Human Touch in Hotel Tech Evolution With Bernard Tan

Speaker A: Welcome to the Lights on podcast featuring stories behind building and running successful hotel businesses. Let's get started. Welcome back to the LightSun podcast. I'm um Khin Seu, CEO of LightSan and your host today. Uh, I also have my co host, Kerry Brown, today, VP of Commercial Strategy at Lightson. Uh, for our special guests on this podcast, we share stories across hospitality about building and growing hotel businesses. This episode is sponsored by Lightson. Lightson helps hotels grow revenue more consistently by managing pricing, distribution and digital marketing. Together, we help hotels identify new revenue opportunities so they don't leave money on the table. We also run the full revenue and marketing operation so the team on the ground can stay focused on the guest experience. If your hotel needs more revenue growth, visit Lyson Co to learn more. Our uh, guest today, Bernard Tan. I'm so excited finally having Bernard here. Uh, he is the chief Commercial officer at castle. We saw SEN hotels with properties across five Hawaiian Islands and New Zealand. Bernard has spent 20 years of hospitality and consulting experience and before Castle held multiple leadership roles, uh, across revenue management and commercial strategies at companies like Aston Hotels and Resorts, Four Seasons Resorts in the Night, and spent years doing independent hospitality, uh, consulting and uh, big shout out to Dan Waxman, also from Hawaii, for connecting me and Bernard to finally having the opportunity, uh, to have Bernard here today. Welcome to the show, Bernard.

Speaker B: Thank you so much for inviting me.

Speaker A: Yeah, so first question before about you, so Castle, for um, listeners who don't know about Castle Resorts, can you walk us through what you are managing today at Castle and what makes this portfolio different from, from other hotel management companies?

Speaker B: So Castle has been rooted in Hawaii for the last 35 years. Locally operated, managed and owned locally. Um, with 19 plus properties across hotel portfolio, hotels, condominiums and vacation rentals in five major Hawaiian islands, including the island of Molokai and also New Zealand. So we operate a full set of hotels, um, um, condominiums and also individual vacation rentals. And so those are our portfolio and we are currently, um, expanding and picking up our properties as we go, be it condominiums or hotel properties.

Speaker A: Yeah, and um, some of the questions, uh, today is definitely, uh, uh, about the variety and the differences because, uh, you guys do managing very um, properties and uh, type, you know, they're very different. Right. So we're going to have more questions about that. But, uh, before we get to the nitty gritty, uh, let's talk about yourself. So starting as an accountant that is like way different than commercial strategy and webinar management. Uh, you know, it can Be like, you know, that, you know, different. Um, what made you kind of leaving that career of uh, you know, in accounting and jumping to hospitality?

Speaker B: Actually I've always wanted to be in hospitality. So when I went to the Nanyang Technology University in Singapore so I promised my parents that I was going to do bachelor accountancy thinking that the school is going to open up a hospitality school in two years and Auschwitz then I was disappointed that decided not to open the program. So I left the school. It's uh, you know NTU in Singapore was kind of highly rated, pretty much an Ivy League accountancy program, kind of hard to go in. So when I left everybody was very shocked because I was one year to graduation, I walk away from the school and came to Hawaii to do um, car, uh industry management and then I finished that in two years and then after that I say hey you know what if I, if I do just travel industry management I really need good, I really need good analytics and things like that for marketing etc. I say hey, why don't I just finish my accounting? So I went, I went back to school right away and did my MBA in accounting, uh, concentration accounting with uh, CPA focus. So I went ahead and did my um, what do you call that? Uh, I did the CPA exam and I, I'm not going to tell you when I passed that because that was a very long time ago. So I, I did pass a CPA exam but that actually gives me the foundation in able to talk to so many different people within the business in terms of it, accounting, finance, even lawyers and attorney. So because I, I took um, I, I took three semester works of contract company and business law in Singapore.

Speaker A: I see.

Speaker B: So I always like, I um, always love the hospitality industry. It's so different. It's so people centric and it's also one, it's also one of the most underappreciated and underpaid economy, um, industry. Right. So that's what I believe that um, we can do better in the industry.

Speaker A: I see. And you sound very uh, convicted about this industry. Before you went to college were there any moments growing up that made you very passionate about this industry and makes you so like I really want to get into this industry uh, you know, for college.

Speaker B: So before I even go into the mandatory military service in Singapore, I spent about, let me see, I spent about three years working in the Changi International Airport inside the transit area, uh, working in the transit restaurant, uh, in counter service and also uh, dining sit down dining services and servicing business class and first Class. I really like the idea of being free. Right. Because you look at airplanes every day and you just have a feeling of, hey, you know what? It's kind of interesting that, uh, not interesting. It's very inspiring to see people, to be able to. How airplanes fly and things like that and just give you so much the idea of freedom. Right. So that's. To me, the freedom is one of my key things that I need freedom and I want freedom.

Speaker A: I see. Uh, well, hopefully now you're just flying business class every day, just like, you know, just like how you imagined years ago.

Speaker B: I actually to tell you that I love the industry so much that most of my research paper, whether I'm doing English paper or whether I'm doing a business paper, it's mostly about the airline.

Speaker A: I see.

Speaker B: So I want to give. I want to crack a joke. I wrote my English120 paper on why airplanes crash. Yes, I did a research paper. I did a paper on why airplane crash. I also did research, uh, on the reorganization of Hawaiian airline from bankruptcy, et cetera. So I did a lot of papers on the airline industry, but I didn't end up on airline. But it's just kind of like. It's a busy. But I also did my uh, my, my professional paper on mergers and acquisition in the hospitality, uh, industry. What kind of value it creates and things like that. That's my underpage professional paper.

Speaker A: We have to uh, take it up and put in the show notes so people actually see all the post work that you did. Put it on my to do list.

Speaker C: Cool.

