Hello and welcome to What the Lux with me Fred Moore and me Ann Sharma. Together we lead Matreform, a design consultancy specialising in brand, digital experience and content and this is a podcast that calls time on tired ideas of luxury. Alongside industry luminaries and thought leaders, we explore what truly defines category leading products and services. Today we're joined by someone who sits at the centre of one of the most recognisable names in global luxury hospitality. Alex Schellenberger is the chief brand in marketing officer, a Mandarin Oriental hotel group. Alex's career has taken him across some of the world's most influential luxury houses, from beauty and fragrance to fashion, lifestyle and travel, giving him a perspective that's unusually cross-disciplined and culturally fluent. And now he's responsible for shaping the next chapter of a brand with more than 60 years of heritage, a brand born from two legendary hotels and a mission set out in 1963 to completely delight and satisfy our guests. Mandarin is long stood for exceptional service, deep cultural identity and has got a distinctive sense of place. And his luxury hospitality enters a bit of a new era shaped by wellness, technology, a shift in guest expectations, I think it would be fair to say, and the rise of a younger and more globally-minded traveler, Alex is leading an evolution of an iconic brand, while preserving the spirit that is defined for decades. Alex, welcome to What The Lux. Thank you so much and there goes my new LinkedIn introduction. So perfect, thanks and thanks for having me. Look, I've got so many important questions to ask, but the first is you pick Gangstar or the W as if you could take one record to an island. Which would you pick on the record? Yeah, very interesting question. I'm, you know, I think we share that, you know, love a little bit for all school, Rab and Hip Hop, so which my wife is constantly in our last three stars. I used to go, I used to go and get up on stage and freestyle in UK Hip Hop events. No, I mean, the same addition to this podcast wouldn't it? It's probably why I enjoy podcasting. Probably, but let's maybe talk about at least the records that really had a profound impact on me. And one is for sure, Outcast, Atlions. Good record. When it came out, it was such a new sound and it was just era defining and probably also, you know, it's, I think when you go through life and personality changes yourself and, you know, all of a sudden, you know, the music, especially when you're younger, is a little bit the soundtrack of your life. I don't know if you ever watched Menace to Society? Never watched it. Because there was also a movie that really defined me because while I was about gangs in LA and, you know, these young kids selling drugs on the streets and, you know, eventually, a very sad movie and, you know, some of them got killed, it was that around, you know, people turned their life around and it was, it was, I was maybe 13, 14 again, you know, at the time, but it was incredibly profound and very meaningful to me. At the time, I think I was also going through, you know, personal life changes. My parents were getting divorced, I had some troubles at school and it was helping. You need, you know, at that time, especially when you're, you know, going through your teen years, you think you need something to hold onto and, and I think hip-hop and the community at that point in time was kind of my bedrock. So Alex, hip-hop aside, you spent a career shaping global luxury brands. You've done it across beauty. You've done it across fashion. You've done it across lifestyle and hospitality now. So what drew you to brand building? What's the journey? Yeah, interesting. I mean, I would love to say that, you know, this has always been a dream of mine and, now finally, you know, I'm here, but I'll come back to that. I think it was a little bit different, obviously, as I think it is for everyone. But as I said, if I take a step back and, you know, I must have been, you know, 14, going through, you know, a little bit of a personal crisis with my parents, you know, divorcing. And of course, at that age, you know, this is kind of a disaster and, you know, not doing well at school. And then why did you not do well at school? I think I was distracted. I wanted to be a rebel. I wanted to, you know, do everything differently. And then I think deep down also, you're probably not quite mature enough at that age to understand what is really happening. And maybe to some extent, you know, kids also then, you know, blame themselves, you know, for what is happening around them. And it's always somebody else's fault. You know, you kind of start sulking a bit in your own pity. I think I carried the responsibility for my parents, sort of slightly failing marriage, actually. So there you go. It's a curious sort of word. Yeah. You carry that way. You carry all sorts of weird things in your kid, the area you realize. Yeah, 100%. And then, you know, I have a sister that's, you know, six and a half years younger and then all of a sudden, you know, my mom went back to work and my dad was a little bit absent for a while. So, you know, I was kind of there to help her, you know, navigate and grow up. And I didn't really want any of that responsibility. And, you know, I kind of, I guess, was, was rambling. But anyway, why the long drawn out answer? Because then, you know, my mom actually did something which, in hindsight, I think, you know, helped me a lot, which is, I got a job. And I was, I don't know, I must have been 14 