Hospitality And Tech with Joff Romoff

Joff Romoff, Google Cloud's Global Head - Travel & Hospitality, unpacks the real and imagined cultural gaps between Silicon Valley and the hotel industry. We talk how tech companies are asset-light and data-forward, while hoteliers are asset-heavy and still inclined to think of the room, not the customer, as the product.

And, how AI is (very) quickly transforming how travelers get inspired via longer, richer prompts, demand for activity outranking accommodation, and a strong desire to trust the new infrastructure of search. 

But AI's real value is reducing friction, not obliterating human experience. The industry is now in an all-out technology arms race, with OTAs, brands, suppliers, and pretty much everybody else you can think of on the front lines.

Transcript

Welcome And Guest Introduction

SPEAKER_01 0:06

Hi everybody, Snow Show with Jeff Foreman. He's over there. Matt Brown, that's me. Joff Romoth is a senior executive in the travel and hospitality technology industry, currently serving as the global head of travel and hospitality at Google Cloud. He sits very comfortably at the intersection of travel distribution, digital payment solutions, and cloud-based transformation, and he understands how and why tech platforms and global suppliers and payment solutions make this whole show work. His career is a rare grand slam of the travel tech world. He has held high-level leadership roles in almost every major pillar of the industry. You got airlines, you got the OTAs, you got distribution, you got software, you got cloud infrastructure, you got hotels with IHG. In the words of Johnny Cash, he's been everywhere, man. But for Joff, it's never just about the numbers. It's about using the technology around us to help people experience the world in ways both new and familiar. From Route 66 to the Austrian Alps, from skiing in the Georgian mountains near the Black Sea to the pristine beaches of Bali, or even heading back to his favorite haunts in Chicago or Toronto. He is out there like a satellite orbiting the earth and living life with family and friends, setting a superlative example for us all. Joff Romoff, welcome to No Show.

SPEAKER_02 1:27

Wow, that was a great intro. I don't know if I can live up to that, but I had to bring the big guns.

SPEAKER_01 1:32

This is fantastic that you're here. So we

Asset Light Tech Vs Asset Heavy Hotels

SPEAKER_01 1:35

had to go all out.

SPEAKER_03 1:36

Well it's great to be here. Thanks, guys.

Jeff Borman 1:37

The uh Jeff, this show is about perspectives and the biggest philosophical divides. Uh one of them anyway, in our industry is between traditional hoteliers and Silicon Valley. How does Silicon Valley see things so differently than we do through the eyes of a hotel year that you have once been?

SPEAKER_03 1:59

It's an interesting question. I think I think the tech space still sees, you know, the lodging space similar to how the lodging environment does, to the extent that they understand that they have a product to sell and they've got customers to service. I think the difference the the tech environment sort of looks at is, you know, we're asset light. In other words, you know, we look at data. We look at, you know, what people are thinking and how they're behaving. When you look at a lodging uh property, it's it's asset heavy, it's got rooms, it's got buildings, it's got guests there. We don't have guests there. So I think the difference between the two is, you know, the fact that uh we're supporting the environment called lodging. The folks that are actually got the asset are having to, you know, serve those uh individuals. And I think there's a commonality in terms of how can we service them in the most effective manner. But at the at the end of the day, we're we're an asset-light uh industry, and lodging is an asset-heavy industry. So there's a massive difference between the the two from that perspective. But you know, I do think there's a great deal of cooperation that does exist between both organizations. And with that cooperation, drives a ton of learning. I think, you know, from our perspective, there's a lot of things that we learn from the industry in terms of how customers behave. What do customers want, which allows us to develop technology that really suits what those needs are. Conversely, I think the launching industry is learning a lot from the technology space, especially now with what's going on. And so, you know, while we may have different businesses, we may view it in in different ways. I think we are aligned together in terms of what the objectives are from a customer perspective when it comes to understanding who they are, what they want, and how we deliver an experience that's relevant.

How OTAs Changed Travel Too Fast

Jeff Borman 3:50

In the late 90s, it took the hotel industry a decade to realize what had already happened in online distribution. When when you entered Silicon Valley, you must have had some moments where you thought, oh my God, that's how they think.