Speaker A: So kind of, you know, from, from that, you know, uh, bring back to, uh, the more recent. Well through all your career of, you know, webinar management, commercial strategy and all that. I think, um, earlier when I knew you, uh, one thing that you said really struck me, uh, and I definitely want to have this opportunity to talk about it. You mentioned that revenue, um, management nowadays is all about distribution, which, uh, I think is still in some way counterintuitive from uh, many of the professional. Right. So, um, why don't we talk about that, uh, for a bit. And what do you mean by that?

Speaker B: I think. Let me think about it just for one second. I think revenue management, it is about distribution, but I think distribution is only one portion of it. And I think Carrie can speak a lot to that too. Because they are not mutually exclusive. They need to coexist at the same time. And revenue management is far beyond because people talk about revenue optimization. I mean, revenue management is the whole encompassing of everything in There and then commercial strategy is the overall thing. And then I always talk about a three component of commercial strategy and revenue management or optimization is one part of it, distribution is one part of it, and the other part is what they call digital. And a lot of people refer to digital as just um. I'm not sure what I'd say is correct. This is my opinion. A lot of people refer to digital and they think about it as oh, digital interaction with the guest, digital marketing, etc. Right, Carrie, People talk about that. I thought of a digital a little bit differently too. Now we need to start to expand digital to talk about digital enablement, right? Digital enablement. So then you start to have to bring in digital technology or marketing technology and things like that. How do you adopt, uh, digital embrace and push out technology that is enabling an enabler for you to be able to reach to the guest, the guest touch point and what is the guest going to do with those? Digital enablement, right? So digital in itself is very, very huge in the whole part of the commercial strategy, right? Distribution is one part of it. How does digital going to enable your distribution to be done more frictionless, more seamless? And I mean we talk about, we talk about direct connectivity. You know, when I first interact with direct connectivity, I can tell you when it's 2001 post, September 11, November, I went to the, uh, I don't know when I went to, but somewhere in New York City and then they were having some kind of show and that was then. They talk about direct connectivity. Can you imagine after 24, 25 years later and we're still talking about direct connectivity. It's almost one quarter of a century and our hospitality world is still dealing with direct connectivity. Where are uh, the pharmaceutical and the banking and all those industries? They are way far, way and beyond that part of the world, right? So the whole digital enablement is a critical part of revenue management and commercial strategy. So it's the part where people talk about, hey, what do I need to do? I mean it's no longer just um, selling this channel, not sell this channel, adjusting rates and things like that. There is so much distribution, there's so much complexity in the B2B world, the B2C world, the B2B world. And with the recent explosion of AI, right people everywhere we go is everybody say AI this, AI that. And what do you mean by that? I have to ask the vendor, what do you mean by AI in your world? What does AI mean? What does that mean? What are you driving to uh, and kin and I has A very spirited discourse on AI. Uh, and I'm more always, um, ah, critical about adoption and pushing things out because there's always, uh, you know how in Chinese, I'm going to use a Chinese idiom, right. It's like the thunder, the lightnings are huge, but the dreams of the raindrops are very minimal, very small. Think about in the past on how voice recognition, voice technology was supposed to fly, right? Fly off the shelf. But Carrie, did it actually fly off the shelf? No. So right now I think we're in the explosion stage of AI and I do believe that there's a lot of consolidation going on. And also we have to think about the workflow and also the value creation within our process. In commercial technology, what is it that we can achieve efficiency that AI can do? And what is it that we need human instinct and human interaction to be able to do so? So revenue management has evolved into such, um, a part that, you know, with um, you know, shouting out the hsmei, right? Hsmei has the CRME certification and then, and also the um, digital certification and things like that. So I'm wondering whether the CRME and the digital certification maybe need to be revolution, revamp within a few years to say, hey, really, revenue management is really not about revenue management anymore. And how do you take all those different components together, right? I mean I can, I can give you an idea to say, hey, is there such a thing as exclusivity anymore to any supplier? I mean to any intermediary party? I mean it's like, it's like, so what do we need to do as hotel supply, as hotel supplier or accommodation supplier? Right? Can I really give something to someone is truly exclusive? I beg to differ. I don't think that ever existed anymore. So what do I do with um, distribution, uh, partner one and two? How do I work with them making sure everything is on the same platform? And I do want to mention something which I'm very passionate about right now, is the whole thing about rig parity. So the distribution partners always hold up to rig parity. But I also want to remind every, uh, team, rate parity is really about sell rate parity. The sell rate parity. But what we're really missing is there hasn't been a net rate parity. We can't hold any other partner in compliance of the net rate parity set because they can, hey, I decide not to make that 15%, I'm going to make 10%. Then we lose our pricing control. And at 5%. And when something happened like that, it Disrupted the whole equilibrium entirety. And right now I believe this is what a lot of hoteliers are facing right now because of the different preferential pricing that exists in the distribution world. And there's so many onward distribution and B2B relationship that it's almost impossible to put the responsibility on supplier. I think not to say that we are kind of like innocent, but it just opens up a whole new can of worms in my view.

Speaker C: Agreed. Question, Bernard. Actually, as we talk about the complexity of the commercial landscape and B2B and parity, do you think that the job description of a revenue manager is going to evolve with all of these new things that a revenue manager, a revenue director is now, you know, being asked to take into consideration is part of their job?

Speaker B: I think what we have been actively trying to recruit and trying to train. Okay, first I'm going to say the school does not prepare a student agreed. In place for a revenue management role or even a hospitality world. Right. Everybody thinks about hey, we have this nice job, cushy job, right? You get fly from one place to another place and then you know, work for nice hotels and things like that. But in reality that's really not the case. We kind of like look into Harry, you know this really well, right? I mean forecast, you know, biweekly forecast and then you slouch through and get the numbers, etc. It's not like everybody saying, hey, press a button, the forecast just shows by itself, right? But it doesn't work that way. And then because there's always some human elements, there's always something that the knowledge that the data only gives you so much. So I think in terms of how really what I'm looking for is I'm really looking for commercial performance optimization person. It's no longer a revenue manager. I mean I'm kind of like going to post a new job, I'm actually writing it out. It's really a commercial performance optimization, someone that can focus on how do I optimize the commercial performance on assigned property. And what does that mean? That means that not just third party but direct businesses and then covers the component of the different part. And I know I'm not going to get the person that's going to check through everything, but if I get someone kind of have good revenue management experience, understand what digital is and have a good understanding distribution, then we can train the person and we can bring out the person. And I believe that HSMAI is trying to do in the direction with whatever they need to do. But internally, um, I hope the Local HSM AI can focus a lot more on having. I know it's like you're taking this um, I call it the donut.