or 15, which is legal in Germany. But I started stacking shelves in a local supermarket. And it kind of gave me, you know, a sense of responsibility and structure and discipline a little bit. And, you know, I did that for a while and then eventually, you know, started doing some some of jobs at, like, insurance companies where, you know, I handed out, you know, the internal mail and, you know, things like that. And whereabouts? Where was this? It was in Germany and close to Frankfurt. And where we were living at the, at the time. And I think that was kind of my first foray into, you know, something that you could call, you know, professional, you know, career or job and at least, you know, a sneak peak and on what would be possible. And then I think I finally got my act together and, you know, finished school and, and then you, you know, in Germany at the time, you had to choose to do either military service or social services. Yeah. And I could never, you know, imagine myself going to, to the military. So, you know, I opted in for, for social services and you had to write this weird letter to, to the government on why you, you know, don't want to carry a gun and, you know, fight for your country and stuff like that. So anyway, usually it gets accepted anyway. And so I did social services for a year and, and was volunteering in an institution that helps, you know, the elderly and, and sometimes disabled people to help them through, through the, you know, daily struggles and, you know, I don't know, wash them, you know, make their food, go shopping, things like that. Together with certified nurses and, and that again, I think gave me a little bit of a different perspective for life and for sure it shows you a little bit of humility. A lot of these old people, unfortunately, were alone, you know, abandoned by their families or, you know, just had no one anymore because, you know, their spouses had died and you were sometimes where they only contact really that they had throughout the day. Quite interesting to get because those, all of those old people would have been have gone through wartime. Absolutely. And to get lots of different perspectives that aren't just your family perspectives about what that period must have been like, presumably they shared many of their stories. The 100% must have been a fairly interesting and educational experience. Yeah, it was. It truly was and, and, you know, on the one hand side, you're right, you, you, you of course, you, you know, form bonds, you know, with some more, with some, with some less, but it really also teaches you a lot about the fragility of life and, you know, how you should probably, you know, live your life to the fullest and, and, and also about the importance of relationships in the end, because, you know, if, if you see these old people and, and, and a lot of them, you know, are old and have no friends and are, you know, left alone to their own devices almost, it was very sad. And also, on the other hand side, you know, working alongside all of these, you know, nurses that were doing an incredible job also gives you, you know, a great perspective on, you know, the people that are actually doing an incredibly hard job and are not necessarily getting paid very much for doing it. Anyway, it did this for a year. And then ultimately did an apprenticeship at Nestlé, you know, big food company, of course, and, and that's kind of a vocational certificate where you spend half the time in school and half the time going through each and every single department of the company. And at the end you get, you know, a certificate and, and, you know, two and a half years kind of thing. And why did that was, I had kind of, you know, maybe at the time a little bit of an idea of what I wanted to do in terms of, you know, I wanted to reach something, I was ambitious, I was driven, but it didn't quite know what. And having the chance to go through different departments of that company, you know, and getting a sneak peek into what it is that they actually do because at the time I had no idea what you do in accounting and key account management and sales and marketing, you know, well, I think it was very difficult to know what all these jobs were and account management, what do you know, advertise, you know, I had some far away sense of what the world of advertising and marketing might be. And I was maybe personally sort of drawn by the environment and what the little glimpses I could get into it, but I didn't know all the specific jobs, so I didn't know what account manager was actually thought it was something to do with accounting.
And there you go. - And I think that hospitality, I spoke a lot about this when we were at ILTM whatever this week. With a lot of people who I sort of shared a lot of joy with about what a great industry is. As you know, if I had known, had a greater insight into what that industry delivered back by where I started, by where people would have been a no brainer for me. - You're right. And yeah, it's not really broadly shared, the industries and what they're all about and the people. But yeah, we'll come back to that, I think, because the people are so incredibly important through our geocoreal. So I did that and then, you know, I guess the one thing that really stuck with me was my, you always spent like two or three months in a different, you know, one of the departments. And marketing was the one that really stuck with me. I had a, you know, really inspiring supervisor at the time, eternally stressed, you know, but it was really inspiring