Diogo Vaz Ferreira
I can tell you that today, our customer satisfaction score is actually higher than what was in the past. And not because that the AI is answering better than people, It’s just that it’s answering faster and sometimes more complete.
Sebastien Leitner
Welcome back to the turn on. Today, we’re diving into the fascinating world of hostels with Diogo Vas Ferreira, the commercial mastermind behind Clinc Hostels. He shares his personal journey and fascinating journey from luxury hotels to the vibrant world of hostels and reveals how he’s revolutionizing guest experience with technology. But here’s the real question. What happens when technology threatens the human touch? Diogo’s surprising answer will leave you questioning what authentic hospitality truly means.
You don’t wanna miss this episode. Hello. Welcome to the turn down, and welcome to Diogo. Diogo is the head of commercial at Clincostals. Diogo, welcome.
Diogo Vaz Ferreira
Thank you so much, Vasil, and thanks for having me. Absolutely. Absolutely.
Sebastien Leitner
You have a fantastic year behind you. You’re, leading the commercial, I guess, disciplines at Clincostals. But I’d like to start, the question today or this program today by our sort of standard introduction question, which is what keeps you up at night these days, Diogo?
Diogo Vaz Ferreira
Thank you so much. And once again, thanks for having me. Again, it depends or if you see the glass of water half full or half empty, because there are two things that keeps me awake at night, the dreams and the nightmares. Right? So when it comes with the with the dreams, basically, I think is the excitement of these industries. The industry that it keeps reinventing itself.
Even with the bad moments like COVID, it was a huge opportunity to reinvent as an industry. The way we sell, the way we work, the way we distribute, the way we talk, the unique selling points. So all the fact that is ever it changed industry keeps me awake at night because it is not a boring job at all. And on the nightmares or on the worrying sides is exactly how can we remain authentic? And I think I I’m gonna say this word, like, a lot of times today because I think it’s a main word for today’s world, is how can we in this industry that is a people’s industry, people for people, people by people, How can we remain authentic when more and more machines, AI, machine learning, a lot of automations are put, into our daily lives?
Sebastien Leitner
How can we remain authentic? I think that that’s me as a worrying is how can we survive in this industry remaining authentic to ourselves? Let’s dive right into it. I’d love to hear your definition of what you mean by authentic hospitality. You put it in perspective of of technology potentially impacting authenticity, but, I guess, what do you strive for when you think of authentic hospitality?
Diogo Vaz Ferreira
Well, it’s always difficult because in today’s world, of course, I think people already get used to to talk, with chatbots, and different a lot of different automation. So this kind of cliche of the human touch, is I think what we need is that, as authenticity. And sometimes it’s no no longer needed in some aspects of our business. And I think there is a lot, and don’t take me wrong, there are a lot of aspects of hospitality business that can and should be automated. I think we don’t need a human being to tell one hundred times a day what is the WiFi code, or, what’s the email address of of the reservations team, etcetera.
Sebastien Leitner
So I think routine tasks should be done by machines, and everything that is extraordinary should be still delivered by humans. So I think the trick to remain authentic is how can we automate the part that can be and should be automated without jeopardizing, without losing the touch with our guests?
Diogo Vaz Ferreira
Because if you feel that they’re only talking with machines, they they want to be heard. They want to be listened. They are paying for service. So how can we still provide those types of automation, but on a way, on a type of language that caters the needs of our guests? And the second part is, since we have now more time to physically spend with our guests face to face and less time with the machines, because let’s the machines run the machines. I wanna use that extra time.
So for me, I’m not really a big fan of, for example, those concepts that are fully automated, one hundred percent self check-in. You get in, you don’t see a a human, being in reception. However, I like the concepts where you go in. You do, for example, your online check-in, your self check-in. And, actually, instead of the receptionist being behind the desk, they are just walking around the lobby. They are the lobby ambassadors or lobby lizards or whatever you want to call them.
And actually, a few weeks ago, I was in in Thailand for a few weeks, and actually one of the hostels, they had what was called the barception. And I really like that concept.
Sebastien Leitner
You know? Because it was literally what the name stands for. It could be as a barman or a receptionist, And it’s a totally different, different feeling. So I think that’s the main thing. How can we still deliver the service?
Diogo Vaz Ferreira
How can we still be efficient and fast as the guests require in today’s world without losing touch for them? Without losing touch and building a relationship, I assume. Exactly. Because people just got more picky. Everyone wants things fast. Right?
Few years ago, sending an an email and wait for a few days was acceptable. Then we went to start calling, and we want the call centers twenty four hours available. So we want to call and have an immediate answer. Calling sometimes takes two, three minutes to answer. Let’s send a a WhatsApp or a chatbot. And I think the future is now even gonna be faster, not even right.
And I think voice AI and avatars and going to the room and actually discuss with the concierge avatar, to be honest, I think is the future. So people just want things faster, more efficient, delivered faster, quicker. However, with still very high standards of quality because the problem is not so much on how to get the information because sometimes, like, maybe one hundred years ago, I need to read a lot of books. What now I can find out in maybe five minutes of of Google search. So I’m expecting information to be delivered fast, but still with very good quality. And that’s, I think, one of the main challenges we as OTLIers have now in terms of when it comes to picking up the right tools to work with.