Speaker A: Right.

Speaker B: The middle is really the power. But the three portion maybe do a series of three separate workshops to talk about what does, what does, what does uh, what does distribution mean, what does revenue management mean and what does uh, digital means in those areas and have expertise. And then maybe do a series of uh, workshops like that and then do a bundle discount. If you register for three, you have a good discount and a separate one of those. I think those are the things that people would like to do. It's not about trying to train them on um, skill sets or things like that, but it's trying to have a deeper understanding. And then I would also encourage the local industry to extend those shops workshops to maybe even just the hotel partners willing to sponsor high school students or even willing to sponsor university students that's willing to attend those kind of shops so that we have a continuing stream of university uh, graduates like Carrie. You know what I mean? Right. Right now it's.

Speaker A: Yeah.

Speaker B: So it's having that student. We're not trying to, we're going to try to at least mentally prepare them. What's coming, of what's coming into the industry. Right. I know I usually talk a lot, but that's what I'm very passionate about is educating the next generation.

Speaker A: Yeah. And you know this is the part where um, you know the revenue management and optimization professionals always are going to the big corporations. Right. So for listeners out there, uh, because we have a lot there more like the smaller owner operators, hotel, um, hotelier type where they don't grow up in the industry knowing what distribution and revenue optimization really mean in the context of hotels. So if I were to draw an analogy, uh, it's like somebody making really tasty ice cream. I think this is where uh, people trying to make the best experience. Ice cream makers, they want people to taste the ice cream. Uh, they believe that they make the best ice cream in the world. So now you have the product, you have the ice cream. Now how are you thinking about uh, selling the ice cream to consumers? Obviously you can start your own ice cream stand, ice cream store. Most people start with that. That's kind of like the direct channel when thinking about hotel booking directly in the over time. If you want more reach now you start thinking about oh, how can I get my ice creams, uh, get them sold in a local Target, Costco, Walmart, just all these different grocery stores. Right. That's really kind of thinking about that distribution you know or to uh. The hotel industry. You know when you start selling uh your room and inventory and experience through different you know, OTA channels, right. Expedia, booking.com, your direct website groups and things like that. So it's kind of like uh. That where now when you have more different storefronts and distribution network to sell your same product now that gets to different pricing, different margin, the differences between where you sell depending on when and what. And hey ice cream being very seasonal, right? So selling ice cream winter versus summer. Now you might think about how pricing will be different because people tend to eat more ice cream during summertime. So this is kind of like how uh. All the revenue and distribution professionals in hotel thinking about ways to distribute honestly the hotel experience the rooms to a vast complex network of ah. Distributions through different partners and websites and whatnot.

Speaker B: Uh, one of my um. Cornell homework uh that was a long time ago. Cornell homework was. Have we ever thought about this is revenue management to the max, right? Think about uh. Soft drinks vending machine. Right? Carrie, Think about soft drinks vending machine till the beginning till now. It hasn't really adopted the revenue management technology. Right. The pricing differential only differ because based on whether it's ala moana or whether it was something else here. Right. So it's something that. But yeah. But hasn't it even considered what is the current outside temperature? As the temperature goes up the cost of that cook should go up too if the temperature drops. I mean I'm just oversimplifying things, right. The urge of people. Right. But since 20 years ago I took that class and had that uh. Homework question really hasn't. But why is it not being pushed out? Because there is no willingness for the supplier to push in that direction. Because they haven't ascertained that there's incremental revenue they get from there. But there's also the elasticity on the consumer and it's going to be more of like the gas that is going to be price discriminated. It's going to feel like much more taken advantage of. Right? Versus an airline seats versus a hotel versus car rental. We all take that as normal based on seasonality and things like that. But certain things that you don't see. Uh, you don't see. Um. So this is another thing that I was looking at. Sorry, I'm just going off topic. But if you think about why does supermarket went from uh. And Hawaii is really behind. Okay, I'm going to use give you kawaii is really behind. But in all most Asia places I've been to all the price tagging about what the groceries and what the items in the supermarket stores are no longer hard coded. There are a lot electronic display so you can adjust your pricing almost in an instant. Um, rather than having to use the printout tag, you know, say how they print out tag. Right. But that's also. They can actually also really respond to changes in demand really quickly because based on supply and demand. So. But where are we in terms of the hospitality industry in terms of that? I mean if you look at my, um, if you have the opportunity to. We. It's not that we're lack of innovation. Our uh, biggest problem is really integration. So many things. I mean let's talk about just independent hotel independent properties, right? Um, the big brands. So much easier. A lot of things are much more easier. It's not easier for them. But in a hotel, in the independent world, we have to fight a lot of things. We have to make sure things. But listen to this um, um phrase. And it's almost nobody even talk about it right now, right? It's called single image inventory.

Speaker A: Right.

Speaker B: Back in those days, single image inventory. And then for me it's just like, hey, we just decided what's the latest, what's the latest talk of the town where the wind blows. Right? So mainly to you is it was parity. Parity is too big. But nobody talk of a single image inventory anymore because it almost never existed in Myla, in the independent hotel. Almost never existed. I mean, so it was like it's a nirvana stage that you want to have single image. Because our distribution system is so complex now and it's so fragmented that we have to decide.