SPEAKER_03 4:05

Yeah, for sure. I mean, I I had the benefit of of going through the internet uh period as well. And so as we saw that take place, I think there was um, I wouldn't call it denial, I would call it more just cautious observation. And I think the industry, and having been in the industry and loving the industry, I I I think I understand it a little bit, a little bit more. But, you know, I think the generally speaking, the travel industry has been one that hasn't necessarily been an innovator. And I think it's really a function that in many cases they're starting to be innovators, but in many cases, they're just not technology companies as a technology company is per se. And so I think they've had to learn how to adapt. But yeah, I mean, it goes with the question that, you know, there's been this period of time, generally, you know, during the internet craze when the OTAs came on and they were providing a lot of content to those organizations. And, you know, I think there was an element of the industry losing their product in certain ways. Now, I think that's come back with the advent of very strong loyalty programs and the fact that they have started to develop good technology products, but it is definitely an industry that is a little bit behind the curve if you compare it to retail, if you compare it to financial services or other industries. And I think that's just the nature of the industry. I do think it's changing, but but I do agree

Is The Room Or Customer Product

SPEAKER_03 5:33

with you.

Jeff Borman 5:33

There's there's an element there that uh one way hoteliers uh in Silicon Valley think differently is product. Uh at least my impression is a hotelier thinks that a room is the product. Uh, and to a tech company, the customer is the product. Hoteliers are just the seller of it, uh, or the tech is the platform to sell it. Is that about right that we aren't even trying to sell the same thing?

SPEAKER_03 5:59

Huh. Let me think about that. I do agree with you that the hotel views the physical asset as the product. And I do agree with with you in terms of the technology side of the business, views it probably in a in a in a different manner. That being said, I do think that, as I mentioned before, there has to be that element of cooperation in order to ensure that the customer is consuming the product in a way that they would like to, and they're selecting the product in which they're most interested in. And so, you know, it's been a relationship, and you're spot on. It's been a relationship where the lodging industry does look at the physical asset. There's no question about that. And us in technology look at sort of the data that sits there and having to sort of be a student of behavior. And I think that's where there may be a little bit of a difference in terms of approach. I'm not 100% sure. I mean, the lodging area has become way better at understanding customers, at segmenting customers, at using data to talk to customers. I mean, that has gotten dramatically better in the last 10 years. But I think we just look at it from that perspective a little differently. And I think, you know, we're not, we're not in a situation where I've got to go build a hotel. We're not in a situation where, you know, I've got to, I've got to manage this. They're in a situation where they've got to do that as well as get you know up to scratch in terms of what's going on in technology. And it's that transition that's taking place and that has taken place that I think is what you're referring to. So I mean, I would say argument be we've got a much easier.

If It Is Free You Are Product

Jeff Borman 7:37

Well, back when the phrase uh data is the new oil, when when that was a big one, uh, there was also one that never escaped me. And that is if it's free, you're the product. And I kind of get into that still, I still wrestle with that. Like, you know, anytime I'm allowed some perceived access to what goes on behind a uh a wall, uh, somebody worked really hard to provide me with a set of options or a marketplace uh and didn't charge me for all their work. I feel like you know, somehow they're monetizing my eyeball for just having entered their walled garden.

SPEAKER_03 8:13

Yeah, I mean, I think I mean that there's definitely some truth to that in the sense of gathering information on individuals that then benefit the industry from my perspective, uh, versus you know, do any sort of damage to the industry. I also think if you kind of look how people are purchasing and how they're getting inspired by travel, they're clearly obviously we all know that they go online for just about everything. In fact, you know, if you look at it today, the average traveler is around 45 years old. They're gen Y, they're millennials, they're they're digital natives. And then you layer on the fact that we've become pretty much a visual society, you know, organizations are wanting to understand how people are consuming. And so from the point of whether it's free, I think there's value that they that they provide. Um, you know, maybe they don't charge for that, but there is an element of opportunity that we share with the industry that allows us to, you know, gain the insights that we do, understand them, the mediums that um various customers want to purchase with, and allow us to provide again what they want and how they want. I think that's the biggest thing is are you providing the guest, the customer, with what they want in a way that they want to consume it? And that's the part that I think is changing dramatically today in terms of how we're searching and getting inspired by travel. And that's only happened in the last two or three years. So I think there's a series of platforms that want to understand that, but conversely, I also think the industry wants to understand it. And so we're that we're that connection to the industry, and the industry also does that on their own. But I think there's there's definitely a partnership in terms of doing that.