You mentioned in your introduction two things.
Sebastien Leitner
One was authenticity, and the other one is change and modernization. Let’s talk a little bit about your role in your company that you’re working for. You operate or you’re part of Clinc Hostels. Help the audience understand what is different about Clinc Hostels. Right?
Diogo Vaz Ferreira
Like, what what’s unique about the brand and and the company, if you will? Well, we are extremely lucky, working for Hostels, and I’m two times lucky to work for Clinc. And I will tell what I mean by that. I think and I used to say this and sometimes it might sound as a cliche, but the hostels, guests, are the guests of hotels tomorrow. So the guests that now they’re staying in the Marriott’s and the Hilton’s of this world, they are corporate clients. They used to be young.
They used to stay in hostels before they could afford the Marriott’s and the Hilton’s. So now because we have these young crowds that are very tech savvy, and they are very eager and more and even require to use this technology, they request now things today in hostels, maybe some hotels because they have a a older target group, a older audience. They don’t have that kind of pressure, but it will come. So I think in hostels and I could give you a lot of examples where some of those technologies, especially after COVID, kind of accelerated the need of hostels to be up the game. And sometimes we see those trends earlier in hostels that we see in, in hotels. And when it comes to Clinc, I’m very lucky because I look I work for a company that’s been pioneer when it comes to adapt a lot of different technology systems.
For example, we’re the first site hostel to side a bit pace, and there were a lot of different, technology that we were first adapters.
Sebastien Leitner
So I think I’m very lucky to work for Clinc, and I think it’s a perfect size company because it’s big enough to make a difference. It’s still the biggest independently owned chain of hostels in in Europe, but still a family company in its really as origin as it can be. Right?
Diogo Vaz Ferreira
Where we discuss with the family on a on a daily basis, a lot of different matters. So I think we are in the perfect setup, myself and the rest of my team, to work for a company that when it comes to investment in technology, never say no, or at least never close the door. Just show me the case and show me why it’s worth it. So we have been investing a lot. And, when it comes to tools, but in some of the things that we discussed earlier, like, modernization, change, and automations. So I also have my share, those is of experience of self learning, using, and adapting, those things in my company.
Fantastic. And, you know, I’d be curious around the modernization that you’re driving forward, on technology.
Sebastien Leitner
But help us understand what does the head of commercial and hostels actually do and cover? What is your area sort of responsibility?
Diogo Vaz Ferreira
Well, I’m, I’m responsible for the commercial departments of Clinc. So, of course, the big areas will be sales, revenue, marketing. But in our company, even it might not really be commercial, the systems and technology part also fall, in in our team. So say those are the main four blocks. And I’m not mentioning the customer support on purpose because used to be one of our teams, who used to be actually one of the biggest, if not the biggest team in Clinc hostels. And, actually, a few months ago in September, October, we concluded, let’s say, redundancy process of the customer support team in our company because after one year of successfully testing a lot of different automation tools, a lot of different data that was, that was tested and analyzed.
We came to the conclusion that wouldn’t make sense to still have this team, and we would invest in other channels of communication. And this was not a decision then in order to save costs because there were some costs, of course, that were saved that are relevant. But to be honest, in the company like Clinc with forty million euros revenue per year was not that that would make a big difference. It was really a question of how can we deliver this faster on a nicer way to the guest, twenty four on seven, without , without strikes, without, all those things that sometimes, of course, managing people, can be a bit more difficult. At the end of the day, I can tell you that today, our customer satisfaction score, is actually higher than what was in the past. And not because the AI is answering better than people.
It’s just that it’s answering faster and sometimes more complete. And, also, our chatbot is also has the capability to understand the tone of how you interact with us and adapt to your own tone. Whereas as a human, we can have good days, bad days, but to be honest, at the end of the day, it’s difficult to talk to deliver twenty times the same message in twenty different tones because twenty different guests require that. And we as a human, it’s difficult to do it, you know, at least for a long time. So customer satisfaction score increased. The response time decreased drastically.
The number of one hundred percent automated bookings done via our chat without the human interaction went by the roof multiplied by thirty times. So all those different set points actually made us me and Mikhail, that is my colleague in charge of the systems and technology, going to the board, going to the family, and propose this for the future of the company. And I think this is where the world is going, and we think that instead of investing on a team that is gonna be based in the office, that we should do something else instead. And we did that, and we are happy without Graba, of course, not being disrespectful with the people that worked for us that were amazing professionals. And luckily, all of them already got very nice jobs after Clinc, so I’m very happy for them. But that we as a company and we as an industry, we are moving that direction.
And either we jump in the train or we can stay in the station and see the the train leaving. But we decided to jump in the train. It sounds like you look at technology as a commercial engine.