Speaker A: Yeah, well let's, I mean you say a real life example, talking about the messiness of um, the distribution and the technology. Right. Because I went. You arrived at Castle. Right. I think from our past conversation, uh, what I understand is your first task really is to map out 19, uh, plus properties. All different technologies. They're not talking to each other. Uh, we can't even call it ecosystem because there's no connection between all of these at all. Right. So just um, talking about. We are kind of, uh, lots of theory just now, but now kind of getting into the task at hand. When you arrive at Castle, what did that look like when you first came in? What did you find and what's your thought process of uh, essentially fixing that to be closer to the nirvana state that you just mentioned?

Speaker B: I think I would want to maybe Correct something that you said. I don't think it's um. So the first thing that I did after 90 days in a company was hey you know what, let's put together an ecosystem, look at the whole evertext that the ecosystem. I don't think that the system is not talking to one another, but I don't believe that's the right statement to make. I think the right statement to make is there's some complexity in the ecosystem. It may be not the most efficient. Right. So the way that we're looking at it is how do we look at it? How do we digest in that whole ecosystem? I think Casel has always been very well known for the ability to manage complexity. Kind of maneuvering around different property management system, central reservation system, distribution system, different form of reservation, different form of type, uh, of reservation. I mean I know Castle is well known for the ability to, to move into hotel system, condominium system, VR system and making sure that both system coexist to be able to distribute type level availability and also individual key level availability. Right. That in itself to me is a very complex uh, aggregation and distribution system. If you look into the world of uh, technology in the hospitality side, on the hotel system side, almost no system can do, can do it. I know of one system but doesn't. Is that, is that what. You only have one choice. But then if you look at vacation rental, a lot of system can do it in a key level but they are very clunky or clumsy when you try to aggregate them and do on a type level. Right. So really depending on what you want to do and things like that. So Casel has always been taking um, the pioneer stage in trying to say hey, how do we better manage those? And we're still learning as we go for the last decade or so and we're perfecting each and every steps as we go about. So we're trying to say hey, you know, what's uh, our return on investment doing it this way? What is our. What, what are we doing it this way? I think at ah, this junction revenue management. And I'm not trying to make things complicated. I'm circling back to revenue management, revenue management and commercial strategy, et cetera. With that uh, with the Avana AI right now it's really going back and taking gas as the gas centricity, right. It's going down to the gas touch point. So AI has collapsed the uh, amount of guest touch point from the initial inspiration to search to whatsoever maybe collapse it to a step, single step that and then Ken can talk to it, right? He will write the cloth and say, hey, I want to go on family vacation, blah blah, blah, blah, blah. And then it's going to come back with giving you the option. So can you imagine all those, so many stages has been collapsed into one, right? And then at that junction, how does AI decide what to show to the guest, the customer? At that point, it's no longer a one dimensional or two dimensional look to say, I just need to make sure that my schema data is correct. My this is correct, my data is correct. So it's become a very multifaceted, multidimensional search in a way that you need to make sure that. And I want to reference. Carrie know this really well back in the OTA days, sorry Carrie, but in a way that they talk about, they talk about, uh, content is king, right? Yes, but, but the content right now really evolves to all those interaction. The, the messaging, the real content, the video content, the, the review content, the ratings content, the photos content. There's so many things right now, right. So I wish someone would come up with a technology and kin, I'm looking towards you that can help us to manage everything in one sitting.

Speaker A: We can definitely talk about that offline. Easier said than done. But I think there are ways. To your point, right? In the final stage, I think to me everything is a spectrum. Anything that we can inch forward closer to the goal is a benefit. Uh, so not necessarily a binary thing like is it 0 to 1 tomorrow you're going to get to this day or not? But I think there are many steps along the way. Uh, to your point, complexity. I think when we find ways to break down the complexity and trying to solve that one by one, uh, there are ways to gain efficiencies and productivity through that process.

Speaker B: So ultimately, who has the power? That's my question now with the AI world. Who has the power to put in front of what the guest is seeing? Because on the OTA side they have different factors that measure visibility. Right? All the different factors and offer strength. In this particular situation, is the AI even considering the offer strength or is it just, uh, is that a pricing thing? I mean, who is the one ultimately deciding what is going to be presented to the guests? Who write that script, who defined that this is a, ah, um, um, I know the answer is to start with a G, but you know, and that way at that junction, right? So nothing is free. I'm going to tell everybody. It's really like whoever can monetize the whole AI process is going to be the one that's going to be charging everybody alarm and leg within the next year or two. So then we're no longer, you know, the whole ppc, search engine marketing, et cetera. What is it going to become? It's just not. AI is not going to be free. I guarantee you. AI search et cetera is not going to be free. Whatever we are investing in Metasearch, whatever we're embedding in search engine, it's just going to get invested into another channel.

Speaker A: Yeah. Uh, one recent case of this, right. We are now uh pushing and from our clientele we talk a lot about the AI Chatbot unsigned engines optimizations as a layer on top of the traditional search engine optimization. There are overlaps but uh, there are new techniques and ways that we have to adapt so that the uh, nirvana go is always when somebody going to an AI chat bar, uh, asking for trip planning. We hope that our clients will show up to those results. Uh, it's still a black box right now. That's not to a point where we will have all these proven best practices, the SEO days because that's been a practice for the last two decades versus now AI. Uh still week over week there are just so many new changes that people, we are still spending lots of time doing research and development and trying to find the best way. But uh, it's a huge cost not to take actions. Uh, there's no one right answer to what is going to get you for certain being the top result by the AI answer. But uh, if anyone is not doing anything right now, certainly they're going to be left behind.

Speaker B: Yeah. And sometimes I wonder about the research. Right. I mean I started off in a research world too King. Just so you know, my initial one to two years, uh, I did a lot of research on numbers etc. But I wonder when they report so much percentage of people is using AI or whatever to do for travel search, etc. I, I'd like to look into those a little bit more to say how valid are uh, those research and what findings are those based on? Because they say the same thing about voice back then, right?

Speaker A: Yeah.

