Beyond the Core : Travel's Blueprint for Diversified Growth

Hello everyone, and thanks for joining today's webinar. I'm Dan Marsek, the research editor with Skiffex, and we are pleased to present this panel discussion today in partnership with ZS Associates.

So, throughout the course of today's discussion, we'll be exploring how you can diversify revenue streams beyond your core businesses to influence more of the customer journey. That's going to help you unlock growth not only in times like these, which, what do we call them, everyone? Uncertain, unpredictable, unusual – you pick your adjective. Um, but we're gonna help you set yourself up not only now, but in the future for success.

So, let me go ahead and introduce the speakers today. We're very, very excited to have Lucy Warner, who's a senior vice president of global partnerships with Marriott International. We have Steven Ellen, who's a director of AWS for travel and hospitality, and then Kunal Sha, who's a principal with ZS. Thank you all for joining and really looking forward to conversing with you.

Quickly on the agenda, um, we're going to cover a new research report from Skiff and Zs. We're not going to spend too much time on it, but it will underpin a lot of the themes that we're talking about throughout the conversation today. Then, the four of us are going to have a panel discussion for the last 25-30 minutes, and then we're going to close with audience Q&A. So, please make sure that you ask questions throughout the presentation, and we'll be happy to answer them either in line if they're part of the conversation we're already having, or we'll answer them at the end.

With that, um, there's a chat here on StreamYard, so please post your questions there, and we'll get to those as I mentioned. And, um, then if you're on social media, don't forget to tag @SkiffLive. And the last thing is, obviously, we definitely want you to be engaged. Take as many notes as possible, but rest assured, you will have a video recording of this afterward. So please, you just feel free to engage directly and make sure that you um are just hearing everything that all the great stuff that we have to say.

So with that, um, as I mentioned, Skiff embarked on a research project earlier this year, and it was in June 2025. So, pretty much at the height of kind of everything that was going on with tariffs in the US and just kind of uncertain what was going to happen with the summer. And so, what we really wanted to know was, how are travel companies, travel and hospitality companies, how are they thinking about growth outside of their core businesses? What are they doing to try to kind of think outside the box and take advantage of all the different assets they have? We'll talk about a lot of that during today's discussion, but what we found was travel companies are very eager to think outside the box, but it's very difficult to act. And that's what we're going to get to today.

Um, you'll see there should be a link here in the chat where you can download the report. So, if you don't have your phone with you, you don't have to scan the QR code right now. Um, but please download the report, and you'll get a lot of great information.

So, with that, everyone, um, let's let's get into the discussion. Lucy, I'm going to start with you, but let me give a little bit of background. One of the things that we found in our report is that 89% of the about 300 travel executives that we surveyed said that they need to further diversify their revenue streams because customer demand and market dynamics are just becoming more unpredictable overall. So, Lucy, working at Marriott and dealing with a lot of this, what are some of the things from a customer's perspective that you have really seen changed, and how has that affected the way that you view what's going on at your business?

Thanks, Dan. So, um, you know, we would say that we've observed several trends, right? So, Marriott has a very large loyalty program, Marriott Bonvoy. And as we have learned more about our guests over time, we really have seen the opportunity to lean into the passions that mean the most to our guests. And so, these really um are focused in on four core areas. So, the first is sports, music, the outdoors, and culinary. And so, we've got a large portfolio of passions. Um, so, for example, in sports, whether it's the NFL, tennis, the F1, where we have curated experiences and platforms that members will be able to get access to via our Moments platform. And we also pull that through in terms of our marketing and brand communication. Um, we do similar on music, right? We've um sponsored tours. So, last year was Taylor Swift and Beyoncé. Um, in culinary, we have tentpole events. And then, in terms of how things have changed coming out of COVID, we've really seen um people wanting to get more into the outdoors. And so, you would have seen in the last couple of months, we did some acquisitions with Postcard Cabins and Trailborn and launched a new category um called Outdoors. And that essentially is not just a hotel product which is differentiated, but it's it's got partnerships that support a differentiated customer experience with um seven different categories of outdoor from skiing, snorkeling, hiking, mountain biking, um and curated itineraries in the outdoors.

Great. I mean, yeah, that's a lot. So, how has that kind of changed the way that you're thinking about delivering things beyond just the hotel room in order to meet some of these demands?

Yeah. So, you know, it's it's really about building the ecosystem of partnerships. So, we've got quite a large ecosystem of about 100 partners across the world um to be able to deliver outside the core stay. Um, and then it's about connecting the touchpoints digitally to make sure that it's a seamless experience, right? And being able to um get better engagement is also a way for us to gather further data points um via, you know, clean rooms with partners where we actually gather more information about our guests and how we can um, you know, customize their experience with us when they're on site.

That's great. Um, and we'll we'll get deeper into some other examples, but Stephen, I want to turn to you because Lucy mentioned the magic word, partnerships. And AWS partners with a lot of companies across travel and hospitality. So, what are some of the things that you're seeing kind of across the industry in terms of how companies are trying to reorganize what they do in order to meet these different customer demands and also deliver some of these new types of products or services? Stephen, you're on mute.

I agree. Somebody had to do it, so it might as well be me to get it out of the way for everybody.

