of Seattle Coffee got into the bean business in 1994 while the duo was based in London and Ally could not find a latte to her liking. After growing that chain to 75 locations, the Svensons sold the company to Starbucks. Eleven years ago, after identifying the void of affordable lunch options — MOD Pizza (www.modpizza.com) was born. The fast casual pizza concept allows customers to build their own pizzas — with as many toppings as they want at the same price — and offers salads and classic artisan-style pizzas as well. The name itself, rumored to be an acronym for “Made on Demand,” is actually a throwback to the “MODs” of the rebellious ‘60s in the UK and represents that guests have the option to MODify their pizza. The MOD story doesn’t stop at pizza. For Ally and Scott, launching another brand would need to have purpose and that centers around people. This has proven to be the brand’s differentiator — an emphasis on people first — from both the customer and employee perspective. In 2018, the brand’s leadership recognized a need to put more focus on its technology strategy and brought on industry veteran Robert Notte as vice president of IT. Notte was not only intrigued about helming the technology team of a brand with such high-trajectory growth — it is the fastest growing chain in the U.S. — but he also appreciates

the opportunity to be part of building upon the success of a brand focused on creating authenticity powered by its digital components. “It’s a place where I can exercise my service leadership muscle,” Notte says. “The brand leadership instills the people-first mentality in every aspect.”

scaling for success While MOD is an 11-year-old company, 80% of the company’s growth has occurred in the last three years. Today, the brand has just over 420 locations with approximately 70% corporately owned and 30% franchised. It also has nine stores in the UK. After Notte joined the brand as the leader of the technology team, he identified three main objectives to focus on. First: implement an appropriate infrastructure that would support the brand’s growth trajectory on platforms that will scale. Second: leverage new technology to optimize and automate workflows. Notte believes this is key to being nimble. Third: drive innovation in order to elevate customer experience both in-store and digitally. To deliver in all of these areas, he prioritized his focus on data. The company had a data platform that was initially built to handle the immediate needs of the company, but was not built to scale. “We need data to better understand what’s driving customers’ actions,” Notte says. “It was essential to invest more capital toward building a scalable data warehouse with AI and the right front-end BI platform. Capturing the right data and having the right tools will allow us to perform more thoughtful analysis and make better business decisions.” A key goal for MOD is to build a one-stop shop for all its data needs to have the right data for the

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right users at the right time. With so much growth happening over the course of just a few years, the company has not been immune to growing pains. To address them, Notte focused on making sure he had the right technology partners in place. Key was having stable and cloud-based POS, ERP and HRS platforms that could scale. Being 100% cloud-based has been a strategic advantage for MOD. Without the need for network administrators and server administrators, resources have been reallocated to have more of a business focus. Employees are now able to focus on things that have more of a direct impact on driving business. “Another big advantage for us is that it simplifies the management of software,” Notte explains, noting that SaaS providers generally manage software releases. “And cloud-based systems often simplify the ability to access data.” MOD Pizza was a cloud-based company when Notte joined the organization. Since taking the helm of the IT department, he pays particular attention to how SaaS providers test updates. Since an update will hit all stores at once, Notte has seen the importance of monitoring how SaaS partners test, deploy and support software releases.

POS from ParTech (www.partech.com), but for cloud platforms that don’t, that’s where Boomi comes into play,” Notte explains. MOD’s back-office also runs Data Central inventory/labor management from Restaurant Magic (www.restaurantmagic.com) and SAP S/4HANA Cloud plus SAP SuccessFactors (www. sap.com). With a self-described “lean and mean” IT team, Notte explains that approximately half of the technology staff focuses on “keeping the lights on” and the administration and support of various cloud platforms. The other half is more analytics and BI-minded, more involved in meeting business development needs with technology.

empowering ops with integrations to grow biz vs. it functions

MOD Pizza’s back-office follows a best-of-breed approach that Notte acknowledges makes integrations and open APIs mission critical. Beyond finding technology platforms that fit the company’s needs, Notte stresses the need to make sure that a company won’t hinder access to third-party data with restrictions or costs. To achieve integration across disparate systems operating in the cloud, MOD uses Dell Boomi (https://boomi.com) an on-demand multi-tenant cloud integration platform for connecting cloud and on-premises applications and data. This enables MOD‘s cloud systems to talk to each other when an existing integration does not exist. “Some of our current cloud platforms, such as Olo for online ordering (www.olo.com) and Punchh (www.punchh. com) for loyalty, already have pre-built integration to Brink

“The goal is to optimize technology so our team doesn’t have to grow at the same rate as the business,” Notte says. “To do this we are looking to take advantage of more features and functionality from our current technology, enabling us to grow headcount minimally.”

enhancing digital customer engagement

MOD launched a loyalty program with its mobile app earlier in 2019. Notte expresses that the digital footprint of the brand is an extension of the in-store experience. The loyalty app is used to deepen engagement with guests through surprise and delight offers, gamification and opportunities for philanthropy. In the case of the latter, customers can choose to donate rewards to MOD’s charity partner, Generosity Feeds, a nonprofit organization that helps feed hungry children. Examples of surprise and delight offers for loyalty members include sending messages to app

