IHG has been around since the 1700s, but most people might know the company as the owner of the Holiday Inn and InterContinental Hotel brands. It is a huge conglomerate with more than 16 hotel brands, including a couple that were architected and market tested using virtual reality headsets.

Trick 3D, a 3D visualization studio, worked with IHG to use VR to design the Avid Hotels and Atwell Suites hotel brands for IHG. I moderated a panel at Greenlight Insights‘ recent VR/AR/XR strategy conference in San Francisco with IHG’s brand manager Anna Karwata and Chad Eikhoff, CEO of Trick 3D. We talked about how the teams created the design of their hotel in VR first to test the idea and visualize it internally for all of the stakeholders.

After all, launching each individual hotel in a chain could cost $12 million each. If you don’t love the design and find out only when the hotel is built, that’s a disaster. But VR is a way to get a feel for the hotel and understand it in a more tactile, intimate way than you can through other kinds of visualizations, Karwata said.

It is an unexpected, fascinating, and very cost effective use of VR that can save a lot of money and speed up the process of desiging a hotel by 30% to 40%, Karwata said. Here’s an edited transcript of our interview.

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Above: The image on the left is in VR. The image on the right is a photo.

Image Credit: IHG

Anna Karwata: I’m a brand manager for Intercontinental Hotels Group. I’m originally Polish. I moved to London to pursue business studies, and that’s where I really fell in love with the hospitality industry. Since then I’ve worked on multiple IHG brands globally — Crowne Plaza, Holiday Inn, Holiday Inn Express.

Three years ago I moved to Atlanta, where I launched two brand new hotel brands to the market with IHG. We launched Avid Hotels, which is the fastest hotel brand launch ever for the company, and we also launched Atwell Suites, which we just launched a few months ago. These are the two brands that Chad and IHG and I worked on, where we used VR to get to market more quickly.

Chad Eikhoff: Anna builds real things — real hotels, real brands, internationally. At Tricke 3D, what I’ve done–I come from an entertainment background. I’ve applied the expertise and the knowledge and creative vision setting that entertainment has to the enterprise space.

I’ve found there’s a great cycle starting to happen, where the creative and the vision is brought from entertainment to enterprise. But enterprise starts to bring the technology and the execution back to entertainment. In VR, AR, mixed reality, this whole evolving space, the verticals are all blending together, and have been for a while. This was a great opportunity to showcase how we apply those tech solutions, creative vision setting, to an industry that really isn’t known for forward thinking and innovation. Now, because of the way technology is, it’s changing the way an industry designs new hotel brands.

VentureBeat: Anna, can you explain some of the things we saw in the video earlier, things that weren’t particularly obvious?

Karwata: You saw a mixture of established brands where we use VR for different reasons. You saw research, marketing, and updating and refreshing design. Also, you saw Avid Hotels and Atwell Suites. These are the brands where we really took VR to another level. Avid didn’t exist three years ago. We created a brand in VR first and ultimately opened a real hotel. Avid, from launching the brand to franchisees opening a hotel, was 199 days.

VentureBeat: How big is IHG, by the way?

Karwata: We’re a pretty big company. We have nearly 7,000 hotels across the globe. We have a huge presence in the U.S., where 90 percent of our hotels are franchised. It’s a decent size.

Eikhoff: One thing that’s interesting for us in creating VR for IHG–in the video you see the concept of a virtual world, creating one inherent asset that gets repurposed across an industry or across an organization. When you start with that, which we’ve now done for a number of companies, this is a great example of not applying it to just one part of a process, but looking holistically at how you improve a process.

We’ve started referring to it as the magic of the virtual environment. In this case, it’s a virtual hotel. That is, at its core, a 3D model. But when you start the very beginning of a lifecycle, building a whole new brand–we’re not talking about one hotel on one corner. We’re talking about a brand that’s going to roll out at scale across the entire world. You’re designing a very large view, not a single thing that’s going to be done with. It’s a long-term vision.

The magic that starts to happen–we’re used to happening about the magic of VR for gaming and storytelling, the magic of being pulled into an environment as a consumer and how you can explore that. I’m using “VR” here as a holistic term for virtual environments. For enterprise, the magic of VR has really been showcased by what Anna has done with this new hotel design, because the magic is that they got to market 40 percent faster than any hotel previously. For Avid, I believe you were able to sell twice as many franchises as expected for the hotel.

That’s a significant impact on business. It’s a different kind of magic, a quantifiable magic, a magic that goes straight to the core of how businesses value themselves and their own products. Applying that magic to something so specific is what this opportunity was. Now it’s starting to evolve even further past that.