There you go. I owe I owe a dollar to everybody on the call, so you can come chase me. Yeah, I think Lucy did a beautiful job describing it, so I would just build on top of it. Uh, you know, the brands that are doing extraordinarily well are those that are working backwards from their specific traveler or guest, right? They either have the data or they're interacting with them through focus groups or panels to really understand what it is that they want to get out of that brand. They're not relying on executives' you know, instincts or guts, but they're using that data to work backwards. I think there's really like two core dimensions I would talk about that, and Lucy kind of touched on them well, which is they're moving from transactional to experiential. And that experiential like actually has two meanings in it. So, the first is they are using the new technology so that it's not just the tyranny of the search box as I used to always say. It's, you know, multimodal. So that means consumers are chatting and interacting with bots and interactivity, you know, through a website or mobile app. Um, they're also probably now using speech. We're seeing a lot more consumers using, you know, text-to-speech over their mobile device or with the new found web browsers. And they're also changing the the user interface or UI in real time. So, like, as I'm interacting and trying to find this experience that Lucy described, all of the visuals and everything on my screen should be adjusting along with it, right? It shouldn't just be a static display.

The second is, and Lucy did a beautiful job describing it, it's that, you know, our guests don't come to us for a single transaction. They come to us for part of that journey. So, like, you know, Lucy did a great job. Like, I wanted to take my nephew kayaking, and so I went to the Postcard Cabins in order to find that. That was that was in a beautiful place in Connecticut to have that experience, right? The stay in the cabin was part of that overall experience, but it was speaking to me as a consumer about the actual end-to-end thing that I want to have. So, I think those are the two core dimensions. I think the last piece I would add, brands that do very well also are thinking about suppression. So, it's important not just to think about the things that we do want to do. We also have to think about the things that a guest maybe doesn't want to interact with. I'm sure most of us have a friend that might be vegan or vegetarian, and they've probably all shared with you a story about getting an advertisement or a promotion for like a triple bacon, you know, cheeseburger. Like, that would be the kind of experience when we talk about suppression. So, we need to speak to our customers, you know, in their language and meet them where they want to be.

That's really interesting, Stephen. I I think that's a great point because it does get to this whole idea. We keep talking about personalization and, you know, customizing the customer journey and things like this, and it is all of those elements. Um, well, you've got a unique perspective as well that's different than both Lucy and Stephen's in terms of working as a consultancy. And you work in travel and hospitality, but I know ZS works really across all industries. So, what are some of the things that you're seeing from that standpoint as well, in terms of what it takes today to be truly customer-led and thinking from that customer viewpoint first?

Yeah, I I mean, I think, you know, I won't I won't reiterate what or or um, you know, restate what Stephen and Lucy said, but I think, you know, all of what they're describing around truly being sort of, you know, customer first, customer centric in everything you do is is really important. And of course, you know, proof is in the pudding, right? I mean, if you look at NPS scores, for instance, you know, customers will tell you if they truly believe you're customer-led, right? I mean, you ask the customer, and the customer will will will share that. But if you kind of peel back the onion, right, and you look back at the companies and say, hey, what differentiates the ones that that truly are? I think you you the most telltale sign is if really the customer is truly at the center of everything the customer does. U right? And and I think, you know, you'll see a lot of companies do things like, you know, personas of customers or, you know, customer journey mapping or even go down the path of saying, hey, what are those moments that matter across those journeys, and what are those moments that we have to influence? I would imagine most large companies do that exercise, but I think what separates the sort of, you know, the the ones who really truly stand out are the ones who can then execute on that, right? And and that's where it gets very tricky, right? Because that's when, you know, you need cross-functional integration, right? I mean, technology's roadmap has to be very aligned with what, uh, you know, marketing or sales is thinking. This isn't a marketing problem, or it's not a sales problem. It's a truly integrated, uh, a roadmap. You know, Lucy described so many nice things. I was writing down around, you know, having a very clear vision around sports and outdoor and culinary, and, you know, then sort of building platforms that enable you to provide that experience, and, uh, and so on. So, so you can really sort of start to see that they're serious when they go beyond just the mapping or the strategy part of it, which I think is, of course, very important. It sets the north star. Uh, but the next phase of that is saying, okay, now rubber meets the road when we can actually integrate, uh, you know, a lot of these pieces that enable, you know, that end outcome.

I'll also say, in sort of hospitality, I think a very important enabler of this is, you know, to drive pull-through. Um, you know, you have to, in in most large brands, there is a big franchisee network, right? And and those franchises have to deliver that same experience. Uh, and so getting that pull-through in a consistent way and being able to provide that seamless experience to the customer is also a sign of being truly customer-led, right? It's not just figuring this out above property, even at the technology analytic level, but then pulling through on this all the way down to, you know, the individual franchisee that is providing that service on the ground.

Yeah, those are really great points. I think this articulates well that we understand how we should change our thinking. We understand what we want to do about it. Now the question is, how do we do it? How do we turn these insights that we have into action? And Kunal, you touched on it already. So let's let's continue down that road. Uh, going back to our research and some of the statistics we have, two of the top three concerns for executives in 2025 and 2026 are delivering a consistent customer experience and the pace of technology advancements. So, these things that we're talking about, bringing them together.

Um, Kunal, we in our research and our studies talked a lot about this idea of expanding outside the core, the core business, and exploring some of these non-core assets that can help put together some of these pieces to really enhance that core experience. So, we did hear that almost two-thirds of executives are worried about pursuing those kinds of things because they're worried about it distracting. But how we see it is really enhancing. Can you, so can you talk a little bit about that? First of all, what we mean by a non-core asset, and then also where we can start to put these things together to deliver on those expectations that Lucy and Stephen and you have already talked about.