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4 MUST-HAVES FOR MOD TECH PARTNERS 1 ABILITY TO SCALE. “Just because you’re working with a cloud technology partner doesn’t mean they’re the right fit,” Notte cautions. “Because of MOD’s growth trajectory, our ability to scale is key and that goes for our cloud platform as well. We can’t find out that systems are crawling because the cloud platform can’t keep up.” 2 OFFERS ACCESS TO DATA. As an insights-focused business, a technology partner must make it easy for MOD to get to important insights from back-office (inventory and labor data) to customer insights. As part of its business intelligence strategy, Notte calls out the importance of adding a consumer data platform (CDP) to be able to look at consumer purchasing behaviors including: when and how often they are visiting; what they are buying; what promotions they are taking advantage of and then being able to critically analyze that information to leverage opportunities. 3 INNOVATION & COLLABORATION. “We’re looking for strategic partnerships, not just transactional partnerships,” says Notte. “We want partners that are willing to put skin in the game and that will offer a spirit of collaboration that will maximize value and benefits for both parties. We are Interested in what they have to offer in the field of innovation as we are always looking for that next new thing. We want partners that will provide us the competitive edge and elevate the consumer experience at MOD.” 4 STRONG VENDOR ROADMAP. Notte advises making sure potential tech partners have a cohesive plan for growth – both their own and for your company. “Look at their current customers. What companies do they have as customers that are bigger than you? It’s not necessarily a deal breaker, but I might have concerns if we were the biggest fish in their pond.”

users who regularly order a particular item and invite them to enjoy an order on MOD or regular patrons will be randomly incentivized to try an item they’ve never ordered before. “It always starts with data,” Notte admits. “We need data and the right tools to understand consumer behavior and shopping patterns. Having a loyalty program and mobile app allows us to access guest action data, enabling us to better understand behavior and deepen our relationship with guests.” Its recent loyalty deployment has given MOD access to data it didn’t have before. Now the brand can marry that loyalty data with insights from the POS, demographic and psychographic data to get a more meaningful picture. Notte believes that the lines between in-store and online should be blurred so that the two experiences are as similar and as seamless as pos-

sible. As the company works to streamline ordering across channels, the brand is testing a number of different delivery options. MOD continues to look for ways to automate the complete journey from ordering to delivery, while capturing key data metrics along the way. By making specific operational aspects digital-first, Notte hopes to reduce friction, ultimately saving time and giving “MOD Squad” members more time to put attention on guests. The focus on digital is paying off; in the last 18 months, the brand has seen online ordering almost double in growth as a percentage of sales. Notte attributes this partially to the steady improvement and reliability of the platform as well as the improved guest digital ordering experience. “Our vision in IT is delivering a better experience,” Notte says. “This also applies to employees. Anything we can do to make their lives simpler, so they can focus more on guests, is important.” HT

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SPECIAL REPORT

By Anna Wolfe, Senior Editor

Building Blocks for the RESTAURANT

A

FUTURE

ccording to the National Restaurant Association, the restaurant industry’s sales for 2018 exceeded $800 billion, with Americans spending 48% of their food budget on restaurants. This is in stark contrast to the 25% that they spent at restaurants in 1955. The fight for stomach share is no longer as straightforward as it was even a mere five years ago. Consumers’ options stretch across segments, service models and business sectors as third-party delivery, off-premise dining and even prepared food options from Cstores blur the lines between concepts and service expectations. To address the shifting dynamics that are driving restaurant sales to skyrocket despite reports of dwindling foot traffic, restaurants need to consider infrastructure and innovation changes that will position them for the next-generation of digital dining.

Evolving diner expectations put demands on restaurants to provide data-driven digital experiences for seamless, customized service

Start with the Cloud Before making a roadmap for a restaurant of the future, enterprises must have a foundation to support future innovation. Operating in the cloud with a robust high-capacity network ensures a brand is flexible and able to stay connected to the infrastructure across the enterprise. Legacy systems remain a top technology challenge, holding back 41% of restaurants surveyed in Hospitality Technology’s (HT) 2019 Restaurant Technology Study. The restaurant industry remains in the early stages of embracing the cloud, which opens a new world of possibilities to restaurants of all sizes, says Hughes (https://business.hughes. com). Moving to the cloud can be a great equalizer, enabling the smallest of brands to embrace technology. Once operations are in the cloud, an IT department can work in an agile environment that will enable a variety of future-ready technology initiatives. Restaurant customers around the world have similar demands. Quick and efficient service is the top factor for today’s restaurant customers, according to an Oracle Food and Beverage (www.oracle.com) research report titled “What Matters Most to Restaurant Guests;” 84% of 15,000 consumers in 14

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infographic

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SourceS: Hospitality Technology’s 2019 Restaurant Technology Study Hospitality Technology’s 2018 Customer Engagement Technology Study 1 9 • M AY 2 0 1 9 • w w w.h o s p itAl i t Yt ec h.co M