Sebastien Leitner
Is that fair or as a driver? Should be. Because of course technology should be as a operation support, and there are a lot of tools that they are not really commercial. They are there just to fit the purpose of our operations team, the guest experience on the on the building itself. But most of the tools, they do have a commercial impact. Because especially when it comes to the guest experience and not so much the the three d on Spot, but the the two d the online guest experience, the booking journey, most of the times, actually, the first experience you have on a certain company or hotel is actually the website or the social media.
And actually, it’s it’s not this sentence is not mine. It’s actually from Anne Dolan, our CEO and founder that says that our website is our virtual real estate. And she’s totally right. So a lot of times, the first impression that someone has of Clinc is not literally when they come to our hostels, when they visit our website or they sec they check our social media, channels. So that’s for sure has an impact, and most of the tools can have a commercial relevance. Because as long as they have an impact on improving either the physical guest experience or the online guest experience, will either increase sales or satisfactions, and both will have a commercial performance and a finance performance.
So I’ll say that almost all tools, even if they might not seem likely to, they do have a commercial impact. Going back to your website, is it your most important demand channel in your opinion?
Diogo Vaz Ferreira
In terms of loyalty and guest experience, I think, yes. Of course, when it comes to percentage and share of business, OTAs, still is the number one channel. However, in OTAs, you can, of course, have an impact in the text, in the photos. But at the end of the day, when it comes to the experience itself, we have very few things that actually can change. Right? Because booking dot com will not change the website just because Diogo grabs the phone and gives them some feedback.
Right? So I think when it comes to percentage of business, still our number one channel are, OTA is by around sixty percent. Then out of those forty percent that can direct, I would say twenty percent. So alpha fit is groups, alpha fit is individual. And they don’t have necessarily the same distribution channels. But our websites is not only the one that delivers the most profitable sales because we don’t take commissions.
Of course, the distribution costs are way lower. But where we can have a higher impact in terms of customer satisfaction, and someone that books our properties on Booking dot com, the only thing they have to say about our properties if they like or not like us is when they come and visit us. Whereas, if a client, a guest, books our hostels in our website, his perception of the quality of clinical start the moment he’s looking at our website. And his entire experience, the the reservation, the booking, the the contact with our team, for example, prior to arrival, all that, if he’s coming to our direct channels, we have a way higher way of actually having a positive impact on his experience. And for example, if he comes from a a notier.
Sebastien Leitner
So it’s not our number one channel when it comes to share, in terms of percentage, plus it’s number one when it comes to focus and attention because the one we are feel that we can have highest impact. Amazing. That reminds me, and not everyone in the audience may know this, Clinc Hostels, how many properties do you have now?
Diogo Vaz Ferreira
And I believe you’re still expanding. I was in Lisbon with you not too long ago, and you were talking about opening a new property there. Yeah. Correct. We have at the moment, six properties. So two in London, three in Amsterdam, and one, in Dublin.
Six properties. And at the moment, as we speak, we two we have two other buildings that are gonna be developing to hostels. One in Lisbon, as you said, and another one in Dublin. The one in Lisbon, unfortunately, has been there for a long, long time, due to some, let’s say, political loss, legislation issues, in Portugal. But now with the change of the government, it seems that we are on the on the good way to make it happen. And Lisbon is an amazing market to to be to be relevant, and we want to be present in Lisbon very very soon.
Sebastien Leitner
I wanna talk a little bit about how you ended up in hostels. Right?
Diogo Vaz Ferreira
Like, your background is in hospitality hotels. You started in hotels. Walk me through your career.
Sebastien Leitner
I mean, maybe the first question is, how did you end up in hotel? That’s probably the most important question. I always liked, so even when I was younger, I always liked a lot mathematics, numbers, economics, management. So I knew very soon around my twelve, thirteen years old that my future would be in business. Then I was lucky because I was born into a family that, always incentivizes to travel a lot, to get to know different cultures, different people, know different languages. So I traveled quite a lot with my, with my family when I was a kid.
So I always fell in love with, you know, going to hotel, the smell of the new the new sheets, you know, discovering the breakfast buffets, you know, even those type of facilities. I always feel fascinated, and I always looked and tried to imagine how it would be to run that show. So I was lucky enough to go and study in Switzerland, hotel management in the school of Lyon. And since then, I actually never went back to Portugal. I never regret the choice. Coming from a hotel school, especially in Switzerland, of course, you always get put to in luxury hotels.
And most of my background prior to Clink was actually in in luxury hotels, a bit in Marriott, but mainly at Hilton and Accor, where I was a bit all over Europe and also in in Southeast Asia. But that wasn’t really for me. Don’t take me wrong. When I go on holidays, if I could still stay in a nice hotel from time to time using, of course, the friends and family rates, I still do it. But that kind of corporate feeling, suit and tie, always very serious. That kind of sometimes old school approach that you can you have to shave yourself.
You cannot have a piercing. You cannot have a tattoo as a receptionist. I always felt a bit sometimes too much, too fake, for me. And I wanted something new, but still connected with hospitality and with travel industry. And why I got attracted to hostels was this kind of more laid back culture that it is is what it is. You see, this is how I I can go dress.
