Enhancing the Hospitality Experience in XR, with UgoVirtual's Michael C. Cohen

Today's guest -- UgoVirtual's Michael Cohen -- describes the hospitality industry like a snowflake - add a little heat and, well, you can imagine. Hotels and cruises rely on proven practices to keep guests happy. Luckily, XR doesn't have to disrupt those practices; they can build on top of them. 

Alan: Coming up next on the XR for Business podcast, we have Michael Cohen from UgoVirtual. We're going to be talking about how virtual/augmented/mixed reality solutions -- or XR solutions -- can be used for front-of-house for customer facing activations, from AR to VR. Pre-experiences, what is it like to book this hotel, looking all around you? And also the back-of-house: how do we use this technology to give the best possible training for the staff, so that the customer experience is flawless across the board? All that and more coming up, on the XR for Business podcast, coming up next. Michael, welcome to the show, my friend.

Michael: Thank you very much. Really appreciate it, Alan.

Alan: It's my absolute pleasure. It's been a long time coming. We've been kind of doing the dance, watching each other grow. And I'm really excited to learn about what you guys are doing in the hospitality field. It feels like it's a greenfield opportunity in hospitality, from travel/tourism. A bunch of companies started with, "We're going to put a 360 camera and let you have a virtual tour." But explain to us, what are you doing at UgoVirtual, and what is the response so far in the hospitality industry?

Michael: Well, first of all, timing is everything, as we know. [chuckles] And the global travel and hospitality industry is absolutely a greenfield opportunity. It's primed for scale and expansion in regards to XR. The reason being is that there have been investments and there have been initiatives, both on the brand and enterprise level of hospitality and travel companies, but also in startups and larger companies who have enabled, let's call it a slice of VR or a slice of AR. Or as you mentioned, enabled OK 360 hotel tours that were maybe derivative out of the real estate market and that sort of scenario. Now, the opportunity is very, very serious for UgoVirtual, because we are the travel and hospitality virtual solutions company, very myopically focused to both consult to the major travel and hospitality brands to help them navigate and make investments and strategic decisions for the next three, four, five years on what XR will be for them.

And also from our perspective, we have a portfolio of XR oriented solutions that are very focused and linear to the travel and hospitality space. So we're not taking generic solutions and trying to overlay them on travel and hospitality. The group that's involved with UgoVirtual -- who I'm a strategic advisor to -- we're all 15-20 year veterans on hospitality technology commercialization for the front-of the house, which is guest facing solutions and the back-of-the-house, which is employees and staff. So when you overlay that kind of multi-decade experience on how to get technology efficiently deployed, efficiently commercialized, exceed the demands or the needs of travel and hospitality brands, with these now slowly maturing VR/AR/XR opportunities, it's a wonderful fit for UgoVirtual right now.

Alan: So give us an example. You talked about front-of-house, customer facing solutions. Let's start with front-of-house and then we'll go back-of-house. Because I don't know if you know this, but I actually met my wife working at Delta Hotels in Toronto.

Michael: [chuckles] That's perfect.

Alan: Yeah.

Michael: Yeah.

Alan: I was a bartender, and she was the night manager--

Michael: That sounds like a great novella right there. But that's for another day.

Alan: [chuckles] It sure is. Let's talk front-of-house. What's going on there?

Michael: Here's the reality about hospitality specifically and hotels, let's be more even granular. There's obviously a massive investments of travel and hospitality startups that are geared towards mobility, they're geared towards guest engagement, the guest experience, the ability for guests to use their own BYOD smartphones to interact and to experience property or a destination, for example. So there's been millions and millions of dollars invested -- both at the brand level and also at the vendor level -- to enable mobile, for example. So things like -- I don't know -- mobile key access to rooms, brand apps, et cetera.