VentureBeat: Can you talk about what it takes to build a new hotel brand? At what point did VR start coming into that?

Karwata: Building a brand, to what Chad mentioned, it starts with a blank piece of paper. You put down a vision of who the guest is, where the white space is, and what they want. Then comes the design, and that comes pretty quickly.

The important context for us at IHG and why VR is so critical to what we’ve done–as I mentioned earlier, we’re a franchise company. Building a new brand is a bit like running a startup that’s backed by a huge machine. We have money to build a lot of our ideas, but we build the properties and the scale with other people’s money.

If you think about that, you have to convince 100, 200 owners to spend $10-12 million on something that they have never experienced. It’s new to the market. They’ve never seen it before. You want them to believe in it, to build it quickly, and to buy into the vision of helping you build that brand.

That’s where we start and what it takes to build a brand. That’s where VR was critical. Getting somebody to spend $10-12 million–in the past we used things like computer graphics. There were lots of lines on paper. That’s great for designers. Designers understand what that means. But a lot of other people wouldn’t. The vision that you’re building–being able to get someone to walk through a room, or stand outside their hotel and see how the exterior will look, that’s pretty big for us. It gets us that buy-in and investment much more quickly.

Eikhoff: One of the ways I’ll put it, the way we work with companies is I see there’s an evolution taking the world from 2D to 3D. How many people here know what a 3D model is? It sounds like a dumb question, but a lot of people don’t. Every kind of visual content is delivered to us on flat screens. If it’s video, if it’s stills, if it’s a game–even VR is technically a flat screen, but it gives you the presence that’s immersive.

In that transition of moving from 2D to 3D, we’re all in a band-aid state. “Oh, architects already do rendering.” But those are all band-aids. They’re creating a 2D image to try to convey something three-dimensional. VR, AR, MR, all the ways of interacting with a virtual environment are now starting to come online, and brands as well as consumers are starting to see the different values in those.

A simple way I put it when we’re concepting: think of the real world plus superpowers. That’s what you’re able to start to concept around. Now that you’re working in a full virtual space, what are the superpowers? What problems do they solve for the brand? That’s the journey we’ve been on.

There are some basic ones, but when you find them–one of those superpowers is what I call translation. We’re used to navigating conversations from different points of view. If a creative person talks to an engineer, half of the conversation is each of them trying to make sure the other one understands what they’re saying. If you’re talking to an executive and trying to convey your design, your ideas, half of more of that conversation is making sure they understand you. More times than not you walk away and they don’t understand in the way you do.

Visualization allows everyone to start reacting from a visual point of view, already eliminating that part of the conversation. We’re no longer trying to convince of what this rendering represents. You’re able to explore it yourself.

Above: Designing a hotel in VR can speed the process 30% to 40%.

Image Credit: IHG

VentureBeat: In a parallel to Hollywood, I think everyone knows that James Cameron created a lot of scenes using VR visualizations first, so that he could see what it would look like, and everyone else on the set as well. But he never really filled them in. They were blocky and simple. What you’ve done here looks almost real. I wonder why you go to that extra length of not just showing what the blueprints are like, but showing what you’re really going to see.

Eikhoff: The takeaway there is that Tricke 3D and IHG have bested James Cameron. [Laughs]

Karwata: There are many reasons. Our speakers earlier alluded to some of them. One is that this allows us to make mistakes quicker. The mistakes look real. If you look at a staircase or the color of the floor, we can show them to the people that work in a hotel, the teams that know the challenges of their jobs, and they can think about, “How would I use this? What looks right? What doesn’t?”

Maybe a certain color for the floor, when it’s dark out, shows a lot more dust. We can change things like that right away. We don’t have to go all the way through building something right away to realize the problem. We can make mistakes quicker and get a better quality of feedback at early stages, so when we get to a physical manifestation, we’re down to little tweaks. We don’t have to change any big elements.

VentureBeat: It’s hard work to build the realistic virtual model, but it’s cheaper than tearing down a hotel and starting again.

Karwata: One hundred percent.

Eikhoff: One thing I love about doing this with different industries is you learn how they already work. We all have some expectations or understanding going in, but mine are always wrong. The way you were designing previously, part of the process is having to order samples of materials. Then you’re looking at sample boards. You want to choose the furniture that you match with the sample, so you order the furniture. There’s this two-week window for things constantly being ordered and delivered. “I want to see this sample on that piece of furniture. I’ll be back in two weeks to see that.” Now that process is, “Okay, I’ll be back tomorrow to see that.” That’s a big difference.