Would Travelers Pay OTA Fees

Jeff Borman 9:59

Yeah, one of one of the things I would love to see most, and it's totally impossible, uh, is for customers to pay for all that they don't see underneath the hood. Meaning, you know, if a customer knew that 15% of that transaction was going to the OTA when and they absorbed that charge, then you'd find the real true value of that OTA, right? Would a customer pay for that? I don't know. It's an impossible question when 90% of this business is immediate intermediated. Uh, but I think ultimately you want to find value. I'd flip that thing on its head tomorrow if I had my wand.

SPEAKER_03 10:36

Yeah, it'd be interesting to see if people would pay for it. You know, it is an interesting hypothesis in the sense that there are, you know, organizations that you pay for certain certain products. You know, you can look at the credit card business, same thing. You know, you pay a certain fee, you get a bunch of different products, and if you don't want to, you pay a lesser fee or or in certain cases zero fee. Again, I think that's what's so interesting in terms of what we're seeing in terms in regard to consumption now of travel product. Um, I do think that there's travel is definitely a high value product, especially with the cohort that we're that we're looking at in terms of its um, it was interesting. I was seeing a little while ago in terms of the top, the top items from a discretional income perspective that people are giving up. And travel was the number one in which they weren't. And I think it's just become you know an element of their life that if they're you know fortunate enough to be able to do it, they continue to do it. To your point of whether they would pay for an OTA, maybe if there was value that the individual saw at uh at a certain juncture, I think that sort of translates outside of payment with with the loyalty programs in which they have, and sort of they they're able to get a certain degree of benefit for being loyal. Uh, would they pay? Well, that's yet to be seen. I haven't seen it, but perhaps somebody will

Subscription AI Agents For Business Travel

SPEAKER_03 11:57

try it.

SPEAKER_01 11:57

I can imagine we're heading towards the the first wave of this being something that would be enterprise related, maybe. Like, oh, it's $49.95 a month for your Agentic AI travel robot to come into your company, whatever tier your company is at. And instead of an individual doing it, that the uh doing you know, individual travel for pleasure, that that the business side of it will start to kind of be the test case for what a monthly kind of Adobe Suite or Salesforce type fee would look like for one of these very customer-friendly AI agents. And speaking of AI, we of course live in the age of AI, but more importantly, we live in the age of the AI think piece. You can't throw a rock at your computer any minute of the day without reading an op-ed on how AI is going to come in and and uh take over everything. But one of the better ones was uh one that Rafat Ali um uh wrote for Skift uh pretty recently. And it was called the Claude Effect is coming for travel. The central premise of it is that the is that the moment that an AI agent can handle the complexity of travel, that this this kind of intermediation layer will have to answer some pretty existential questions of why it exists, or at least why it commands the money that it does. When we think about Google, Google already has this kind of unmatched data on travel intent through search and maps and Gmail confirmations and the whole bit. So we were kind of wondering when when a gentic travel booking becomes viable,

Agentic Search And Google’s Role

SPEAKER_01 13:30

is Google effectively in pole position? Is it gonna start the race with a structural advantage that no OTA can match?