Yeah. So, so first of all, right, to your question of sort of what is a core non-core asset, let's first describe what is a core asset, right? And so, um, you know, core asset, think of it for a travel company as, you know, the assets that that's able to provide the sort of core service, right? So for an airline, that would be, you know, seats on an airplane, selling those seats. For for a hospitality company, it's of course, um, you know, renting out rooms and and so on. And, you know, car rental for renting out cars. So the assets being the cars, the hotels, the planes, and so on. Um, but then, you know, when you look beyond that, anything beyond that is what we would consider sort of non-core assets, right? And so, um, you know, I think one non-core asset, which of course the the industry is very famous for, is ancillaries. Uh, you know, when you think about, uh, uh, you know, bags or you think about seat upgrades or room upgrades and things like that. That sort of, I would almost argue the travel industry is a pioneer, uh, and and almost leads the way in some of the thinking when it comes to ancillary sales and and and what the industry has been able to do with that. Um, you know, but then there are other assets, right? Like customer attention when flying on an airplane or or at a at a hotel. Uh, you know, Marriott, United, companies like that have done a very nice job of of capitalizing on that to meet the customer where they are along that customer journey, but then being able to commercialize that through say, media networks, right? And and this is only getting started. But then the ability to use that customer attention, hey, I have four hours of an of attention of a customer. How do I provide that personalized experience? Like Stephen said, you know, if you're vegan, you know, not showing you, you know, uh, uh, bacon, right? And so, how do I actually provide that sort of seamless experience for you? Uh, but that's customized, that's tailored, and capitalizing on that sort of attention. Um, but there are so many others, right? Like access to customers, or hotel franchises in the case of hospitality, or, you know, leveraging brand affinity through co-branded credit cards, right? Or even the ability to to provide a service and leverage your internal capabilities. Um, you know, I I, it's it's of course nice that Stephen is on, right? Because I think Amazon is famous for its ability to have shifted in or or or expanded in that realm, right? Even will say that others from AWS say this too, but, you know, um, AWS's birth was really in was grounded in the ability for or or when customers came to AWS or Amazon and said, hey, how do you do what you do? Show us that technology, and can we actually leverage that technology, which was, you know, a lot of what inspired kind of the birth of AWS, truly customer-led, but then the ability to leverage that same capability and and make it a sort of behemoth of a of a company. Um, but even in the travel industry, and we actually, uh, talk about this example in the report, uh, somebody like the Airline Reporting Corporation, right? ARC. Uh, they are effectively a company owned by all the major airlines, all the major US airlines, right? Um, and their business, their core business is actually settlement, where they settle all third-party transactions that go between, you know, say, travel agencies, for instance, and and the airlines. What they realized through the way was saying, hey, hold on, I'm sitting on some really interesting data, uh, because I'm settling all these transactions. I can provide ticketed share data, which is pretty much non-existent in the industry. And so, over time, they've morphed into not only a sort of settlement company, but they're a data company, right? They're a data products company, and now a bigger and bigger player in the distribution space. They have a product called DDS, which is like a very, very famous product for, uh, for for airlines, which airlines use in contracts, right? Both, you know, for for reps as well as contracts for travel agencies. So, you know, a good example of sort of how companies start to think about, hey, I'm doing this, but now I have the capability to also do that. So, you know, I hope that gives some flavor of, you know, what what we mean by non-core and how how companies are are are doing that.

Right. That's excellent. Kunal, and and Lucy, I'll I'll turn to you to give give some more examples of this. You know, you mentioned Kunal, AWS, obviously, um, giving some insight into why we've curated this specific panel. And Lucy, we nodded a little bit to that, the Marriott ad network, which is one thing, but if you can talk a little bit more about how the company approaches these different areas of customer attention or corporate ability to create new revenue streams to add on top of what you're already doing as a hotel company, um, give us a little bit more insight into that and some more examples.

Thanks, Dan. Kunal did a great job in in kind of articulating I think what the opportunity is, right? And so, Kunal, you mentioned co-brand credit cards. We've had co-brand credit cards um globally, right, in different providers in different markets. And we have see that as helping the distribution flywheel because um people use their cards, they stay with us, they can redeem the points, right? And so that has kind of been our initial foray into kind of new spaces and places. Um, but we then look at the customer journey, right? And how do you really connect the dots, right? So, we launched Marriott Media Network this summer at the Coachella Festival, and essentially um that is across the properties, right? So, the GRRE in Rome, and it provides an opportunity for our partners to actually showcase content. And it provides us um an ability to give guests content that they're looking for, right? Be it entertainment, be it wellness, be it to highlight the passions, right? The sports, the outdoors, um the music in room. Um, but we've we've seen that, you know, that Marriott Media Network is is highly effective. So, if you look at um, for example, Pepsi is one of our um early pilots testing the media network, and they've actually seen by, you know, running placements on the Marriott Media Network that it it drives um high single-digit lift of sales in property um for their products. So, it's really about understanding who customers are, showing them the right content, right? Which then drives business results for us and for the vendors. Um, and I think another example is boutiques, right? So, we've launched a new boutiques integrated store this year. Um, and this again will will look at the in-room experience and how do you make that shoppable so that you can take products from the destination and hotel home with you. So that's a little way of of how we think about the bets. Um, you obviously mentioned ancillary. We have our Moments and our Tours and Activities, which is really about curation of experiences and then merchandising that through the customer journey, um as well.