Where UgoVirtual has identified a couple of years ago and has been investing into initiatives, is the virtualization of those type of experiences, the enhancements, the scalability of those types of engagement experiences such as virtualized hotel tours, deep virtual tours. They don't require headsets. They don't require Hololens 2 for the consumer, but the consumer through their mobile device, their tablet or at home, through our solutions, through our virtual hotel tours that we are fully rolling out in January of 2020. And we have some beta sites already deployed all across North America. UgoVirtual hotel tours solutions are very deep. They're very much about the flow through a hotel, experiencing the hotel, versus simply a 360 camera and some sort of images.

The reason being is that hoteliers have consistently over decades invested so much in the experiential design and the look and feel and the feature function of their properties. It's an incredibly competitive market, like many other vertical markets. And their investments in new builds and renovations are massive and substantial. But this is all about the pre, the present, and the post. The pre-virtualization of a guest experience. The pre-experience of what it will be like to book this hotel, or book their convention in this convention hotel, or book their meeting in the meeting space, etc. is a massive benefit of what we call hospitality XR from the front-of-the-house. And those are things that we feel have been -- in a limited fashion -- enabled in the travel and hospitality vertical.

But now we're bringing out these solutions that are far deeper, far richer, based upon technology that you and I and others in industry know very well. But it's all about execution. So one major area is definitely the pre-virtualization of travel or accommodations, so that consumers and the guests -- passengers of a cruise ship, for example -- they have the ability to differentiate and to make decisions on where they're going to build their travel itineraries, who they're going to make their reservations with, who they're going to purchase services from. That's a massive opportunity that we're very focused on executing in the travel and hospitality space. That's one major area of the front-of-the-house.

The other area of the front-of-the-house that we're rolling out in 2020 as well is the augmented reality experience within the guest room and the public spaces of hotels or convention centers, etc. And we have invested and are rolling out particular technologies that replace a lot of the traditional content, printed content, even some of the digital content that has been invested in by brands or travel destinations over the last five, six, seven years, to make it a far more seamless augmented reality digital overlay on the skin of the hotel or the destination. That's another area that you know well what I'm talking about, and I'm sure the listeners do as well. Taking this augmented reality interaction, these activations and actually focusing them on the guest room. So we'll be making announcements in January, February on our next range of augmented reality solutions for hotels.

And then the last scenario that we very much have commercialized and we're rolling out is the virtualization of events within the travel and hospitality space. But the reality is that like any other vertical market industry, there's a wide array of industry events, of vendor events, of organization events that you and I travel to many times, in many ways, in different verticals. Well, we have a technology that we've commercialized over the last 18 months and we've already landed and are deploying multiple virtualized events of brick and mortar exhibitors. And these are industry related events in our space. There are organizational events and there are also the vendor conferences for -- for example -- hospitality technology vendors, who may have a conference every two years because it's incredibly expensive, quite challenging in regards to bandwidth and time for the attendees and the vendors or the speakers. So they may have these events every two years. Well, with UgoVirtual virtualized events, they can have those events every year. One year virtual, one year brick and mortar. And that's really been a major push crush. And we've had a lot of positive feedback on that as well.

Alan: Watching the video, you've basically created a system where you can have a virtual trade show, looks like. And virtual meetings.

Michael: That's exactly what it is. Exactly.

Alan: So that's not necessarily in VR. I mean, you're doing that on 2D screens. And so how is that working out? What's some of the response with that?

Michael: Well, we've generated a lot of revenue, and we have multiple events signed and we're rolling them out in 2020. So I guess that's the ultimate feedback from the industry, is that people like us, they really like us, as Oscar winners have said in the past. [chuckles] So, I mean, you can have a vision, you can have an idea. If you're executing in a vacuum, it's one thing. But when you're executing and getting positive reinforcement, and actual industry players are signing contracts and investing in virtualizing their events, that's the ultimate feedback you can expect. And we're still in a bit of a soft launch, because we want to make sure that we're executing very, very strongly on these events. But the opportunity to go wide is really there, because here's the reality.

