Fortune's Catherina Gioino on hospitality's love-hate relationship with AI

[00:00:00] Catherina Gioino: Technology is huge. It allows us to be more human, and it allows us to have those human interactions in a grander way. I know that your flight now, because you pre-booked or you already automatically signed in, is at 9 a.m. I already called a ride-hailing service. Now, you and I don’t have to wait on our phones. You and I are chit-chatting about, oh well, you know, you enjoyed this restaurant while you were in town. You enjoyed this show while you were in town.
[00:00:35] Matt Welle: Hi everyone. Welcome back to another Matt Talks Hospitality. My guests so far have been hoteliers, people that work in technology, people that work at Mews, but the one thing I’ve never covered is someone who looks at our space from the outside, a journalist. And that’s why I’m very excited to have Catherina join us today. She’s the news editor at Fortune, and I would butcher your last name, so I’m going to make you say it before we get to the first question. But what I’m really interested in is to get an outside perspective on hospitality because you seem to report a lot on technology, and it will be interesting to see where you think our industry is shifting towards. But thank you for joining me today. And what’s your last name?
[00:01:11] Catherina Gioino: It’s Catherina Gioino, but thank you. It’s been a perfect pronunciation of the first name.
[00:01:15] Matt Welle: I love it. So, how did you end up covering hospitality at Fortune? Like, what was the backstory there? And are you enjoying this category specifically?
[00:01:23] Catherina Gioino: Absolutely. I mean, my main concern really is AI and tech, but really tangible technology, the ways that we can affect and see the effect on our lives. It’s so easy for us to talk about data centers, to talk about AI, talk about tech as something that’s, like, out there. I’m really curious about what it is in our day-to-day lives. Right? Whether it’s you and me talking right now on camera. This has been something that’s been around for the last 3 decades. But whether or not you can record this, and the ability to have a transcript produced, is relatively new. So, really, I’m curious about it in terms of what I go through when I travel, what it is when people go to restaurants, when people even order cars or taxis, how really technology affects you on the day-to-day life.
[00:02:04] Matt Welle: Have you always had this skill growing up of wanting to understand how things work and then, like, asking question and question and question to figure it out? And is that, like, an innate skill that a journalist needs to have?
[00:02:15] Catherina Gioino: I think I was a very annoying child and probably still am. I mean, let’s not get this wrong here. Asking questions, you know, like when you’re a 3-year-old, and you always ask, “Why? But why? But why?” Yeah. And whenever I got a dissatisfying question or answer, I would always think, well, I can do the research and figure it out myself. So, here I was at 3 or 4 years old trying to figure out why the sky is blue or why pizza boxes are square instead of circular. And, you know…
[00:02:36] Matt Welle: Why are they square?
[00:02:38] Catherina Gioino: Oh, so you have more space, and they also stack easier. It makes sense, clearly. But now we know, right?
[00:02:43] Matt Welle: I love that.
[00:02:44] Catherina Gioino: That one sticks with me to this day.
[00:02:46] Matt Welle: It’s so funny. I have the same skill of asking questions. I think it’s a skill that entrepreneurs have, that journalists have; it’s going very deep and understanding why. My friends always say when a new friend gets introduced to the group, they know what I do because I want to get to know that person very deeply, very fast. Like, please don’t do the thing that you do, like, this endless why questioning. But I find it’s a critical skill for success in business.
[00:03:09] Catherina Gioino: I think you and I are probably the same person. I want to get deeper, but I also have been told that I come off a bit aggressive. So, my favorite question, which I’m now going to give to you, is: if you have two liquids on your fingers that you can shoot at any viscosity, any temperature, any amount, which two are you choosing? Believe it or not, you get so deep so quickly. And I just believe that all conversations are doorknobs. So, as soon as you open one question, you gotta walk through and keep on asking why. But what are your two liquids? Now that we’re asking?
[00:03:37] Matt Welle: I have no idea.
[00:03:38] Catherina Gioino: “Oh, it’s a big one.”
[00:03:39] Matt Welle: Don’t make me go down that rabbit hole because you’ll sidetrack me for this thing.
[00:03:43] Catherina Gioino: Mine’s definitely olive oil. That’s definitely one. That’s all.
[00:03:46] Matt Welle: Olive oil. What’s the other one then?
[00:03:48] Catherina Gioino: Wine. It changes on the day, you know, today’s coffee. But what are you gonna do?
[00:03:51] Matt Welle: Fair. It’s too early. If you think about the stories that you’ve covered throughout your history as a journalist, what’s been the most interesting story that really opened your mind?
[00:03:58] Catherina Gioino: Yeah. I mean, like, this is my first year at Fortune covering tech, covering businesses and how they use AI, how they use technology. I spent the last few years working as a political course reporter for Rolling Stone. So, I would interview the current president of the United States when he had a hushnight trial, or I would spend 5 years covering crime. So, I’ve had very distinct periods of time. I was just talking about this yesterday. I think my favorite story in general was talking to Toni Morrison’s neighbor about how she overdosed on chocolate, but that’s different than today. Last week, I wrote an article about the cheese banks of Italy. Of course, it always comes back to the tangible side that I care about. It went viral, but essentially I knew that there’s always been cheese banks in Italy. It’s very common knowledge, I think, for most Italians. We have cheese caves in the United States also. People don’t know that, not necessarily. So, it’s always, like, a, I need to be smarter than someone else. That’s definitely a trope that many journalists and, I would say, founders and executives, also have. But more importantly, I really wanted to see how technology is being used. So, climate change obviously is affecting the entire country. All of Europe, I mean, is experiencing one of the greatest heat waves that we’ve seen in history, and we’re going to have the worst one next year, as they have predicted. These cheese banks don’t have the cooling infrastructure in place. But I cared more about the technology that they’re doing. So, they’re putting this high-tech cooling infrastructure, but they’re also using blockchain to essentially allow farmers to bring these wheels of cheese and get the collateral to get loans to pay off their farmhands, pay off their feed. Amazing stuff.