SPECIAL REPORT

countries surveyed identified quick and efficient service as a top factor, followed by order accuracy at 83%, and enough staff to provide good service at 82%. Self-Service Ordering Solutions Sources interviewed by HT agree that future-ready self-service solutions, including tableside ordering, pay at the table (PATT) and self-ordering kiosks, are another technology that can make a large impact. “On the customer-facing side, the order process is a prime candidate for tech infusion,” says Chris Randall, managing director of L.E.K. Consulting (www.lekc.om), a management consulting firm. “Instead of a customer waiting for a server, give the customer control of the ordering process through technology. This will drive a better experience and meet the customer’s need for convenience,” Randall says. Applebee’s (www.applebees.com) was an early adopter of self-ordering solutions, adding Presto (www.presto.com) tablets in 2014. The fast-casual chain is now using the PrestoPrime EMV tablet, which lets customers self-order and pay at the table with the EMV and mobile payment technologies, including Apple Pay, Android Pay, Samsung Pay, Chip-and-PIN, Chip-and-Signature, PINDebit and mobile payments. Jay Runnfeldt, a restaurant consultant with JCB Projects (www.jcbprojects.com), expects to see more fast-casual restaurants adding PATT in the near future. In addition to higher customer satisfaction, “it saves everyone time and leads to faster table turns,” he says. One of his fast-casual clients with a large outdoor space recently added PATT. “If the server grabs a credit card and has to walk back inside to the terminal to swipe the card, it could be 2-15 minutes until the customer gets the card and receipt,” he says. When it comes to technology and the customer experience, “it is still early days in a lot of places … It is always a challenge when a franchise is asked to put in money to execute these things,” says Randall. According to HT’s 2019 Restaurant Technology Study, 37% of restaurants plan to add tableside ordering with the guest’s device this year. Through a tablet, placard or even their own device, customers could view the menu, customize

orders, close out bills and self-pay, completing a loop of self service. Chick-fil-A (www.chickfila.com) has been testing tableside ordering at a handful of locations. A Kallpod (www.kallpod.com) device sits atop a dining table and provides the customer an opportunity to summon service staff directly through the push of one of three buttons – Order, Service or Manager. Service staff is immediately notified on a smart watch when a specific customer pushes a button. Devin Deshotel, COO of two Chick-fil-A locations in Houston, started using Kallpod’s solution last year. “Implementing Kallpod’s technology into our locations has allowed us to add incremental revenue and to raise the bar even higher when it comes to our already outstanding customer service,” he said in a statement. Before implementing Kallpod, Deshotel’s locations were averaging $30 to $45 per day from guests’ ordering a second time at the table. After three months, the locations were averaging between $200 to $350 dollars per day on these second orders. At these Chick-fil-A locations, technology is empowering staff to deliver improved customer service. “We are never going to reduce the level of service our guests receive with technology,” said Deshotel. “In fact, that’s the opposite of what we are trying to do. We are making sure the customer has the best experience possible, and the server has a clear path to make this happen.” SingleThread (www.singlethread.com) is among the fine-dining restaurants embracing technology to empower their staff to provide the best customer service. The Healdsburg, Calif., destination uses Slack (www.slack.com) as its communication platform. “It’s been an indispensable tool since the beginning for us,” says chef and owner Kyle Connaughton. “Effective communication during service is critical to creating a really high-touch guest experience; Slack allows us to do that.” Every employee has Slack set up on their mobile phone, with the service team accessing Slack through their Apple watches. The service team is messaging between themselves and the culinary team and relaying important information such as wine orders, last-minute notifications of dietary restrictions, and more. Connaughton is aware how distracting technol-

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SPECIAL REPORT

ogy can be, “so while we use tech to power what we do, it’s always out of guests’ view,” he adds. Replacing manual processes, such as writing out order tickets, with technology can help improve the dining experience and save time for customers and staff, says Felix Torres, CTO at LMS, (www.lmsonline. com) a data consulting firm. “It doesn’t necessarily mean machine learning or artificial intelligence (AI). There’s a lot of small tech changes we can embrace to improve.” Torres points to Princess Cruises (www.princess. com). The cruiseline was using a manual ticket system in its specialty dining restaurants before it launched Ocean Medallion, a quarter-sized IoT device that can be worn on a wristband, clip or stored in a pocket. Guests use their Medallions for cashless payment, a mobile key and more. Self-Ordering Kiosks Delivering guest convenience is driving investments in interactive kiosks, making it the top investment among 67% of restaurants that identify as “digital customer innovators,” reports HT’s 2019 Restaurant Technology Study. Restaurants globally are looking to automate experiences, and millennials are embracing kiosks, points out Zebra Technologies (www.zebra.com.) Eatsa (www.eatsa.com) reinvented the FOH experience when it debuted in San Francisco in 2015. Customers order solely via self-ordering kiosks or the mobile app and pick up their orders from personalized cubbies. The QSR turned tech company started out “building a different kind of restaurant operations model that is very much tech forward, tech first so we could drive different angles in terms of experience, operations and take the next step,” explains Tim Young, co-founder and CTO. McDonald’s (www.mcdonalds.com) has been adding self-ordering kiosks at a rapid-fire pace, implementing more than 17,000 worldwide. So far half of the 14,000 U.S. locations have been transformed into the quick-service restaurant’s “Experience of the Future” concept that includes self-ordering kiosks and digital menu boards. “…This is an aggressive pace with an ambitious agenda at a time when the U.S. market is experiencing intense competitive pressures,” President and CEO Steve Easterbrook said during a recent earnings call with analysts. Here in the U.S., franchisees plan to complete transformations by 2022. HT

