How Desert Hospitality Is Using AI to Create More Time for Hospitality

Paul Mengacci still remembers a family trip into New York City as a small child. His father lifted him onto the front desk while they were checking into the Marriott Marquis and the front desk agent upgraded them to a high floor overlooking Times Square. 

He stayed up most of the night, mesmerized by the city, watching what he thought looked like Matchbox cars from so high up. 

“Here we are decades later,” says Mengacci, now Chief Financial Officer at Desert Hospitality Management, “and that has still stuck with me as an experience I’ll carry with me for the rest of my life.”

Mengacci’s passion for hospitality is hard to hide. He studied accounting in college but worked behind the front desk and in operations after graduation. He soon transitioned into finance, and has spent the past 20 years there, but he’s never forgotten those early roles. 

“Having that foundation on the operations side carries with me to this day and will forever,” he said. “In any role I have within the hotel business, or even as a traveler staying in hotels, you just have such an appreciation for everything that goes into running a hotel, how demanding a job it can be, and how great the people are who work in this industry and take on those jobs.”

Managing What Drives the Margin

As CFO, Mengacci knows labor is the largest controllable expense and what drives the margin ownership groups care about, but it’s also where better decisions can give the people on the floor more time for hospitality.

Desert Hospitality Management operates a growing portfolio of branded hotels and resorts across the U.S., working with leading brands like Hilton, Hyatt, and Marriott. The properties range from full-service luxury resorts to select-service properties, each with different demand patterns, staffing models, technology systems, and ownership expectations. 

Having the tools and the processes in place to continually track labor is critical. It’s not set it, forget it, move on. It is continually evolving.

Paul Mengacci, Chief Financial Officer at Desert Hospitality Management

The current environment makes it even more important. Rising interest rates and increasing construction costs have limited hotel development and acquisition, so getting the most out of the current portfolio is vital for management companies.

What can we do on the operational side to drive that bottom line as much as possible? That's where getting into AI, and figuring out the right places and the right types of technology to deploy, is something I am hyper-focused on.

Paul Mengacci, Chief Financial Officer at Desert Hospitality Management

Building a Culture Around the Data

Desert Hospitality uses the Actabl suite to connect its financial and labor operations. ProfitSword serves as the central hub for forecasting and business intelligence, bringing data together from brand revenue management systems, reservations systems, property management systems, and sales and catering systems. On the labor side, Hotel Effectiveness uses the forecast data to drive staffing models and targets for each department.

The platforms work in unison. Forecast data flows from ProfitSword into Hotel Effectiveness to create the right labor plan, and the actuals flow back so the team can measure how closely the results matched the forecast.

The loop has improved how the team operates, and the conversations have moved from reporting results to interpreting them. 

“What happened within a particular department? Where were the wins? Where are the opportunities? What's our cost per occupied room? What are our margins?” Mengacci says of the questions now being asked. “It's helping the team understand that the financial statement tells the story. And it's a matter of peeling back the layers of that onion.”

Making More Time for Hospitality

As CFO, Mengacci thinks in terms of the P&L and driving margin, but he knows increasing efficiency is about more than just the bottom line. It’s what has him excited about the potential of AI and why Desert Hospitality recently purchased Actabl’s AI Insights for Hotel Effectiveness.

AI Insights works like an expert daily coach. Each morning, through email and inside the Hotel Effectiveness Daily Labor Check-In, it identifies what needs attention, explains why, and recommends a clear next step.

Being able to put the most valuable information in front of the team members in a more efficient manner is where I think a lot of the value is going to come from with AI. If they’re not having to scrub the data as much, and they’re being presented with the key findings in a more efficient and direct manner, that time can be repurposed.

Paul Mengacci, Chief Financial Officer at Desert Hospitality Management

For Mengacci, that means more time for creating memorable moments like the one he still remembers to this day.

AI may actually give us more opportunity to be hospitable. If there's a way to use technology that can create more opportunities for great experiences, and those experiences lead to happier associates and happier guests, which creates greater activity and a stronger bottom line, well, we’ve checked a lot of boxes.

Paul Mengacci, Chief Financial Officer at Desert Hospitality Management