There are three areas of the travel and hospitality industry globally where virtualized events from UgoVirtual make a ton of sense. One is, obviously, our vertical market industry organizations. There's organizations called HTNG, for example, that's Hospitality Technology Next Generation. There's organizations called HFTP, which is the Hospitality, Finance and Travel Professionals. These are -- like any vertical market -- these are major organizations where we're all members, and it's an important part of our careers. It's an important part of training and networking. And they all have very large user groups and work groups and so on. So we are looking to talk to those people and move their events -- which we are all members of -- to a virtual scenario because you have an ability to expand reach, expand awareness, drive actual interactivity between members of an organization or a vertical market.

Because not everybody can travel to New Orleans or travel to LA or travel to Monte Carlo. Not everyone can do that. And no-one has the level in their career as an executive or a decision maker, or they don't have the bandwidth, or they don't have the travel budget. And secondarily and very importantly, what we're doing is also -- as many of the people you interview -- it's also green. This is a sustainability play, too. The ability to have more events append existing brick and mortar events with UgoVirtual virtualized event as a sister to the existing event is really impactful from a sustainability perspective as well. Carbon footprint, all those good thing.

Alan: Let's shift focuses now to the back-of-house. What are some of the solutions that you guys are providing for back-of-house?

Michael: So in the back-of-house space, we're also a consulting firm, as I mentioned earlier. So we're focusing on assisting hospitality and travel brands on their strategy for their employees, for their training scenarios, for optimization of their back-of-house, human infrastructure. The reality of travel and hospitality-- And you were-- now that you mentioned it, you worked in this space. You know that turnover is massive. And that's a big challenge for hospitality brands, and ownership groups of hotels, and conventions, and other scenarios. The turnover is massive. And therefore, when that happens, a lot of the intellectual IP of how to do what you need to do and your job in a hotel or in a conference center or another hospitality entity, it evaporates. So there's this constant requirement for new hiring and training.

So taking the massive growth and impact that virtual reality training is enacting in major North American and global enterprise -- as well as other vertical markets -- we're bringing that to hospitality. So the back-of-the-house for us is very much focused on VR and augmented reality training. So we're consulting with firms and we have relationships with the Microsoft team in regards to Hololens 2, the HP team and their scenario. We're talking to Lenovo and many, many others who have both the hardware and the cloud based infrastructure, so that hospitality and travel companies can utilize this infrastructure, these tools to create their own content, to be able to have a far more efficient, higher retention and tremendous ROI on their training and back-of-the-house staff. So that's one area.

Another area that we're involved in -- from an augmented reality perspective, in a product and deployment solution -- is creating the augmented reality overlays to the physical plant of hotels or convention centers or mixed development properties. The engineering manager of Hotel X been there for 15 years. He knows that the only way to get the boiler in the boiler room to really kick in on the coldest day of the winter is you've got to kick it twice and you've got to turn the lever to the right. He leaves, he retires. That is gone. That knowledge is gone. I'm using a very simplistic example, as you can imagine. But when you have an ability to deploy a PIN code protected augmented reality overlay next to the boiler, that has all this data, all this intellectual property -- knowledge -- that's permanently affixed in an augmented reality scenario next to the boiler, it's now there for the future. All future employees or anyone who needs to have this information available on the fly. So we are working on the back-of-house, as well.

Alan: Kick twice and go down to the back. [laughs]

Michael: Yeah. I mean, obviously, when I'm using-- I'm being pejorative and using a simplified-- but you know exactly what I'm talking about. And you've seen it. And-- I mean, listen, this is not always about inventing something. It's about taking best of breed solutions that are in industrial and other enterprise scenarios, and overlaying it on a very competitive, a very lucrative business called travel and hospitality.

Alan: Well, it's interesting. Oil and gas companies have been doing this for a few years now. Microsoft has really focused on enterprise. But when you see "enterprise", you think oil and gas, mining, construction. But travel and tourism is an enterprise. Any group of companies where you have millions of employees is an enterprise. So what are some specifics? Like, what companies are rolling this out? What are what are you seeing results wise? Is there any specifics you can share?

