AI, Hospitality & Digital Transformation with José Soares

Chase Le Roux (00:09)

Welcome back to the scrums.com fintech arena. I'm your host, Chase Leroux, and we're excited to welcome you to the ultimate podcast for fintech leaders. Today, we're going to be taking a deep dive into digital transformation in the AI in hospitality industry. And our main focus is going to be talking through the massive complexity, the multiple customer touch points, and ultimately how to create operational efficiency.

in the sector. We're joined by Jose Suarez, the CTO of the Capital Hotels and Apartments. And a little intro on Jose. He has nearly two decades of experience across FinTech, mobile payments, gaming, telecoms, you name it, and now in the hospitality space. And he's currently applying all that he's learned over these over these years into how to lead digital transformation and embed AI into

the day-to-day operations of the capital specifically, which is one of South Africa's fastest growing hospitality groups. So Jose, we're super excited to have you, man. Welcome to the FinTech Arena. It's great to have you here.

Jose Soares (01:16)

Thanks, Chase. It's a real privilege to be able to share some of my experience and thoughts with you guys.

Chase Le Roux (01:22)

Yeah, super excited to get into it, man. And Jose, normally a great place to start is, as mentioned, you've had an incredibly diverse career across, you know, fintech, gaming, telecoms, as I mentioned, and now in hospitality and being at the Capital for about six years. What drew you to the hospitality industry? And was there sort of like a moment that said, right, I've got this whole bunch of experience. You know, what made you join Capital Hotels?

Jose Soares (01:49)

To be honest, I didn't go out looking for it. Like you said, the background or the history there is very different. I started making mobile games. I wanted to be like most software developers and techies and geeks, so I wanted to make games. And unfortunately, we were so good at making games that we made no money making games, so we had to do something else. And then got involved into app development. during that time, when obviously there was a lot

Chase Le Roux (01:52)

Okay.

Hahaha

Jose Soares (02:14)

bespoke apps needed to be made and that eventually led us to making fintech products working in lotteries in gaming and with telecoms a whole diverse bunch of things right and had a business we sold the business into a big group and after being there for like a decade hearts didn't align with that core that business sold out left and started consulting

and you know consulting is I was consulting for doing lotteries in Africa and broader Africa and it's not a nice business because it's heavily regulated and a lot of involvement with government and it's not pleasant working with any government. You know so inevitably what happened was someone came and knocked on my door and said listen you know the capital and I didn't know them from a bar I'll be honest because I wasn't looking at hospitality.

Chase Le Roux (02:54)

show.

Jose Soares (03:05)

I was still very much in Lotto's gaming and telco work, you know. So they said, look, they're very innovative. They're looking for someone to come in and just really dial up the needle. And I think the timing was just right because I think I was so fed up with being in that space and I wanted to try something new. And it was a white canvas or blank canvas, if you understand what I mean.

Chase Le Roux (03:05)

Yeah.

Yep.

Jose Soares (03:27)

But I

thought, you know what, let me go and take this jump. What I didn't know is that six months after that COVID was going to hit and hospitality space was one of the most smashed spaces. But luckily, you know, as fate would have it, I joined probably one of the most adaptive groups within the country. mean, not only did we survive COVID, yes, we bled like everybody else, but we came out there.

Chase Le Roux (03:36)

Hardest hit,

Jose Soares (03:51)

know, guns blazing, managed to pick up two or three amazing hotels that were distressed properties at that time. And we, you know, we haven't looked back since. It also gave me a bit of breathing room to get the tech base growing because obviously the focus could be rooted there whilst, you know, COVID was being dealt with.

So no, it wasn't by any desire. I started there. Obviously I'm Portuguese and my parents had restaurants. I've been in hospitality from a young age. And when I left that space, I said, never again. And here I am.

Chase Le Roux (04:25)

And here

you are. Yeah. Okay. Well, that means it sounds like you love solving complicated problems, know, specifically gaming.

I'm to say gambling, but sort of that FinTech space that you've gone through. Understand, you know, myself, we also don't do too much work with the government. But I think you've clearly joined a place that allows you to express what you're wanting to do, right? And I think that it's interesting to me because hospitality itself...

can sometimes be, well, it's worked like this for a very long time. Like I'm happy with, I don't know, communicating with staff on WhatsApp, you know, and seen that quite a lot, seen it quite frequently. But I suppose sitting in this innovative space that you are in with your experience in the background, you know, has that whole has that experience helped you solve technology challenges in hospitality or is it completely different?

