Collaboration needed for revenue management in 2017
 
Collaboration needed for revenue management in 2017
20 JANUARY 2017 10:17 AM

The importance of converting and targeting guests might sound like yearly calls to arms, but those tasks require a greater the level of complexity in 2017.

LONDON—Hoteliers need to take an all-hands-on-deck approach to driving profitability in 2017, according to speakers at a recent Hospitality Sales & Marketing Association International event.

Speaking on 19 January at the CitizenM Tower of London, Clinton Campbell, director of revenue management at Apex Hotels, stressed the need for collaboration.

“We have to forget titles and focus on profits,” Campbell said, mirroring comments made at the recent 24th Annual Hotel General Managers’ Conference.

The hotel industry has been dominated by talk of hotel departments working as silos, Campbell said. He said that needs to change and “everyone should sit around one big table.”

“A lot of what (revenue management does) is directed by marketing; a lot of what they do is based on the data we give them,” Campbell added.

Suzie Thompson,VP of marketing, distribution and revenue management for Red Carnation Hotels, said her work combines those disciplines, which leads to a more holistic approach.

“In terms of channels, how guests come to us, my aim is to not grow one at the expense of another,” Thompson said.

The one supplier on the panel, Terri Scriven, head of hospitality and tourism at Google, said she believed “global chains were finally realizing silos were not effective.”

“In the future I think we see more combining of revenue management, marketing and e-commerce in one team,” Scriven said.

Distribution directions
The new year will see hotel firms engage in a greater sophistication when it comes to targeting potential guests, as well as an increase in the percentage of budgets focused on repeat guests and upping those guests’ spend of wallet, sources agreed.

Scriven said a more acute targeting of guests would occur across the industry, something she termed “sniping.” The practice is driven by the use of more accurate data and focused efforts organizationally of delivering coordinated marketing messages.

Campbell said Apex was looking at perhaps new distribution channels such as Facebook and WhatsApp.

Thompson, who worked at online travel agencies before coming to Red Carnation, said the hotel-OTA relationship used to be driven by a sense of partnership, but that the landscape now was more about algorithms and conversions.

“For us, 2017 will see a greater targeting of repeat customers as our strategy, and then it will be about how to optimize our (customer relationship management database),” Thompson said.

She warned, though, that hoteliers should get excited about avoiding commissions by circumventing OTAs, noting In-house marketing costs roughly the same as business coming in through an OTA, but the latter looks worse on a profit and loss statement. t.

Shouting for sophistication
Campbell said there remained a battle for hearts and minds of customers.

Campbell said Apex conducted a survey that showed 50% of OTA bookers said price and trust were the reasons they booked via OTAs, which led him to be more aware of how Apex framed its offering on its website.

“It is almost embarrassing that we are still talking about the need to convert guests, but we still have to focus on conversion optimization and profitability,” he said.

Thompson said this did not necessarily mean ignoring OTAs.

“Using, and abusing, our relationships with OTAs also will be seen in 2017, but OTAs do provide excellent information.” Thompson added. “We just need to use it to increase direct conversion.”

Scriven said Google now regularly sees 50% of bookings coming through mobile, “upwards of 70% at Christmas,” a trend she said forces hoteliers to adopt more savvy marketing.

“Marketing is now about micro-moments and personalization. Build sophistication in everything you do,” Scriven added.

Thompson said Red Carnation’s emphasis on social media and reviews has paid rich dividends, but that often comes with unexpected repercussions.

“It is remarkable how many birthday cakes we need to make. Guests have seen the reviews in which other guests have mentioned they’d received a cake,” Thompson said. “That is all wonderful, of course, but all these things affect profitability.”

Testing, sophistication, analyzing reports and data correctly— are all things that need to be focused on more than ever, sources said.

“Historically, the hotel industry has been slow to adapt,” Campbell said.

He believes hoteliers need to invest in technology that communicates well across systems to make better use of data.

“The opportunities will come in knowing how best to share the load to consolidate the business mix, to eliminate the cutting of rates and to have a true idea of bar rates, as well as having partners who truly understand your business,” Campbell said.

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