and that kind of stuck with me. So then I finished, you know, those studies. And at the time I met someone who had just finished his masters at Lancaster University. I would have never dreamed of, you know, at the time this was 2000 or 2001. So quite a while ago and I would have never dreamed of, you know, studying abroad, but, you know, through conversations, you know, with that person who is actually still at Nestle, who has a very big job now, it kind of inspired me to, you know, inquire and go about it. So I flew to the UK and I flew to Lancaster University and did, you know, the whole kind of spiel in terms of, you know, interviewing and testing, is that a ZERO, which at, you know, at the time in Germany didn't really exist. There was a central system and, you know, the government kind of told you where you can study based on, you know, availability and the grades you got and stuff. And then I went to Lancaster and did that and loved it. And then ultimately, you know, at the end of graduation, had a couple of job offers and PNG stood out above everybody else and it was the people, first of all, and, you know, that's, you know, a comeback to at the beginning, which has been kind of, you know, there's always some points throughout your career that you can pinpoint and for sure, whenever I took the choice based on people, it was, or turned out to be the better choice than going for the fancy job title or the fancy, whatever, you know, brand, I mean, it was lucky to, you know, work for, or still work for, you know, incredible brands. But I think in hindsight choosing people over, you know, whatever it is, title material things is incredibly important. And then I did PNG for, you know, very long time, I was lucky enough to do 12 years and got really the fundamentals of brand building again. I had no idea what brand building it was, but PNG, you know, of course, was kind of, you know, I guess one of the incentives, because there's a science to brand building and to my rating. And it's sort of missing in the luxury industry because a lot of people haven't paid their dues and gone through that process because it's so creatively driven that it is just about earlier. Exactly. And then as these brands have had to scale and we've entered a more global market, I think it's exposed maybe a little bit of lack of literacy and what these fundamentals are. 100% and I think, you know, PNG kind of decoded that a little bit and when we get into hospitality, especially marketing or brand is not even something that people study in hospitality schools. It's not a, there's not a subject, most likely also because, well, for the, you know, the longest period of time this industry was largely defined by either being a very good operator. So operations is of course, and it is to this state, you know, an incredibly critical part of it because, you know, that's the front line towards the guest and or real estate, you know, management. So a lot of focus on those two parts, but nothing when it comes to branding and marketing. So I guess that's also what at least helps me today in terms of, you know, trying to, you know, define a man or a gentle and kind of leading it into the next era. But so, they 12 years of PNG and then, you know, eventually, they decided to sell part of their beauty portfolio and I was working for the fragrance bands at the time, most of the time actually in, well, beauty for the 12 years, but seven years in the prestige business, which was licensed, you know, fragrances in the luxury sector. And then I did one and a half years, Cody didn't like it and then moved to Sorosky for four years. So retail, very different again. And then eventually, you know, through head hunter, got the opportunity to join a core as Chief Marketing Officer for the group. Did that for about two and a half or three years? And then this opportunity where we met originally. This is where we met exactly. This is where we met, you know. And then, I don't know, Yantal, and what drew me to it is really the opportunity. When you mentioned it, you know, we are very fortunate to have the strongest brand in the luxury industry, not measured by ourselves, but externally. It's so sexy. Yeah, it is. It's got it all. It's got all the ingredients. Yeah, exactly. You have an incredible history. I mean, you mentioned 65 years, which is, you know, when the mandarin in Hong Kong originally opened, but it's fabulous hotel. It's a fabulous hotel. It's undergoing, you know, an extensive renovation actually and will be shining, you know, in full new glory at the end of next year. But the Oriental in Bangkok is actually 150 years old. In fact, you did a great campaign when that refurbishment started, didn't you, which won a can-line, I think, last year, was shortlisted, at least. Yes, shortlisted. I was at the GM writing, too. Yep. That's right. Client. That's a recommended room. Exactly. Second place hotels. Yeah, but another place is. Yeah, very good. The fact that it's been talented, where they could go and stay. And we are, I mean, we're in the midst of, of course, doing full new launch campaign for the reopening next year. We're investing a lot of money because we own that hotel and Bangkok celebrating 150 years next year. What's your mixture of asset and asset light? Yeah, we have about 10 owned or co-owned hotels, 45 in total. So 35 of them are management agreements. And that's also asset light, and that's the strategy going forward. I think I mentioned to you, but we started this, you know, we had this incredible journey that we're on, and