HYPE CYCLE UPDATE:

THE NEXT WAVE OF DISRUPTORS

Delivery By Drone Alphabet’s Wing Aviation (https://x.company/projects/wing), which began as a Google X project, received Federal Aviation Administration approval as an airline, an important step that gives it the legal okay to begin delivery drops via drone. Wing plans to continue testing drones in Southwest Virginia, with the goal of launching a delivery trial later this year. Connected Commercial Kitchen Connected commercial kitchens — where grills, fryers and other equipment get data that will drive speed of service and order accuracy — are in beta testing now, says Panasonic (www. panasonic.com). Expect more processes to be automated with robotics. Payments This summer Apple (www.apple.com) is launching the Apple Card, a credit card. This could be a game changer for the payment industry, Panasonic pointed out, as Apple already has Apple Pay, and when it becomes its own bank, it will add customer purchase data to its data arsenal. The payments landscape will continue to be disrupted and forced to evolve by other big tech companies. Facebook (www.facebook.com) is planning to launch its own cryptocurrency this summer that will allow WhatsApp users in India to send money instantly, reported Bloomberg. In the Philippines, McDonald’s rolled out crypto-rewards for customers through it partnership with LoyalCoin, a blockchain-based customer loyalty rewards program, reported Cryptoslate. (And after acquiring personalization platform Dynamic Yield (www.dynamic yield.com) in March, McDonald’s deployed menu boards with AI at 700 U.S. restaurants.) Voice Voice ordering is on the horizon, sources interviewed by HT agree, and will see more adoption in restaurants within the next 2 to 4 years. ValyantAI (www.valyant.ai) is beta testing conversational AI with a Denver location of Good Times Burgers & Frozen Custard (www.good timesburgers.com).

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POINT OF SALE

By Julie Ritzer Ross, Contributing Editor

3 LOSS PREVENTION MUST-HAVES INTEGRATED SYSTEMS, PREDICTIVE ANALYTICS AND ARTIFICIAL INTELLIGENCE WILL STEEL RESTAURANTS AGAINST PROFIT-LOSS Loss prevention continues to be a major priority for restaurant operators, with nearly half (48%) of those queried for Hospitality Technology’s 2019 Restaurant Technology Study deeming it a musthave component of point-of-sale (POS) software. Additionally, through integration with other applications, including next-wave technology such as predictive analytics and artificial intelligence (AI), POS data itself becomes a loss prevention linchpin. 360-DEGREE VIEW OF OPERATIONS PROTECTS AGAINST PROFIT LOSS

For certain restaurant players, integrating inventory and related applications with the POS is an integral part of loss prevention. COPA (https:// copadurham.com), a Cuban farm-to-table restau-

rant in Durham, N.C., utilizes the Upserve (https:// upserve.com) POS platform, which integrates with a module called Upserve Inventory. This syncs the restaurant’s recipes with the POS system, minimizing waste and subsequent loss because ingredient usage is automatically tracked. “Because recipes sync to the POS, every time we sell a mojito, [we know] exactly how much rum and lime juice was supposed to leave the bar,” says Elizabeth Turnbull, co-owner of COPA with her husband Roberto Copa Matos. She adds that she also uses Upserve Inventory’s recipe costing feature, which lets the system recommend a price for each menu item based on the cost of individual ingredients and a desired, pre-determined profit margin. Turnbull recalls a

Pictured: Copa can minimize ingredient waste by automatically tracking ingredient usage and can decide how much new menu items should cost based on ingredients used.

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POINT OF SALE

situation where she was attempting to set a price on a new drink that was to be added to COPA’s menu. With three ingredients, one of which was very expensive, the drink was complicated to cost out despite being rather simplistic in structure. Turnbull utilized the system to realize that she had to boost the libation’s price in order to meet the restaurant’s margins. GET PROACTIVE RATHER THAN REACTIVE

Some operators leverage loss prevention tools that integrate with and apply predictive analytics to POS data to assess the likelihood of employee scams and address them before they become major problems. These range from improper handling of/failure to ring up guest checks, granting unauthorized discounts and more. Clyde’s Restaurant Group (https://www.clydes.com) integrated its Avero (www.averoinc.com) POS system with an Avero predictive analytics module that monitors and scores every front-of-house employee across seven “watch types,” including comps, tip inflation, auto gratuity, check reuse, voids/promotions, transfers, and POS authorization. In addition to check-level detail, the module analyzes employee patterns, performs peer comparisons across POS data and isolates historic trends. It apprises operators about which employees trigger the most alerts and where problems are most likely to be occurring or will occur given isolated patterns. According to Avero, access to predictive analytics gleaned from POS data has allowed Clyde’s to