Yeah, that's great, Lucy. And, um, we talked about this when we were preparing for it. Um, but the ad networks are so interesting, both yours and, um, United has has launched their kind of seatback entertainment one. And the thing is that there have been ads in hotels and on planes and things like that for a long time, but the thing was, in the past, you would only have the same ad. Going back to our vegan example, this is such a great one, Stephen, because you everyone would see the bacon cheeseburger on the back of their United flight or in their room at Marriott. But now you have the ability to really dig in and understand that individual customer and what they're doing at that level. So, through Bonvoy, through other loyalty programs, and that's giving you such a unique opportunity. So, you know, Stephen, I'm going to turn it back to you to talk about that in the sense of what are companies able to do now at an organizational level? Lucy shared some really good ideas and really good activations. What's going on behind the scenes in terms of how they're putting all that together and able to make that a reality for their customers?

Yeah, I think the the truth is that in today's digital age, right, the the data is more than just numbers. We all know it's zeros and ones, but really it's a footprint of us as an individual, and it shares both like our actions, our behaviors, but it also gives insights into like desires. Um, and so like organizations are able to use some of the technology in order to discern those behaviors and desires. Um, you know, having the conversation and working here with Lucy made me reflect back that I was super fortunate to come up through operations. And so I did actually work at a Weston hotel. Um, and I used to just admire how the concierges would do their job, right? There were like four steakhouses within a mile area of where we were, but they would have an interaction with a guest and they would make assumptions about the guest. They would ask follow-up questions, and based on all of that, they would pick the best of the four steakhouses to make the recommendation for that guest to have, you know, the best possible experience. Often the guest would come back and would thank them and, you know, would continue on. And so like I think about now in today's world, like how are we digitizing all of that? And so that that's really where the data comes in. The data is informing that interaction. So I think the biggest insight has been through the use of now generative AI and the agentic AI. Is where like Lucy and her team used to monitor like shopping carts or webpage abandonment to try to infer all of that. Now, with generative AI and consumers typing in, you know, Taylor Swift concert in Tennessee and these dates, and I'm traveling with four people and a tour of teenagers, right? Like Lucy and that team is now getting all of these insights that we never had in the past, where she's been able to go curate and content and create or create that new content that really speaks to what that consumer was looking for in the first place, which was the experiential journey we described, not the transaction. So I think Kunal brought it up, like, as you look across the totality of all the sub-industries that we service. I I actually think like Lucy and her team in the hospitality industry have an advantage because the franchises are super well, you know, tied into this community, and they understand the events. They understand, you know, the local environment, what kind of shops are available, you know, all of activities, the sports, the culinary, and the rest, where, you know, some of our airline or airport customers don't have that. And so like, data is going to continue to be increased in value, and we're going to see the travel and hospitality brands using that data to really feed into the consumer's, uh, inspirations and behaviors as well.

This is such a good point, right? Um, because I think this idea of combining, you know, local data with macro data and and being able to sort of, you know, because at an individual property, of course, for the larger hotels and the larger attractions, it's, you know, I don't want to say it's easier, but it's much more feasible, right? And but when you start to go down at a very local level and you start to think of, you know, in the case of, uh, Lucy, sort of the Courtyards of the world, right? Those now those attractions, those linkages become much, they're not as sort of ubiquitous, right? And so how do you take all of that data, integrate it, and then actually deliver a personalized experience for the customer? The, it's not easy. Uh, and and, you know, as companies continue to invest in this, you're only going to get sort of better.

Yeah, that's excellent. Um, Lucy, if you don't mind, we got a really good question from the audience. Um, but I think that it's it's very much in line of kind of the next place we plan to go with the conversation. But the question here is, how do ancillary sales impact loyalty? And related to that, but I think it's actually the kind of bigger picture question, what is the best way to add value to a consumer's travel experience and increase revenue while still maintaining or enhancing loyalty? So, the way that I read that is the sense of, um, how do you basically shift the consumer's perspective from, "I'm trying to sell you more stuff," to, "I'm really genuinely trying to make your experience better." I don't know if you read it the same way, but that's kind of how I think about it.

No, that's a that's a great question. Thank you for the question. I'll answer it in reverse, right? So, um, the first part of the question was around ancillaries. You can kind of remind me what that was in a minute, but, um, how do you, how do you sort of connect the dots on ancillaries in a seamless way? I think that's really about understanding the consumer and their intent and where they're at in the journey, and about connecting the dots on partnerships and being able to figure out what to merchandise when. And you've got to basically surface those opportunities to alleviate pain points, right? So, I mentioned we've got an ecosystem of around 100 partners, right? So, this is everything from cruise, car rental, Uber, Starbucks, you know, ecosystems, all the passions that we have too. So, if you think about somebody who's staying in New York City, they booked a flight with United, you mentioning United, they're a partner of ours too, and they're staying at a a hotel in the city. You could actually say, okay, can we pre-book you an Uber? Or if they're staying at a Select Service property, maybe it's an Uber shuttle, right? That we've got a partnership in terms of, um, you know, supporting some of our hotels with with airport shuttles. Um, so it's surfacing that at the right point in the journey. Um, connecting the dots between, we see you've got a United flight, we see you staying at the Courtyard, you know, would you like to add this on and then have it pre-booked, right? Or you understand that somebody's traveling with children and they're in a longer stay property, um, can we um use Uber to deliver groceries so that, you know, when you arrive, you've got breakfast for the kids, um, if if it's not one of our properties that offers, um, you know, breakfast, for example. And so, I think it's it's understanding the purpose of trip and then how you connect the dots, um, in a seamless way. Um, the first question, remind me again, it was about ancillaries.