Michael: Sure. I mean, let's talk about on the front-of-house side of things. So Best Western, about two to three years ago -- major brand, huge portfolio of owner managed hotels -- made a mandate in order to roll out virtual hotel tours to each of their Best Western properties. And it was well accepted. It was a very good first major move. They're one of the first movers in the industry. It's more of a 360 real estate type experience, but it's absolutely adequate and it has been adequate for that period of time. And there's been other brands that are more in the boutique and independent luxury space, who have definitely done the same. Where there is a next gen or next level is in regards to really making these virtualized tours -- like we are doing at UgoVirtual -- far more -- what's the word? -- impactful and engaging, and integrating them into different systems.

When you have a UgoVirtual tour of a hotel, and you can embed in the actual booking of a hotel room from one you're-- while you're in the tour, or booking of a meeting space through the RFQ interface of another system right within the tour. As you know, engagement and activity. So that's really where the next level of what we're doing in regards to the hotel tours. But listen, Marriott has made investments. Hilton's made investments. All the major brands have had different levels of interaction in regards to the tours. And we're looking to -- what's the word? -- maybe aggregate some of that demand and bring out a very consistent, deeper, richer, virtualized experience there. In regards to augmented reality in the guestroom, the big, big push and the big deployments have been different types of app-based or appless content and interactive solutions in hotels.

I will say that we are in the early stages, and our timing is great in regards to the augmented reality overlay within hospitality. That is -- again -- an evergreen opportunity. There has not been a massive amount of guestroom related implementations. That's why we feel we have a tremendous first mover advantage and during our announcements in early parts of 2020, we're going to make sure we make the most of that impact. But what I will say in regards to augmented reality in hospitality, there's been a lot of very successful activations by people like Foxwoods, casinos and hotels, and other forward thinking brands and travel companies, who have used it as more promotional and a way to do gamification around their property, to have the guests or the consumers move through the property to -- for example -- have a digital hunt where you're looking for different symbols or you need to collect the activations of 12 different photos of Big Papi -- former Boston Red Sox, a DH -- who's obviously an ambassador for Foxwoods, for example.

So you have to go through the hotel and you have to find all of the photos of Big Papi, and then use your phone and activate the augmented reality experience. And when you do, you get a bonus offer or you get points or you get a gift. So that's been really successfully rolled out in hospitality. And there's the beginnings of what we're also involved in, is the AR activations for the exterior of the buildings. So you've seen this in major brands in the consumer packaged goods and consumer product space for using these major neural activations. Well, that is starting to trickle into the hospitality as well. Because these are buildings, and these are buildings and resorts and convention centers, which have a ton of external real estate -- if you know what I'm saying -- that the activations of AR experiences are starting to trickle into there, as well. And we're involved in that, too.

Alan: It sounds like you guys get your fingers and everything to do with XR and hospitality.

Michael: We're focused still, I'll be honest, because we're not a custom development shop, per say. Yes, we're a hospitality XR consulting company, for sure. But we have selected and have invested in specific lines of business and solutions, that we feel have the most opportunity for travel and hospitality. One thing that's really important, Alan, I think for this conversation is yes, were a startup and in growth mode, for sure. And we have interest from various parties to help us with our growth. But we're not-- I'm not looking to belittle the traditional startup cycle, but we are overlaying hospitality XR both for the product and service to space and as consultants on the realities of commercializing technology in travel and hospitality industry. We know the budget seasons, the line items, how the widgets have to be positioned from a commercialization and business model space.

That's incredibly important, because what we're doing is we're doing our own proprietary and we have exclusive licensing on a range of technologies that we're commercializing globally in travel and hospitality. But we are overlaying our own technology or licensed technology on existing business models, that have been proven and are required over the last 30 years. And that is a big differentiator here, because as you know, it's hard enough to get buy-in authorities or C level folks to engage and get behind a new technology. But if the business model or the commercialization plan doesn't align with what they're used to, it's even another challenge. We have absolutely met that and exceeded that scenario, because we know how to put the square peg in the round hole, and roll out the technology in a way commercially that is both viable, scalable, but also understandable to travel and hospitality executives.