Jose Soares (05:23)

It took some degree, it's different. And I think, you know, that was probably one of the reasons that the executive here went looking for a person like me. They didn't go and find a technologist who had been in the hospitality space because they wanted somebody to come in who was going to look and approach, obviously, things from a different perspective, right? Now, the problem with that is that the hospitality space is so process driven.

Chase Le Roux (05:43)

sure.

Jose Soares (05:47)

in terms of, you know, this is the way we've always done it and why the heck would we ever change it? So as much as I love, I love obviously innovating, you can imagine how infuriating it's been trying to get people to get on the bus, you know.

Chase Le Roux (06:01)

Yeah.

Jose Soares (06:02)

So luckily, belief and the understanding, obviously, from the team around me is that this is the direction that we've had to go into. And it's had massive, obviously, positive impacts on the business. not without its challenges, but definitely, you know, and being able to draw from the experience, from everything, even payments, you know, because in hospitality, payments is such a massive component, you know, you're

They're accepting payments before someone arrives, when they're in stay, after they've been here for corporates, for leisure, for all kinds of things, from OTAs, from booking channels.

You know, so having an understanding of how the payment sector works, been able to work with banks and negotiate rates and things like that. Typically people don't understand these things and start tokenizing payments. So definitely you draw from all those things, you know, and you draw from the gaming side, you draw from the gamification, you draw from the, you know, when you're creating guest experiences on a mobile app or a website, you draw from those experiences because you understand how the mind works and the brain works, you know.

and the lotto side, the addictive nature of things, you you understand what people want to repeat doing. You not that I want to make lotteries and make people gamble, but you draw from those things, you know.

Chase Le Roux (07:10)

Yes.

Absolutely. So I mean, that's interesting, because I mean, it doesn't matter. There's this term that I think everyone's been using for far too long. And it was always this, you know, we are on this digital transformation journey. Right. And it was.

at the time to get online, right? Just have a website. Then it started going sort of more into accepting payments and that type of thing. But I think that where we are right now, at least for me, looking at digital transformation and you talking about people bringing, you know, bringing people on the bus. We're of course in the age of AI and coming from software development space myself, you know, we're starting to see

a whole bunch of tool fragmentation and people popping up using different tools and trying different things. How complicated has that been in trying to say, okay, now everyone's almost too much on the bus. You know, we need to slow things down or we need to do it or actually screw that. Let everyone just, you know, use their own own narrative and use whatever tool it is and go out there. And you know, is is how what is your sort of perspective on that?

Jose Soares (08:22)

We've taken both approaches. So I mean, in some regards, you you let people run their own race and it's rewarding because they obviously produce things. Now, what I mean by that is pulling in their own tools or software to execute whatever task is going to be, whether they're even going and grabbing, you know, some AI tool set that they've got that, you know, it's so unique to the area of the business that they are the only ones using it. The problem comes in that you're in part of a bigger

organization right and I'm going back to to hospitality being that business that draws on on very much on process and if you've got that happening around and there's not a centralized defined set of tool sets that have an SOP behind it and the data moves in a certain way you inevitably are going to end up causing some level of disparity and chaos

Chase Le Roux (08:51)

Hmm.

Jose Soares (09:14)

and then it doesn't work. it's not, it's not, you can't run it out. And then the other problem is the visibility, right? Because that's the big issue here. Because not only do I have to innovate or we have to innovate, we also have to secure the space. We have to secure the data that's moving through there, the actions that people are taking. We've had some very, you know, I don't think any business of any scale can tell you that they haven't been hit by some form of cyber fraud or activity. We've had ours, you know, we've had some very scary ones where, you know, we've even had

Chase Le Roux (09:39)

sure.

Jose Soares (09:43)

to go to the regulatory bodies and say to them, listen, we've had a breach, we've contained the breach. You know what mean? So to your point, yes, let people experiment. And that's also one of the reasons why I love it here because I'm often sometimes given too much to leeway to go and experiment things. But that's how you find a path forward, right? We try new things and they either work or they don't work.

I currently have a number of projects on where I believe in them and some of the ex-co believe in them, some of them don't. But you know what? Let's just go out and give it a try and see what the result is. Do it in a controlled manner. Look at the data.

Chase Le Roux (10:20)

show.

