In this week’s episode of AHIC Talks, Jonathan Worsley spoke with Jalil Mekouar, Founder & CEO of inHovate Solutions about the data challenges in hospitality and how his company uses data science, machine learning and A.I to help solve them. As properties across the globe look to optimise and stay lean, finding solutions like inHovate have become paramount, as it provides 360° degree optimization across all functions including revenue management, operations and CX through its suite of web-based applications – providing complete visibility into hotel operations.
Welcome to AHIC Talks, a podcast for the Arabian & African Hospitality Investment Conference: The annual gathering of the hospitality and investment community for the Middle East & African region. Tune in each week to hear our team at AHIC share insightful conversations with industry leaders and innovators in the hospitality and investment community. And now, let's dive into this week's episode.
JONATHAN WORSLEY: I'm delighted to have Jalil Mekouar, the CEO and founder of Innovate. Welcome Jalil.
JALIL MEKOUAR: Thank you, Jonathan.
JONATHAN WORSLEY: So Jalil where do we have the luxury of speaking to you today?
JALIL MEKOUAR: I am currently in sunny Dubai.
JONATHAN WORSLEY: Sunny to Dubai, and you just returned to Dubai from Toronto, I believe?
JALIL MEKOUAR: That's correct. 421 days of not traveling, being with my family in Toronto. It was great to be with the family, but fantastic to be back in action in Dubai.
JONATHAN WORSLEY: That's great. Well, nice to have you back in Dubai. And you have very successfully launched to Innovate during COVID. Tell us a little bit of bit more about how you've managed to do that almost entirely virtually.
JALIL MEKOUAR: Actually, completely virtually. Throughout those 421 days in Toronto, we've managed to secure some very prominent clients, we've managed to develop the platform, raise our seed fund, hired people around the world, from Asia, to Europe, to Middle East, to the US, North America in general. And all of that from the comfort of my living room, dining room, home office, garden and the likes with people working almost across time zones from the four corners of the world. So it's been an interesting challenge, but a fantastic adventure as well.
JONATHAN WORSLEY: Fantastic. It's really interesting how we've all managed to carry on with our businesses during this lockdown period. Jalil tell us a little bit about yourself. When did you actually get into hospitality?
JALIL MEKOUAR: I got into hospitality about 30 odd years ago, a bit more than that, actually. And then the last 30 years, swimming across swim lanes in hospitality, and about a third of my career with operators, intercontinental Marriott, not to name them; another third of my career with ownership groups in Asia in the Middle East. The last third with advisory asset management, valuations, 02:07 groups, brokerage firms across again, worldwide, but mostly covering the Americas, and also Middle East and Africa. So I sort of bumped and moved from swim lane to swim lane within the hospitality, and within the hospitality operations, real estate, finance, asset management, etc.
JONATHAN WORSLEY: So you're in a really good position in terms of understanding data, revenue management, in the hospitality space. So what is the problem that you're trying to solve with Innovate?
JALIL MEKOUAR: So the problem that we are solving with Innovate is a problem that I and a number of my colleagues in the industry have been suffering from the past 30 years and more for those who have been in the hospitality for more, which is our industry is really data rich, we generate a huge amount of data. But we are, I believe, and we believe that insight poor, whereby we really don't use that amount of data efficiently and appropriately. And we also very much siloed in our industry. We siloed structurally and organizationally, we have departments, we are siloed system wise as well, we are siloed on I would call it also horizontally between the owners and operators etc, etc. So we are a very siloed industry, we have very siloed business models. And therefore what happens is that all this data is really unutilized. And ultimately, those who are suffering from that is the investors and the operators because they are not having at their fingertips the information, the intelligence, the data that will allow them to make the right decisions, either operationally or commercially or investment wise. So what we've been doing traditionally in our industry is really to throw bodies at the problem. And more people, more analysts, more Excel, more crunching numbers and re-crunching them, and re crunching them, as opposed to being able to sort of access them centrally, and making much more sense out of it. So the one thing is the access to the information.
The second point that we're solving here is also the integration of all this data together and how one influences the other and the correlation between one set of data and the other one. One obvious example is the cost of doing business. So cost of bookings from different channels is very different. Everybody's talking about you know, net rate and how can we calculate our net rate? Well, we had an integrated set of data, we would immediately know what would be our net rate pretty much for every single booking that we will get and then be able to analyze that and make those decisions, etc, etc. So the integration between all these data sources is critical.