48

%

OF RESTAURANTS SAY LOSS PREVENTION IS A MUST-HAVE APPLICATION FOR POS SOFTWARE

SOURCE: Hospitality Technology’s 2019 Restaurant Technology Study

identify several “check-level” control areas. In turn, the chain has altered its procedures and policies — for example, its procedure for voids — reducing the risk of loss. Predictive analytics is also being used to aid loss prevention by minimizing the food waste that stems from purchasing excessive quantities of perishable ingredients to preparing too much food for a particular day, offering the wrong menu items, or assigning too many staff members to work a certain shift. Tenzo (https://www.gotenzo.com) takes historic sales data from the POS and combines it with other data such as weather predictions, events and labor schedules. Then real-time push notifications containing forecasts and alerts are conveyed to management. For example, the operator of an Italian restaurant might receive a message that making

Pictured: WingHouse Bar and Grill has saved $600,000 on beer that would oth­erwise have been lost due to over-pouring or the actions of dishonest or careless employees.

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eight pans of lasagna for the following day, as planned, would not be a good idea based on the snowy weather forecast and/or historic traffic patterns, or a restaurateur might be informed that its labor expenditure is always too high on a certain day or during a particular time of day throughout the week. AI GAINS GROUND

AI-based solutions and tools that integrate with POS systems are beginning to play an equally critical role in loss prevention, according to TouchBistro (www.touchbistro.com). Some solutions and tools thwart fraud and/or other loss by bringing to light server performance issues. Examples include waitstaff pouring too much alcohol or giving a customer a “break” on his bill by ringing up the price of a less expensive drink. In some instances, an AI component can find patterns indicative of waitstaff misconduct. Tenzo gives the example of a waiter with consistently very low average spend per guest (when compared to other employees) or an unusually high number of credit card transactions compared to cash transactions. Either could mean a server is pocketing cash, according to the company. WingHouse Bar and Grill (www.winghouse.com) integrated its Aloha POS (https://alohancr.com) system with BeerBoard’s (https://beerboard.com) BeerBoard BOSS (Back-Office-Support-System) at two of its 24 locations, with further rollout slated to begin shortly. While one of the primary functions of BeerBoard BOSS is to ensure that employees pour the proper quantity of beer for each guest, keeping waste from over-pouring at a minimum, the integration of the POS system with BeerBoard curbs shrinkage by

ferreting out and alerting managers to anomalies. “We can see situations such as 120 ounces of a particular draft were poured at 2:45, but nothing was rung up in the POS until 3:07, or that two guests were served at the bar at 5:30, but only one glass was recorded in the POS system,” states WingHouse Bar and Grill CEO Dennis Prescott. “The intelligence in the system finds the information. It also tells us whether we’re within the guidelines for what we call a ‘perfect pour,’ which is less than 5% waste. Then we can address the issues.” Prescott notes that since the technology was implemented earlier this year, WingHouse Bar and Grill has saved $600,000 on beer that would otherwise have been lost due to over-pouring or the actions of dishonest employees. Two-thirds of the savings stem from dissuading employees from “giving away beer in one form or another” because of the integrated system in place or because dishonest actions have been curtailed, Prescott says. Aloha parent NCR (www.ncr.com) also offers a loss prevention and employee performance monitoring tool called Restaurant Guard. It utilizes AI to perform functions like analyzing POS data for suspicious transactions, such as transfers, voids after check close, and comps after check close. Instant notifications of significant events are sent to a manager’s mobile device. In another application of AI to loss prevention, cloud-based POS solutions are being integrated with video surveillance and data platforms such as Envysion (https://envysion.com) and Solink (https://solink.com). The platforms work by first examining existing videos of restaurant operations to garner an understanding of operational patterns, frequent transactions, and customer and employee behavior. These video extracts are then analyzed by AI and machine learning algorithms in order to detect repetitive events and recognize them as normal or suspicious activities. POS transactions are matched with AI-based video analytics, and when such suspicious activities occur in real time — for instance, an employee uses the same check twice — a notification is sent to the restaurant owner. According to Poster (https:// joinposter.com), matching transactions, date and time with AI-based video analytics also allows restaurant operators to easily predict suspicious actions with a high degree of reliability. HT

Pictured: WingHouse Bar and Grill has been able to dissuade employees from giving away beer because they know the powerful accuracy of the software in place.