we started at 38 hotels. We've added seven until the end of this year. Basically, we just opened Vienna, which was number 45, a couple of days ago last week, actually, and have another 34 HMA science. So in our strategy was always to elevate the brand and double the portfolio when we started at 38. So we're on a good track. What are the challenges this scale? Look, I think the challenges, especially if you operate in this high luxury segment is, you don't want to lose yourself. Right? You don't want to lose what makes Mandel and Oriental stand out, tall above the rest, which is, I mean, of course, the legendary service on the one hand side. And the other thing that I would mention is this really truly human approach when you enter any Mandel and Oriental. And maybe last but not least, the very tailored and personalized way of engaging with our guests. And in fact, the way we have encapsulated our mission is to really turning guests into fans, to really connect ourselves also with this iconic fan campaign that has been running for, well, 25, almost 26 years since 2000, with Michelle Yor, and David Tang at the very beginning of Michelle Yor, is still with us actually today as a celebrity fan. And that's just incredible. And David Tang of Shanghai Tang. Is that me? I'm a fan, who used to work at Shanghai Tang after David's time. But a notable character. I'm visionary, absolutely. A colorful visionary. Yeah, absolutely. So can I just ask you, say, you sort of work to Hugo Barz and Cody and Serovsky and Akor. And it's a bit of a shift to go from retail to hospitality. Yep. And I'm interested in the whole convergence of retail and hospitality anyway. It's a key theme at the moment. And what convinced you that was the right moment to switch? Because it's a big sector shift. Yeah, it is. And in fact, it's not that I was necessarily desperately searching for. And I really want to get into hospitality. Like you said, I had absolutely no idea what hospitality really was all about. And in fact, I never thought it was possible to really shift. And I think that happened. And it must have happened just after COVID, 21, I believe. And it was more through a casual conversation with one of the headhunters that I've known for a very long time. And we were having a conversation about what's going on and what's the latest. And she said, there is something. There is a very interesting role. But it keeps changing. And it was live for a while. And they couldn't really find someone. And it might come back. And maybe it's something for you. And I never really thought anything about it. And then a couple of months later, she said, yeah, it's actually-- it's live now. It's very clear. They really want someone external. They really want someone that doesn't come from the hospitality industry. And I said, yeah, why not? You know, let's have a conversation. And this is how this whole thing kind of kick started. And then I met a couple of people at Accurring, including the CEO, that of course is still there, Sebastian. And it kind of felt like it's the right moment. And actually at the time, which is important context. But my wife and I, we knew that we're going to have a second child. and at the time
actually, you know, Swarovski offered me another role, which would have been to go to New York. You know, so we were debating, you know, and it's funny sometimes in life, you know, these sometimes these things actually all happened at the same time and it actually happened that within the same week, we got an offer for both, and then we were debating, you know, from one day to the next. We're like, we're going to New York now we're going to Paris. And also it gave, you know, us or me, another almost, yeah, career in hospitality. And I found that truly exciting. But I absolutely no idea what what I was going to expect, so to speak. And then I started, actually started as not a CMO, but as SVP for brand. And the idea was to then, you know, slowly, but surely morph into what transition into the CMO role, because, you know, my predecessor was, you know, was about to leave at like six to nine months time and it was all agreed. And anyway, and I started the first day and he calls me and he says, I'm actually leaving in three weeks. So that was my kind of cold shower into hospitality. So I had to, I guess, accelerate my learning and understanding of, you know, the industry relatively quickly. And at the same time, you know, while I was learning a little bit, you know, the business and the operating model is that as a, you know, kind of getting understanding of how to run this, you know, incredibly diverse portfolio, because it was about 46 brands, I believe, that we had to somehow manage and define a space for. What are the similarities and differences between branding tangible things and then service led products? You're interesting. And that was probably for me. I mean, of course, you know, switching industries like that, a couple of, I think, big aha moments, but one of them was for sure that there's a huge difference. Specifically, versus, you know, PNG and then, you know, hospitality, because ultimately you have a little bit of that in retail. But the brand fundamentals, I think, you know, are the constant throughout that you can apply in terms of, you know, how do you manage a brand? How do you express it? How do you activate it? You know, and what that means? How do you express the personality, the character, and, you know, how does that come to life? But then, of course, in hospitality specifically, you have such an important