And last but not least, is the speed at which we access this information and the ease of analytics behind it. Because our human brain is obviously limited with the number of intake and input you can put into it, and the amount of output it will produce. But using technology and data science, to be able to crunch all this data, once it's available, once it's standardized, harmonized, homogenized, and once it's all integrated, so you watch what you do with it. And what you do with it, you need unique technology, and you need data science to help you navigate and extract the insights, etc. So we're combining human intelligence with regards to experience and expertise together with artificial intelligence, and then computer science and data science for us to be able to harvest all this data, but then make a lot of sense out of it and spit out and help operators, owners and asset managers, make those right decisions and break down those silos, sort of democratize the decision making process, as opposed to keeping that into silos, and therefore very, very inefficient.
JONATHAN WORSLEY: I can understand where the data is coming from, from big data, from STR, UNW, TOW, TTC etc, etc. But what about the data from hotel companies? And who has ownership of that data for you to be able to access it?
JALIL MEKOUAR: Yeah, that's a great question. Actually, all the data that the hotels accumulated through the various systems and as you know, there is more than a dozen systems that hotels use from the property management system, to the point of sale system, and the ERP and accounting system, and so on, and so on. All these systems that are implemented within hotels, and each one of them serve a specific purpose. Ultimate ownership is the ownership group of the hotel, the owner of the hotel. Now, the owner of the hotel gives access or gives the operator the right to obviously use this information. But ultimately, when the operator leaves the property, all this data is given back to the owners, because the owners own that. Now, I was talking about exceptions of this data. But when it comes to loyalty programs, these kind of sensitive information is owned by the operators, because this is sort of their loyalty to their brand. So any loyalty data that is outside of sort of what is consumed within the hotel belongs to the operator. But other than that all the other operational data is ultimately owned by ownership groups, owners of hotels. So they can absolutely collaborate with operators and have access to this data. And for that the way Innovate works is that we, on behalf of our clients, and it could be operators, owners, or asset managers, on behalf of those clients, we would connect to those hotel systems basically pump out all this data on a regular basis, weekly, monthly, daily, whichever. And then with this data, build around it all the analytics systems and our engines to provide the output to the client.
JONATHAN WORSLEY: And how many data points are you obtaining from hotel companies today versus what the hotel companies were obtaining in the past.
JALIL MEKOUAR: That's also very interesting. So if you look at just the property management system, and you look at software, like revenue management systems that actually pump some data from the PMS with the property management system to predict what rates you should be selling your rooms in the next few days, weeks and months, those RMS or Revenue Management Systems use about 30 fields of data from the property management system, 3-0, imagine 30 columns, so to speak. We actually extract from the PMS 600 fields of data for each reservation out there. So we extract as much as anybody could and that provides us a extremely deep data pool to utilize to provide analytics. And that's only on the room side, then we have on the point of sale system, which is on the F&B side, and the accounting side. So all together, we're talking about 1000s of fields of data points that we are extracting from all those systems internally, plus the data that we get from outside, which is a lot more even.
JONATHAN WORSLEY: One of the challenges that we had when we launched the bench in 2001, which we merged with STR in 2008. We started working on the food and beverage side. So we had a food and beverage bench. And one of our challenges was having too much data. Because of that it was difficult for the operators to actually use it as a management tool because of the abundance of data. How are you managing that and how are you providing for a system that helps the revenue managers get the concise and correct information.
JALIL MEKOUAR: Well, that's also where artificial intelligence comes into play and data science. Obviously, if we have too much data and you don't have the right systems in place to be able to extract the insight from it, you probably end up in a sort of paralysis by analysis situation where you have way too much data to deal with. And that's precisely why it's important to understand the ability that data science brings to the table, as well as using the right technology, and in particular, artificial intelligence to be able to decipher this data, and really just extract from it the juice and what's critical and what's important. And we use a supervised machine learning and it's supervised, because you need experienced people, people who have hospitality experience to be able to feed and direct the system and the machine on where it should be thinking and where it should be looking at. So it's really a combination of human intelligence based on the experience and expertise of people in the field, together with the power of data science and artificial intelligence that helps us, focus on what's critical and extract the key insight from there.
JALIL MEKOUAR: How many hotels do you currently have on the system?
JALIL MEKOUAR: So we are currently are deploying about 150 hotels in 14 countries, and that's across 20 different brands. And most of the international brands are represented into the portfolio of hotels that we are rolling out.
JONATHAN WORSLEY: What's your biggest challenge at the moment in obtaining new clients?