Karwata: Building on that, I love this expression from one of the earlier speakers, the “anxiety gap.” These are big decisions that will end up meaningfully affecting millions of dollars of someone else’s money that we rely on to be successful as a company. A lot of those decisions are made by executives who are not designers. Being able to respond to their feedback quickly and come back with, “Here, this is how it will look. This is how this shape works,” it takes the anxiety out of making the right decision.

Eikhoff: One ingredient of that, and this alludes to what you were talking about earlier, is that visual quality is a huge part of that. There are elements in the space that we can all see, videos on YouTube about best-case scenarios — look how quickly you can change materials. Then there are things that are by-products. Once you get everything in a game engine, what can you do with it?

Above: You can also view hotels in augmented reality.

Image Credit: IHG

There are still limitations to each different delivery platform. We focus on the core CG asset, and then the different ways we deliver it, whether it’s an HTC headset or a Pico headset or website or an iPad app. Those are all just windows through which you can access that world. But the visual quality, when you’re making a decision, that’s inherent in what Tricked3D’s history is, what my history is. Our goal is to build beauty.

When you get something built beautifully, everyone is resonating with it in the same way. When an executive looks at it, what is the visceral reaction they have? You don’t always make a decision just because of the practical considerations. What does it feel like when you walk in the room? It’s not just a question of whether something fits in the room. You don’t get that without beauty. That’s the focus on design at the beginning.

Closing the gap, that anxiety gap–the anxiety is caused by feeling like you can’t see what the real thing is going to be. That makes you nervous. The closer you bring those two together and can say, “Wow, I get a very good sense of this is going to be, and I want to change this, or I think it’s absolutely beautiful,” you’re now having a conversation in a space that’s much closer to the final one.

Karwata: You can see behind me, on the one side you have the VR model, and on the other side you have the real hotel. The best reaction is when people say it looks exactly like the render. There are no surprises. We’ve proven that with Avid, and now we’re seeing it work with Atwell. People inherently trust us more, because they’re not surprised by what they see. They know what to expect. They know what it will look and feel like. We’ve done our due diligence. We’ve taken them on a journey.

That’s another big point, especially with franchise owners. Showing them things early, so they can be able to fit into the design process — which they couldn’t do previously — is really getting them believing. It fits this model of co-creation. Sometimes that’s a double-edged sword, because you do have to manage different opinions, but it gets everyone on the same page. It gets to that feeling of having other people who are your brand ambassadors from the get-go.

One more quick story on how realistic the renders are. I don’t know how many of you have stayed in a hotel where the sheets aren’t ironed, but one of the comments we got on the early renders was, “Can we make those sheets look less real? Make them look ironed out.” [Laughs]

Above: VR hotel on the left, real one on the right.

Image Credit: IHG

VentureBeat: Can you tell us more about where these tools are right now, and where you’d like them to go in the future? It reminds me of some announcements that Unity and Epic have made about their game engines and how they hoped that game designers would design their environments and worlds from inside those worlds. It would be as if they’re painting the world. They could get inside the environment and see how tall something is, and if it’s not the right height, they can change it right there.

It sounds a bit futuristic for what you do. It seems more like you were taking the design offline and checking it in VR. Is that how you’d describe it?

Eikhoff: I can jump in on that, because part of this goes to what’s technically capable in the real-world business and where that’s at. This is an inherent difference between entertainment and enterprise. In entertainment you’re being creative a little more loosely than you can be when you’re building a real hotel. Doing that with an architect — who has a certain number of rivets and a budget for every kind of rivet and a very specific trim line they want to put in — is different than just thinking, “I’m gonna put a wall there and make it look nice.” The level of detail that has to be decided upon affects everything down to the purchase orders and up to the visual quality. It’s a different discussion.

Where we fit in, a lot of what we’re solving isn’t even on the visual side. We’re applying the technology to a business process that already exists. We’re not going to go in and say, “Hey, you no longer need architects. Now you can just design everything by yourself at home.” That’s its own complication. How do you plug in between designers, architects, and brands to bring that visualization as a tool that everyone can leverage?

One example where we did do that for some of the IHG brands, not specifically on this one–we can take the Revit files from an architect, put that into VR, and let them do user insights and have other people walk through it. The big difference with full immersive VR is scale. There are lots of things you start to pick up on in terms of how you resonate with a space that you can’t see if you’re not in that space. That’s coming soon.

Some other things bleed into that as we get into fabrics. As those libraries grow, as those who create fabrics or models or furniture start to generate their own textures and models, there will come a whole ecosystem that will evolve very quickly. We’re on the front end of that right now. Very few brands are generating those kinds of assets, so we have to do it from scratch.