SPEAKER_03 13:39

I don't think it will. I don't think Google's intention is to replicate an OTA. I do agree with you in the sense that it does have access to search and maps and Gmail and distribution is definitely shifting left, if if if uh if you know what I mean, in the sense that the top of the funnel is getting driven through the the means in which people are searching. Um I think it's actually truthful. There's two things is from an OTA perspective, it's super hard to be a platform, and they have been able to do that over the last 25 years incredibly well. You know, would would an agent be able to go out in in in the future and book for you and then come back to you and say, you know, I buy book? Sure, that could be the case. But I do also think that the OTAs aren't blind to that, and I see that they see, you know, a situation where that will be the case. And to your point, that's where a subscription service could come in in terms of the ability to do that for you. But I don't see, in terms of Google's perspective, I don't see them becoming an OTA. I do see them providing information to travelers. Um, you know, if you kind of look at travel search today, the average prompt is about eight or nine words. The prompts today are now pushing multiple products. It's no longer hotel in Chicago. It's I've got a five and an eight-year-old, I'm going for spring break. I need a beach and I needed a place that has, you know, restaurants for kids. What that has effectively done is expanded what the product line is in travel. In fact, um, you know, we have some research from 2024 that was noting that the activity side of the business is actually the top demand from the customer with accommodation being second and airline being third, which makes sense if we kind of look at what the props are are uh are saying. And so, you know, I see a situation where you may go into a Google type environment to look for those types of uh experiences. But then I also see a situation where you're engaging with the supplier directly to uh to book that. The outlier still is is the servicing side of it. And I think that that's yet to be sort of determined at this point. But you know, I I don't see, I don't see Google becoming an OTA where it goes from end to end. It's just it's not something the organization does. And truthfully, you know, we're at a point right now with distribution shifting uh towards um more of an agentic flow, where I do think the supplier actually is in a situation today where they've got an opportunity to, you know, get more of that direct traffic. And the question is whether or not, you know, they'll be able to develop products in a timely fashion to capture that traffic in a way that a consumer wants to wants to purchase it. So yeah, I I see it a little bit differently. Downstream, it may be the case from an agent-to-agent perspective where you and I will just have an AI agent. That agent will go out and you know, search for travel, it knows our attributes, and will go out and book it for us and bring everything back. I'm not sure the world trusts that yet. Um, but you know, downstream, that could be that could be a reality in this industry and in many other industries. I use AI all the time as a concierge, if you will, in terms of sort of finding out, you know, what what are you know some of the better restaurants that sort of fit in in my uh in my desire to go to. Um, you know, you mentioned at the beginning of the podcast um skiing in Georgia. I found that through an AI prompt, and we ended up doing it. And so I think from an inspirational side of it, you're gonna see a lot more of that. And that's where the sort of the gen media side of it comes in. I definitely see a massive gen media play. And you're starting to see some companies now that are that are getting into the space in in regards to how am I looking at travel? I'm looking at it generally from you know a prompt that goes through, and then usually I'm going out to some sort of video um site, whether it's you know a social media site or or YouTube. I'm getting an idea of what that looks like, and then I'm sort of developing what my itinerary is. I do see a world at some point where we will book directly off of video or something to that extent. Somewhere where we'll book, I think new distribution channels are going to start evolving. I think podcasts could be one. Um in terms of, no, honestly, in terms of we, if you kind of look at the travel business, the travel business has always sort of been very linear in the sense of how they give you information. It's usually in a text format. And you know, one of the things that I see coming down is engaging in travel, not only from that type of format, but from a video format, from an auditory format, and really sharing that with travelers.

Trust And Accountability In AI Booking

Jeff Borman 18:41

One of the the troubles that keeps me from seeing the future uh is the accountability of that. If if I'm a merchant and you're a customer, it's real easy for me, the merchant, to say, uh, but Joff, you bought it. Because you did. Where is accountability for purchase going to lie when your partner begins acting on your behalf and they're not going to get it right every time?

SPEAKER_03 19:07

Yeah, no, it's it's it's a great question, which is why I think that portion of the of the industry is probably a little ways away. I mean, if you if you look at NDC in the airline business, right, and that's been around for let's call it 10 years, there's a lot of friction in terms of who supported the cut, you know, who supported the customer. I think it's it's a similar type of a similar type of environment. I think the first stage, though, is the trust factor, right? I think we trust, I trust AI when I'm going through and I'm asking, you know, what restaurant should I go to or if I want to go skiing, where is a good place to go skiing, or whatever the case may be. I trust it to give the information that it gives me. I verify it, generally speaking. I'll look at it and then sort of play around with it. I'm not sure, you know, the the public is quite ready to trust a AI agent to go out and make a purchase and then come back yet. But that will develop. I mean, I think a great example of that is did we ever think we were gonna have driverless cars? Right. And I'm a big fan of them. When I'm in cities that that have them, I use them all the time. But if you talk to other people, we're not quite at the stage there, you know, where people are like, oh, I'm not sure I I I would use them. The same could hold true for, you know, when Uber came out, right? People were kind of like, I'm not gonna get into a stranger's car. They started to put parameters around that and the trust started to develop. So I think that the only way that that is gonna be a successful distribution channel or successful way of using AI is if organizations surround it with the ability to ensure that cases like what you're saying are gonna be um resolved. Otherwise, you'll lose trust. And if you lose trust, you simply won't have customers. I think we're a ways away from that. But I think we'll get there. I I think this is moving so quickly. I, you know, I could see it starting to develop in about a year, 18 months. I could see it getting momentum in about three years, and in five years, I could see I could see it not being the majority, but I could start to see it develop as sort of being, you know, 40.