[00:05:29] Matt Welle: So, it sounds like it doesn’t really matter what the topic is, as long as it’s a very complex underlying thing that solves a real-world problem, which is the thing that triggers you then?
[00:05:37] Catherina Gioino: Oh, absolutely. Yeah. I mean, I think it’s just curious, right? Like, is there something that you’re so curious about that you want to learn more and more about? And then all of a sudden, I am an assignment editor, so I can’t assign someone, if I’m very curious about it, to do the work for me and then have them write the article too. That’s part of the power.
[00:05:52] Matt Welle: So, I read, you wrote this article about ‘Google it’, and it’s a thing that I say all the time, and I’ve completely stopped googling in the last couple of years because I only live in, like, ChatGPT and Claude today. Can you explain, you know, what shifted with this new generation? And are they still saying Google it?
[00:06:07] Catherina Gioino: They are not.
[00:06:08] Matt Welle: Like, the generation younger than us?
[00:06:10] Catherina Gioino: I wrote this article very recently. They’re saying, “Search it up.” Because the first thing you see when you go on a search bot or when you go on ChatGPT or Claude or any kind of chatbot is search it up, basically. So, now, the younger generations, the vocabulary, right, like you and I are saying, Google it. Google has fundamentally also changed search, where it gives you the AI overview. Same thing with these chatbots. They’re saying, “Search it up. You have a question, search it up.”
[00:06:35] Matt Welle: That’s so great. And it’s so true because I still say it, but I don’t do it anymore. But it’s just stuck in my head forever.
[00:06:40] Catherina Gioino: Oh, forever. Now, that’s immediately how you can tell that you’re an old person, essentially. It’s like, oh, you grew up before the era of AI.
[00:06:46] Matt Welle: But like, LLMs have changed the way that people travel, discover hotels - what are you seeing in that landscape? Like, what should hoteliers look to do to kind of get their hotels serviceable in these LLMs?
[00:06:59] Catherina Gioino: I mean, hoteliers should really start considering how they come across on social media. How they come across in search engines? Because the typical search engine of Google, again, does not exist anymore, right? You have the AI overview on Google, but you also have people skipping Google, essentially, and they’re going straight to the chatbots. So, really, it’s where they’re scraping this information, and that happens to be a lot of Reddit. It happens to be a lot of articles with journalists. And I hate to falter down the influencer journalism kind of line and pipeline. I’m sure we’ll get to it at some point here, but unfortunately that does get hits, not just because of, you know, the hundreds of thousands of people who follow that person, but that’s what the chatbot does scrape. So, maybe you shouldn’t consider, oh, this one person has only an Instagram, and that’s it. You should consider: do they have a blog? That’s what ends up getting scraped by these chatbots. And really it’s like, how do you present yourself in a way that’s truthful but also genuine? So, if a Reddit comment says, “Hey, I really enjoyed the stay at this location,” that’s going to get carried more in that chatbot response than having a blog post or having just a single Instagram or social media presence? You really need to have something that it can scrape off, and that’s just how technology has been working for the last few years. And it’s only going to explode now as we go further into the chatbot kind of universe.
[00:08:16] Matt Welle: But then do you think, if I was an independent hotelier and I remember when I was a hotelier, we were like, well, we’ve got to get a PR agency that gets journalists on site, and then they’ll write articles in traditional magazines about it. That shifted towards we need the influencers to write because they’ve got big followings, to maybe hotels having their own organic reach through their own posts. What’s the most powerful thing that they could do today, you think?
[00:08:36] Catherina Gioino: I mean, I honestly think it’s organic reach for, like, for the most part. I mean that, and then journalism, of course, my bias still shows, but having just an influencer that just has a Twitter account or a, let’s say, X or any kind of TikTok, Instagram, that does not get scraped by the chatbots. And I’m fully aware that chatbots are scraping from the Internet, from my articles that they are taking; it is a little bit of an annoyance because I get calls from PR people saying that something was wrong, but I’m like, well, whatever AI you use was wrong. I was correct, and I’m very pedantic here. So, yes, I do think you need the influencers. If they have an on-site, online kind of blog. If they don’t have that, it’s kind of not worth your while, outside of getting the people who just follow them on social media. Because in my just observations and in my own research, I know people are turning not to Google; they’re turning to these chatbots. The chatbots cannot physically access any social media accounts. So, something that they should be aware of is, A, like, if you have someone that has a video, it’s going to hit the thousands of people who follow that person. It’s not going to hit someone who’s searching, you know, best hotel in this one area.
[00:09:44] Matt Welle: I love that. And do you think there’s a path back towards traditional media now, because there’s so little trust in what you read online that actually suddenly people like, well, I need to follow this magazine because I trust that they actually research these things.