Oh, it's basically, uh, well, the question literally, how do ancillary sales sales efforts impact loyalty?

Yeah. So, I think if it's done right, it's a huge driver of loyalty, right? And I think um, people don't just want to go and, and I think this is really shifted with COVID, they don't want to just make a trip and stay in a hotel. They really want to experience the destination in an authentic way. They want to get special access. Um, and so they're going to rely on the brand and or the staff at the property to kind of curate those experiences. And I think, you know, if you if you have, whether it's a tour and activity or a Marriott Bonvoy Moment, you know, that's pretty special. And I think it it builds on itself, right? So, I look at, um, you know, we just did a, for example, a concert series with Starbucks where we hosted Alex Warren in the Roaster in Chelsea Market in New York City. It was one night, um, small group, 200 people, invite only. And Alex was amazing, right? He, you know, he spent time, um, one-on-one with guests. He was making cocktails with them. And, you know, I was spending time with members, and they were sharing stories of, there was a a mom and, um, her son had just, um, had a really bad ski accident, right? And so he was a huge fan of Alex Warren, and having the ability to kind of spend time with him was was a real momentum to like his recovery, so that he would be able to make the event. And, you know, stories like that, I think really touched my heart, right? And I think being able to offer things like this, it goes beyond money, it goes beyond points, it builds, you know, lifelong love for brands.

That's great. Stephen, Kunal, anything to add? I excellent example, but I was just going to say Stephen, you you had something that you were gonna

Just I'll do it quickly because Lucy did a beautiful job describing it. That example is so is so prime. Like, you know, universally we hear brands say it has to be cool and not creepy. And the way that they make that determination, and Lucy described it, is like it's always been a human in the loop is the term, right? So there was a human making that decision of what was the offer, what was the package, how do you make the connection. Even when we have technology and we're trying to automate this, it's important that you put that aspect of human in the loop into it. And so we use this term of companies creating frameworks or tenants in order to drive the decision-making. And the best example I can give is one that actually comes from Disney. So like every decision that gets made is based on safety, courtesy, efficiency, and then the magic. And it's in that order, right? And so like, it's super clear for them anytime they're ever going to do anything with a guest, it has to go through that four-part piece in order for the decision to be made. So we would just encourage other brands again, human in the loop as much as possible. Where you're going to automate, make sure you're clear and like specific on what your tenants are for how you make those decisions.

So this discussion is perfect because it leads me into what I wanted to talk about next. Um, but first of all, let me throw some statistics, more statistics at you. So, in our survey, 86% of executives said their companies are interested in exploring these incremental revenue streams. Um, 84% said they have clearly identified a strategy, and 75% said they've already identified some non-core assets. However, less than a third said that travel and hospitality is very innovative when it comes to this, and 60% said that other industries do a better job. So, let me consolidate that into a single question. We talked a lot about today and what we can do, what Marriott is doing really well, how you can set up your organization. What about the future? How do you identify these assets and think about five years down the road? What is going to be impactful? Um, so Lucy, I'll start with you again, just in terms of, you know, how when you think about these things. I mean, Stephen actually did a really great example of how Disney has a framework for this already. What is Marriott's perspective in terms of, you take customer preference, you think about how to implement it, how do you make sure that it ends up showing up, and what's, you know, even a hypothetical kind of theoretical path to get there? What, what is that framework for you?

Yeah, I mean, I think everyone did a great job like touching on it. Like, in theory, it seems so simple, but it's complex to deliver because to connect the dots within all the technology, especially at the global scale that we have, it's it's very, very substantial. And then you've got legacy technology, right, that you've got to kind of lift as well, um, to migrate to the cloud to kind of be able to have the right base and infrastructure to enable it. In addition, you've got core hotels that need to run their business. We're in an environment of declining RevPAR. So, there's real pressure on just continuing to deliver as ADRs are higher post-COVID. There's also, you know, a real focus on intent to recommend and guest satisfaction, right? And so, it's getting the balance right between not distracting operations from nailing core operations and driving revenue, but being able to provide a framework and test and learn what works and build. I think Steven did a great job, the framework, right, of how we think about it, and then being able to test that out to be able to um, figure out what works, does it monetize, and then how you support the hotels. I think to get it done right at scale, you need standardization, but then you also need localization, right? So, you need playbooks, you need frameworks, but then it's also got to be localized for each market and different customer segments, right? What an ultra-affluent customer needs versus a mass customer are 180 degrees apart, right? Um, you'll also see within our guest space, you've got members that stay in ultra-luxury hotels, but then if they're traveling for youth sports with their kids, they might be staying in a Courtyard, right? And so, it's understanding that trip intent and who the customer is and what the expectations is. And technology helps deliver that, but there's got to be, as Stephen said, a human element to be able to support that curation. And the technology is the mechanism that gives the human the data to make calls.

Right. Exactly. And, um, as a journalist, I'm contractually obligated to ask about AI. So, Stephen, let's take that, what, what Lucy was saying about technology and and and, you know, extend that to the next few years, especially we've been talking a lot about agentic. You know, how does this come into play when we're talking about some of these aspects and some of these executions? And once again, it's very similar to what Lucy was talking about with practical applications for the customer. How do we think about this for technological applications and building for the future without necessarily knowing what's coming next?