Complexity Keeps Intermediaries Valuable

Jeff Borman 21:16

I mean, I have hotels around the world that work with me in different ways where the the tour operator still holds all the cards in the whole marketplace, right? I mean, like as a customer, you wouldn't even try to book without them because of the complexity and the nuance of getting from a micro airport to a landing strip. Uh, it puts you in a four-seat prop. By the way, they don't operate that plane unless it's got at least six passengers, so you better guarantee six tickets. Hope they sell, like, no way. Like, and that's a reality in a good chunk of the best vacations in the world.

SPEAKER_03 21:55

Uh I mean, yeah. Um, I'll throw us a stat at you. I think it's 58% of. Travelers feel overwhelmed with the complexity. Yeah. Like six in 10. Um, and that is why, in my opinion, the OTAs do bring a lot of value because you're developing a platform. And that platform talks to things like you're mentioning. And so it's not only tour operators, it's OTAs, it's DMCs that are in various locations. And I think that is the portion of it. And there's trust there, right? I trust that it's going to work. I trust that everything's going to be on time. And that takes a long time to build. And so, you know, when I do see artificial intelligence and agent-to-agent communication, I definitely see it happening on a one, two, maybe three product type of itinerary, which is why I see it happening more on the corporate side out of the gate first than on the leisure side. Because the corporate side is somewhat binary. It's a lot easier to do. And I think there'll be a degree of trust there. Now, to your point, there has to be a methodology that allows you to correct errors if they exist. And so, you know, for that reason, I still think the platform, the tour operator, the TMC is, or the DMC, excuse me, is relevant. Now, they're going to have to adjust the way they do business and use artificial intelligence. And a lot of it from like a tour operator or a DMC perspective is both a B2B and a B2C customer perspective. From an OTA, it's it's it's on both sides. But I mean, these are platforms that have been developed over a long period of time. I mean, it's it's a really hard thing

Using AI To Reduce Hotel Friction

SPEAKER_03 23:34

to do.

Jeff Borman 23:34

You know, we've mostly talked distribution and commercial subjects. How does hospitality, again, the Silicon Valley view, not the hotel yard insider view? How does hospitality need to bring tech into the operation of the business?

SPEAKER_03 23:51

Um, yeah, I think there's a lot of angles that that they can look at. Obviously, it's it's not necessarily deemed to reduce your headcount. I think it's deemed to reduce the friction of your employees. That's the kind of the way that that we've been looking at it. You know, and I'll give you an example is you know, if it's easier for a back-of-the-house employee to diagnose, you know, a problem with a piece of machinery or whatever the case may be, and bring it to the attention of whoever needs to fix it, that just reduces friction for that, for that employee. You know, a great example is you know, housekeeping being able to sort of something's wrong in a room, and they're able to take a picture and there's uh you know a bunch of uh data that sits behind um, you know, in our case it would be Gemini, and you're able to diagnose it, and you're able to either fix it on the spot or give it to you know somebody who can fix it, it reduces that friction. It keeps a room in inventory, which obviously is good from a revenue perspective. And so I think there's one element that looks at that. And then the other element is how do you use technology to drive operational efficiencies from a guest-facing uh situation, whether that's technology challenges that you have that can be resolved very, very quickly, or information on guests that is relevant and not too personal that you can use. Or, you know, if you think about the perfect room, the wired room where I can walk in and it remembers what my preferences are, right? That's that to me is how operational excellence uh will be driven. Um and I think that the industry, I mean, we're starting to see a little bit of that with um uh with robotic services that you'll see for certain types of things that, you know, whether it's uh room service that's being delivered or housekeeping that's delivering products up. But I think you have to take it to the next step. And that next step is is actually using the gentic and natural language for your employee group to be able to solve problems. I just spent three days with um with a bunch of uh technology, travel technology customers, and they are just jumping in to provide services to the industry. And I do think, you know, they're seeing the opportunity. You may be in a situation where a lot of this stuff, instead of, you know, obviously not not built, a lot of it will be buy. And that will sort of develop the industry in a favorable way. But it's we're in a basically a technology arms race. And and I think it's a super exciting time. And I think that organizations that embrace it, that are willing to invest, you're gonna make mistakes along the road, and that's just a part of it. And you have to learn from those mistakes, but you will come out better on the other end. They're gonna thrive. And it's the ones that are just stuck in in yesterday's uh business model that they'll be there, but it'll be like dial up internet. You know, some

The Arms Race And What Wins

SPEAKER_03 26:48

places, some small places have it, but the majority of places are on fiber optics. So I'm really excited about the industry. I'm really excited about the technology, and I think you know it's it's gonna be a super interesting two to four years coming up.