[00:09:57] Catherina Gioino: Well, I think so. I mean, I personally just do my own research. I am the type A spreadsheet person for my friend group here, and the majority of the time I go on Reddit myself and I look at someone’s comments. And my whole thing is I’m a native New Yorker. I’m a snob when it comes down to things. It’s just the way that I grew up. I know what’s best for me, and I know that I want this restaurant over this restaurant. I know that I would prefer a room with a view. And how would I know that when I’m booking a small boutique hotel with 6 rooms if the photos don’t show that? So, I think really the traditional part also goes back to the hotelier. Right? They need to make sure that all the questions that I would typically ask, that I’m going to do more research than the typical person who goes down the chatbot kind of route. I want to see the photos of the room; I want to see the photos of the window, the view. I want to be able to see these things. I want these questions answered before I have to go through Reddit and through the comments, before I have to go find this article that was written about it, and then I also do treat traditional media with more respect than I do, that’s a personal thing, again, than influencers. Are you looking to attract the biggest reach? Yeah, sure. Someone on social media is probably your best bet. If you’re going to attract someone who, you know, you want a certain type of individual booking your rooms, then you should be considering the typical traditional method. But really, really double down and become anti-AI because we’re also seeing a lot of people want that sentiment of you’re traditional, you are the person that’s going to be anti-social media, maybe the person that just will serve the bed and breakfast that I want. And you’re not posting a photo that’s clearly slop, let’s say.
[00:11:26] Matt Welle: This weekend we went to a bookstore, and I didn’t think we would still be buying Lonely Planet, but we did. We’re going to Japan this week. And my husband’s like, “No, I want the Lonely Planet because I trust it.” I was like, but you can find everything online. But it’s like, yeah, but I like the idea of sitting on a train reading a traditional book about travel. And I was like, so pleased because I thought a few years ago a business like that wouldn’t thrive, and they seem to be doing really well today.
[00:11:48] Catherina Gioino: Where are you going?
[00:11:49] Matt Welle: Osaka, Kyoto, Tokyo. So, we’re doing the traditional Japan, like, the beginner’s Japan, before we go crazy. But I already loved Japan the first time we went 10 years ago. And yeah, it’s because it’s so distinctly different from how I experience the world. But also, hospitality is just so good, and on my holidays, even though I work in the segment, I seek out the craziest and most extreme hospitality experiences. So, we’ve booked some incredible brands there, which I’m excited to basically look at everything, like, open every drawer, figure out how they do check-ins and stuff. I’m really annoying. You do not want to go on holiday with me.
[00:12:23] Catherina Gioino: No. No. No. You and I are probably the same person here. But this brings up the best point here, right? Like, if we were having, you know, a time crunch, I would just totally, oh, A, have a map that I can show you, but, B, that’s what happens also, like, I care about word of mouth. And I can give you right now 14 different coffee shops because I’m a big coffee snob too. And my favorite one is across the street, Shinjuku, right next to Tower Records. You have to walk in between two alleys. I’ll find it for you, and I’ll send it to you. But that’s it. I do my own research and I also trust - if someone’s a snob, I can pick that up very well, and I’m using that in a nice way. I can pick that up very well. So, yes, I trust your…
[00:12:57] Matt Welle: Yeah. You’re a snob. Like, you’re great. Here’s a coffee recommendation.
[00:12:59] Catherina Gioino: Yeah. Yeah. Here. Sorry. All right. You know the difference between blueberry notes and raspberry notes. This is fantastic. 100%. So, I trust that person. And also, like, do you know the area well? Right? It’s like the same thing. When I went to Pakistan for a friend’s wedding, I didn’t know anything about Karachi, but here I am now telling someone that has lived here their entire life that that building is from the 1940s, right after the whole entirety of the city came under British rule. So, it’s just a fantastic time period to get to be a nerd, basically.
[00:13:28] Matt Welle: So, going back to hotels and you wrote about the annoyance economy, which I thought was a really interesting article, where you talked about when businesses introduce friction because it makes their business more, you know, make more money, basically. And then I look at hotels, and I think about the processes that we have: the check-in, you know, the queuing up and then the departure being so painful. Do you think those processes were induced by people trying to make more revenue, or is this just like a lack of technology in the industry?
[00:13:56] Catherina Gioino: I think it can be both. Right? I think all those frictions that you’re seeing in place now is either the traditional mentality of how to run something, how to run a kind of business, whether it’s a hospitality group, whether it’s a restaurant, whether it’s something, like, there are people who are traditionalists and that you need to stand online and wait for someone to hail a cab, for example. There’s traditionalist that need to say, “Hey, you know that people are going to want to say hello to you or goodbye to you when they drop off their cards.” I’m that person. That’s the way I grew up. So, now I am also aware. Let’s take a hotel, for example. There’s a drop-off box for the most part that has been introduced for years. I am still in the mentality that I need to go wait in line to…
[00:14:34] Matt Welle: Give the key back to someone.
[00:14:36] Catherina Gioino: Exactly. Yeah. Or else they won’t charge me overtime. Right? So, I think it’s twofold. A, it’s being aware of your own as the operator, as the hotelier, like, being aware of your values or also of how your methods are inducing this kind of friction, and B, being aware of the people like me that still say ‘Google it’, right, instead of search it up. People who are like me that are aware that, yes, there’s a drop-off key box, and so therefore just do that. And very much so, recently, I’ve been traveling for work and also just again on my own leisure here. I’ve been seeing a lot more hotels saying just drop it off when you leave. Like, you don’t have to wait in line. So, even just having the 2 extra seconds when I check in to say, “Don’t bother waiting in line.” And that usually happens around 4 a.m. if my flight’s back to New York for that reason. But even having that say, like, you’re fine, don’t worry about it.
[00:15:24] Matt Welle: Because when I tell hoteliers we can automate your check-in, your check-in outflow and they’re like, yeah, but I want that moment; I want to create an experience. So, like, does that automation then make hospitality worse?