Karwata: Designers and architects are very much focused on walls and the spaces inside them. But if you look at something like breakfast bar over here, it has vessels and coffee machines and lots of other things you have to put there. That’s not in the realm of what architects do. That’s where it allows us to go into the world and see–does this fit? Does it look good? Can I see it from over here? Can I recognize the coffee? There are lots of little details we can get in here that we wouldn’t be able to if we weren’t using VR.

VentureBeat: Where would you like this to go in the future? The next time around in a project like this, what kind of improvement would you like to see?

Eikhoff: It’s all evolving very quickly. I’ll reiterate what I said at the beginning. One thing we love to do is sit at the crux between enterprise and entertainment. It’s bringing the creative vision that we have from entertainment to enterprise, and then the execution and the technology from enterprise back into entertainment. You create a cycle.

Forever, those two have sat separate. You maybe had the same accounting software, or maybe you didn’t even have that. But the way you’d create and evolve and innovate in those worlds was pretty different. As those start to overlap–I see a lot of that happening with things like The Void, or the Quest headsets. Those are going to start to create some of that inspiration and vision for what’s possible to do. Can we now walk through a hotel and actually feel things? Can we use fabrics and textures in a different way?

Similarly, enterprise is quickly developing a library, as I just mentioned, of all the assets–as retail starts to generate and leverage AR for iPhones and Android devices, the Home Depots, the Loew’s, the Wal-Marts, the Amazons are all putting pressure on the manufacturers to create their own models, because they don’t want to have to photogrammetry modeling for all those assets. They’re starting to request those.

As the people who make real-world products are starting to become required to make CG versions of those products for retail, that creates a whole ecosystem that designers will be able to start to pull from. It’s a whole different ecosystem. I’ve been calling it “Second Earth,” because it’ll be an entire doppelganger of the world.

Trick3D helped design a hotel in VR.

Above: Trick3D helped design a hotel in VR.

Image Credit: Trick 3D

VentureBeat: Then the video game people will take all that and blow it all up.

Eikhoff: Right! But to me, there’s a lot going on in those aspects that shows where the future is starting to go. It’s pretty exciting. Tangibly, right around the corner, as we do more designs–as the engines like Unity and Unreal invest more heavily in those tools that are more creative tools inside the engine, I‘m very excited about that. We can pass that on to the designers so they’re making choices in the headset. They’re very close to that right now.

Karwata: The ease of being able to change things–it’s already super refreshing and easy to do that now, but ultimately we could see something like where, in a meeting room, you could change walls and move chairs around, or even change the fabric on the furniture. Like you were saying about building game worlds in real-time, we’ll be able to do design in real-time.

Question: How much time did it take you to go from the Revit files to the finished VR virtualization?

Eikhoff: The way we approach it, it lives side by side with the design process. It’s not just doing a render at the end of the process. We’re actually going back and forth. We’re in the design process with the architects. We’ll get Revit files, but we’re iterating and refining constantly throughout the process. They’re able to do more with it from the brand standpoint. The architects are able to get their own visualizations faster.

You’d assume a lot of things that don’t actually happen at most architecture firms. Most of them are still outsourcing post-design renders. They do their own design process, speaking their own language, that they then try to translate to clients. When you get that visualization earlier, it changes a lot of things. So that process is ongoing.

Question: So it’s just you and the architects working, without a subcontractor producing the renders?

Eikhoff: That’s right.

Question: What would you say the iteration time between you and the architect is like?

Eikhoff: It’s kind of a living back-and-forth. The files are in constant communication. As they’re designing something, going into an executive review or a design review, it’s just built into the timeline that we’ll get that as soon as they have it ready. Then we’ll apply the changes to it.

Karwata: Sometimes it’s as little as two hours. Sometimes just changing the color of a wall makes all the difference and solves someone’s problem.

Question: Do you integrate any tracking data from the people wearing the device to acquire feedback?

Eikhoff: We don’t currently. We have the capability. The way we’ve been doing it right now, everyone’s in the same space and you can see what they’re looking at, so it’s more discussion-based as opposed to analytics-based. However, I think as this evolves, that will definitely become more and more important.

Karwata: I can see that application happening a lot with guest research. One thing we also do with new brands is to validate our assumptions with our guests. Things like eye tracking, particularly for signage and any messaging we want to put in, I can see us using that more and more.

Is VR the new digital blueprint?

Above: Is VR the new digital blueprint?