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REPORT Anna Wolfe, Senior Editor

2 4 T H ANNUAL MU RT EC

ALMOST 900 TECHNOLOGY EXECUTIVES ATTEND SOLD-OUT EVENT

The 24th annual Multi-Unit Restaurant Technology Conference (MURTEC) was one for the record books. With the theme, “Powering the Possible,” MURTEC 2019 attracted almost 900 technology executives from quick-service, fast casual, and full-service brands plus solution providers — an 8.5% increase in the number of restaurant operators and an 11% growth in the number of participating companies overall versus last year. Produced by Hospitality Technology (HT), MURTEC was held March 11-13 at the Paris Hotel in Las Vegas. The conference also attracted a recordnumber of sponsors and exhibitors. The sold-out show floor was loaded with tech solutions — everything from restaurant management, point of sale (POS), loyalty, marketing, online ordering, artificial intelligence (AI) and more. The event kicked off with a morning round of golf at Desert Pines Golf Club and afternoon educational sessions including MURTEC University classes and an interactive roundtable discussion, Innovating & IT Problem Solving. The operator-only session dedicated to fast casual/QSRs was led by John Robinson of Sonic Drive-In and Eric Rosenzweig of Qdoba Restaurants. Operators shared best practices on IoT, EMV, kiosks, self-service, automation, mobile pOS and more. Full-service restaurants also got the chance to share and learn from their peers. John Gigliotti, Director, Chuy’s, and Robert Surbeck, Sr. Director, Restaurant Systems, The Cheesecake Factory, led the interactive discussion that covered guest engagement, loyalty, tableside ordering and payment and more. Highlights from MURTEC University included a session on How to Deploy Emerging Technology Rapidly, led by Kesha Williams, Software Engineering Manager, Chick-fil-A, and a Top Women in Restaurant Technology award winner. With Williams as guide, attendees rolled up their sleeves and got to

A

B A. Jason Silva, host of Brain Games, delivered a rousing keynote. B. About 200 golfers enjoyed a friendly round of golf.

Polling Snapshot:

Kiosks: What’s the next killer app? 36% say biometrics followed by analytics for customized orders at 32%. Source: Audience poll sponsored by HP (www.hp.com), asking MURTEC attendees to identify what kiosk applications will be must-haves with adoption on the rise.

work on mini-training courses designed to demystify several emerging technologies: voice, facial recognition and automation. “If you want your staff to innovate and think outside of the box, they need time away from their

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REPORT EX ECU TI VE

W W W. G I V E X . C O M

I N SI G HT

How Future-Ready Restaurants Are Navigating Evolving Consumer Preferences GRAHAM CAMPBELL, CHIEF OPERATING OFFICER, GIVEX

What role does technology play

Considering the rise of today’s on-demand consumer, how

as restaurants continue to face

important is it for restaurants to offer mobile ordering as

increased competition and minimal

part of their omni-channel experience?

brand allegiance in today’s

CAMPBELL: It’s absolutely critical. Getting

on-demand economy? GRAHAM CAMPBELL:

Data-driven insights, powered by a fully integrated cloud-based system, are necessary to run a successful, modern restaurant. Integrated point-of-sale (POS) systems are commonplace. Legacy systems just can’t handle modern challenges. Today’s technology solutions empower efficiencies — from back-of-house, online ordering, POS and more — so restaurants can focus on delivering a superior customer experience. Reliable technology enables restaurants to respond and adapt to changes in consumer demands and the marketplace. Being versatile and flexible is imperative for restaurants, and reliable technology enables that.

consumers what they want, when they want it is key to running a successful operation today and for the future. According to Technomic, 86% of consumers are using off-premise dining at least once a month. This increase in off-premise dining is fueled in part by the rise of third-party delivery and mobile ordering. Customers are looking for more out of their mobile experience, and operators want to be able to work and do anything from their mobile devices. Operators want to use their mobile devices to receive upto-the-minute data and notifications on how their restaurant is performing. How are restaurants adapting to ever-changing consumer demands?

What are some pitfalls operators should watch out for when integrating systems? CAMPBELL: Restaurants often underestimate the time and labor required to integrate multiple systems, which is not only time consuming but also opens the door for data inconsistencies. Clean and accurate data is essential to run a modern enterprise. Having one unified cloudbased system empowers operators to optimize operations across multiple locations. Businesses should be able to run a report across all locations and have all of their relevant data in the same place. These consolidated reports help restaurants visualize trends across the enterprise and provide access to insights that can be used to further streamline operations and optimize customer service and product offerings.

CAMPBELL: Fast-casual and full-service restaurants alike are adapting to the new reality through online ordering, mobile apps, self-ordering kiosks and third-party delivery. This omni-channel strategy is impacting how restaurants and kitchens are being designed, For example, in areas where takeout is popular, commercial kitchens that fulfill orders may be the best option instead of having a much larger footprint with dine-in space. There is an evolution happening and brands want to have the infrastructure in place that keeps them flexible. Restaurant technology needs to be multifaceted yet easy-to-use to meet demands. Brands must be able to adapt and adjust their system in real-time to successfully navigate this ever-changing landscape. Franchisees should ask if their technology is working for or against them.