[00:15:36] Catherina Gioino: Yeah. I mean, yes and no. Actually, I’ll take Mews into this. When I went to the Mews conference this year, I had an extra day, and I booked a hotel, and it was all automated, and I was out, you know, with friends in the city that are around. But then I also went back to the hotel at an odd hour, and it was automated. But I think of myself as very technologically savvy. I did everything, and of course the anxiety that gets induced. It’s 4 a.m. I’m not going to be able to get into this hotel. What if something goes wrong? And I know how expensive it is to have someone overnight. I know how expensive it is to have CapEx and OpEx. I fully am aware of these things. Having someone at that desk to control the what-ifs, the hypotheticals, just in case the door got jammed and couldn’t open. All of that is needed just to really make the person’s experience that much better. And again, it’s such a small thing, which you have to just think about them as, hey, I’m going to automate check-in, but I will have someone here just in case you need something, just in case you are in a different foreign country and you are, you know, you need to go to the hospital, if you need to go grab something, that’s to, you know, late-night snacks because you were out drinking, for example.
[00:16:43] Matt Welle: Or even have a conversation like not about your credit card and check-in form, but actually just about why you’re in town and how can we make that stay better?
[00:16:51] Catherina Gioino: Yeah. 100%. If I can check in automatically, but then also just come in and then have a person say, like, “Hey, you had a great night? Fantastic.” First of all, I’m a gabby person, and now I’ll be talking that much more for sure at 4 am, in the morning, I’m checking in. Absolutely.
[00:17:06] Matt Welle: So, you talked about the Mews event. So, we host Mews Unfold in Amsterdam once a year, where we try and talk about innovation in hospitality. What was your experience with that event?
[00:17:14] Catherina Gioino: I mean, my whole thing, I really didn’t go down into the deep dive until Mews, with hospitality in particular. So, I really, it was eye-opening. It was a great way to really learn about just how hoteliers across the country, across the world even, are using technology in general.
[00:17:30] Matt Welle: Thank you so much for listening to Matt Talks Hospitality. I really enjoyed these conversations. I did want to take a moment to talk about the Mews Revenue Management System. Two years ago, we acquired Atomize and we then, from that moment, started rebuilding the whole platform from the ground up at the core. So, the idea was that the Mews Operating System becomes the core platform that everyone in the hotel lives in. But we had to rebuild the whole user experience inside that same platform whilst we optimize the algorithms. That product is now live. Hoteliers and revenue managers love it because once they log into Mews, they get their business intelligence insights. They can manage the rates and the connectivity to the channel managers. And now all the price recommendations are sitting in that same platform. And this makes the life of revenue managers much more interesting because it turns them into revenue strategists. You can see this demo straight away directly inside the system. We can get you live by tomorrow, and we can get recommendations flowing to instantly make your business a better business. I hope you enjoy it.
[00:18:24] Catherina Gioino: I thought it was the, you know, like, the name brands, the giant conglomerates that you and I can think of, but really it’s like I met so many people who happen to have 3- or 4-room boutique hotels in the middle of the countryside of random countries here that I’ve only always wanted to visit, but I’ve only visited as like a B&B kind of thing, not as an up-to-upscale boutique. So, seeing that, seeing people say, “Yeah, we don’t have access to WiFi.” And people like to go to WiFi. But we’ve also found a way to get a router to introduce any kind of key fobs to enter into your door. This way, you don’t have to carry around these keys, like, seeing how people, like, that kind of small thing is amazing for me and really eye-opening for me to think about because again, it goes back to removing the friction. But also I’ll remember that for the rest of my life. I don’t remember the key card I use when I tap onto a door, but the key fob and into an old-timey key. Of course, that’s memorable. That’s imprinted in my mind forever.
[00:19:23] Matt Welle: I like when people specifically resist the technology because they thought deeply about the experience. Not when they just couldn’t bother to invest into the hardware, but actually when they specifically say, no, no, this is part of the experience and they think deeply about it. I love when hotelier really puts a vision on a piece of paper and says this is the experience that I want to create and then execute on it. Because I think, you know, technology is great but ultimately travel should be a thing that you remember. It shouldn’t be the thing that was so seamless that you walk away just not remembering the trip.
[00:19:55] Catherina Gioino: Absolutely. Like, those small details really come down to it, right? I do remember, I mean, I remember this, this hotel in the south of France very well because I actually erred. It was my own error. But it had the old-timey key, like, an actual key into this 4-room boutique hotel. And I checked out, but I did not give him back the key. My entire fault was driving with, you know, a partner at the time to the airport. 20 minutes later, we get the phone call saying, ‘Hey, you didn’t drop off the key. Don’t worry about it. If you’re on the way to the airport, just you know, mail it back to us.” We left with a lot of time, obviously, so we turned back around. But yes, it goes both ways, right? So, removing that friction, it’s also like, hey, you mail it back, doesn’t matter, we were not in a rush. That’s completely fine. At the same time, like yes, a key fob would have been probably like something more recognizable, something that would have been easier for the hotel to realize, oh, they didn’t check out this.
[00:20:47] Matt Welle: And you’ve briefly touched on, like, the big brands that you were expecting. But actually you’re hearing the stories of the individual hoteliers and I think, you look at the U.S, which is very brand-heavy. I think 80% of hotels have a brand on the roof. Europe is the exact opposite. And what do you think is the future of the unbranded hotel? And should hotels go independent, or should they go branded?
