A Technological Revolution in the Hotel Industry: A Conversation with Radisson Hotel Group’s CIO

With over 1,250 establishments in 95 countries, the hotel group Radisson is one of the largest in the industry. For Jaime González-Peralta, the Chief Information Officer, technology has become an essential component of the company’s success, and more broadly, of the entire sector.

After working at Procter & Gamble, HPE, and DHL, Jaime González-Peralta settled at Radisson Hotel Group four years ago as the CIO for the EMEA region, before becoming the group’s CIO in April 2020 – a particularly complex time for the hotel group due to the paralysis that the pandemic inflicted on the tourism sector.

During this period, thanks to the reflection period that the health crisis offered and the time the organization was able to dedicate to innovation, Jaime González-Peralta made a more pronounced shift towards technology and digital transformation to support the multinational’s transformation plan that had begun shortly before his arrival. Today, he assures, over 90% of the company’s business initiatives are made possible thanks to the technology from the CIO.

After leading Radisson Hotel Group’s IT globally for more than three years, what do you consider to be the main milestones you have crossed?

Jaime González-Peralta: When I joined the group in June 2019, there were two decision centers: the Americas and the rest of the world. These two poles collaborated with each other. However, before the pandemic, in the first quarter of 2020, I became the CIO for the entire group and merged the two organizations. In March, the pandemic struck, and the hotel sector halted, but it gave us the opportunity to accelerate the transformation and digitization process of the company, a process that had begun in 2018 with a five-year plan. Previously, Radisson’s IT was considered a cost center; thanks to this plan, it became a central pillar of the group’s strategy.

Then, during the pandemic, we completely restructured or created the IT components the company needed: a new ERP, systems for purchasing, hotel management, and human resources, for example. We closed three of our data centers and fully transitioned to the cloud with multiple providers. We also developed a new data strategy to completely restructure the company, from security to finance to the hospitality relationship, or a new website. We redid everything from scratch.

Our owner, Jinjiang International, set a very clear goal for us: to move from systems created in the 1980s and difficult to maintain to modern systems. In just eight months, we managed to migrate 80% of our platforms to current technologies.

From an organizational point of view, we evolved into a nearshore model, attracting the talent needed to deploy these new technologies. And we did it not only to be closer to operations, but also to take advantage of the potential that Spain offers in terms of human capital in the tourism sector. More than half of the IT organization joined the company in 2020, so we had to build a plane in mid-flight.

On what principles have you rebuilt all the IT teams?

We adopted an onshore model and created a center of excellence in Madrid where we manage all operations and lead all projects worldwide. This center has 350 professionals from over 40 different nationalities. But it is not only composed of IT professionals, but also people working in the areas of purchasing, human resources, finance, architecture, and revenue management, for example.

How many people make up Radisson’s central IT department?

Approximately 90. And the question is, why are there only 90 people to manage over 1,000 hotels worldwide? Simply because we also took advantage of all these changes to raise our level of outsourcing. We carried out this project with the EY team, which played a key role in this process.

Your transformation plan covers the period 2018-2023. What was the overall investment in information technologies and what is the next step now that this plan has come to an end?

I cannot reveal the details of the investment, but it was substantial. We are already starting the next plan to evolve revenue management systems to reach the level of sophistication we are looking for thanks to Machine Learning.
Traditionally, companies in the hotel sector have focused on the implementation of various modular solutions connected to each other. But Radisson’s decision was to use a single system connected to a unique customer database. This has significantly reduced the level of integration and change management required, while allowing us to increase our agility in the face of challenges. In addition, the support of the entire company in this technological transformation has been essential, as such a significant change affects people, systems, and procedures.

You mentioned the development of a new data strategy to restructure the company. Why are data so important in your approach?

I like to call the IT department, “information-based decision systems”. Our differentiation does not come from the management of functional solutions, but from systems that allow us to have information to adapt. Explaining the past is complicated, but predicting the future and knowing exactly what actions we must take to influence it is even more complicated. We have 900 people using fully certified data-based decision-making tools. For us, this is fundamental. Moreover, we have moved to data-driven execution. For example, hotel managers and service heads all have dashboards where they have the necessary information to control and predict the future and thus make decisions.

One of the IT missions is to push technology to the maximum so that users, both in hotels and in offices, can free up some of their time to dedicate to tasks that are more useful to the organization.

The entrance of a Radisson hotel. Technology has an impact on the processes of a hotel group, the relationship with its clients, but also on the hotels themselves. (Photo: Lyudmila Arslanbekova / unsplash)

Are you already working with generative AI?

One of the challenges for any CIO or company is to stay focused. Radisson focuses on the strategic plan that has been established, which makes us unique. That said, a small group within the company focuses on innovation. We have an innovation committee composed of representatives from operations, finance, and IT, where we explore emerging technologies. We are not afraid to try them. In fact, our approach is to test them quickly to fail or succeed quickly. This is what happened with RPA. We tested it three years ago, found its usefulness, and now we have an RPA Factory for the entire company.

Regarding AI, we remain cautious. We analyze the maturity level and have a private testing environment with Microsoft to see how we can take advantage of it in the short term, especially in terms of interaction with users. In the future, we are convinced that the search for hotels by users will change radically, not only due to the increase in the volume of searches, but also the search itself, which will be different. This is what we are currently studying.

From the perspective of business objectives, we work in five-year periods, but from an IT perspective, our horizon is two to three years, ideally two. Only this way can we make decisions that I will not regret in the near future.

How do you see the future of the hotel and tourism industry with all these technological changes?

It’s exciting. We have impressive growth plans thanks to technology. It allows us to go faster, be more efficient, and reduce the cost of change or transformation. We focus on systems designed by and for users, creating constant dialogue between IT and business.

Technology also has an impact on what the hotel of the future will be. It will be smarter in its relationship with users, but also more efficient in terms of infrastructure, water and energy consumption.

In our sector, we manage emotions, and it is a relationship of trust that customers want to establish with the brand. If a customer goes to a website and cannot find the information they want, as they want, and in a reasonable timeframe, they will go to the competition. Therefore, we invest a lot in the way we present ourselves to the customer, creating immersive experiences, improving our website and application, for example. We want to offer, as much as possible, personalization of our offerings to the customer’s needs.

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