Image Credit: Trick 3D

Question: You were saying you had multiple forms of consumption. People use a headset or an iPad or other form factors. What do you see as far as the evolution of conversion between the form factors?

Eikhoff: We’re very much in a form meets function approach. We want to align the right technology to the right solution. There are weird resistances from some people to putting on a headset. Executives are inherently still resistant. There’s a power play aspect. “I don’t want to not be able to see what people are doing around me.” There are some soft resistances we still have to work around.

Karwata: We’re very mindful of what we put in front of whom. For example, we have the 360 view that ends up in a B-to-C role. On our website, before opening the first Avid hotel, you could take a tour. We couldn’t do that on the same scale with VR glasses. But very recently, after we launched the first Atwill Suites, there was a big hotel conference. That’s where we took VR glasses to owners and to journalists, because that was a much better medium for the setting.

Again, we take a mindful approach as far as what works where. But having an asset that works across multiple media really helps us target that content.

Question: You mentioned that you had twice as many sales in a comparable time with Avid. What do you think you can attribute that to? Was the ability to preview in VR glasses a factor?

Karwata: It’s very hard to attribute something to just one medium. It’s more about how VR and different models help us set it up and tell the story. That, for me, is where the real ROI comes in. Everything is about the content. It’s less about–the VR glasses are a means to an end. How do you sell the content in a way that’s relevant to a particular person? That’s what makes the technology applicable. If you don’t have good content, you can have amazing VR hardware, but you can’t do much with it.

VentureBeat: How many other ways of seeing ROI did you have? You had the 30 percent, 40 percent faster time to complete the design. What are some other things people should think about as far as ROI goes?

Karwata: For us as a company, looking at the model and the use of VR over the lifetime of the project, you invest much more upfront to build it. As Chad mentioned, we’re designing and building in parallel. But throughout the life of the project, you can use this in sales to owners, in presentations to journalists. You can use it in consumer websites and promotional materials. Launching a product to a new market is so much quicker if you can make that product market-relevant, make both guests and owners interested, versus focusing on it as an American brand.

Change is a constant. The initial design may last for two years, and then you have to start refreshing it. Having this kind of model makes it much easier. There’s a very long tail of ROI on this, and we’re seeing that more and more as the project goes on.

These virtual assets have counterparts in the real world.

Above: These virtual assets have counterparts in the real world.

Image Credit: Trick 3D

Eikhoff: I’d love for a mathematician to give us that number because no company really tracks the money in that way. You understand that it’s there, but tracking something over time across multiple divisions of the company who all have multiple budgets and all find efficiencies and change the ways they do business is difficult to track.

Question: One of the buzzier sorts of technology developments we’ve heard people talking about recently is the concept of real-time rendering. Generally, that’s more confined to the animation and gaming space, but with your grounding in entertainment, is there a possibility of that technology having a measurable effect on what you do in more of a B-to-B capacity?

Eikhoff: Absolutely, 100 percent. The trick right now is that many people start from the campaign level. They say, “We’ll do a marketing campaign. We’ll do a VR campaign, an AR campaign.” Then they start working backward from there, and you start to run into the limitations of what’s possible if you don’t have CG assets.

The big difference here, and there’s still some infrastructure work happening on the tech side–we have some proprietary processes to work around it, but you still have two pipelines. You have a render pipeline and a real-time pipeline, the way those assets are deployed and developed and created for each. For us to create an asset that can be leveraged for a high-end photorealistic rendering pipeline, but then also leveraged for a real-time, fully immersive 6DOF VR experience, is its own trick.

That’s one of the issues of the world moving from 2D to 3D. I can send someone a JPEG and they can open it without a problem on any device. If I send them a 3D model, how should I do that? There aren’t standards set on the consumer side, much less–we’re starting to try and set some on the creation side, but there still aren’t standards. Apple uses a different standard than Google for AR modeling.

A lot of that is going to determine where all that falls. But without a doubt, real-time rendering is where it’s all heading. We’re leveraging some of that on the consumer side and the creative side. These models will sustain that pipeline wherever it lands, but there’s still conversion steps within there.

VentureBeat: I like how you can put this on your website and consumers can look at it in VR. They can see if they really want to stay there. They become part of the sales process as well. But if you make it too good, they might not even feel like they need to go.

Karwata: [Laughs] I don’t think that’s going to become too much of a problem. It’s a great point, though, about consumer trust. What we’ve seen with some of the assets we produce at the beginning, they’re generic enough, not location-specific. We actually have more freedom to use them across multiple hotels that are not ready to show. We’re using that a lot in consumer marketing. As more consumers can use VR at home, that’s something we may think about bringing to them as well.