[00:21:07] Catherina Gioino: I fall between this line so hard here. On the one end, I travel a lot for work. I previously was a consultant for two micromobility companies. So, I would spend around 2 to 3 weeks out of the month traveling to a different city across the country. And I like my points. I’m a big fan of points, like, I don’t think I’ve paid full price for a flight in years. And also with that I also like getting upgraded. They can see, “Hey, you spent, I won’t name, you know, various brands, but you’ve spent, you know TK, or you spent X amount of days in this hotel brand throughout the year. You’ve been upgraded entirely.” At the same time, I am Italian so I appreciate the non-conglomerate, the really, like, care-to-detail attention, to personalized experiences that comes with whenever I stay and travel within Europe or really across the country and around the world outside of the United States, of course. So, I think it’s a mixture of, A, Americans, especially, are very much so heavy on rewards. They want to be rewarded for being loyal, let’s say. And finding a way to reward especially those kinds of travelers, people who… Have you been on FAT travel on Reddit, for example? It stands for something I can’t even think about, but FAT is in caps, and it stands for, like, financially something, something essentially travel. So, it allows someone who, you know, they can splurge, and they’re fine splurging on something. They are the ones who are going to go to the Amans of the world, and they will refuse to go to a name brand even though Aman is, at this point, a name brand. They want to see themselves at a hotel that does not have a points system because points, inherently, I’m sure maybe the hotel industry would agree with this. Inherently, maybe cheapen your look, let’s say. And that’s the angle Americans, who are subscribed to this kind of mentality, have abroad. Internally, I know that my options are limited when it comes down to work travel. I know my options are limited when it comes down to just traveling to the flyover states, let’s say. And again, I am a snob for coastal elitists here. So, I’m not going to be booking a room with those particular hotels. I am going to be booking a room with this brand name. I want to be rewarded for traveling. I want to be rewarded for having the loyalty. Even though I’ve had a fight with my boss to get the extra $100 a night spent for that. I don’t know. It’s an ongoing question I have. I think, for smaller hoteliers, maybe having a system of networks that allow people to say, “Hey, I’m not afraid to turn you down and direct you to a competitor because it’s kind of a rising tide lifts all boats kind of thing.” Maybe you can’t book into my boutique hotel that has 6 rooms, but go across the street, there’s an, you know, unfriendly hotelier that also will take you for the night.
[00:23:47] Matt Welle: Love that. And you briefly talked about the ultra-luxury segments, which I’m obsessed with. Like, that’s what I save up for the whole year to stay in these ultra-luxury segments. And I had this exact conversation with my husband about points, and we’re like, why does this brand not have points? He’s like, “Because it cheapens the brand.” But the thing that still frustrates me at those brands is that they don’t recognize when I’ve stayed at other hotels within the brand, and I’m like, it’s ultra-luxury. So, part of the research is actually knowing me, holistically, you know, as a guest of the brand. What are you looking at when you look at the luxury segment specifically in terms of technology and where it’s moving? Because we’re in this K-shaped economy, and the luxury brands are doing incredibly well right now. But are they changing their ways of operating?
[00:24:31] Catherina Gioino: I mean, I’ll speak as a consumer side of it. I do go, too, the same exact thing, like I’m saving up all year to go to these kinds of hotels, and I’ve always wondered, like, I hate, I mean, I really want to name-drop here because I’ll…
[00:24:44] Matt Welle: You can name-drop. I don’t do it because I represent the industry. But you do not. You can go.
[00:24:48] Catherina Gioino: Don’t worry about it. That’s totally fine. There’s a CNR brand or a hospitality group, let’s say, that happens to have a lot of these boutique luxury hotels, right? And I always wondered, well, if you’re under the same umbrella, why don’t you know that I stayed in this hotel when I went to Costa Rica and when I went to Japan, for example. Don’t you know that I enjoy sleeping in late? And so, therefore, you should say, don’t worry about checkouts at 12, you know, like, why don’t they know these things. I’ve always wondered, again, if I am showing again this loyalty, which again is a very common thing with people with rewards, then you should know, hey, I don’t enjoy getting woken up, like, send the cleaner to come in after 12 because I will be sleeping in late and I’ll be out late. And that’s how my time is when I’m abroad or when I’m on vacation. At the same time, it’s such a great question here. It’s like I know that on the technology front, that is something that hotels are able to do, right? They’re able to think about the person who is loyal to a brand. They’re able to think about, hey, this person stayed with us for X amount of times, and they enjoy their coffee. They are going to come down for the hotel breakfast at 6 a.m.; how about we have a table for them already sub and just, like, having that person - the waiter or even, like, the host - saying, “Oh, hey Matt, you are an early riser. So, we’d have, you know, your typical table here set away.” And the idea of you being personalized through technology is why I go down this rabbit hole, why I love this kind of industry, especially, and just in general, why I keep writing about it, right? It’s like personalized through technology. There’s a human angle to something that we have, for the last 3 decades, really made as inhuman, as robotic as possible.
[00:26:30] Matt Welle: I think, like, now that you’re talking about it, I’m thinking I go out of my way to make sure that they have my loyalty card at a Marriott or a Hilton.
[00:26:36] Catherina Gioino: Okay.
[00:26:37] Matt Welle: So, I make sure that they know that I have a centralized profile where all my information is kept. But when I say ultra luxury, it’s their job to figure out whether I have a centralized profile, whether there is historical information, and I think, because of the legacy technology that probably these luxury brands have, because they’re the last ones to jump on innovation, but because of that legacy, I wonder what that does to the actual service that they deliver. Maybe locally, they’ll remember me, but when I stay at the next hotel, that brand, they don’t, or they don’t know that I’m lactose intolerant and therefore give me lovely chocolate in the room, which is milk chocolate, which doesn’t add value to me. But I think it matters long-term for my loyalty to those brands.