Alan: So if you're speaking-- let's say-- assume that somebody from the industry is listening to this podcast, what's step 1 for them?

Michael: Well, step one for them is-- first of all, if you're listening to the podcast, we appreciate it. [chuckles] And second of all is, they're digesting a lot of information. There is a firehose that's being blown into the travel and hospitality space -- like many other vertical markets, enterprise markets -- that these executives know they have to get on board. They have to start crystallizing their strategy and their visions on how in our industry hospitality XR -- hopefully through UgoVirtual -- is enabled within their brands and their properties and their destinations. So they're already investigating. They're already collecting information. They're reading, they're watching. The goal is there needs to be an alignment of this technology with what's the successful principles of their business. From our perspective-- and that's why we've opened the consulting side of the business, because we're there to help them align those two important areas.

And then obviously, they need to investigate what is the appropriate next steps if they're interested in front-of-the-house hospitality XR. What sort of areas or what sort of feature function or benefits they want to achieve? What sort of enhancements do they want to append to their existing successful guest engagement scenarios? And those are things that have to be laid out. And then they would talk to people like us, to help them organize that, but also just to see what's available in regards to technologies that they can license, technologies that are scalable.

One thing you have to remember is that in the major travel and hospitality brands, either destinations or resorts or hotels or Disneys of the world, everything's a thousand points of light. It's usually not one property or one destination. In the enterprise side of travel, hospitality, it's hundreds. It's thousands. There's 14, 15, 16,000 hotels in North America, for example. There's hundreds and hundreds and hundreds of thousands of guest rooms all over the world. That's a big consideration. That's a differentiator from other industries. Yes, of course they have 200 locations, or they may have 50 training centers. These are all really major accommodations that require a lot of planning a ticket to an exponential level with travel and hospitality. That's a critical, important part of the successful identification, research, rollout, and execution on hospitality XR: the thousand points of light. It could be 50 points of light, could be a 1,000 points of light. But that's really important.

Alan: Let's talk about-- I do want to bring up one company in particular, because they kind of been flying under the radar. What are your thoughts on a company called Oyo, who -- from what I've heard -- now are the number two hotel chain in the world?

Michael: So we can have this conversation regardless of hospitality XR, because this is really important. So Oyo has a business model and has a system in place and they've come out of Southeast Asia and Ritesh [Agarwal], their owner, is a very dynamic CEO and he has major funding from Softbank, so he has taken the traditional hospitality business methodology and he's put it on its head into almost like a technologies solutions company. So there are great opportunities, great growth, but there are also great challenges that they are facing. Hotels are hard. Every hotel is a snowflake. It's very challenging to scale traditional hospitality surfaces, traditional hospitality technology, a server, access points, IOT sensors, hardware. It's challenging to roll that out, because there are different configurations, different designs, and different systems in place in every hotel in the world.

Alan: Oh, I know. Wi-Fi. Listen, the hotel people that are listening to this: please, if you're going to work on one thing, Wi-Fi that works universally.

Michael: No, Alan, I mean, the point is -- you know this, I'm going to bring this back to our conversation -- is the consistency and the quality of Wi-Fi. I was-- I have been involved in Wi-Fi commercialization in travel and hospitality for 15 years. And I worked with AT&T and other leading hospitality Wi-Fi companies for many, many years. So I'm a bit of an expert, barely stayed up at this one, I could say. And you're absolutely right. It's a critical juncture. It's like oxygen for a hotel, because if the Wi-Fi is not consistent and the quality is not there and the coverage is not there, it's a real impact to the guest satisfaction scores of hotels. And this is a good segue back into what we were talking about.

Two things: guest engagement, guest experience. So it's front-of-the-house again. That's where UgoVirtual-- and that's where the virtualized and augmented reality solutions that we're bringing out, and the hospitality XR consulting that we're we're delivering is key. Because this tsunami of XR that's going global, which you are a world expert at-- and you know I'm not kissing your behind, because I know who you are, we're friends. And I know the impact that you're making around the world, and all the travel that you do, and all the events you go to. So the tsunami of XR in all different types of business and enterprise, it has its place in travel and hospitality vertical. But what's mission critical, it's not only about revenue and the retail environment, it's about optimization. It's about revenue per square foot. It's about making sure that each aisle is activated in a way that can drive more products to sell.