Jose Soares (10:21)

So you can even apply that to any kind of AI or any system that anybody's using. I think it's often a mistake that businesses make and even development companies make is go, what is the actual ROI? What is the actual measure for this thing making an impact? And defining that upfront before you even start the build. So that when you go into that process and you actually put whatever it is that you're going to put in the field.

you can actually go, okay, I know how to measure this because otherwise it's just vanity stuff, right? And that's what I find a big problem at the moment, particularly with AI. A lot of it is vanity, right? A lot of it is glitz and it's very cool. And genet AI is amazing. You know, I'm a big fan of Nana Bononna and all of that. So I love being able to put Batman on a skateboard and all kinds of crazy things, right?

Chase Le Roux (11:07)

Brilliant.

Jose Soares (11:12)

But, you know, when it needs to come into the business and that's when it becomes a little bit more complicated and a little bit more complex and people struggle there, right? That's why it's good to have partners that help you navigate those areas.

Chase Le Roux (11:21)

Yeah.

Absolutely, we've almost deemed it like orchestrating software development. You have your tools, your teams, and they're all sort of in a secure environment because there is, want that level of autonomy, whereas when, because of the reasons you've mentioned on security breaches and risks, a lot of businesses out there actually just shutting down and sort of choosing one stream, whether that's copilot or...

chat itself, whatever it may be, they're locking it down. That and also because of costs, but I mean, you know, there is this perceived, well, not perceived, extremely high risk out there. I you know, someone at the capital and finance could potentially just take the financial statements, put it into ChachiPT and say, generate me a brilliant report, right? And there's these massive levels of risk out there.

And most of us are sitting and saying, well, you know, what do we need to do? And I think creating that space to allow in a secure environment that sort of flexibility, almost that, you you can still be creative in this space. I don't know what your take is on that.

Jose Soares (12:31)

No, it's exactly, it really is exactly that. you know, damned if you do and damned if you don't, right? So you need to give people the ability to experiment like that and the freedom to feel like they have the ability to empower themselves at their roles. But then you also need to have the governance inside of it and understand how you're to do it. I think there's also an opening there for...

people to make a bigger impact on an organization if they have those abilities.

create something that can support other structures of the business and I'm an F &B manager, you'd never thought we'd be able to do something like I can go and have that person can go and have a significant impact on the business in a way that they never even ever dreamed of. But again, it comes down to compliance and regulation and it's very difficult, you know, when it comes to managing and monitoring data without having very, very expensive tooling.

Chase Le Roux (13:13)

Yeah.

Jose Soares (13:26)

that's looking at the way information is moving around your organization, its networks. And then the problem is you get into that catcher in two we spoke of, right? Where you go from being this entrepreneurial, you know, no red tape business to going, shit guys, we're back, we're a bank. You know?

Chase Le Roux (13:29)

Yeah.

Yeah.

Jose Soares (13:45)

I can't go and look at, I don't know, rental flats on an Airbnb now all of a sudden because that's not an approved site. that's, you know, we haven't done that to that degree, we bent in and we put a proper zero trust policy down. you know, yes, it changes the dynamic a little bit, but when you've got a thousand plus employees, how else can you, how else, you know, can you manage it? It's just...

It's impossible. And that's where the governance like you're speaking about. I think we're going to have to go the governance side of things here, but that's really where ultimately how you end up there as a bank. Thousands of employees. You can't monitor them like you would a buddy system, when it's a startup there with three guys and you know, go on the internet and Google everything. Click every button. If we get hacked, we've got no data.

Chase Le Roux (14:16)

Yes, yes.

Yeah.

100 % and I think that's a draught is that it's almost like everyone is becoming a bank but not in the term that we that we know it's actually just a data bank right you know responsible for for a whole bunch of data and I suppose you know we've spoken a little around the team the business impact and that type of thing but for you Joselak how has AI made an impact on you?

Could be personally, could be, yeah, could be personally, but I mean, where's it made the biggest impact for you, right? Is it personally, is it in the business to say, well, you know, we actually can 10X our customer experience or like you gave Nano Banana example, whatever it is, you know, those are fun things, but like, what's made, yeah, how's it made the biggest impact for you as Jose?

Jose Soares (14:56)

as a person.

Okay,

so I think, look, let's talk in two veins here.

Personally, there's an existential question, right? Which I think we can have a whole separate podcast on, you know? And someone like you said, I've been in IT employed for 20 years. I've been trying to get into that space for 30 years. I'm a person that grew up with computers from, I can't even tell you. mean, my first computer was, went from a Spectrum to a Commodore 64 and all, know, I've tasted everything. So.

Chase Le Roux (15:25)

Yeah.