[00:27:14] Catherina Gioino: Absolutely. I mean, like, I’m a Catholic also. I mean, Italians mostly are. And I always joke with whoever I’m staying with, “Oh well, I have to earn their respect. I have to earn.“ But they have to know that I know what I’m doing. Right? So, the ongoing joke is when you go through security at the airport, I take my shoes off, I take the laptop out. You don’t have to tell me twice. I know. I’m a well-versed traveler. They should know that I am that good. Same thing with hotels, I guess. I’ve been to these super high-luxury hotels in Japan. They should know that I’m also going to book a very cheap budget hotel when I go to Taiwan because I’m staying the extra night when my friend’s out of town that I would usually stay with. So, it’s a mixture of both. And I do also have that same question: are you losing out on that kind of personalized experience? Or should they also automate that backend in a way that I should never know about, in a way that you should never know about either? Right? Like, the hotelier, if you happen to own a high-visibility, high-luxury brand that’s not just under a small boutique name, you should be able to say this person stayed 4 nights in this country and this person is going to stay 5 nights in this country. They are someone who gets it, essentially.
[00:28:23] Matt Welle: You know more than the average person about technology today. If you were to fast forward a couple of years and you were to book a hotel, what were the parts of the hotel experience that you hope that AI eliminates and what are the parts that you hope it accentuates?
[00:28:37] Catherina Gioino: I really do hope the technology, especially AI, gets rid of all kinds of dynamic pricing, all kinds of personalized pricing. I have covered this extensively. The EU right now is going through a similar debacle, let’s say, and we have certain senators in Congress. This is something that’s very apolitical. It does not matter what field you belong to or political ideology you hold, people hate personalized pricing. People hate surcharge pricing. They hate dynamic pricing. Just because I googled a certain watch, now all of a sudden I’m going to get an extra $200 tacked onto my nightly bill. And that is absurd. And the extent that I go through, because I know that they are tracking, they have cookies in place, they have the ability to search through my search history, I go through a various extent that I’m sure various people who are booking hotels don’t know that this exists, and so they are getting hit with this kind of surcharge purely because they happen to made a search of a random object 5 days ago. Right? I cannot wait for bills to be put in place, for regulation to be put in place, to obviously stop that.
[00:29:42] Matt Welle: I’m so sorry about that.
[00:29:43] Catherina Gioino: In the United States, there’s already been a bill that’s been proposed in the EU. Something with the GDPR has been added as a caveat. This is one of the few occasions where I think the United States is a bit further ahead than the EU law. But not by much.
[00:29:56] Matt Welle: The only time when the U.S. legislation is ahead.
[00:29:59] Catherina Gioino: Yeah. Don’t worry. But not by much. It just so happens that there are 3 very small niche subjects where you get apolitical support, and this is one of those things that you’re like, okay, yes, everyone’s a big fan.
[00:30:10] Matt Welle: You said dynamic pricing but also personalized pricing. So, dynamic pricing being, you know, everyone pays a higher price when they book last minutes. Is that out of that frame? It’s really about you as a person pay more than the person next door to you.
[00:30:22] Catherina Gioino: Correct. Yeah. So, dynamic pricing. Think about an unnamed ride-hailing service, for example, that sees, hey, you and 15 other people have just landed at an airport at 3 a.m. The odds of you hailing a cab are slim. The odds of you wanting to take public transportation are slim; you’re tired, you’re jet-lagged, and you’re carrying luggage. And you are now not only competing with the 15 people who are around you, but you’re also competing with the limited amount of drivers at that hour, at that time, in that area. So, that’s dynamic pricing. Same thing for, like, concerts. Oh, we just are, you know, let’s say sporting events. We saw that 20 people have just left, or now they’re all booking the same service. We’re going to open the app. This is going to be dynamic pricing. Personalized pricing is, Matt, I see that you like the color purple and now all of a sudden I’m going to charge all purple. I’m going to make sure that you view only purple colored objects from now on. And they’re gonna, at some point, I’ll figure out that you like purple canoes. And then I’m going to show you these kinds of ads that are purple canoes, especially. It’s the perfect color purple. I figured out exactly what kind of canoe you like, what kind of oars, what kind of shade of purple you like, and now I place this in front of you. You go and click on the ad because you’re curious, of course. It now charges you a personalized price that is an X percentage higher than it would charge me, who has not looked up anything regarding purple, nothing regarding canoes. And that’s just personalized pricing for you particularly.
[00:31:54] Matt Welle: That is so interesting.
[00:31:55] Catherina Gioino: And that’s technology at its finest.
[00:31:57] Matt Welle: Yeah. Like, I don’t think our industry is that advanced. Like, we’re still talking about merchant guest profiles at this point. So, I wish we could do these things. But, like, we are just a few years away from it, and it’s good to make sure that legislation is ahead of it so that there’s no discrimination in pricing.
[00:32:11] Catherina Gioino: I think they’re ahead of it. I think they’re starting to catch up. But if it’s the one word of advice I can give to you and all your viewers, it’s delete your cookies, delete your history and do that on a weekly basis. Just a good digital detox, you know, a little keeping shop.
[00:32:25] Matt Welle: That’s maybe the best advice from today, actually. Like, that people can walk away with an action immediately because it is very valid advice.
[00:32:32] Catherina Gioino: Yeah. Yeah, of course. Yeah.
[00:32:34] Matt Welle: On the pricing. So, we did a study this last week because we have such great data, and we looked at the World Cup and the impact that the World Cup had on pricing in North America, and it was just fascinating to see how different destinations had distinctly different pricing models. So, we saw, for example, LA, yes, in price increase, but moderately year on year and therefore occupancy was very solid. And then you saw Miami, where they hiked the prices, and occupancy plummeted because there was basically a riot of customers saying, “Yeah. I refuse to book hotels at that point.” But I’m not interested in the World Cup. I’m much more interested in what the effects of Taylor Swift’s during The Era tours, but also when she got married in New York. Do you see that events like that drive genuine travel demand? Is that the thing you think about?
