<B>Folio Data Takes Off</B>
<I>Starwood Moves Aggressively To Break Out Corporate Charges</I>
By Bruce Serlen
Starwood Hotels & Resorts Worldwide last month announced the introduction of Folio Express to give travel buyers electronic access to travelers' full hotel folio data. IBM, Ford Motor Co. and Joseph E. Seagram & Sons have made use of the technology to date. By Aug. 1, 100 to 200 of Starwood's 780 properties worldwide are expected to adopt the new system. Thirty-two properties participated in a successful beta test that concluded in June.
"For a long time, travel buyers have been interested in getting access to full hotel folio data that can be transmitted from the hotel and populated into the traveler's expense report at the company," said David Ogilvie, vice president for global corporate travel at Starwood. What companies receive is the complete hotel folio, broken out line by line, including the room and tax, restaurant charges, laundry and incidentals.
"By the end of the year, Folio Express should be in operation in almost all of our hotels around the world. The launch already has elicited a big increase in interest," he said.
IBM has been at the forefront of the e-folio effort for a number of years. "Because of IRS regulations around receipts, we couldn't go to a truly paperless expense reporting system without e-folio," said John Rosato, IBM's manager of employee disbursement systems and control.
The hotel paper receipt has been the last stumbling block, but now that obstacle is gone. "This will make the paperless expense report a reality," said Earl Foster, director of global travel management at Seagram. "It's something I've really needed for my travelers."
Starwood, with brands Sheraton, Westin, St. Regis, the Luxury Collection, W and Four Points, was well positioned to move forward technologically because systemwide it had only two property management systems, Geac and Fidelio, which already contained a considerable number of integrated systems. According to Danny Hudson, vice president of distributed systems, this integrated environment allowed Starwood to take a proactive approach.
Not all companies are ready to receive full hotel folio data. According to Hudson, companies need to have an automated expense reporting system in place that can adapt to having the folio information downloaded into it. In fact, three companies in addition to IBM, Ford and Seagram attempted to use the data during the Starwood beta test, but their internal systems balked and will require further adjustment.
Given IBM's needs as a Starwood customer and its pioneering work in e-folio with a limited number of Crowne Plaza hotels, it set the U.S. standard for how it wanted to receive the data. In fact, the first 32 hotels were chosen for the beta test from Starwood's portfolio around the country because they used the Geac property management system and already were included in IBM's hotel program. Sheraton, Westin, W and Four Points were the brands involved.
IBM's interest in e-folio also has to do with the fact that it markets an automated expense reporting product of its own, known as Expense Reporting Solutions, to other companies.
The IBM rollout went relatively smoothly. "Certainly, there were bumps in the road, but that's to be expected with any new technology," Rosato said. "Remember, this has pretty much been uncharted territory."
Ford was next and chose to receive the data in the same format that Starwood had provided to IBM. Seagram, however, wanted the data in a slightly different way, a preference Starwood was able to accommodate.
Because Folio Express breaks out hotel charges line by line, it is likely to accelerate travel buyers wanting to negotiate with hotel companies on the basis of total spend, rather than simply room spend. Because the total spend number can be significantly larger, it can give buyers greater negotiating leverage.
"This is a trend we're already seeing, so once full folio data becomes more widely available, the trend should grow further," Ogilvie said.
Starwood opted to develop Folio Express internally, rather than working with an outside vendor. The next version of Folio Express will support international currencies and thus will accommodate the hotels in the Starwood portfolio outside the United States.
The percentage of companies that have the appropriate automated expense reporting systems is growing.
"I expect that by the end of 2001 or into 2002 we're going to have a large percentage of companies using Folio Express," he said. "As we get more of our hotels on board doing this, there's going to be that much more interest by clients to get systems in place at their companies to make use of it."
Starwood saw being able to provide its best customers with a full folio data product electronically as a form of competitive advantage. "No doubt, other hotel companies will follow our lead and do something similar," Ogilvie said.
For Foster, who helped lead an industrywide call to promote access to full hotel folio data several years ago, this is a significant milestone. "The industry has been pushing for a long time to get this," Foster said.
For Rosato, it goes to the core of customer service. "It's like being laptop friendly or offering broadband in guest rooms today," he said. "You've got to give travel buyers as many reasons as you can to choose your hotel."
"Starwood definitely has a leg up on everybody else," Foster said, "at least for the moment.