Jose Soares (15:44)

It's it's it's the frightening side of it and the speed of it. I have concerns around it Okay, it improves certain aspects of what I from a personal perspective is I don't spend as much time doing documentation and PRS is and if IDs and all those things because it's very easy now to turn those things out so that is a really really nice, you know helps also with the thinking and the rest of it, but there's an existential There's an you know, there's that question that goes, you know the impact that's going to happen on the

workforce. mean, briefly when we chat before, we're to start seeing retrenchments and we are seeing them in major technology companies, you know. And I even know here, you know, when I speak to like, let's pick on the finance department, because we all know that's probably one of the easiest areas in the business and where AI comes in and just eclipses, you know.

Chase Le Roux (16:20)

Yeah.

Jose Soares (16:32)

I can go and pump out reports and edit spreadsheets and do all kinds of things. The workforce here, you don't need that a dentist clerk, as an example, is doing. So there's that side. Then there's positives, right? So like my belief, you know, there was one of the big challenges coming into hospitality was I believed in, and I still remember when I joined, I was told, I was told upright, don't think you're coming in here you're going to build this big team and have developers and all kinds of things, right?

Now you fast forward six years, we've got this big team in front us. Because the guys understood, my whole thing was I said, fine, okay, let's go on the journey together, right? And we'll figure this out, and you'll start to understand why we need to do these things. You need to own, whether you're in hospitality or not, software development has become such a democratized thing.

Chase Le Roux (17:02)

Yeah, yeah, yeah, yeah. 100%.

Jose Soares (17:19)

that it's easy enough for me to rather go and instead of battling with off-the-shelf stuff, go and build something custom. I don't have to you build everything. You find a strategy that works in an ecosystem and say, what is it that I have to control at the core and manage at the core to create great experiences and help my business and do that. And what things like AI are now doing is obviously it allows us to 10x on that. Now, what I mean by that is that

You know, in my first business, I mean, we got to a point where were like 200 and something employees, of which 80 % of that was software developers. Okay? You don't need that anymore, right? So what happens is the 40-man team becomes the four-man team, right? And you might think, okay, well, they're still doing the work of 40. No, they're actually moving a lot faster because we're able to cycle through things a lot quicker. We're able to test things, you know, where it would take us two months to write, you know,

a process to interpret a document and change the manipulator. You feed that into the Azure AI Studio, use some document intelligence in two days. You're sitting with a POC on a concept there. That's incredible, you understand? Being able to draw from those libraries, which means that...

If you've got the courage, you've got the gohanes, as a business, really can move through and start tackling some of those challenges head on. Because you don't have to be intimidated by the fact that it's going to cost an inordinate amount of money.

And then it's only for the very big businesses and it's only for the very technical start. It's very accessible and I think that's one of the main driving factors, you know, is I always kind of try and say to everybody in the hospitality space, you know, or anybody that I meet and say like...

just go and do it. You know, you'll be surprised that it's not that it's a it's not that expensive. OK, I think it's going to find a middle ground somewhere because, you know, I think the prices that that have historically been charged in those spaces for those services will be challenged and they will have to and they will have to come down. But then I think what you find is it will find a balance in that more is being done. You understand? So it's so it's it's not less of a

big prices, but it's more of a moderate price, makes sense. So both industries can move in positive ways. So, you got to me in here, because otherwise I'm going to run off.

Chase Le Roux (19:36)

No, I think

that was spot on. And it was, you answered it sort of at the end there. wanted to say for, because you're clearly passionate about this, for CTOs or other technology leaders, everyone is currently wrestling with AI adoption. And we spoke a little bit about the...

the risks, we spoke a little bit about the governance, we've touched a little bit on how we need to be exploring but cautious at the same time. But I suppose one of the more challenging things is there's a lot of noise, there's a new tool every single day.

How can a leader like yourself apply AI where it actually works by cutting out the noise? And it's quite a complicated question, but in terms of there's so much, how do you hone in and say, right, this is where I need to spend my time?

Jose Soares (20:30)

That's, you know, for me, that's I don't think that question. honestly don't think the answer, in my opinion, OK, I don't think the answer's changed. It's always when you look at a business, you look at two factors. Where am I bleeding? Where do I make money? OK, and if you take those two components, the rest is just it's just it's just nonsense, right? So if you look at those two components and you go, where am I? Where am I bleeding? Where am I making money? And you're going, OK, and what are those problems look like? And how could I apply?

AI solvers and that's fundamentally what we've done. Obviously we looked at it in the beginning and it was like this and that and laser beams and torpedoes and then eventually you have to kind of bring it down and go you know how do I make a great guest experience okay how do I make it easier for my staff

And how do I generate more money? And if you just focus on those little pieces and you bubble out and you just make a hierarchy of what's the most urgent and work through it, down to it, I think that's the way, I believe that's the way in which to tackle it.