critical element with operations and service delivery, which you have to an extent in retail as well, but not to this degree, because people, you know, in a retail shop, they might walk in and you have, you know, I don't know, maybe sort of a five to ten minute, you know, engagement and conversation with them. But, you know, people on hotel might stay on average, whatever, two to three days. You have hundreds of touch points together with them and each and every single interaction can make or break, you know, their stay in their experience and their memorability. And that's, of course, is a privilege because it's an incredible opportunity because guests are so receptive and, you know, stay with you and, you know, I don't know, of course, from rooms to all of the different restaurants and bars and spire and wellness and everything you have to offer. You have incredible engagement opportunities, but at the same time, it can break down any second. And that, for me, at least, was the, was the big, kind of, a hard point on how to, yes, it's important to be clear on, you know, what your brand ultimately stands for. It's important what the personality of the brand is important, what the DNA is, it's important what the history is, but ultimately, you need to then work hand and hand with operations who are absolutely critical in bringing it to life, the frontline, through the general managers, through the front office staff, through everyone on property, to, you know, engage them on the mission to make everybody understand what that truly means that you have created and not, you know, create like some sort of ethyr or, you know, really inspiring PowerPoint, but that you know, able to deliver it on the ground. I don't think that people spend enough money or time on internal brand, the activation, absolutely. And we've moved into this very custom-acentric/guess centric world and, and we forget the great pressure it puts on staff. Accessing a labour force is hard. Yeah, that's hard anyway. And then we've got to do it at global scale. We've got to inspire people into working for greater purpose. I think, well, first of all, we're incredibly fortunate. I started with how important it is to pick the right people. We have an incredible CEO who has, you know, not only the foresight and vision, but also the deep human values that I think are so important in this industry and he doesn't even come, you know, from, from the industry, similar to me. But he, you know, apart from, of course, putting, you know, very strong ambition together was all very clear along the way. And in fact, actually, when we met on, on Wednesday, you know, evening, actually on Wednesday morning, we did a live town hall to 15,000 colleagues all around the world from IOTM to, you know, continue to engage and, you know, make sure that everybody understands the transformation, the transformation journey that we're on. Where do we stand with regards to our overall ambition? So that there is a constant flow of information and communication across to every single employee all the time. And we don't only do it once a year. We do it constantly. And we took incredible care even last year when we redefined, you know, in a way that the brand and we rolled out a new vision, a new mission. We did our first brand visual identity refashion 40 years. And we took really, we took probably more time than maybe would be necessary. And for sure, spend more money than would be necessary in order to take everybody along the journey with us. Yeah. Because we ultimately, and I think, you know, this is a measurable, I don't know, but, you know, ultimately what you want is you want everybody to feel part of it. You want everybody to feel proud to be working for Manon Oriente. You want everybody to be part of this transformation, journey and ambition. Because the worst thing that can happen is you define a vision and a strategy on paper. And the only people that are executing it is kind of the C-suite and the rest of the people are like just watching, you know, what is going on and being dragged along. And that's not good. But I think there's, it's interesting what you say about measurability as well, because there's almost two components in my mind and people get very caught up on measurability and like, how impactful the brand has been for the customer. And it's like, you can't measure good taste. No. And you can't measure what it does when you take a leadership stance and pull the market with you to a new place. You can try and measure that because it's a fool's errand. However, how you activate a brand internally and sequence behavior change. That needs to be gated. And that needs to happen over time because if you try and hit people over the head with a PowerPoint and don't make them feel like their voices are heard and don't consider the behavioral strategy, then then you just end up with words on a page on a PowerPoint gathering dust knocked in a drawer. Exactly. And it will be a very short term impact. All right. I think the measurability probably comes through sustained improved consistent performance over time. How do you ensure Mandarin remains different from this growing field of luxury hospitalities focusing on everything from private membership through to longevity, short term rentals. There's a lot going on. Yeah, there's a lot going on in space. And what's your, how do you navigate that? Yeah. And the industry, as you know, as I said before the luxury hospital industry is continuing to grow, which is good. Looks about 3 to 5% for the next coming years. We