I actually go like this to Clink office, even to meetings, to be honest, very casual. And also because it’s my main background was in, commercial, but more specifically in revenue management and pricing. Pricing and revenue management in hostels is way more difficult, way more interesting than for hotels, for a lot of different factors. So I always felt, well, I should at some point tried hybrid, like accommodation. So either co working or student hotels, like like the student, for example, the social now. So I was felt the track, and it was just the right timing when I had this opportunity with with Clink.
Back then, I just had, like, I will talk, why not?
Diogo Vaz Ferreira
You know? And system, to be honest, I I fell in love with the industry and even coming from luxury hotels. And at the beginning, of course, it takes some time for it to adapt. I ended up being in this industry that I love. And as you know, also for the past twelve months, also being part of the management board of Wise, where I’m very lucky and proud to be part of your of your team. And I was kind of I felt here with the parachute, you know, coming from a different industry, but was just an industry that I I love.
And now I’m sure that not sure if I’m gonna stay longer with Clinc. Hopefully so, because I really love my company and my colleagues. But even if I move, I’m sure that my future will be in hostels or at least, like, hybrid accommodations for the years to come because I think You’re not going back to luxury hotels? No. Not at all. Oh, no.
It is maybe, but not to work. No? That’s interesting.
Sebastien Leitner
That’s interesting. It is though fairly binary, meaning hotels and hostels don’t typically mix. I mean, you know this. Right?
Diogo Vaz Ferreira
Like, we are at industry conferences. We are talking to executives in in in both areas, but they either work in hotels, they all work in hostels. So your career is quite interesting because you came from hotels. You made a conscious decision to move to to hostels.
Sebastien Leitner
What’s the biggest difference between the two? Well, there are a a lot. Right?
Diogo Vaz Ferreira
I think, I know what that’s was actually a very interesting conversation I had to wear with my father when I did that decision. Like, what’s happening going from Hilton to to Clinc? You know? What’s wrong with you? And I told him not only the culture and more laid back aspect that I previous said, but I think that there’s a strong misconception about hostels. Like, when you talk with some of your friends about hostels, they have this conception that you wanna stay in hostels if you don’t have a budget to stay in, in a hotel.
And actually, it’s not a it’s not a reality. Yes. There might be some people that, of course, stay in dorms, in hostels because the cheapest way for you to stay in a new city, But a lot of guests that stay in hostels stay for different reasons. For example, if you are a solo traveler, you have way more chances to mingle and actually to get to know different people and to really be immersed in the local community if you are staying in hostel. Small groups of friends, four, six, eight people, for example. It’s way cooler to stay, like, in one dorm with all your buddies in the same dorm, you know, telling jokes and stay awake until late at night.
Then pick, like, four random twin rooms in a in a boring hotel and meet in reception to have a beer. So I think there are a lot of reasons why people stay in hostels, and there are some trends that actually have been accelerating those. You know, the fact that, with COVID, that you can work remote, the digital nomads, you know, the the hybrid, the flexible working, and the fact that solo travelers, and especially the female solo travelers has increased quite a lot, luckily, is also a sign of the times that hostels have been more and more popular. And I think when it comes to hostels, you still have a few old traditional backpacker hostels, quite basic that maybe doesn’t fit the needs and the likes of everyone. But there are a few amazing brands, in hostels that honestly, when you especially if you stay on a private cruise, you easily feel that you are in a nice four star hotel. I think it’s just overall the culture that is a bit more laid back.
And also as an industry, we are way more flexible because when comes to amenities at some facilities, sometimes if something’s not really perfect, people won’t expect it to be perfect. So I think they give us some break. But also, when it comes to optimization, if you actually make the calculations in term of optimization per square meter, actually, hostels, most of the times, they have higher profit margin than than hotels. I think if, hotel chains, some of them, the big ones started to understand that. Like, for example, Accor with Joe and Joe, but all the brands are also on the way. They start to understand it.
But I think it’s overall, culture is a bit more different, a bit more laid back to work, to stay, but also amongst competitors, you know. Working in Clinc, I have very nice relations with other brands, generator mining, and wombats, Stay Okay, Aster, you know, Estello Bello. I got a lot of different brands. Also because, of course, of my work with Wise. But, you know, Telus is different. You know these people you meet in some conferences, but they always feel like even when you are trying to discuss about your performance or issues, that everyone is overselling their actual performance for for a bit.
In ourselves, I think people are just authentic. We go for a pint together. We we share. We talk. It it overall, I think if you have to put it in one word, it’s the atmosphere. The entire atmosphere is different.
It’s way more casual. It might not be for everyone, but personally speaking, I feel more at ease with this type of culture.
Sebastien Leitner
In a hostel, typically, the audience is much younger than a typical hotels. What’s your normal age range? Is it eighteen to thirty, sixteen to thirty? Help us understand sort of the the traveler segment, if you will. Of course. The eighteen to twenty five, of course, is the main is the main segment.