About the Sponsor: Givex offers omni-channel POS solutions, gift card, loyalty and loaded tickets which drive sales for clients, help them engage customers and make better-informed business decisions. S P O N S OR E D

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REPORT

D

C

C. Restaurant operators got the chance to work in groups and troublehoot common problems. D. Kesha Williams, software engineer manager with Chick-fil-A, shared her best tips for deploying emerging technology rapidly.

day-to-day job responsibilities and (they need) production support so that they can explore, play and fail,” Williams said. “And they need the tools.” With data and digital front of mind, restaurant operators flocked to MURTEC seeking out solutions and sessions. According to HT’s 2019 Restaurant Technology Study, operators’ top technology objectives for the year are improving analytics (40%) trailed closely by effective digital programs (38%). Capturing data and harnessing its insights to drive the business forward is front of mind for Kelly McGuire, VP of revenue management for MGM Resorts International, who shared best practices and fielded questions during her interactive session, “Driving Value From Data: A Revenue Manager Tells All.” Josh Patchus, the chief data scientist for the fast-casual brand Cava, offered advice on how IT teams can be empowered by data and best work across departments during “Building an Infrastructure for the Restaurant of the Future.” Many restaurants’ roadmaps include the cloud, and Wayne Pederson, CTO, Fazoli’s tackled “Master Your Cloud Migration” in one of the MURTEC University sessions. Moving to the cloud is a top strategic objective for 7% of restaurants, according to the HT’s 2019 Restaurant Technology Survey. The networking at MURTEC is invaluable to attendees and the rest of the day included a curated networking session where operators and solution providers were introduced based on interests. Following that, the welcome networking reception was held in the exhibit hall offering operators and solutions providers the opportunity to mingle and even see some of the latest restaurant tech on the market in a fun and relaxed atmosphere. A sold-out networking breakfast started things

off on Day Two. Operators flocked to moderated discussions with their peers on a variety of ontrend topics including: “How to Create a Unique Loyalty Program that Produces Results;” “Mobile Payments;” “Technology and Labor Costs;” “Kiosk Payment” and “AP Automation.” After breakfast, keynote speaker, Jason Silva, the Emmy-nominated host of National Geographic Channel’s “Brain Games,” took the stage to deliver a high-energy presentation that challenged attendees to “Become an Organization of the Future.” For many brands, innovating at the beginning is easy; the challenge is maintaining the path and not falling victim to disruption, he said. His tips include to question everything and to think exponentially. Silva got the crowd thinking (and maybe a little spooked) when he shared his vision of a future where IoT and AI intersect in what he called the “Intelligence of Things.” He posed the the possibility of a world that would know what humans desire before they do. He also challenged organizations to think beyond their immediate interests. “How can you scale your business to help your community be better?” he challenged. Recognizing some of the best and brightest minds in restaurant technology, HT announced the winners of the 2019 Top Women in Restaurant Technology Awards, sponsored by 7shifts (www.7shifts. com). Honorees for the third annual celebration of innovative women include: Cacy Merrifield, Sonic Drive-In; Carissa De Santis, TGI Fridays; Laura Kirkwood, Merivale; Sif Rai, QikServe; Kesha Williams, Chick-fil-A; Allison Page, SevenRooms; Nora Naranjo, eatsa; Kathy Hartman, HubKonnect; Kristi Turner, Compeat; and Laura Rea Dickey, Dickey’s Barbecue Pit.

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Seen & Heard

In a session that reignited the never-ending discussion of build vs. buy, Dickey, who is CEO, shared the barbecue company’s experience building its next-gen POS, Smoke Stack. Most of the development was done in-house with the help of some key vendors. She shared the company’s challenges with siloed data, and its initial goals when creating Smoke Stack: “profit driving quality,” to deal with data, be profitable and service operations better. “No one cares about the technology, they care about the benefit,” she said. Mid-day included more networking and lunch included 18 more table topic discussions including topics such as: “Best Labor Practices,” “Modernized Cloud-Based Point of Sale;” and “Self-Service Kiosks,” and more. The afternoon’s sessions included three MURTALKS, which are fastpaced 20-minute presentations. Some hot topics were: Applebee’s Strategy to Innovation with Duane Aldridge, Vice President, IT, Dine Brands, and Scott Gladstone, VP Strategy, Development, Applebee’s. With the evolution of delivery and mobile ordering in mind, the duo shared how their teams collaborate to stay ahead of guest expectations while getting buy-in from franchisees. Starbucks’ Flavio Diomede, Lead, Retail Platform Engineering Group, pulled back the curtain to share the innovative strategy that led the coffee giant to the development of a production control engine to manage all of its incoming orders. The good, bad and ugly of third-party delivery was a common topic of discussion throughout the conference. Dining at home, including pickup and third-party delivery, show no signs of slowing down. According to a study by Off-Premise Insights, restaurant sales for takeout, delivery and catering topped $209 billion last year, with delivery representing $45 billion, or 22%. And third-party delivery, at approximately $13 billion, is forecasted to grow at a rate of 13% annually over the next five years. In the MURTALK session, “Evolving Food Service Strategy for the Stayat-Home Consumer,” Carl Howard, President & CEO, Fazoli’s tackled this paradigm shift head on, emphasizing how brands must create an online and delivery experience with the same passion as the dine-in experience if they want to be in business in three years. In today’s competitive landscape, creating and maintaining guest loyalty is a challenge. In a workshop sponsored by Comcast (www.business. comcast.com), Leveraging Tech to Power Guest Loyalty & Experience, Adrian Butler, SVP, IT & CIO, Dine Brands Global; Zerrick Pearson, Vice President of IT, Five Guys; Chris Czarkowski, SVP, Client Partnership, NBC Universal, shared their brands’ approach to engaging digital customers. Attendees had the opportunity to work in small groups to troubleshoot common concerns such as evolving guest’s technology expectations, marketing to different generations, and how to attract new customers without alienating loyal ones. In “Stop Leaving Guest Data on the Table,” sponsored by Zenreach (www.zenreach.com), Skip Kimpel, Vice President of IT, Anthony’s Coal Fired Pizza, shared how the brand is marrying WiFi marketing with its loyalty programs and driving personal connections with customers. The final day kicked off with keynote on “Disrupting Digital Disruption,” delivered by Kelly Smith, Senior VP and CDO of MGM Resorts In-