want to capitalize on that, of course. I believe we have a differentiated offering. On the one hand side, we have this very unique dual roots, the one hand side originating from Bangkok, which is really giving us this service edge. I mean, anybody who's ever been in Thailand, this is really truly the motherland of graceful Asian hospitality. And we embody that, of course, as gracefully throughout all of our hotels, because that was literally the blueprint, as well as Hong Kong, which has the energy, the dynamism, and the, I would say, entrepreneurial spirit a little bit. So those two really guide us, you know, going forward in order to differentiate ourselves. Then of course, wellness is another critical component. You mentioned it in 1993. In fact, in Bangkok was the first, or the Mano Nguyen Tzu Bangkok was the first to establish a wellness temple on the other side of the Chau Praya River, which is to this date the experience. So if you want to go to the wellness and the fitness, you take a boat, which we operate from one side of the river to the other side of the river. So it's part of the experience and you get your massage and you experience all of the different kind of wellness experiences on that, on that, on that side. And for us going forward, wellness, of course, will continue to be inspired on the one hand side by Eastern medicine, which I truly believe is fundamental to our DNA, as well as all the advancements that you can see in the medical sector. But it's really having that balance on the one hand side with ancient traditions, Chinese traditional Chinese medicine, because ultimately, you know, we're an Asian Brad. And at the same time, of course, not closing our eyes to making sure that we incorporate recovery, for example, certain longevity items, is that a Zedobu? Would we ever go fully medical? I don't think so. The evolution of fans of MO and your loyalty, which is something that was a joy to work together on. Yeah, thank you. This shift towards emotional recognition rather than transactional loyalty, can you tell us what drove, which is clearly important, because I think the upload just a bit fatigue, with many of the loyalty programs that exist today? What was it that drove your decision to reposition membership. I mean first of all I think you guys that if I be lost job on that.
to help us guide through that. But of course, also before that, this actually took, this was almost three-year job. Why did it take so long? Because we really wanted to listen to the guests that were already part of the program before. And we really wanted to make sure that we deliver something that they actually want and need. And what they wanted and needed was not another loyalty program where they collect points, which, I mean, don't get me wrong, they're very good, for the big chains and they deliver really good commercial value. That's ultimately what it is. But what they wanted, what our guests wanted, was more emotional recognition. And not necessarily a transactional program. That means yes, you have tiers, of course. You have four different tiers, which are, of course, also based on how much money you spend and how much you engage with us, overall throughout the lifetime. But it is much more based on perks and benefits throughout those tiers that you will receive. Sometimes those perks and benefits might be surprised and moments of delight as you stay with us. And others are very transparent in terms of, yes, you get a room upgrade as of a certain tier. You get certain other benefits that will delight you throughout your stay. But ultimately, what really drove it was the needs and the ones of the guests and very profound research into that. I think the power of just surprising people, absolutely. The risk with loyalty is that you can actually commoditize everything else. You can turn everything into something that feels transactional. Before you know it, you've actually undermined your own brand. But it's just so simple when done well. But it's just turning loyalty into a gesture of hospitality and kindness and rowing of mission that actually you're someone who enjoys being here and we enjoy having you. And so something that we speak a lot about is generosity. Luxury is also not about generosity. And how you show that. And of course, we're very fortunate because most of our guests are very discerning the ultra-high net worth. They might be C-suite entrepreneurs, ultra-high net worth individuals that, again, do they need points in order to redeem them for something most likely not? As you said, what they are looking forward to is a, recognize me when I'm staying with you. Then B, and that is also critically important, is yes, we did the re-platforming of fans of a more-degest recognition program. But at the same time, we introduced our first ever mobile app. And what that allowed us to do is, in the background, we basically consolidated all of the data points of our guests. What happens more often than not in the industry is, you have all of these different software as running in the background across your operations in terms of seven rooms for the restaurant, sparse-off for the spa. You have your hotel management systems across the ZZR. And what happened over time was none of these systems spoke to each other. So you would have a none as maybe five different profiles across the group. And so we took a lot of time and cared to create a data lake with the help of AI, create one single profile of you as a customer. So all of your preferences, likes, behaviors, ZZR stored in one profile, doesn't