Mhmm. We do have a few youngsters because as you know, being part of, Austell, we have a lot of school groups. Mhmm. Fourteen, fifteen, sixteen, and also sometimes young professionals, especially the digital nomads, flexible working. So fit twenty five to thirty, but the bank bulk is eighteen to twenty five. In terms of geographic markets, of course, apart from the European markets, because Clink is only based in Europe, US, and Australia, they tend to stay almost every month in our top five of nationalities that staying, staying with us.
But overall, it’s Europe, US, Australia, eighteen to twenty five. Slightly more female travelers than than male. But overall, that’s it. Interesting. Interesting. Are you saying that there’s fewer men traveling than women in general?
Diogo Vaz Ferreira
Well, it’s just that or the way around. Right? There are more women traveling than men. I think especially because for many, many years, for cultural, political, sometimes religious, issues, some women, they are not really free to travel. I think in most of the countries worldwide, luckily for us, at least in our part of the world, these things are are gone. And despite the fact that still some safety, hygiene concerns in some parts of the world when it comes to female traveling, and especially solo female traveling, I think the fact that a lot of this has been has changed, females just feel more empowered to travel.
You know, female power, they travel way more. And also, a lot of more studies show that the newer generations, you have more females than actually males attending universities and college and high degrees. So I think that even the pay gap that we constantly keep talking about, the pay gap between male and female at the workplace, I think this might be hopefully changing in the near future to be more balanced. And a lot of countries now on the earlier, the younger generations, actually, there is quite the opposite because you have more female with degree studies and more eager to travel because they haven’t they couldn’t have done it or their mothers and grandmothers couldn’t have done it. So just eager to prove to their families that they can do. Their strong independent women.
Sebastien Leitner
So we just see that it’s a bit more women that actually, men traveling at this moment. You said something earlier, which I thought was very interesting, which is before COVID and after COVID. And and oftentimes, COVID sounds, at least in this industry, to be the one single event that changes this industry, right, that changes how we travel, that changes how we experience hospitality. In your perspective, what has changed before and after COVID?
Diogo Vaz Ferreira
You’ve been in this industry long enough. Right? What what are some of the things we were just talking about travelers and guests. Right? Maybe let’s start there, guest expectations. Have they changed before and after COVID?
No. Totally. And some COVID was a game changer. Right? And I think the easy sentence never waste a good crisis to learn, and actually this comes from the investment world. But I think there were some trends that COVID came to accelerate that were already there.
Especially, we talked earlier that our guests are quite young. So there are some generational trends that were there, and COVID just make it, even bigger. For example, and the fact that everyone now is always with their their phones and they cannot leave without their phone. Even if you go to our hostels, today and you look around the lobby, instead of, like, being and seeing, like, people talking amongst each others, like strangers just mingling. They go to reception, they put their backpack, and they start talking around, having a few beers. Most people are on their phones, and that’s just the reality, unfortunately, of the younger generation these days.
And I think that kind of, people, they they feel that they are more empowered because with the social media, with the Internet, they can do whatever they want these days. But they kind of lose the touch, the human touch and the personal touch when they are facing strangers. And also the fact that a lot of political, issues are out there that makes you starting to have suspicions about your neighbors just because they have a different gender, different color, different race, whatever. I think, unfortunately, these trends, together with the COVID, that made you afraid of chickens, made you afraid of kiss strangers, made you afraid of angst. I think this kind of distance, unfortunately, is still a bit there. So there are still some points, for example, that you can see that when it comes to the physical touch, or some, some interactions that are different than they were in the past.
And one of the trends that we’re seeing more often in hostels that pots are becoming very, very popular. And they are becoming very popular because you get that hygiene and privacy and safety that, for example, COVID, came and show us. But also, if I’m in a pod, being part of a generation that doesn’t like to interact face to face, we prefer to be the the heroes of our keyboards and hide behind fake profiles on Facebook or whatever. The fact that I’m in a pod, that I can close the curtain, or I can just go in and hide myself for the world. And I’m the one that I decide when I go out of the pod, I put my hat outside, and I decide when I interact with others, makes this kind of concept very popular. But then this goes against what the hostel should be.
Because if a hostel and all hostels start to be converted, these kind of capsule hostels with omnipods and people separating. Like, what’s the point?
Sebastien Leitner
Right? And then those goes again that kind of living, community sharing, type of vibes that most of the hostel brands want to, to have present in in their products. But I do think that COVID has changed those aspects of community, discussion, social interactions. And, hopefully, hostels are still there to remind people that this should be the way the world is. And the fact that, we have the guests of tomorrow, we have the future five star hotels guests today that will go to hotels tomorrow. Hopefully, we as a company, we as a hostel, we as a group of bunch of people that welcome these guests, can have an impact and change their perceptions and change their opinions.