Speaker B: I mean if they tell me that 40% are using AI to search for this and that, I don't know actually

Speaker A: just borrowing a case studies uh, from other industries. Alexa for Amazon.

Speaker C: Right.

Speaker A: I think there's a big uh, premise that Amazon was pushing big on default first search thinking that when you put an Alexa into everybody's home people can be start uh, shopping and actually submitting orders through the force Experience which in reality uh, is a flop. Right. People uh, still have that stigma or uh, the hesitancy to um, place the final order through that they might be using that for discovery. Which we all know all consumers right now are using AI as a way to discover, as a way to plan out their trips. Uh, I don't think consumers are ready at this level yet where they are willing to have AI to also make the final push decision. So I think there's still uh, I don't know it's going to be like a forever timeframe. But I think uh, there's still a time frame where the ultimate purchase decision, uh, consumers still like to hold that onto their hand and actually do that transaction. Whether it's going to be OTAs, whether it's going to be direct websites. I think uh, consumers still taking that result from the AI research to make a decision which uh, I think uh, extrapolates that for anything we do with AI. Uh, this is still the coexist model where how can somebody use AI to best facilitate a decision making. Right? I think human beings still needs to be put in the driver's seat to do that decision making process. Right? We call it the human in the loop. Uh, but it's a moment in time just with how things are moving like what I just said, it might be infected three, six, nine months from now. So uh, depending on when this episode comes out, uh, something may have changed already.

Speaker B: No, the thing I'm thinking about is I think the findings are not really based on generation. We have to understand the consumer for travel because we always assume everybody wants everything quick and fast. Everybody wants everything quick and fast. But I'm always the gut check and the conscious check, right? Because I do think that some people actually enjoy the process of discovery to really see for themselves. Because once you get to the point of everything is all AI centric, then it ended up. Is everybody going to end up going to the same place to visit just because they think and move online to a certain extent. Did you know what I'm saying? It's like we're starting to treat everybody is a vanilla color, right? Vanilla thing. And then it starts to think about a lot of I'm going to Hollywood now. A lot of the movies that were making the past really do come true. So when AI came to a point where is everybody actually looking the same? Is AI going to automatically recommend almost the same thing? Because there's a lot of. It really depends on what you put in, right? It really depends on what you put in and Things like that. But the research that's happening right now wasn't maybe I haven't read one, wasn't really targeted. And what's the difference? How is Gen Z, Gen Y, Gen X and even the boomer generation embracing AI?

Speaker A: Yeah, um, well actually I'm going to do a shout out to one of my favorite podcasts, the best one yet, uh, kind of um, linking back to what you just mentioned. Back in the day people said uh, content is king. So um, that podcast that I just mentioned, they kind of coined this phrase, uh, content is king but curation is queen. I think talking about discovery uh, is definitely something that consumers enjoy because this is how they dreamed about the next vacation and how they think about the experience. I think the process itself, uh, is an enjoyment. So I think what AI is going to change similar to how um, Google, the search engine changed how people um, through that discovery process. Uh, I think AI will have that way and algorithm to present and curate things that you think about to plan your vacation. Uh, I don't think that is a mutual exclusive from uh, replacing the process itself. I think you're just going to be changing how consumers um, discover and how they uh, use that process, uh, getting to the final purchase decision of um, you know, the experience of the trip, of the vacation.

Speaker B: Yeah, I'm not, I'm not disputing it but just you know I'm way older than you are Ken. So I'm just going to tell you over the years like Terry is way younger than I am. I am not. You can, she can hear about all these things because remember back in those days about how the, the, the explosion of Internet booking, the OTAs, etc they talk about the travel advisor is going to be um, gone but they didn't really go away. They evolved into something else which is much more service oriented. Then they talk about, hey, voice channel, et cetera, a lot of the call centers, definitely not as much as it used to be, but they also have evolved into. But if you look at, if you look at transactional pricing, you look at transactional productivity, the average booking value, it's going to be way higher with a co existed booking versus an online booking. Right. That's my experience. So a lot of prediction they say hey, this is going to replace. This is going to say hasn't exactly, I'm not saying they fall flat, but it hasn't exactly came out to be what they say. And some actually fall flat like voice itself. Right. So I'm not trying to be cynical. I like how they're embracing our AI. I just think that we need to think about what is the value creation in that process, rather than talking about what is it going to replace. Because every time something come on, oh yeah, this is going to replace this, things like that. But to me, in this whole booking process, how does it enhance a whole option, choices and decision making? I almost do not hear. This is my limited reading. I almost do not hear people talking about it. It's all about replacement. It's all about replacement. Back in those days, oh, direct connectivity comes on. We don't have so many reservation people. Come on. There's always synchronization error. You spend more time resolving things along the way. So it's really the efficiency is the key. But nobody talk about efficiency with AI, uh, on what does it enhance. It's all about replacement. And I don't think that that's the right approach to take.

Speaker A: Yeah, well, and let's talk about human, right, because, uh, it's not just AI. I think especially in the world of hospitality right now we talk a lot about integration, innovations, moving systems. Uh, I think you through kaso, you're also going through introducing new vendors, new technologies, swapping tms and things like that. So, um, AI or not, I think that technology side of things is going to happen. It's going to change, it's going to transform. And to your point, um, many times it's not about replacing human being, but human needs to be part of the journey as part of that transformation and doing that in the size of capsule. Because, um, I think for Castle, you guys are what, 5, 600 plus employees working at different properties or interacting with systems of different forms. So how do you think about bringing the human, bringing the team along with that journey of transformation?