“Data and analytics and getting to this notion of personalized experience is something that will be transformative for the restaurant industry in general. Digital transformation and how to use digital as a way to touch and actually enhance the experience of the guest is very important.” ADRIAN BUTLER, SVP IT and CIO, Dine Brands

“Everyone is talking about delivery. I really enjoyed the session (Taking Control of Delivery: Putting the Restaurant Back in the Driver’s Seat) with Potbelly Sandwich Works and Torchy’s Tacos. It was interesting to hear how others are dealing with this. This is my 13th MURTEC. I always enjoy the networking, getting a chance to connect with vendors and colleagues. MELISSA FLETCHER, Restaurant Systems Consultant with PR Management Corp.

“The restaurant roundtable was excellent (Innovating & IT Problem Solving). Fullservice is at a crossroads with technology right now. We’re here shopping for some technology solutions that we need. Right now we’re a little antiquated in terms of how we do some of the things. We’re reallylooking to move to the next level so we can grow.” KURT BOHLSEN, Owner, BRG

“I’m here to see new technology and new ideas, and there’s also a big value in connecting with the people. The networking is probably the most important. You get to connect with people from all over.” HANS RASMUSSEN Senior IT Director, SMS Holdings

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REPORT

E E. HT’s Editor Dorothy Creamer with Top Women in Restaurant Technology winners: Kristi Turner, Compeat; Laura Rea Dickey, Dickey’s Barbecue; Sif Rai, QikServe; Allison Page, SevenRooms; Kathy Hartman, HubKonnect; Carissa De Santis, TGI Fridays; Daniella Bellaire Head of Sales, Enterprise from 7Shifts, sponsor of the Top Women awards; Cacy Merrifield, Sonic Drive-In; and Nora Naranjo, eatsa; and HT Brand Director Abby Lorden. Not pictured: Laura Kirkwood, Merivale; and Kesha Williams, Chick-fil-A.

ternational. Prior to joining MGM in 2017, Smith was the digital visionary behind Starbucks China digital efforts. Smith reminded attendees that it’s “impossible to write checks for digital disruption.” He cautions against chasing key performance indicators. Instead he suggests the mindset shift of thinking of KPIs as validation of a goal when it comes to technology investment. MURTEC concluded with a notable IT Power Panel discussion with Michael Verdesca, CIO & EVP, FOCUS Brands, Adrian Butler, SVP, IT & CIO, Dine Brands Global and Karen Bird, CIO, Hooters Management Corp, moderated by HT’s Editor Dorothy

Creamer. The group shared struggles, such as thirdparty delivery and a stack of tablets, and where they see emerging technology having the biggest impact, such as “smoothing out the friction points in payment,” said Butler. When it comes to mobile payment, Verdesca offered a viewpoint that could speak to the overall state of technology with the current pace of change: “We have a lot of work to do.” MURTEC provides attendees a unique opportunity to network with and learn from restaurant technology leaders. Mark your calendars now for the 25th annual MURTEC, which returns to The Paris Hotel & Resort, Las Vegas March 9-11, 2020. HT

The Game-Changer for Restaurant Technology HT announced its plans to help improve the restaurant technology industry with the official launch of the Restaurant Technology Network (RTN, www.restauranttechnologynetwork.com), a new membership community dedicated to technology innovation for restaurants. RTN’s mission is to enable restaurant operators and solution providers to identify and solve industry challenges through peer work groups, standards development and best practices. All were invited to attend the session, Meet RTN and Help Mold Workgroups that Work. The session was hosted by Angela Diffly, RTN’s Director, Membership and Business Development, and Patrick Dunphy, CIO at Hospitality Technology Next Generation (HTNG), one of RTN’s strategic partners. HTNG is very experienced with organizing work groups — volunteer groups that unite the brightest minds in technology, both from the operator and the supplier side — to tackle pain points and create best practices. To date, HTNG has published 150+ industry standards. The session was packed with more than 120 restaurant operators and vendors hungry to learn more.

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