Because if you are fifty or sixty years old, it’s difficult to change drastically your opinion about a strong subject like this. But if you are sixteen, seventeen, eighteen, and you really come to us, you have a great experience meeting people from all over the world, maybe your perception will will change. And we are I sometimes see ourselves as a good advocator, and try to advocate for these for these values, and make sure that you fight for the right values and you pass these values to the people and to the travelers. Because if the world becomes more open, a lot of things will change positively economically, but also as a society. A lot of things that are not going right at the moment. I think if people travel more, a lot of things will be solved.
I’ll give you an example. I remember one of the most impactful travel events for me was going to China. And of course, I’m somebody like you described that is glued to my phone. I arrived in China. Nothing worked. I couldn’t have Google.
I couldn’t, like, I couldn’t get data to really work. And I had to navigate a very foreign country without the support of technology. Was I scared?
Diogo Vaz Ferreira
Maybe a little bit. Right? Was I uncomfortable? A little bit. But it was also exhilarating. Right?
It was such a weird like, it was a very strong emotion. Right? I almost got arrested, but it was, you know, there were there were some really, exciting events happening at etcetera, etcetera. Here’s a thought for you. And I’m I’m I’m curious, but bear with me for a second.
Sebastien Leitner
What would happen with people’s interaction if Wi Fi stopped working in one of your hostels? I would love that as a as a social experiment to to make sure. I would be happy because I hopefully, people just join the events. Of course, the first ten minutes, they all come to to reception to complain. And if Wi Fi doesn’t work, wouldn’t really change much because they’re just using the the data. But taking this example even further, and let’s imagine for one day or a few hours, there wouldn’t be Internet.
One of the things will happen is either they come down to reception and they start interacting with other people and going to events, playing beer pong, you know, just sitting at the bar and talking to random people, or they go out in the city and discover themselves by talking and visiting random places. But both scenarios will be better than just stay in the hotel or hostel in your bed, in your room, and just keep surfing. Because what’s the point?
Diogo Vaz Ferreira
That’s against traveling. If you go traveling to different city, go out, meet out, you know, talk with people. Sometimes we have to be pushed towards an experience. Right? Like, outside of our comfort zone.
Sebastien Leitner
You made a really interesting comment earlier that I wanted to double click. I put it down as a note as a follow-up item. And this was around pricing and revenue management. That hotel pricing and revenue management is very different from hotel pricing and revenue management. Help the audience understand what you mean by that and how it is different. Well, because in hotel, it’s very simple to understand pricing, because it’s very simple to understand the preferences of the guests.
Right?
Diogo Vaz Ferreira
Everyone prefers to have a room with a view, a sea view, a mountain view. Everyone would prefer to have a suite than a a standard room. Everyone would prefer to have higher floor than a lower floor. So the the kind of preferences is are easier to understand. Everyone prefers a king bed to queen bed and so on and so on. When it comes to hostels, we have so many different room types and so many different configurations like shared, toilets, in in suite toilet.
There’s a lot of different, configurations. And so for example, we have guests that might prefer to be in a large dorm. Because if you are a bit more introvert and you are in a large dorm with a lot of people, you can be quiet and don’t really interact with a lot of people because you there are others to talk amongst themselves.
Sebastien Leitner
However, if you are in a group of a dorm of four, and you don’t talk with the other three, you are a bit weird. Alright?
Diogo Vaz Ferreira
What’s the point? Like, you of course, you are only three, four in the room, so why not talk with with each other? Some others would prefer to have the en suite bathroom beside the inside the room so then they have more easy access to the bathroom. Others would prefer to be outside because then they don’t have noise, and they have less traffic going to the bathroom, etcetera. There are a lot of different configurations that pick it’s way more difficult. And also the main point is that we don’t sell rooms, we sell beds.
So it’s about bed optimization. So I get constantly asked, for example, by the family, donor family, the owners of Clinc, to run, for example, some analysis and trying to understand if a certain space that they have, is it more profitable as a a private room or a dorm? And then if it’s a dorm, if I put six beds or eight beds, okay, it’s more than if I put four. But maybe if I have four and I have a question a bit more space and comfort, do people pay more for it? Yes or no? You know, all those type of different scenarios in terms of bed optimization and square meters optimization makes it way more, more difficult.
And also, because not only about directly speaking, it’s also from the technology tool, like the tools we use as a PMS, as a RMS, as a distribution, we have a lot more difficulties because a lot of different tools, they are not really done to understand how to sell a bed. At the end of the day, we are a bit more limited on the systems that can really understand our hostel could run. And the fact that you as a hotel, you have way more markets, way more segments. You have corporate individual travelers. You have series. We have, way more different channels of distribution and sometimes also a loyalty program that is a bit more more important, especially if you are American group with a strong loyalty program.
Where in hostels, most of the time is in individual bookers, leisure, is very few corporate, way less groups than, for example, a Mysore corporate hotel will have.
Sebastien Leitner
So I think we have to be a bit more dynamic. Right? We have to be a bit more flexible and adaptable to the to the to to different changes. What could hotels learn from hostels?
Diogo Vaz Ferreira
I mean, that think about you. You you worked as revenue manager or in in revenue management for hotels. You could go back to yourself and say, hey. You should look at that. What is what is something that hotels could learn from hostels in your opinion? Adaptability and being flexible.