Yeah. Uh, it's a very true statement that you made. I'm fortunate. I was around during, you know, the late 1990s, early 2000s. So e-commerce and that transformation was real. Uh, agentic is the equivalent of that. So I can just share with you like, very real, our world is going to continue to change. So you're smart to ask the question. Um, I'll try to keep this as least technical as possible and, you know, really focused on the business, but we'll have to bring in some of the technical aspects. And I think it's important for all of us to realize that we are technical practitioners, whether we want to be or not. So I encourage you all to like, you know, dive deep and learn and be curious around the subjects. But basically, when you talk about that pace of change, like we're really talking about disruption. And there's disruption that can occur, you know, from external forces, or there's disruption that can occur internally. Um, and so that that's really where I think agentic AI is going to take us. What's super unique about what you're talking about of the agentic AI, and from all previous incarnations of tech, is that the agentic AI itself can do four very specific things. First and foremost, it can actually like plan. So you're asking it to do something, it's going to build a plan. It then prepares on how it wants to execute, meaning it decomposes those into discrete tasks. It then goes and actually acts, goes through those discrete tasks. And the most important thing is it has the ability to respond. So if it doesn't get the direct outcome that it's seeking through those first three steps, it can actually go back to step one and replan, reprepare, and try to react. And so like, if you've used any of these research agentic AI agents, you know, you type in your question, and the thing goes away for 60 minutes or maybe an hour or more, it's because it's going through that whole process. What does that mean? What does that translate to? Well, I think Lucy talked about it. Well, it was a partner-based ecosystem. And in the past, what you had was really smart, uh, you know, systems, but you had a really dumb pipe, and that was all the integrations that Kunal talked about. Like, it was expensive, it was costly, it took a long duration of time to set up those integrations to all those partners. Our new world flips all of that 180, in that we can have really dumb systems, but now the pipes are going to be really smart because of those four attributes we just talked about. And so partners are going to be able to discover each other's systems, discover all of these assets that Kunal talked about, and be able to offer all these experiences to customers in a much more rapid, fast, less costly kind of fashion. And so we genuinely do believe like transportation, you know, travel and hospitality is going to transform in a way that it hasn't over the last 100 years.

You know, um, Stephen mentions, um, you know, smart pipes. I I think it's, um, or now smarter pipes, previously dumb pipes, now smarter pipes. I think, and we're talking of course a lot about hospitality here. Uh, but, you know, if you look at, uh, sort of the innovation in in NDC, right? And the ability now for airlines to be able to distribute, uh, just excellent content now through third parties because these pipes, previously that were not as capable of delivering this. I mean, you could barely deliver even seat upgrades, right, through through some of this stuff. Now you're able to, you know, now we're seeing a future in which airlines can be true retailers, right? They can actually distribute a lot of phenomenal, uh, uh, uh, you know, services to customers along this customer journey through these, you know, smarter pipes, uh, because the technology now enables it. So, Stephen's point is excellent, and this is how you you're seeing this manifest in the next, I mean, NDC is only getting started. In the next 5 to 10 years, I mean, we're looking at a very, very different travel and hospitality retailing environment, and, and quite frankly, a much more elevated experience for customers.

Yeah, that's great. Um, the one last thing that I wanted to ask all of you, um, is another one of these pain points that we've run into. We have all these ideas, right? Say, even you're Lucy, you're very high up in your organization. Um, but how do you get buy-in at the top level when it comes to some of these concepts, ideas that are a little bit outside the core business? That was a huge concern among the executives that we surveyed. It's once again, going back to this idea that you have tons of brilliant, innovative, uh, eager, excited people who are willing to do these things. But Lucy already brought up the point, these global systems can be very slow-moving, and sometimes, you know, the customer experience is different than the shareholder experience, etc., etc. So, what, uh, what is it that you would say is kind of, you know, the number one thing that you have to think about? Is okay, we've got this idea, we've got this execution plan, how do we get, you know, high-level buy-in? I'd love a, you know, quick answer from all of you if you have one.

Yeah, that's it's a great question. So, I I would say it's definitely a journey, right? I think it's building a robust business case of understanding, you know, from pilots, right? I think you got to run pilots first to actually get some early customer data of will this resonate, and if yes, what good could look like, right? And use those pilots to inform what the business case would be on topline and the fully loaded costs and time, and figuring out all the cross-functional stakeholders that you would need, right? And so, I think it's, um, framing up a vision, framing up a compelling business case, being realistic on the timeline and cost to deliver it, and thinking through all the stakeholders that you're going to need, right? Um, to bring that experience to life.

You know, I I'll just I'll just say that, you know, I think you just implicit in your question is this is hard. Uh, you know, this is not easy. I mean, we we, you know, I think a couple of times we've mentioned some, you know, let's call it some plateauing of, you know, at least in the midscale, upper midscale segment in hospitality, plateauing sort of ADRs, and, you know, I think a lot of this is, you know, as you you think about the future and investing in the future, it does of course compete. I think Lucy had brought this up earlier, it does compete with kind of your core service and the things you have to do and, you know, things on that roadmap, uh, as well. And I think, you know, in my mind, it's, you know, it's, um, you you have to sort of make sure you're not always sacrificing, you know, the important for the urgent, right? I think there is, I'm I'm not being naive. I I think, of course, there are, you know, callings that come. I mean, there's, you know, business happens, life happens, things happen, and and you have to react. But this ability to keep the north star in mind. I think Stephen described Disney's, uh, you know, sort of vision and and tenants, if you may, or guiding principles, very nicely, which is, you know, you still want to keep going toward, you still want to keep moving towards that while continuing to sort of, you know, manage what comes your way. And I think it really does start with, you know, this this culture of sort of saying, hey, Lucy said, you know, pilots, but this ability that we are innovating, right? We are growing. So by definition, we're going to do things, some things that won't work out, some things that will work out, and celebrating some of those things and saying, hey, as long as we continue down that process, as long as we continue to innovate, um, and as as long as we continue to to stick with that sort of, uh, uh, north star in mind, you know, some things will go, you know, some things may not work out, some things may, but at least let's kind of, you know, be patient and continue to sort of innovate through that process. So, uh, you know, that's what I would say say is is really to me.

