22 August 2019 | BI and data analysis, Revenue management, Distribution
Last week, the OTA Insight team attended the 11th annual Hotel Data Conference in Nashville, Tennessee. The sold-out event attracted hospitality industry executives with an interest in crunching data to improve the performance of their hotels or revenue management companies. Spanning three days, the conference was a swell of activity, featuring 135 speakers across five general sessions, 17 breakout panel sessions, 18 “data dash” sessions and nine advanced-level “data dive” discussions.
With so many sessions and a variety of data being analysed, here’s a quick round-up of the key takeouts that emerged from the conference this year.
Last year’s conference saw continued speculation on when the current growth cycle within the travel industry would end. This year was no different with some panels focusing on downturn prep such as Chaos or control? Pricing in a downturn and Labor costs in the downturn.
At Thursday’s general session, president of Tourism Economics, presented a slide on the probability of entering a recession between 2019 and 2020. Recession odds in the US were placed at 15% for 2019, whilst 2020 predicted a 40% downturn.
Speakers at the Downturn preparation: Staying ahead of the curve panel spoke of being prepared by building a good company culture from the top down. Christine Herrington, VP of asset management at Park Hotels & Resorts, said hotels and companies need to have the right leaders in place who can execute a plan, and who can communicate the plan throughout the organisation.
Speakers stressed that cutting rates isn’t necessarily the answer in the face of tough times. If companies have great staff who can build a rapport with guests and provide a positive experience associated with that hotel, they will see repeat business regardless of rate.
In light of the difficult forecast ahead, hoteliers will be looking to be on top of their strategies as well as seeking the best performance possible from their teams whilst growth remains.
As a company specialising in helping hoteliers leverage their data, the OTA Insight team were a strong presence at the conference. Co-founder and CCO Gino Engels took part in a panel entitled Stop revenue-managing everything! The session examined the role of revenue managers in maximising profit through pricing and availability of rooms, yet balancing this function with other revenue strategy demands.
The panel discussed what should and shouldn’t be on the revenue manager’s plate and what the future may hold, insights particularly useful for individual revenue managers at single hotels or full teams of revenue-management specialists working for large destination resorts or multi-property enterprises. Some key takeaways from the panel included:
Revenue management expansion
With the changing distribution landscape, revenue management is undergoing constant changes. Gino highlighted close links with technological capability as to why the role is evolving at a far faster pace than other departments, stating that profit management is beginning to play a more central role for hotels, so focus on increasing profit margins may start to take precedence over focusing solely on increasing revenue.
Breaking down silos
Despite the role of a revenue manager becoming more all-inclusive within a hotel, this doesn’t mean they are by themselves. Gino urged: “revenue management teams must work closely with all core business arms within a hotel to tackle distribution, marketing and sales challenges.” There are a number of opportunities that can be leveraged to bridge the gap between marketing and revenue teams. Web-based data is used commonly by marketing teams, which if shared with the revenue team can give insight into how website visitors are reacting to pricing strategy. By examining the goals of both the marketing and revenue teams hoteliers can find common goals with the tools already there to take advantage of the insights available.
OTAs, the increase in market disrupters such as Airbnb, and high demand from guests have made the travel industry increasingly competitive. As a result, hotels are resorting to customer analysis in order to offer better products adapted to each segment. Personalisation or attribute-based selling remains a hot topic in the travel industry despite the idea originating over 10 years ago, albeit in a different industry. The more revenue managers know their hotels’ traveller segments, the more there are opportunities available to craft pricing strategies that are likely to add profit.
OTA or direct? A traveller’s perspective was presented by Sean Morgan, Director of Research, Tourism Consumer Insights at STR, who shared some insights on traveller booking trends and attitudes towards hotel-direct booking and OTAs. The session encouraged hotels to gain a better understanding of guest profiles and traveller attitudes, in order to compete and collaborate with OTAs to leverage distribution channel opportunities.
Opportunities to collaborate included choosing the right OTAs to work with by considering if the OTA can offer a segment that can’t be reached via direct. OTAs can often help hotels home in on a particular geographic or demographic target, thus growing a new audience.
The chance to compete with OTAs comes with direct booking campaigns. In the face of OTAs’ increased market share and trends such as 52% of Millennials preferring to book hotels via an OTA, hotels have pushed direct booking campaigns more fiercely than ever to try and redress the shift that has seen commissions increase and decreased profitability overall. Reports suggest that massive direct booking campaigns can be successful, with new loyalty members staying loyal. Data also indicated that net average daily rate for brand.com loyalty bookings is higher than the net average daily rate for bookings made via a third party, such as an online travel agency like Expedia or Booking.com.
As well as taking part in the panel, our OTA Insight team were catching up with customers and showcasing our new industry-first rate-type comparison module. Check out our resource centre for more detail on the topics covered at the Hotel Data Conference, including a webinar and eBook on how you can align revenue management and marketing to deliver revenue results.
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