I can sometimes a lot of different analysis, not only in revenue management, but overall in hotels. When something is not working right, we always tend to, oh, that can never be changed. Like, our hotel is bad because of a, b, and c, and that’s never the case. And sometimes, when hostels, when you have this kind of ongoing discussions, oh, instead of a dorm, mate, let’s make it a private room. Let’s make it a meeting room. Let’s make it the co working.
Keep changing the status quo. And I think sometimes a lot of brands in hotels, they take things for granted, both bad and and good things, but they take things for granted. They are always more reluctant to change. I think adaptability, flexibility are key aspects of hostels that hotels they can learn with. Also, apart from a few budget brands in hotels, like, for example, Ibis, Best Western, and those type of brands where sometimes it’s normal to see one person being a bit multitask and doing different tasks in hostels is very normal. The guy that’s working in a bar reception does a bit of everything.
That’s it’s kind of the that’s a normal brand. That’s a normal, approach. So I think that kind of approach to work where everyone jumps in, if I need to go to my hostels and I’m there while while working and, for example, something happens in reception, I’m trained, and I could just go to reception. And especially with this uniform, it’s easy to go.
Sebastien Leitner
I’ll go in the reception, and I I’ll I’m more than happy to to help. The same goes for taking a beer, you know, at the bar, etcetera, etcetera. I think this type of flexibility, this type of attitude, like, let’s do it. You know?
Diogo Vaz Ferreira
Let’s why not? You know? Instead of why is why not? Let’s go. I think hotels, a lot of different brands that have been there for many, many years, they need to be a bit more eager to change and understand that either they change or they are the ones that are changed by consumer perceptions. You know?
That’s such an interesting comment, and I’m sort of continuing in my head what you just said, which is in hostels, you have maybe five or ten hotel managers on staff that could potentially do anything and everything. Right? While in hotels, you have much more compartmentalized departments that say, here’s a barman, here is a waiter, here is a receptionist. And they do this extremely well, but they would never be able to check-in a guest, or they would never be able to clean a room, or they would never be able to do a maintenance request, or reset the router, or whatever else is is needed in order to get Yep.
Sebastien Leitner
Is that fair? Is that fair? It’s a quest of expectations. Right?
Diogo Vaz Ferreira
For example, if I go to a Hilton and the reception, no one is there, and I have to go to the bar and ask the barman to go and make his check-in, that is weird. If I go in the hostel and the receptions are not there because they’re checking, for example, a room, and the guy in a bar comes to reception and say something, hey, mate. Sorry. Let me see if I can find a way to check you in. Even find it funny. And while we are talking with the guy, maybe he’s pouring you a beer while you you wait.
You know? So it’s this type of I don’t know. I never checked in. I don’t have a many many experience much experience checking in. Let’s give it a try. Or even the way around, like, the receptionist, the bar is very busy.
The receptionist goes and makes a a pint. Is it gonna be a perfectly pint of Guinness where the foam is exactly where it needs to be? Maybe not. But just the fact that you’re so pumped for it, let’s let’s do it, I think it’s kind of casual approach that also the guests, they they like it.
Sebastien Leitner
You know? And at the end of the day, they have different sort of of expectations, and they go with it. They go with the vibe. We’re in hotels. If you know, I paid for it. I have to wear it a certain way.
It has to be that one, and it cannot be slightly different than my expectations. Jorg, we talked a lot about, COVID. I wanna talk a little bit about the future. You know, your predictions, your personal prediction on where things are going. And we’ll focus on three areas. So it is twenty twenty five now, which is a scary thought.
It’s twenty twenty five now. Within the next five years, what will happen with guest experience?
Diogo Vaz Ferreira
Voice. A lot more on voice AI. Everything. From the interactions with the website, with the phone. A lot more will be voice command, voice based. So going to hotel or hostels, so we stop tripping.
Yeah. I think that that will be will slightly disappear. I think it’s gonna be voice command. Turn on the TV, the lights, call reception, a lot more use of the voice because more convenient. You don’t need the hands to do it. You know?
And there’s also you don’t need the hands. You need the you don’t need, like, to even have a a phone. You don’t even need to write a certain language. Because, for example, they are voice AI system, but I can talk with them in Portuguese, and they translate to the other person in their language. Even my Samsung does it. I can speak in Portuguese with you, and it will speak in English or French on the other side for you and vice versa.
So I think that’s already there. I think voice will be way more relevant, the years to come. And because we talked slightly about it, about revenue management and pricing, and as you know, is my one of my favorite topics, I think the way revenue management will be done in the upcoming years is gonna be totally different. And now, of course, doing some publicity to to Cloudbeds. What I’ve seen, from Amit on the presentation of Cloudbeds on the Cloudbeds Intelligence, I think that’s gonna be the future. The fact that I have now an RMS will show me my forecast for a certain period is bad, and me as a revenue manager will look at the forecast, will maybe talk with my marketing team, with the GMs.