matter where you are, in the world on any property or any of our outlets and experiences. Yeah, it's bringing us up an interesting thing, actually, that I'd like to talk to you about, which is AI. You've commented recently on the use of AI in hospitality. I have found it quite contentious, because I think that there are many incredibly useful use cases for AI, the unsexy use cases, how you think about operations, supply chain management, food wastage. There are amazing startups like Winno, that actually film and optimize menu and supply chain that people like Ibera Star and have used and actually EMA hospitality have used as well. Amazing case studies fit for those sorts of things. And for cleansing data and helping with integration issues. People I think desperately trying to find their next AI headline. And I hate to say it. I think a lot of it's barlegs. I think the way is people in brands who actually know how AI is helping them, and it's not the stuff that makes headlines. It's not the easy stuff that makes headlines especially. Probably not. Maybe people are looking for the golden nugget that all of a sudden solves all their problems. That's probably not what's going to happen. I mean, we're of course using AI. Of course, we have a program. Of course, we have use cases that we are now exploding. And of course, I use AI as well as a very helpful tool. But more for administrative tasks, right? Or helping me write something or helping me rewrite something or helping me to summarize very long documents or things like that, or helping me to organize things in my inbox, helping me to find things in files that are related. I think this is-- That is. --and create-- who we actually worked with to create an AI model for creative asset development. Downstream stuff. 100% content, automation of content, automation of creative content, predictive AI. That's of course interesting when it comes to CRM. Right, based on past behavior, using predictive AI to help you engage with customers in a more meaningful way, personalized messaging, which of course it's-- doing it in automated AI-generated way is going to help massive amounts of time. And of course, the technological advancement is going to be coming faster and faster now over the next. I think it will be interesting to see where we are in a year from now, maybe two years from now, simply because we probably can't even fathom the capabilities and advancements that will come. I think it'll equip staff to do a better job. And I think at the end of the day, the hospitality industry has been beholden to a suite of incredibly bad tools. Yeah, 100%. It is like unbelievable. No GM wants staff to spend more time fiddling with a bad system instead of actually being on the front line dealing with their gas. And that's why they're in that industry. Even things like morning meetings for general managers, right? The morning meetings with the staff, important arrivals, departures, Zedra Zedra, creating profiles of people that stay with you for the first time, maybe even personalised amenities throughout your stay based on your social media profiles. I think there's lots that AI can really help. But of course, the service will continue to be delivered through human interaction. Alex, I'm frustrated that we're about to run out of time. I think we need to go Joe Rogan in the future and do three hour sessions. But I've got a couple of questions that relate to our luxury report that we will be publishing in the first quarter of next year. And we want to use this opportunity to ask you a couple of quick fire questions. They don't need to be long-ans, Zedra. Snap response. How do you forthink the idea of value in your sector is changing? And what do you believe your customers will start valuing in the next few years by 2030? Interesting. I think, I mean, to us, value is continuing to be delivered through the services that we deliver. And ultimately, the human interconnections that the front office staff delivers. And if we are able to connecting back to our mission of turning guests into fans, that's all we want. What behaviors or expectations from the next generation of luxury clients feel most consequential for the future of your industry? Oh, interesting. And actually, there were quite a few topics on that at ILTM. Yeah, we spent in CUNN for the listeners a couple of days at the biggest luxury travel market in the world that happens always in this week in CUNN. And there was quite a bit of talk about the next generation of luxury travelers that actually do have the money. There's happening, of course, a relatively big wealth transfer from one generation to the next. And interestingly, I think the gist was going forward. We also need to make sure that we have what I would call high-low experiences. So as I said, I think the people have-- they have the money, they have the means in order to spend it. But they're very careful and considerate in how they're spending their money. And it doesn't mean that it's always, for example, Michelin start dining on property. But they might stay at Maninoyental Hong Kong or Maninoy at the Bangkok or any of other wonderful properties. But they, at the same time, then, go out and have street food. So being able to curate experiences that give that high-low experience ultimate in a destination, I think. It's what makes it interesting. And I'm the same in a way. Of course, you want to stay in a wonderful exceptional property. But in order to then experience the destination, it's probably not your white tablecloth. Totally. Dining experience. You want to connect authentically with the culture and the destination. Neat a bit of grit, basically. Yeah, you need a bit of grit. And that's probably what this generation also wants. They seek this authenticity. And to have both, I think, is interesting. Bring the hip-hop. What forms of innovation, technical, cultural, organizational, do you think luxury brands are too slow to adopt? Neat.
