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Hotels explore contactless tech to combat coronavirus spread

Enseo CEO Vanessa Ogle joins Yahoo FInance’s Zack Guzman to discuss how the hotel industry is using technology to combat the spread of the coronavirus.

Video Transcript

ZACK GUZMAN: Of course, we've been covering extensively the impact that a lot of sectors have been dealing with as coronavirus continues to spread around the country. And it's tough to think of a more hard hit sector than the hotel industry. And today, we got the update from the CFO of Hilton speaking with Yahoo Finance, talking about ways that they're trying to make guests feel comfortable in staying at the hotel chain.

One of those ways would be including a seal on the door to make sure the guests feel safe in the way that their room had just been cleaned, that they're the first entering it. But a lot of other hotels are shifting into contactless check in processes and making sure that people can actually get into their rooms without those issues at all.

For more on that, I want to bring on Vanessa Ogle. She's Enseo CEO, a company that works with some of the largest hotel technology companies in the world to make sure that contactless check in processes like those can be very smooth. Vanessa, I mean when we look at the technology itself, it seems like an interesting time for a hard hit hotel chain to be thinking about investing in something like that.

But it seems very necessary at this point we think about how fearful so Americans might be. What have you been seeing in the way that some of these chains are shifting to focus on that tech front now?

VANESSA OGLE: Well, you're right. It is a very difficult time to think about new investments, but it's critical. And the hotel industry is on the forefront of trying to understand what can they do to bring guests back into these properties and get their properties back up and running as quickly as possible. Contactless technology is one of the ways that that's happening.

And that's happening on two fronts. It's happening for the guests. How can the guests come into the guest room and touch as few things in the guest room as possible, such as using their phone as a remote? Many of us have seen the check in possibilities for using your phone as a remote and opening the door using your phone as the key.

But now, that's expanded into we've launched a new product that allows you to use your phone as the remote control for your entire room to control your television, the thermostat, the lights, the shades. And so, being able to remove those contact points as much as possible.

The other side of that, as you mentioned Zack, is on the check in process so that when a guest comes into a hotel-- kind of turning it from-- it used to be luxury was high touch. Now, we're really thinking in the hospitality world that luxury is about my touch. I want to touch another person when I want to, but not unless I am ready for that.

And so, offering some non personnel involved check in much like I'm talking to you now without us being in the same studio, can I have a live check in procedure where I actually have an interaction with a human that's a real human that can listen to me, and hear me, and care about me, but also do that without any kind of germs exchanging place. So there's technology available that's being launched in trials to have remote check in with a system very much like what we're using today.

ZACK GUZMAN: I mean, you guys obviously as one of the largest tech companies you're working with these hotel chains-- obviously, you work with Hilton and Marriott. We saw Marriott, though-- they gave the announcement today reporting a 92% slump in profits for Q1 as bookings plunged. Again, not a lot of people are very excited right now about the idea of staying in hotels.

So since you've been working with some of these hotels for so long, I mean the trend line I assume had to have come off just as quickly as we saw profits come off in terms of working with companies like yours to actually invest in the future here. Have you started to see, maybe now as we're talking about this, an uptick in maybe interest in really addressing that underlying issue of safety?

VANESSA OGLE: Yes, and we've seen both. So we have some interesting data to pull from. As we have about 2,000 hotels that we service as a technology provider directly and then another several thousand hotels that we do indirectly. And what we've seen is that originally out of those 2,000 hotels, approximately 20% of them they closed.

They literally closed their doors because there weren't enough guests to keep them occupied. But of that 20% that closed just in the last week and a half, 15% of those have come back and asked us to reopen them from a technology perspective. So we are seeing an uptick. We're seeing an uptick in hotels coming back alive from an opening perspective.

We're also seeing a significant uptick in occupancy rates. And now, the numbers that we're seeing a significant uptick and we're talking about 1% or 2% a week improvements. Those might may not seem like a lot to you, but going from single digit occupancy to double digit occupancy is really the difference from these small hotels and the small owners being able to be open or closed.

So we're quite positive and we've seen some positive trends over the last group of days. So we're very hopeful.

ZACK GUZMAN: I mean, I'll take it. We've been talking about green shoots. Even counting a 99% cancellations at OpenTable and you think about how much they've seen reservation fall off. Even just a 1% tick higher is still a green shoot. I don't want to discount it. But you yourself are actually a small business dealing with this, as well.

I understand you applied for PPP funding and got it there, too. And we look at how you've been dealing with staying afloat here. What was-- I'm just curious to get what your process was like.

VANESSA OGLE: Well, it was hard. So the first thing we had to do was to understand how could we survive to be on the other side of this without understanding how long it was going to last. So we made some really hard cuts in personnel. We did a layoff. We did furlough. We were able to get the PPP funds.

So once we had that PPP money in, we went back and brought back all of our people who were available to come back. We brought them back. We have them onboard for another three or four weeks. And then, we have to understand are we able to get the main street lending program which might extend our runway even more and keep all of our people employed for even longer, or do we have to go to other measures?

So there's cost cutting, which was one half of it. The other part for us-- we're lucky to be a technology provider, not just a services provider. So we could think about how do we take all of our technology teams. How do I let my propeller on my propeller head self go at full speed?

And let's do some new innovation and new ways to communicate to guests why it's safe to come back, to help make these rooms safe to come back, integrating with other third party products. Hilton has one answer. Marriott has another answer. Four Seasons has another answer, but they all have to keep track.

They all have to-- is this room clean or dirty? Is it sanitized or un-sanitized? Some are going to use a sticker. Some are going to use technology for that. And some will use a combination. For example, the idea of contactless check in or not touching a key and using your phone is great, unless you don't have a door lock that's already installed that allows you to do that.

ZACK GUZMAN: Yeah, I mean there's a lot of questions and a lot of different solutions out there in terms of how you going to do it. And I think the market's going to let all those operators try their hand at it. But for now, we'll leave it there. Vanessa Ogle, Enseo CEO. Thank you so much for breaking that down for us. Appreciate it.