Speaker B: Can I give you one example? Because I travel quite a bit, Kim can allude to that. So can you imagine, can you really imagine as a guest traveler? We start, we start. I don't even want to talk about the booking process because I almost book everything from my phone and not on it, not on desktop anymore. But if you imagine that when you start checking in, you do your from a mobile phone, you check in, you never interacted with any of the, uh, airport desk people. You go to tsa. Can you imagine that TSA officer is no longer there. You just use your facial recognition, et cetera, right? Because they know that you have a flight because all the information shared with them. Can you also imagine you walk through security, not having a single security officer there, but you just go to a gate, they Scan you or they didn't scan you. You go to that and we get to boarding. You got the boarding for the flight. You do not see a gate agent. Right. They just see your face. You scan it, the gates open, you bought the plane and then do all the way down there. By the time you get to the hotel, you haven't interacted with a single person except the flight attendant. Right. It's at uh, worst because they can never be replaced unless robot goes on the plane. By the time you get to the hotel, do you really want to go through a mobile check in for a lot of people that go on vacation that you just. Not to say. Not, not some. Sometimes I prefer not to see anybody on the um, on the check in process. Right. You just scan and mobile check in, get your key on a car and things like that. That to me is the world deviate of emotion and relationship. Right. So does hospital. How does. I'm not talking about Ellen, not. I'm talking about us in the hotel industry. Do we want to take away those human touch experience from people? Truthfully. Right, Right. If you imagine we're only at the receiving end when we come and check in. Right. But you think about all the steps beforehand. We haven't talked to a single person, uh, the flight attendant or the flight mate. So what do we need to be cognizant of? Two things, right. I think the first thing is we need to develop empathy in the industry because a lot of things can happen before they set foot at hotel. They could have a bad time on the plane, they could have flight delay in this weather situation. And then the first thing is really we need to train a high value. That's about empathy. Right. And then the second thing is it's about what is it that I can make, what is it that I can do for you that make today a great day? And that is being customer centric first. Then you talk about that technology, about how can I do it better, having that first human interaction, helping them to check in, et cetera, things like that. That would be helped. And then automatically, uh, this is what I noticed change in the hotel industry. Not necessarily. I see it from the mainland where I used to receive a phone call from the front desk or the guest. How your chip is, has been replaced by text messages is that, I mean I don't dispute with it. But then at that stage, what are we really introducing? I mean we are making every interaction a commodity at this junction. So how do we distinguish our property from another property if we don't Focus on the guest experiences from the point they arrive to the point that they leave. I understand we need to embrace technology. Don't get me wrong. The guest engagement, there's a guest engagement system. It makes it more efficient. But I think we also need to think back. How do we infuse the human touch? Point to it. And that's something that I don't hear people talking about it. Right, Carrie?

Speaker C: Absolutely. Um, it should be talked about more, I think, in a lot of ways, especially with the revenue management side of things, we're very numbers focused. But at the end of the day, this is about hospitality. It's about the guests. Um, and it's about really making people feel special, especially in a destination like Hawaii. Like, this is such an incredibly special place. And that personal touch is something that really delivers an experience that's above and beyond what somebody's able to offer in, you know, in Iowa or in Michigan or, you know, in different places. This is something special that's really, um, central to Hawaii and the culture. And, um, it really should provide that foundational element of how we build out the rest of the things, uh, that make a hotel run and make the industry run. For sure.

Speaker B: Yeah. Something else that I believe the big brand might be doing it, but I'm not definitely, uh, I'm not 100% sure. And maybe you guys can take a look at your property that you guys are doing and things like that. I just noticed that on the hotel side, on the accommodation side, we focus so much on the property that sometimes we forget about the destination. We feel like the destination is an HVCV or HDA situation. But to me is how do we infuse the destination into the property? You can go to, uh. And this is what I do on my mobile app, right? I search for properties that I'm going to, mostly city, because Hawaii I need to. My energizer, I need to get recharged. So I need to go to, like, Tokyo, New York or Hong Kong to get the energy back. But I noticed that most of the photo gallery focus on the property, the facilities, et cetera. It almost does not have the folder about the destination. So are we doing a disservice in trying to sell the property and not the destination? We're not staying 24 hours at the property. At most we're standing to 10 to 12. The other 12 hours is really our interaction with the destination. So what I'm really looking into it, really m for the next one to two years is how do I infuse the Destination into my property.

Speaker C: Because those messages are mutually exclusive. Right. The destination and the property. But they have to be integrated into one another and that's how you amplify a message like that. So effective.

Speaker B: Yeah, so, so if you really go and look at, look at a brand, sorry, I'm not going to call any other brand because they're not my business. But look at independent property, look at the brand, look at how many people actually talk about uh, the destination. Yeah.

Speaker C: Mhm.

Speaker A: It's actually a really good point because um, I think from everything that we've seen so far, it tends to be something overlooked. Um, I think for the reasons where getting in the game, I think everyone can be so competitive. Especially now marketing Hawaii when you have that many hotels staying in the same destination. I think people start thinking about the differentiation factor. How is my property different from my competitor? And I think they're so focused on that, which I uh, think. But now what you mentioned, kind of bringing people back to uh, the first principle. Right. People go to travel for destination, they pick Hawaii first, not necessarily they're going to this particular hotel, that hotel. There are cases like that where the property has experience that draws people to it. But for the most part people first of all think about this is where I want to go. Then they start thinking about the planned experience, where I'm going to stay and all that. So uh, I think it's actually probably like the thought of the day. Yeah.

Speaker B: I think we think about Hawaii, it's not 100% repeat guests. We're US West Centric, a lot of them are high repeat. But they would also like to know what does the destination have to offer not just for the repeat guests, but for new guests from further out and things like that. We, I think overall as a destination, I mean HTCV promotes Hawaii fairly well. But then on the hotel side we just focus on yes, we should promote a hotel, but we should figure out within the whole ecosystem, where do we sit. Right, yeah, go ahead. Sorry.

Speaker A: Yeah, no, right. So um, since we are talking about brand, I think it's such a good segue into uh, something that Capsule recently did, uh, where you are, uh, in the portfolio. Two of your properties, uh, affiliated with uh, Wyndham's, uh, the soft brand, the trademark collection. So how did you decide what properties needed a brand, whether it's soft brand or not, and uh, which are better off without having a brand?

