In June Travel Tripper, IDeaS and OTA Insight joined forces to host lunchtime roundtable discussions on current trends in the fast-changing world of revenue management.
Meeting in Orlando and Miami, the distinguished groups of Industry leaders and experts covered a wide range of hot topics, including artificial intelligence (AI), machine learning and the emergence of Airbnb as a distribution channel.
If you couldn’t join us at either lunch, don’t worry, there will be more of these in the future, coming to a city near you. Here are some of the key takeaways and highlights from the events.
Airbnb as a distributor
- The emergence of boutique hotels on Airbnb with commissions at 4-5% was highlighted.
- There’s a corporate traveler trend of short stays of one to two nights, which continues to benefit the hotel side over Airbnb but longer stays are starting to shift towards Airbnb.
- Airbnb offers a broad spectrum of experiences, whereas hotel customers know what they are getting, and there will always be a need to capture this customer segment.
The changing distribution landscape
- The distribution model is expected to change drastically with the emergence of vacation rentals and properties offering a variety of rooms and experiences. This will create a mix or blending of vacation rentals and standard hotel rooms, with Marriott entering the vacation rental space, for example.
- Asian markets are growing and guests tend to book through tour operators and agencies, whereas North American travelers act like their own travel agents and make direct bookings.
- Disruption is occurring everywhere across the industry, which is causing greater segmentation, from cruise ships beginning to diversify by offering different experiences from the traditional family-orientated cruise - such as Virgin - through “glamping”, to “luxury backpacking”.
- The importance of innovation has never been higher, as has being able to capture guests for the long term and securing repeat business.
OTAs vs hotels and who owns the customer?
- We're beginning to see global chains crack down on OTAs commission structures
- “Whoever owns the data in this paradigm controls the narrative given the frequency of change”
Key metrics to measure revenue management performance
- The key metrics for hotels still focus on the STR/REVPAR Index, history, pickup and pace performance.
- A key focal point was a discussion around the continued dependence on historical performance instead of forward-looking data, such as pace and pickup, with questions on how to leverage technology and analytics so hoteliers can be more proactive instead of reactive with their revenue strategy.
Personalisation: the “Next Big Thing?”
- Pricing is not developed for an individual person - yet. But there is some growth in building the capability to narrow down guest demographics, to geo-target, by analysis of buying seasons and other trends, etc.
Artificial intelligence and hospitality
- For parity, there is more technology to help monitor the landscape, and we are seeing brands start fining hotels for being out of parity.
- There are concerns that AI detracts from the core foundation of hospitality: the human touch and engagement.
- AI is already a feature of revenue management in the form of automated algorithms. There is development towards voice recognition (VR) for data inquiries, rate changes and booking behaviour, etc.
Independent and brand hotels
- Brands are now operating in the boutique world, such as Curio by Hilton and Autograph by Marriott.
- Independents need to make best use of the tools at their disposal - such as websites and booking engines - to counter the brands and the easy booking experience provided by other competitors such as OTAs.
- There is ongoing difficulty in driving brand loyalty as an independent. There’s little loyalty among millennials, as they tend to search for different experiences. So hotels are now having to continually spread the net wider to maintain and not necessarily gain market share.
Data, analytics, transparency and GDPR
- There is a lot of concern regarding the EU’s General Data Protection Regulations (GDPR) - which were brought into force across member states in May this year - in how they will impact on driving business from markets beyond the US.
- One participant noted that website and pay-per-click (PPC) performance, as well as booking engine data, should be treated with the same level of importance and transparency as that of a personal bank account.
Topics like these are regularly covered in the blog posts and other content you can find in the OTA Insight resources centre.