JALIL MEKOUAR: Really, I think it's the mindset and the change of mindset. I was talking to tech people that are involved in many different industries, they consider hospitality as one of the sort of the slowest to adopt, I want to call it not technology in general, but specifically data oriented technology, I guess. Financial world has embraced that a while ago, and we see how efficient they are. So I think it's really the change of mindset, and that the industry needs to go through and precisely in recovering from this horrendous crisis that we are in just experienced, is a mindset of looking at how can we be more efficient? How can we use data intelligence to our benefit, and not being scared? And I've heard from some industry colleagues saying, well, are robots going to replace us in managing hotels? And all that? The answer is absolutely not. Technology and data intelligence and data science, and all of that is going to help us be better hoteliers, because then we can spend more time on doing what we do best, which is serving the clients understanding them and forging partnerships, as opposed to spending too much time in sort of preparing reports and understanding, trying to decipher them and all of that. Let the machine do that and let's move on with doing what we do best in hospitality, which is being hospitable and doing our job as hoteliers. So I think the mindset to change is, I don't know if I would call it a challenge, but certainly something that is critical to work on with the industry colleagues, for them not to fear. The wider use of data intelligence is an opportunity, not a threat, and a massive opportunity in being first to market, faster to market, much faster to react that will improve your customer experience. Because we will know better what to do for our customers, will improve our profitability, will improve our the happiness of our staff, because then they will do work, which is a lot more exciting than just crunching stuff, numbers and trying to prepare reports. I only see opportunity all over it and some people see a risk, and they see a risk for themselves. So I think that's the one thing that that I would hope that we would sort of evolve and change slightly our mindset in the industry.
JONATHAN WORSLEY: I'm sure it's the biggest challenge but also the biggest opportunity as well not just for the hotel industry, but also for destinations as well. Because if we can enrich destinations with data, then we can evaluate what works and what doesn't work for destinations much more effectively than we have in the past. But the holy grail for you really must be maximizing profitable revenues whilst minimizing customer acquisition cost.
JALIL MEKOUAR: That's absolutely correct. Yes. And bringing value to our clients is really what we're working we're aiming for and that's what drives us every day. It's really not about having one more system, it's in making sure that the use of this platform that really integrates the information and data from all other systems does add value ultimately, and by improving customer experience and increasing loyalty to reducing costs, to improving revenue, and ultimately, obviously, impacting very positively and enhancing asset value, and return on investment. And that's, to me achieving that is our main objective and that's what we live and breathe for.
JONATHAN WORSLEY: You must be providing predictive analysis for hotels, particularly during this time of COVID. Because the historic data is somewhat irrelevant.
JALIL MEKOUAR: Yeah, that's a very good point. So we are currently working on developing a predictive model, where we are predicting, but not only revenues, but expenses as well, and the revenues at a very, very granular level of detail and information. So yeah, so we are working on that intelligent predictive engine and that does not necessarily only rely on the past, but looks at also future trends. And the idea is really to have a model that almost zero basis yourself all the time, rather than say, I'm going to look at last year plus 5%. Rather, look at what's out there, what's possible, and how can I get my share out of that? And where are we going in the future? And that, to me a much more reliable and sustainable sort of predictive model than looking in the past.
JONATHAN WORSLEY: Excellent. Tell us a little bit about your journey at the moment, in terms of fundraising, where you are since you've launched Innovate. How is progress today?
JALIL MEKOUAR: Well, I have been blessed to have really amazing investors that have come on board. So we've recently closed our seed round, and we've exceeded our target by I think, 60 to 70% even, and we've accepted those because they're just amazing profiles from from amazing companies. So we have some of the largest private equity firms, I mean, individuals that have been or are executives from top notch private equity firms like Blackstone or from investment banks like Lazard or Deutsche Bank, or from the Big Four like NY, or from bench. Some of the amazing conference and media organizers, and others. So we've been really blessed to have those great supporters from those amazing organizations. And then we are looking at, obviously progressing towards our series A Funding sometime next year, probably sometime early next year. And there's been huge interest into the platform, into the business model. So we are very confident about continuing our journey in that sense.
JONATHAN WORSLEY: Well Jalil, thank you so much for joining us on our AHIC Talks. What a fascinating discussion we've just had with you, and very much look forward to having you participate at AHIC in September, where we're going to learn more about your journey and your successes to date. So many, many thanks, Jalil, for joining us on AHIC talks.
JALIL MEKOUAR: Thank you very much for having me and very much looking forward to AHIC which is definitely going to be the best ever as every year it gets better, but very much looking forward to that. Thank you, Jonathan.
Thank you for listening to AHIC Talks, a podcast for the Arabian & African Hospitality Investment Conference. For a full transcript of this conversation, along with other reports and insights visit AHIC-dot-com. We look forward to welcoming you and your colleagues live and in-person at AHIC in Dubai from the 20-22 of September 2021. Register and purchase your pass today at AHIC-dot-com and save on the Early Bird Rate. For any questions email us at Hello@AHIC-dot-com. Until next week, stay safe and keep well.
Published 04 July 2021