Chase Le Roux (21:32)

Brilliant. And I know that from an existential perspective, said, yes, know, I know really where AI is going, but I want to know from a business perspective, what do you think the hospitality industry is going to look like in three to five years?

Those are very two, two, two, two, maybe, maybe those are two. It doesn't sound broad, right? To anyone that's not in the tech space, but three and five years is almost double the amount of time. So let's say three years.

Jose Soares (21:46)

And...

Yeah, so look, data is the key here, right? So I think, and don't speak for all groups because I think they each have their own complexity. So, you know, anyone listening to this might go, yeah, you know, but that's okay. It's my opinion. you know, I'm just trying to give you my kind of view on it is what we will see is cohesion.

I think the hardest part, one of the trickiest things in coming into hospitality was the volume of software solutions that we have to implement in order to execute on the mandate. You're a place where people sleep, you're a place where people play, you're a...

financial place, you're an exhibition hall, you're all these different things and you're taking reservations from here, integrated into this platform, you've got a restaurant running over there, so you can understand we're running somewhere between 30 to 40 different software packages that are tightly integrated, right? And this is common, okay? The more diverse, you if you go to the big brands in the world,

they have got even like subsidiaries where they run on their own niche groupings of software. So there's not even consistent across that group. So what I think we'll start to see is a lot more cohesion. And what I mean by that is these layers being able to talk together a lot better, right? Because you're gonna have a lot more proficiency. People understand that.

the API structures, the openness there, the ability for these elements to talk to each other, coming together, right? Now that inserts itself because the more accessible it comes for you and I, you can imagine for an AI it becomes even easier to interpret those things and to be able to do a data transfer. And then the critical component there is the data itself, right? Being able to healthy, clean, sanitized data,

in a way that is orchestrated across all these things so that from a natural kind of language or from any anybody interrogating a platform they'll be able to actually derive that information. That's where the space for me is shifting. So you've got a lot more coming together and I think the rats and mice that have been maybe playing in those graves. So in other words systems that have been born out of the fact that very hard to do data and very hard to do that

probably falling away.

potentially falling away or changing the nature of their business. We've been attacked. I personally, because of, get, I don't know how many chatbots I get told I need to have for my hospitality group in a day and no, it's just, and everybody's trying to sell everything. So there's too much at the moment and that's normal. And the ones that find their way in will obviously float away, it will stay around and the others will

floats away and I think we get a lot more rigid and I would like to see less doing more so in other words us needing to do fewer integrations and managing the disparity between the information that's where this really needs to shift and I do think it's going to shift in that way I mean some of the PMSs that are coming out and are really approaching the build

of their software in the right philosophies in terms of how their data architecture and their frameworks work as opposed to some of the store walls that have been in the industry for 20 years. They've got, they've almost got the same problem. And I'm speaking from my experience having worked with banks. They've got that technical debt where they're stuck and they can't break out of that situation without a huge expense coming their way. So that's really what hospitality and...

Chase Le Roux (25:27)

sure.

Jose Soares (25:43)

It's great experiences for the staff, great experiences for the guests, and hopefully for us as the hoteliers, there's ways to bring down costs and complexity.

Chase Le Roux (25:53)

Awesome, Jose, that was a solid answer. Thank you so much. And then last question here. What's your favorite book and why?

Jose Soares (26:01)

Don't do that to me. I, shamedly so.

Chase Le Roux (26:03)

Yeah

Jose Soares (26:05)

I only read certain types of books. If anybody's ever met me, I'm a Batman fan. I've got Batman tattoos and a Batman this and a Batman that. So the books that I typically read have drawings in them and bubbles and bubbles inside of them. So my knowledge comes from podcasts. So I sit and listen to podcasts and I shame it. So I should probably read more.

Chase Le Roux (26:22)

Brilliant.

Okay.

Jose Soares (26:32)

than just the comic book but you also gotta get your kick somewhere.

Chase Le Roux (26:36)

No, brilliant Jose. Thank you so much, man. And it's a pity, but it is the end of this episode. So a special thank you to you, Jose, for sharing your time and expertise. And to the listeners, if you found today's conversation valuable and you want to stay ahead of trends, subscribe and join us next time as we continue to uncover the stories and strategies behind the world's most influential fintech leaders. Until then, keep innovating and remember.

the future of finance is just a conversation away.

Jose Soares (27:06)

Thanks, Joyce. Thanks, everybody. Ciao.

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