Speaker B: I think primarily you had to look at it in terms of the branded world. Right. I mean how many brands does Mera has Can, has anybody kept count?

Speaker A: 38, 30 plus.

Speaker B: I mean what's the difference between this particular brand or that particular brand? If you go to the mainland a uh, Fairfield Inn is always next to a residence inn, right or something like that. So that's the value proposition. So the way where we look at soft brands and soft brands is fairly um, I shouldn't say recent but it's something that it is when you get to a whole uh, maturity in the regular branding. That's how the hotel brand starts to say hey you know what, there is probably some, some areas they can go into. That's why they create this so called soft brands that allows you to retain your identity, allows you to retain a control. So that's where we kind of like look into it and say we really don't want to lose the identity of the two properties that we are thinking about Saw branding. But then we also look at in the marketplace who does not have a presence here, who does not have a presence here. So it doesn't make sense to store brand somebody under Hilton, Marriott, Hyatt also because there's really so much um, there's also some branding guidelines that you know in terms of vicinity, radius, et cetera. So Wyndham trademark is a mutual um, you know the needs of both parties between us and them and say hey, maybe trademark might be a good fit for the Hilo Hawaiian and the Isore because we have access to their global distribution ecosystem. Um they are very well connected um in that distribution landscape we fall within the uh, brand guidelines and the brand gut rail without losing the identity as you know soft brand itself that we still retain the management, we still retain a big part of uh, some of the sales and marketing and distribution even though we're relying on the distribution program. So we look at it to say hey, those are kind of like good, good things and they also have good uh, good um, trying to figure out what the right word to use. But they have a good solid um, base of membership, you know window member. So there's different ways you can uh, promote to them and there's different kind of marketing partnerships and programs to the Wyndham member. So that's what we see as uh. And, and I recently run an analysis in terms of it's not just particular one set of members but you know different tiers of members that could revisit a property. So how do we choose which one to be? We look into the uh, uh footprint. We look into their footprint. They generally don't have Hawaii in general except for some of their timeshare. But then you think about leisure destination. Waikiki itself is kind of like quite congested at this point. Doesn't mean that we are not potentially would have another Wyndham saw brand here and things like that. But when you think about places to start and test, Hawaii hotel property would be a good, good, good fit. Ilo Hawaiian in a big island will probably be a good fit to add that junction. So those are the really good, uh, pilot properties to test it out and things like that. So right now it seems to me my initial analysis for the first maybe seven months, it does looks like it drives good, um, incremental revenue coming from the Wyndham, um, ecosystem.

Speaker C: Uh, I guess, Bernard, as we're talking about independent versus brand, especially soft brands, um, for the properties that you've chosen to stay, I guess independent, what sort of distribution levers replaced what the brand would have offered you? Um, I guess in, in those different ways.

Speaker B: Sorry, what you're saying the. So what is the, what is the soft brand replacing on their distribution?

Speaker C: I guess, you know, the, the brand does offer, um, a lot of distribution levers, you know, some of the sales and marketing, some of the membership, um, lovers that you'. So how do you, how do you work to kind of bridge that gap with the independence then that you have? How do you kind of bulk up the independence to compete with that?

Speaker B: Uh, so you're saying that how we're going to work with our current independent properties, et cetera and things like that? I think, I think it's also, um, taking the best practices that we're gleaning from our relationship. Wyndham trademark, we say, hey, they are doing things this way and we're doing things this way. Is this better for us to do it either way or what makes sense. So that's kind of learning the best practices for them. At the same time, looking from the brand perspective, this is how they are running their, uh, this is how they're running their revenue management. This is how they're running their distribution. Really, really different because they have a global workforce. They have a global this and that. So definitely we can't compete with that on the global workforce, et cetera. But what we can do is with the branding of the property and because the property still exists under the Castle, not a brand, but Castle portfolio, so that raises the overall awareness of the Castle brand and also the Castle stuff and in other properties. So in itself that they market. Wyndham will continue to market Hilo Hawaiian ISO under the trademark. We could Also market those properties under our digital E Blast, our email marketing, database marketing. At the same time, having the brand under uh, our portfolio also instill the confidence of the guests on the rest of the properties that we manage and also instill confidence on the other owners on how we manage them. Right. I mean how we manage them is about hey, we have leadership position, we have good partnership with people in the industry. We are able to manage complexity with multiple system with brand and non branded system. Uh, that might be different things we can do. There's speed, execution, action and things that we do. So we showcase ourselves to be able to manage very small size property to a big size property. Working with independent, working with brands. So that's just kind of like give us a different talking point about who we truly are in Castle.

Speaker C: The strength of diversity.

Speaker B: Yeah, for sure.

Speaker A: I see. So thinking about introducing a brand into the portfolio, right. Um, obviously a big part is about the incremental revenues brought by making that decision. How does that introduce um, additional complexity uh, to the ecosystem in terms of the technology stack? Obviously when you start adopting uh, a brand, whether it's a hot brand or soft brand it comes with, my guess would be additional technology. Whether you have to swap a pms, you have to run peril systems, uh, to some extent. Uh, how did you handle that transformation uh, as well.

Speaker B: So tin, you saw my ever expanding diagram that I shown it to you before. So I moved in on one side, I moved them on one side and then this is a very rudimentary. Carrie, don't laugh. I use Excel because I'm an Excel person. I do everything by columns and rows. I do everything by columns and rows and then all my rows are ah, on the touch point, the pms, the crs, the booking engine, et cetera. So we'll kind of identify the technology and then break it out. So then we look at it is hey, start from not just the voice but from the website, the web existence. Right. There's a brand.com which is the uh, Wyndham, which is a wyndhambread.com, the Wyndham brand, the trademark where the product existed on castleresauce.com this is where our property existed on our castlebrand.com and then the property has its own standalone website. Right. So then we need to understand each, on each website, what kind of booking capability each one is using. So with the Wyndham trademark brand and uh, our stuff. So Wyndham was very flexible enough to allow us to build out from the same central reservation system two Separate booking engine that looks different. So one. Yeah, so that's quite a bit of work too. So one align with the trademark brand and the other one align with the standalone website that has its own property branding. Um, so the look and feel. So the look and feel, et cetera, things like that and also infused within the standalone um, website and then the selection of what shows up and things like that was a little bit different from the brand dot com. They were nice enough to um. I would say they were very accommodating to our needs to say what we think is important because can you see. Think about. And I need to shout out Wyndham Chemo did a really good job in helping us to get to the point where I just happened to know the person that I was working with on this and he's based in London so uh. Um. Forgot his last name. Sorry. Just Adrian. Yeah. Was agent. Yes, agent. So he's based in London. So he and I have a mutual friend from Singapore 20 plus years. So that kind of helps the whole relationship and things was very fruitful.