An important aspect as companies think about going down these journeys. Stephen, anything to add?

Yeah, I think the peers have done it well. I would summarize like the executives have to have that alignment. So we use this term, disagree and commit. Like, lock yourself in the boardroom, have all of those disagreements, but like, when you leave that boardroom, you have to be committed around what it is you're trying to achieve, right? This is not a side project for the CMO, or this is not a special initiative that, you know, the CRO is working on. Like, the, the entire executive suite has to be aligned on like, what the desired outcome is. You know, set that goal. Lucy talked about it well. Like, the whole org needs to understand and be aligned over what's trying to be accomplished. Uh, so that makes it easy for people to understand how they spend their time and how they're prioritized. You know, I think a third piece that that maybe we hadn't referenced is like, this may not be native or natural to many of those in the organization. And so make sure you're thinking about like, the training and the upskilling and how are you teaching, you know, your organization that, you know, adding an auxiliary item for a customer is actually making a better experience for them. Like, you're not selling them, you're helping them to have a better experience. So you have to bring your organization along on the ride for you. And then I think Canel said it well, like, this is new. It's somewhat experiential. I think I would replace the word with iterative. And it's that like, you're going to test. You're going to get feedback from those customers and guests that we talked about. It's going to inform making an adjustment and just commit yourself to being in this virtuous cycle of like, continually improving and and that's what will lead to success.

That's great. So, um, if I can just quickly get our slide back up on the screen, I'm going to go through some key takeaways. Thank you. And while I'm doing this, everybody think about your questions, put them in the chat. We're going to take some audience Q&A. Um, but basically, just to recap, you know, we're talking about what we can do to set ourselves up for future success. Of course, that means our core business and all of these things apply to that, but it also applies to thinking outside the box and thinking about what other assets and platforms and abilities and things like that that our companies have access to uniquely that uniquely serve our customers that only we can provide. So, start with your guest journey. Think about the partnerships you have or that you can make and use data and technologies to connect those. Of course, then you've got to look at an organizational standpoint. We just talked about getting buy-in. We talked about how you set things up through a frameworks or anything like that, but it all once again really starts with your company and your customers and then testing with small real work cases and scaling what provides a better customer experience overall.

So, um, with that, let's please, uh, we've got one question that I'm going to ask, um, a couple more here, uh, but, but keep them coming if you have them. So this, this one that I have, I think, you know, we obviously touched on a lot of examples, but, um, I'm going to challenge everybody. Canal, maybe I'll start with you, uh, since you've had a lot of insight into this and we did our research together. What are some of the most non-expected or unexpected non-core assets that you have seen in travel and hospitality? Um, and then, you know, maybe to Stephen and Lucy, if we can think of some really crazy ones or really just maybe unusual ones. How do you think about identifying those at your own company?

It's a good question.

Tough one.

Yeah, you know, I don't know if it's unusual or not. Actually, Lucy is of course probably familiar with this, but I think there are some very creative ones. I I kind of mentioned alluded to this earlier. Uh, but you know, this idea that, hey, uh, you know, in ultra luxury hospitality, for instance, people, I think Steven coined it nicely, right? Cool, not creepy. And this ability to sort of meet you along in the journey and provide you with things just at the moments where you may not even want it, but you just appreciate it. Um, and I thought things like, uh, you know, uh, displaying, you know, high, um, quality, high-end art on walls in say, in an ultra luxury hospitality chains where people are appreciating that art, especially in, uh, some of the European cities where, you know, you get a much more of that sort of museum feel in some of these, in some of these hotels, and then your ability to say, hey, I really like that piece of art, can I actually purchase it? Uh, right? And, and so, so again, you know, it's, it's done with a with a flavor and with a, uh, with with a sense of, uh, uh, discretion, right? But at the same time, sort of providing you that thing in the moment when you're looking, when you want it, you know, that service is, is available, not pushing you that art before you even thought about it and sending you emails about it, right? There there is a, there are different ways you can go about doing it and I thought that was a a creative use of assets, right? I mean, you don't think about, you know, walls, uh, uh, you know, of your hotel as being potential, uh, assets, but you can, but you can continue to leverage it. You can commercialize it, but you do it in a way in which your customers actually appreciate it, right? That it's cool. It was a good experience for you. Uh, not something that someone is like, you know, pushing and then you, you know, you're resistant to it, where even employees then feel like, hey, that's not really on brand, right? Like that's not us. Um, this feels a lot more like it, it meets you kind of where you are. So I I thought that was an interesting way of of leveraging leveraging assets.

Yeah. Just Canal, I can build on that. I'll give two examples. I think, you know, one of the big shifts you've seen in ultra luxury hospitality is this expansion of branded residential. And I think Canal, just building on your point, you know, it's the guest wants to be able to live with concierge type experience, you know, a curation of their home, right, from decor through to the layering and the art and even their curation of FNB, etc. Um, so I think that's an extension of the brand. Um, and taking that a step further, I would say brands finding where their customers are spending time and popping up where you would least expect them. So, takeovers of spaces and places that aren't core to the brand, but you know, your customers are spending time there.