Okay. Looks bad. Let’s make a promotion. Between I understand the data. I decide that we need to do something. I talk with the marketing team, with the design team, with the GM, with the finance, without whatever.
Even in a good organized company, it will take best case scenario two, three days to work on something to have a promotion run and being sent to guesses in a very good scenario. Most companies I’ve worked for will take maybe two weeks. In Cloudbeds, for example, in the new intelligence, part of Cloudbeds, in a few clicks, not only the system will tell you when you should lead the campaign, what should be the discount, how should be the message, how should be the stay staying period, the booking period, how the template looks like, how the design looks like. So in a few clicks, the revenue manager, of course, with some integrations to other, like, PPC, SEO, and, of course, some other design tools, we’ll have it sorted. So I think we will work when it comes to the commercial teams way more holistic approach. Because if there is no sales, there is no revenue.
And if there is no communication, there is no sales, or sales will be more difficult. So I think sometimes companies make these mistakes where they put a revenue manager in a corner with Excel and a calculator, the director of sales promising everything to the corporate clients that, actually, the revenue manager won’t approve, promising discounts that the revenue manager won’t approve. At the same time, the revenue manager is working on on yielding. The market keeps, for example, doing campaigns on cheap budget promotion, cheap now, you know, discount deal. That’s not aligned with the communication with the pricing that the revenue management team is put in place. So I think these teams working together and especially having the tools to have everything done by one decision maker, I think that’s gonna be the case.
A lot of people say revenue managers will disappear. I don’t think so. I think their positions will be even more relevant in the future. But instead of spending tons of time analyzing data, let the systems analyze that data. Let the systems predict what is predictable. Let you predict what is unpredictable or react faster to what is unpredictable and making sure that he focus on, okay.
This is the price. This is distribution strategies, the marketing strategy, and let’s do it. Because now, for example, with Cloudbeds, I know it will be very is very soon possible. Taylor Swift announces a new concert in Brussels. In a question of minutes, Cloudbeds will be able to tell me based on our previous experience from the other cities, this will be the potential impact on price, so we suggest you to do this. Best case scenario today, if I’m not really a Taylor Swift fan, what actually is the case, fortunately or unfortunately, only by the tomorrow pickup report, I would have figured, well, something is happening in in Your hotel has sold out.
Or you’re And you’re gonna put voila. Too late.
Sebastien Leitner
Right? Mhmm. So I think all these kind of live sources, live data, using, for example, weather forecasts, there are some European weekend breaks that having a very nice weekend last minute, like, the sun is there and was not really expectable all the way around, that, for example, this time rain in a sunny period, that will have a huge impact. And I think very few revenue management softwares are actually prepared for that. So I think voice, multiple source of data, and multiple users of that data controlled by someone that I think should be the revenue manager or the director of revenue. I think this will be the two key, components together with, of course, we discussed at the beginning, automation chatbot, automated, automated, automated.
I think this will be the three things that will be in our radar for the upcoming years. That’s amazing. Before we wrap up, I wanna, sort of go back to our original question, right, which was what keeps you up at night. Right? And you talked about authenticity, the need of of change and modernization. Reversely, you know, I’m very curious of what lets you sleep easily.
What are the things that give you comfort?
Diogo Vaz Ferreira
In my personal case, knowing that I work for a company that is ready for tomorrow, whatever that tomorrow will bring, trusting my team and trust the tools that we have in place. Because we have to have the right people to manage the right tools, but you also have to have the tools. But I do believe that the tools we have, I do believe the people we have, so that’s why I can sleep at at night. As an industry or a part of industry, I think what we have to say is we faced a lot of wars. We faced COVID. We faced a lot of challenges.
And despite all those challenges, after all those wars, all those economical crisis, all the impacts of COVID, tourism always rebound stronger than it was before that crisis. Might take a while, but it always came stronger because end of the day, people want to travel.
Sebastien Leitner
You know, we might travel for work, might travel for leisure, visit friends, visit family, whatever. But if it’s one of the things that we can make sure that people keep doing is traveling. I think that’s a perfect way to wrap this program up, Diogo, and this episode. Diogo, thank you so much for joining me today and sharing your insights, your experience, your work, and what you’ve been, busy on on developing at at Clinc Hostels. Thank you so much, Diogo, for joining.
Diogo Vaz Ferreira
Thank you once again, Sebastian, for having me. Thank you.
Sebastien Leitner
That brings us to the end of yet another episode of The Turndown. Huge thanks for all of you for listening. We hope you enjoyed the conversation. Of course, this podcast wouldn’t be possible without the amazing team behind the scenes. A massive shout out to the producers, Talak Kaheirao, Linda Pejai, Lana Cook, Ricky Sherman, and Eilifakuhasen for the incredible research and preproduction work always keeping us on track. To Paulo Sanchez, thank you for your stellar audio editing and for making us sound so good.
And finally, thank you to Ying Liu for her organizational talents and keeping the season on schedule literally. Remember to subscribe wherever you get your podcast and follow us for updates and bonus content. Until then, take care and stay curious.