to think about. Yeah, we talk a lot about innovation. I mean, as we said, the first mobile app that we delivered and there's new guest recognition program is probably good examples of innovation. I don't think the luxury hospitality industry is very well known for being a very innovative industry. So we're trying to change that. We have a couple of big plans on the way in order to deliver against that because coming from FMCG and retail innovation is probably a little bit more of the lifeblood for those industries and it really isn't so much if I think about even the last 20, 30 years of what innovation has been delivered to the industry, not very meaningful. So in fact, we're now currently rethinking a little bit across the guest journey and customer pain points. As you said, usually the guest journey also starts much more before people actually arrive on the property. If we think that a person's expectation only starts as soon as they enter the hotel, we've already lost because whatever they start their journey, actually probably from the time they leave their door at home to the time they arrive on property, that's where you need to start creating value references. People can not only have a better time but also feel that being delivered value. Absolutely. What tension do you think your industry has to navigate that will go some way towards defining the next era of luxury? Look, I think one of the big tensions at least that we've seen is, and I'm quite cautious about as well, is ever since COVID we've seen a relatively huge spike in rate. Everybody's seen it, not only luxury across every segment of the industry. And I think we've got to be careful that we still deliver the value that is connected to the rate and that we don't run into, which I believe to an extent is why the luxury retail industry is suffering at this point in time because the pricing has gotten completely out of balance. It's always a mix of. The McDonald's got quite wrong as well. I mean, a mix of really sort of big downturn is when to sow astronomically through the roof that everyone was like, I now feel like I'm being ripped off. Exactly. And if you're then not able to, because their promise was all about craftsmanship and the details, and then if people find out that actually, well, first of all, it's not really about craftsmanship, it's actually all about mass production. But digitization/globalization has caused a great undermining in my opinion. And I think the big Maisons are actually going to have some challenges. Yeah. Very, very difficult to now rebalance this. So I don't want this industry to fall into the same trap. So we're very cautious to continue to deliver and elevate the guest experience to be in line as much as we can, at least. And as much as we can, I want to control it in terms of delivering guest expectations versus value. We're talking about guest journey. If you could redesign one part of the guest journey for the industry, where do you think we get it wrong? There's one that I have discussed with another spokesperson for the industry for quite a while. And I think across the entire industry, the biggest pain points that we see for anyone is always check in, breakfast and check out. And especially the check in and check out experience is absurd in many occasions. We try to already make it as easy as possible. And these are not my words, but a friend of mine always used to say, well, you check in all of these fancy hotels. And even if you prepaid or it's an all-expenses, pay trip, the first thing that they ask you to do is to put a hold on your credit card in an absurd amount of like 1,000 or 2,000 USD, because they probably think that you're going to run away and or wreck the room. And so which is already a kind of sign of, do we really trust this person? It creates a bad thing. It creates a distant, it creates an emotional distant. I mean, it's become kind of industry standard, so everybody's doing it. But I think if I could change that, that's one of the things that I think nobody has gotten really right. And it would remove a huge, huge fiction point. What do you believe will endure in luxury? What won't change even it when everything else does? Wow, interesting. I think meaningful brands that really deliver versus their brand promise will ultimately prevail. That's usually what we see. That's also why we're taking so much care in defining our brand promise, defining our DNA and then rolling it out, meaningfully across the organization, and engaging people into that brand promise. So if you're capable of delivering against it, authentically, naturally and visibly to the guests, that ultimately see the value in what you're delivering, then I think that's a recipe for longevity. Alex Shellenberger, thank you very much. It's been wonderful. Thank you so much, Ellen. Thanks. Thanks so much for listening. This has been What The Laks. You can find us on socials at MathuraForm and drop us any questions or comments on Twitter using the hashtag #WhatTheLaks. Or if you're a luxury brand looking for strategy and design that goes beyond the banal, get in touch by
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