I I would just add, uh, I think some of the ones that consumers and travelers and guests value the most are the ones that are actual stress relievers. And so Lucy touched on it well, like the partnership with Uber is absolutely brilliant because for decades we've been talking about this idea of a seamless customer journey. And if anybody's taken a trip lately, you know that that's absolutely farthest from the truth, right? Like you're going to interact with 10 to 15 different service providers as you're taking that end-to-end journey. So like, you know, does it make sense for an airline to be selling parking? Yes. Because like at that point of purchase, when the consumer is thinking about their flight, if it's natural for me just to add the parking now, it's one less thing I got to worry about. I don't got to go to another website. I don't got to worry if there's going to be space for me when I show up. Right? Like those things that are stress relievers are just natural extensions that we find brands do well with and that consumers really, uh, you know, are thankful for.

Yeah. Those are all good examples. One thing that actually I've been reporting on recently that was very much related to this is even changing for certain hotels, this doesn't work for all of them, but changing the mindset about their role in a community. So my example is is great. So like I live in a, you know, small town suburb of Atlanta and we're talking about building a hotel and so thinking about the fact that I will never stay at that hotel. However, I will be a customer of that hotel probably almost every day if they have a coffee shop, if they have a bar and a restaurant, and my parents will stay there instead of at my house. And so, rethinking the mindset around what a guest really is, um, is is some this concept that I've been following around for a little while and it's really interesting to me in the sense of, you think about hospitality investment as real estate asset, and it is, um, but it's also so much more. And when we're talking about the customer-centric experience, that mindset shift is equally important as any of the individual assets, which all then kind of naturally flow out of it. So, um, that was a that was a good example too. Oh, I've got, um, got a great question here. Can you share an example of failed diversification and the key lessons learned? It doesn't have to be personal. It can be hypothetical. Um, but I thought that was a really great question if anybody wants to tackle that challenge.

I mean, I'll I'll jump in. I don't know if it's failed. I would say where complexity comes in, right? So I think about aviation, right? So you think about private islands and you think about the need to have aviation and airlift, right? Or you think about, like, helicopter transfers, right? That from a customer lens, it seems like you're easing pain points, but there's a lot of legal complexity that goes into that. So, um, I wouldn't necessarily say it's failed, but I would say there is, uh, there is just increased, you know, regulation and scrutiny and complexity in delivering some some aspects.

Yeah. I I'll also say, I I don't know if I see these as much as failed as much as it's, hey, they they they don't pan out the way you thought they would, but then you learn something through that process. You might actually learn something about your technology integrations that actually in the next go-round you're going to use. So I think, you know, it's an interesting question because I I think part of the challenge is very often companies think about this through the premise of like success and failure, right? And I think, of course, there are objective criteria you want to manage when you're doing things like this, especially, you know, whether it be merger acquisitions or or just, you know, investments through your venture fund or whatever it might be. But there is a, there is a sort of a mindset shift, right, that needs to occur, which is we're going to look at this as we have a clear sense of where we're going. And we're going to make bets along the way. And as we make those bets, we're going to see which ones we can continue to ride the wave. Maybe some we ride the wave only for a little while. Maybe some we continue to ride. But the learnings we get from along the way on all these things will then sort of help us. So I think, you know, what you might deem as a failure right up front might actually have been the key reason for a sort of success much further down because of a learning you kind of got through there, right? So not to dodge a question, but I I actually truly think that like if you look at it through the lens of success and failure only, uh, then I think you're you you might be missing some of the opportunity that you might have in terms of learning and, you know, Stephen talked about change management and actually getting people to to behave differently, um, that all is, you know, it takes time. It's it takes patience. And so the first one that fails isn't really a failure. It's more of a step along the journey.

Yeah, I think offer a

Sorry, I was going to offer a non-travel and hospitality one, which is sometimes a shiny example. I don't know if anybody remembers the Amazon Fire Phone. So there was this whole thought right that Amazon should extend its brand and create a phone to compete with, you know, uh, the Android devices or the Apple devices because it was a natural extension. Um, it was a huge failure. It was actually $150 million write-off if you go back and you look at it. But the learning that came from it through Canal's example is that consumers actually interacted with it through the voice search option and it was the voice search option of the Fire Phone that became Amazon Alexa. And most of us understand what Alexa became and how that created this whole idea of smart devices in the universe. And so we might not have never got to a situation where Alexa existed if we had never failed with the Fire Phone.

Yeah, that's an excellent example because that just it goes to show that that's why you want to experiment and why you want to be set up in order that you can have the opportunity to do that when when you see something arise. And so it all really goes back to yes, setting up that framework, setting up that experimentation, um, you know, kind of lab for lack of a better term, um, to to think through these different kinds of things. So, um, we're getting close to the top of the hour. Um, if we can please pull up the the last screen. Would like to thank of course DS for for co-hosting that this with us. Um, if we can get that link to the report back in the chat so people can make sure to have that, that would be great. Um, and in the meantime, we appreciate everybody's willingness to participate and throw in some questions and we will send out the recording after. Thank you for spending your time with us together today. And Canal, Lucy, Stephen, really appreciate it. This has been an awesome conversation.

Thanks for having us.

Thank you for having us. Have a great day everyone.

Thank you.

Thank you all. Take care.