[00:33:20] Catherina Gioino: You asked the perfect person for this. I’m so sorry to burst your bubble here. I happen to have - not only is my Master’s in journalism, it’s in urban economics and urban policy here, but I also wrote very much on FIFA, on the displacement effect and substitute effect. And these two are actual economic terms and phenomena that happen. So, take New York City, for example. Again, I’m a snob, and I’m an elitist, and I love, and I have great hubris for my city. It is a city that people will come visit no matter what. Whether there is a World Cup, whether there is Taylor Swift, whether there is the national truck driving competition. It doesn’t really matter. People are coming here regardless of anything that’s going on in the peripherals. So, what happened in the World Cup? What happened with Taylor Swift? What happens with these grand events? You’re just substituting one group of people who book the hotel for another group of people who are booking the hotel. Now take that to Kansas City, for example. I went to Kansas City. I necessarily maybe would never have gone to Kansas City had it not been for the World Cup. They are a city that does not have the substitution effect, does not have the displacement effect. So, now, I’m spending money at this hotel that I would not have otherwise done. They’re the ones who gained the most from it because New York was always going to have this kind of mass demand; that small city was not going to, and that’s what hoteliers also think about. Are they somewhere where we have an event going on? We have the Milan Olympics, for example. We have something going on in the future where someone’s going to come and book it. So, should we even try to hike prices? But you’re really working against your favor here. Or should we try to collect people who are coming in because they would have never come in in the first place? Miami erred in that scenario. New York, for the most part, there’s been a lot of debate about whether or not the 80% downfall of hotels, but at the end of the day, they ended up averaging out. That’s always been a trope that’s been said. I just covered this week that the city received $3.5 billion in economic development to the area, within New York and New Jersey. So, we were always going to win, let’s say. It’s the smaller areas. When it comes down to these events, like, don’t hike prices; be aware of the substitution effect, a behavioral economics phenomenon. Be aware of how consumers spend their money.
[00:35:28] Matt Welle: And I think when you’re a smaller destination, and you see something major coming, the opportunism that sits in people’s heads obviously affects them. We see this, for example, with Olympics that are moving destination to destination. So, those destinations are not used to the demand that’s happening. And usually what we see, what we saw in France last year, was that actually, yes, on the peak days they thrive, but all the days around it, they suffered because they have basically made their city so inaccessible that actually regular tourists and regular business people wouldn’t come to that destination.
[00:35:56] Catherina Gioino: Of course, yeah. I mean, I know I’m not traveling to the Olympics, for example, but I know that if I go visit a friend in LA, I just know, again, thanks to technology, I’m going to be hit with that surcharge demand because the Olympics is going on, and as a result, I’m going to maybe want to book out of the area that I would have done otherwise. And that is the displacement effect. So, I prescribed before, the substitution effect. Now, you’re displacing me. I’m not spending the money that I would have otherwise done because I have the idea that you are going to try and take advantage of me.
[00:36:26] Matt Welle: Turning back to the hotel experiences, and I always like to ask the guests about a personal experience that you’ve had in a hotel that left a lasting memory for you. Like, because most of the time we check in and check out and we forget about the hotel because it was, like, the same experience as anywhere else. But other hotels that you’ve experienced where you’re like, wow, that really changed my brain, and I always remember that particular experience.
[00:36:49] Catherina Gioino: One of those hotels that really changed my experience entirely was Nordelaia in Italy, in Piedmont. So, my family’s from Naples; they’re from the Campania region. It’s a very homey, hospitality kind of environment. You come in for dinner; you don’t leave until 7 hours later. And even then, you’re probably not going to get out for another 3 hours because saying goodbye takes forever. So, Nordelaia is in Piedmont. I’m a big wine person. I love talking about wine. My father’s family comes from the Fiano region of Italy. So, I know Fiano very well. Going to Piedmont, that’s where I met so many wine and grape varieties and immediately befriended Francesco, who is the, or was actually; he got promoted to one of the Ammans in the Middle East, actually. But he’s the wine director in a now, formally, strictly non-alcoholic country, which is very interesting to see. I do love how hotels are able to, again, like, are able to bring alcohol. I do love that. So, he and I still talk to this day, but as a result of that, we talk to this day because of just how much we were able to just banter and talk about it. Like, immediately we sat down, and he’s like, “Ah, you seem to know what you’re talking about.” Again, like, I need to earn his respect. That’s the Catholic in me. He’s like, oh, you seem to know what you’re talking about, but you’ve never experienced the grape varieties of Piedmont outside of the 3 main ones. Let me tell you this very obscure, smaller grape variety you’ve never heard of. And as a result of that, like, we got to really just meet and became friends. And we still talk to this day about grape varieties purely because he realized, oh, she swirled her glass a certain way. That’s it.
[00:38:23] Matt Welle: But the thing, I ask this question usually, and it always comes back to the human experience that you’ve had. It wasn’t about the bed or it wasn’t about, you know, the view that you had. It was about the humans that ran the hotel that connected with you personally.
[00:38:37] Catherina Gioino: Absolutely. And like, listen, let’s have to say, like, the view is fantastic, the pool, the area is beautiful. The entire experience was fantastic. But really, I haven’t stayed there in 6 years now. Right? Like, I still think about that experience of he noticed. It’s the observational skills. He noticed how I swirled the glass, and he came over and he’s like, ah, let’s chat.
[00:38:56] Matt Welle: But that’s because he’s a hotelier or a hospitality expert that has a deep empathy for their guests and looks out for the signals. And that just comes from training and passion. And I think sometimes the passion is the thing that’s missing, or training. We don’t seem to do that much anymore. And I just want to go back to those roots, especially now with AI. We take away a lot of the work, but that doesn’t mean we have less employment. It means we need to reroute our team members towards those kinds of experiences. But that requires training, and it requires hoteliers to teach the next generation.