In hospitality, if you mess with the guest experience, you're in deep trouble. So the ability to efficiently and intelligent roll out hospitality XR in our vertical is incredibly delicate and also incredibly important. Guest satisfaction scores are the cornerstone of a lot of the metrics in general about hospitality. So that's really critically important. But second to that is, let's talk about connectivity and let's talk about wireless connectivity.

Back to the Wi-Fi scenario. Wi-Fi 6, 5G. You know this, we've talked about this in the general sense, but in hospitality and travel, it's even more paramount. Because you have massive concentrations of guests, passengers, consumers who are on present -- so this is the present part of UgoVirtual's strategy -- they're on premise. They're interacting with the property, the destination or the cruise ship. Any solution that's deployed by us at UgoVirtual -- or anybody else in hospitality XR space -- needs to have seamless connectivity to make sure that experience is 100 percent, because if it's not a 100 percent because the connectivity is off, there you have the guest satisfaction challenges again. So 5G and Wi-Fi 6 is the massive enabler to this next generation of front-of-the-house and back-of-the-house solutions for travel and hospitality. It's a critical part of the success methodology for it.

Alan: Well, Michael, I really want to thank you so much for taking the time to explain how XR is going to be used for hospitality. If you look at just from the lens of training people, I mean, that alone is a massive opportunity for hotels. When I was in hotels, the training was not that great then. And it really hasn't improved since then. So being able to give people the opportunity to train at a higher level, before they even step foot into a property, I think is a really great opportunity for these organizations.

Michael: There's two quick things I want to add -- if I could -- to that from the back-of-the-house perspective and I'll be brief, is in our industry -- like many others -- the SOPs, the Standard Operating Procedures are mission critical. And like you know, we know, but maybe not everyone knows who's listening to this. People like Wal-Mart and FedEx and other major companies have made reasonable corporate investments in VR training, for example. And they have realized exponential ROI. Is that fair to say, Alan?

Alan: Yes. At least 10x what they've put in.

Michael: Correct. I wanted you to say 10x, because I don't want to be the hypester. You're the expert. So what I'm getting at is in hospitality, the ability to pre-qualify, pre-identify through the actual HR process of potential back-of-the-house staff to interact in the actual experience of implementing standard operating procedures and certain tasks -- at a hotel or a conference center or a cruise ship, for example -- is amazing, because you actually have ability to cull down to the best cohort of your applicants and then you can get them into the company and then you can train them very efficiently. As we know, with VR training, you have higher retention, shorter training cycles and major ROI. I mean, those are-- that's a winning scenario. That's really important. So the combination of SOPs with VR training and working with brands and working with travel companies from a UgoVirtual perspective, so they understand how to implement that on the back-of-the-house is definitely part of our mandate and our mission.

Alan: I'm really excited for the future of what you guys are working on. And I'll end on a quick story.

Michael: Sure.

Alan: You know how Marriott introduced VR room service, like VRoom service? So we actually pitched them on that, and they took the idea and built it, and then sent us one. So we got this briefcase where it was like a Gear VR and a phone. And it's like, "Look, VR room service!" I'm like, "Oh, great, thanks."

Michael: [laughs]

Alan: I was like, "Oh well, it was a good idea." But yeah, the hotels are really experimenting with these things and it's exciting. And hotels, restaurants, everybody will be impacted by it. So thank you again for taking the time to share this vision. Where can people find UgoVirtual?

Michael: Sure. It's ugovirtual.com, and in LinkedIn just search for "ugovirtual.com." And we are the travel and hospitality virtual solutions company.

Alan: Thanks so much, my friend.

Michael: Alan, a pleasure. And look forward to seeing you in the future at the next major event. Thank you for this time today. Appreciate it.

Alan: Sounds good.