Speaker C: So

Speaker B: we're able to prioritize and we were able to even allow um, Carmina local residents rate to show up on the search even on their brand.com site and honor standalone. Usually they don't allow and things like that. So I have to like. But I went. I pull up the data and I show it to them on all the things and how much money we would. We would potentially be losing if we don't make things easy for our guests. So that's one. And then personalization and also Adrian's involvement in trying to make sure that what looks good on our stay. Because m. He doesn't manage the. He's just really assisted me to customize the booking engine to look and feel like the standalone. So then there's still an identity. That's the nice thing about soft brands. So the identity. So we use the same thing for the ISO property but not only that, we also retain the whole digital marketing for the property. So you have to think about. We have to balance that right. The brand.com in our trademark and investors are. So we maintain the retargeting, we maintain the paid search, we maintain the meta search, we maintain uh, our own site. So we're driving everything to our site to our standalone site. We're driving everything to Castle to our site. So we're able to isolate how much of the web revenue is coming from Wyndham trademark, the transactional channel versus our channel. Definitely there's a lift because of the name brand itself, things like that. But that's kind of hard to quantify. But we're trying to find different areas to make those kind of measurements and my job is to make sure that those measurements comes out on a QBR right quantity business review to say hey, how much revenue are we driving from uh, our standalone? And I can tell you that with the support of Wyndham trademark the property is actually doing pretty well on the digital side in terms of uh, roi. The ROI that we're seeing for the overall investment in digital is quite, is quite revealing.

Speaker A: I see that's thinking about the making selection of not just brand but I think in general. And this is kind of getting to the last question for you. Thinking about our listeners, uh, who are independent hotel owner operators. It might be they own a small portfolio, two, three hotels coming in. Right. I think even for that a much simpler uh, scenario, uh, these hotel owners and operators could still be facing many options when they think about oh there are now this brand and soft brand they can choose from technology decisions and all the different components they can choose from. And in reality is that everybody have a pretty messy technology stack as well. So if a person like that coming to you for an advice, okay, now I have a messy technology stack and I want to find a way to optimize it for you know that get me the optimal revenue strategy and distribution. What would you tell this person to first look at?

Speaker B: Come to me.

Speaker A: Yeah. Yes.

Speaker B: Uh, Patrick at Castle Resource in hotels. You know, yeah, my platform myself just look up Castle Resource in hotels and call and look for Patrick and then he was trying to work to me and then you know, so, so no it's, that's, that's not really joking aside, that's really applied. So if an independent is looking for some kind of third party management things like that, they are more than welcome. They are very encouraged to call us and uh, we can take an initial assessment and dissecting things. And this is really true because um, I'm currently existing one developer in mapping these things out. It's a much more um, tedious uh, process. Right. You're going through exactly what technology, what engagement you want to do rather than say hey, just sign up with this brand or things like that. Sometimes you really don't have to go to the brand route. Really depends on exactly what you're looking for and how much inventory are you moving in what location. Right. So brand is not for everybody. Uh, soft brand will work however you need to take into consideration where you are in your Life stage of your property. Right. So and things like that. And if someone has been operating independent, I mean we have, we have very successful examples about, you know, you know, Napili Surf beach resort that was independent for 40 something years and they came onto the Castle portfolio in 2024, January and this coming year, 2026, this is out that year. They will probably have the best year in your whole entire 40 plus years of history. This year though, it's not to say you have to go to a brand, but Castle is a regional powerhouse in Hawaii that we can help people to take a look at it. How do we diversify distribution? How do we spread the market share? How do we increase the gas repeat ratio? So that's what we are proficient in doing. So yes. What do I tell them? Right? Look for someone that's familiar. No, look for someone that's familiar, uh, in the industry. Look for someone that's familiar in the distribution world. Look for someone that is familiar with the technology part. Right, Carrie? Right. It's not. Revenue matching is not important. But you need someone that knows the whole commercial spectrum. Yeah, you need someone. So I believe there are good companies around. LightSun is a good example. Right? LightSun is a good example. If someone wasn't sure exactly what they need to do and then they can look for Lights on company like Lights on company like Castle company like don't know who else is out there. I know who else out there. But I'm just going to shout out lights on. And now. Thank you. So at least we look at it to say, hey, this is what we can do. And then we'll tell you what is feasible, what's possible. It's beyond top line and expenses. It's really about profit maximization. So that's all I can say.

Speaker A: All right, thank you very much, Bernard. Uh, listeners, we've been talking to Bernard Tan, uh, the chief commercial officer at Castle we Sawson Hotel. Bernard, where can people learn more about you?

Speaker B: Uh, casa resorts.com for the property or you can look him up in LinkedIn.

Speaker A: Awesome. We will make sure to uh, put those links in our show notes. Best salesperson for your company as well. Bernard, thank you very much for uh, joining us today. Always a, uh, pleasure talking to you, Bernard.

Speaker B: Thank you so much. Thank you, Carrie.

Speaker C: Thank you, Bernard.

Speaker A: All right, starting off, thanks for listening to the Lights on podcast.

Speaker B: Best.

Speaker A: We'll see you again next time and be sure to click subscribe to get future episodes.

Speaker C: Uh,