[00:39:28] Catherina Gioino: 100% agree with that. I think teaching the next generation. But also it’s like a version of empathy. I get very scared when I think about, like, my cousins, for example, or I think about younger generations. Technology, right? The ability to be connected also means we are the most disconnected people ever in history. So, I’ve written a lot about the negative effects of technology, right. We’ve seen an explosion, or really the de-escalation, of talking to people. We’re speaking 30% fewer words than we did 2 decades ago. We’re not dancing. We’re scared of someone taking a photo of us in public. Vice versa. We move on to, again, I am Italian. I’ll never give Macron any kind of credit. But I do think he’s right when he’s saying you should all, in high school, go work in retail, go work in service. I spent 5 years as a waitress, and no one taught me how to be empathetic. But getting yelled at taught me how to be empathetic. Right? Or no one taught me how to be observational, but knowing that, you know, couple that comes in every Saturday evening for their, like, steak and eggs, for example, I know that he likes this certain particular kind of salt. So, I would bring the salt before he even asked. Right? That’s just observational. We never even exchange any words. He just acknowledges, and I acknowledge, and that’s it. But that’s the kind of observational empathy, whatever you want to call it, that we are losing unless people do go into any kind of service, any kind of retail, any kind of hospitality industry.
[00:40:53] Matt Welle: Like, I remember when I started as a waiter and no one told me that if the glass is empty, go and say, “Would you like another glass?’ So, I just didn’t know. And I just never asked in those first 2 years until someone pointed it out to me. And it’s like, you know, what happens is you basically make another sale, and your tip is a percentage of the sale, so you make more money. And it just needed someone to point it out to me. And then from that moment forward, I never forgot to ask whether they wanted a refill of the glass. But it does require an older generation to kind of point out some of these things because we just don’t think about these things.
[00:41:24] Catherina Gioino: Yeah, I mean, I also think it’s like, again, it’s observation, right? Like, observing how I was treated in one hotel or how I was treated, even, I’ll give you like a dumb example of an airplane. I took EVA to my Japan trip and I got my points to get me into first class here. And I had ordered a certain Sake, for example. Rarely, if anything, had I seen it, I mean, maybe again, I am 10,000ft in the air. So, who knows where I was. But it barely got below 3/4 filled and someone without even asking just came up, refilled it. Not a word was exchanged. Maybe that would have been terrible for me because I did fall asleep immediately, who knows? But fantastic. It’s just like being aware of constant observation in the good human aspect of it.
[00:42:09] Matt Welle: A question I always end on is what’s something that bothers you in hotels today that I can go and fix for you because I work in technology.
[00:42:17] Catherina Gioino: Oh man, this is such a great question. Something that bothers me that you can go fix technology. I mean very simple, any kind of technology-related situation, right? So, let’s say I need WiFi, like, offer WiFi for free. I had to go to a hotel recently and they made me sign in into my account but it was in a spotty area without WiFi. So, I was in Costa Rica, and I was like, are you kidding me? Like, I have to sign into an account just to sign in to get the WiFi, just to get the WiFi in the first place.
[00:42:49] Matt Welle: Unnecessary.
[00:42:50] Catherina Gioino: Unnecessary. Exactly. So, like, back to your question about removing friction, removing that kind of obstacle if you can solve that and then vice versa. Technology is huge. I think technology allows us to be more human, and it allows us to have those human interactions in a grander way. I’m not asking you, oh, you know, what time’s your flight? I know that your flight now because you pre-booked or you already automatically signed in is at 9 am and you don’t even that ask me. I already called a ride-hailing service, already called a car for you because I already got that traveled by. Now, you and I don’t have to wait on our phones. You and I are chit-chatting about, oh well, you know, you enjoyed this restaurant while you were in town, you enjoyed this show while you were in town. And that again is the human interaction. It’s like removing the obstacles, removing the deterrence from talking about logistics. People hate logistics. I love it. People hate logistics in terms of I need to get to the airport before I miss my flight. That’s all figured out for you.
[00:43:44] Matt Welle: So, the thing I’m obsessed with right now, what we’re building is the Uber integration. We announced it at Unfold.
[00:43:48] Catherina Gioino: I saw that
[00:43:49] Matt Welle: We’ve been building it out. And like the idea that you book a transfer with your accommodation so we can tell you the moment you pull up to the hotel because the Uber can do that. Like, they know where the guest is at any point, so that you actually get recognized the moment you walk in the door, because you never get recognized when you walk into the hotel. But that Uber integration will allow us to do that, and like, these are the things that I obsess about getting life in a very near future.
[00:44:14] Catherina Gioino: I mean, I loved it. I loved it for the opposite end too, right? It’s like I’m continuously cutting things so close to time. That’s just how it is. My time is very valuable. Of course, I’m a New York minute. So, knowing that, oh, downstairs I don’t have to wait 12 minutes, for example, I underestimated the time it takes to grab an Uber, to grab a ride share. I now don’t have to wait that 12 minutes because I can just walk on out. It’s already been ordered for me by the hotel, all integrated.
[00:44:39] Matt Welle: Thank you so much for joining me. I’ve thoroughly enjoyed our little rabbit holes that we went down, but it’s just so great to talk to someone who thinks so deeply about our industry and has a real opinion on it. So, thank you.
[00:44:48] Catherina Gioino: Thank you, Matt. I really do appreciate getting the chance to talk with you.
[00:44:51] Matt Welle: Anytime.
[00:44:52] Matt Welle: I hope that you’re enjoying this episode because if you do, make sure that you press that subscribe button. It really helps grow the audience and keep you informed whenever a new episode drops. We have some of the best hoteliers on this platform, and I love asking them the hard questions so that hopefully you can improve your hospitality business as well.