11 July 2022 | Revenue management, Industry news, Industry technology
The travel industry has endured a lot over the last two years. The devastating impact of the pandemic, compounded by growing regional political instability and a precarious global economic outlook, has changed the way the hospitality industry operates. For hoteliers, and their commercial teams, their work has never been more challenging.In the middle of challenges, however, there are also opportunities. If you can spot them.
By adopting the right technology solutions that use real-time historical, current and future-looking data to deliver commercial insights, hoteliers and their commercial teams are visualising opportunities, taking necessary measures and actions, and shaping a commercial strategy that balances efficiency with dynamism. Today, more than 55,000 hoteliers in 185 different countries are using OTA Insight solutions to cut through the noise, and discover more revenue opportunities.
While this may seem like a seismic transformation for the hotel industry, it isn’t. Instead, it's a shift that was already underway among market leaders and early adopters, and has simply been accelerated by the impact of the pandemic. With the industry outlook still in flux, and many other challenges looming on the horizon, hoteliers, and their commercial teams, will need to embrace a data-driven commercial strategy where they can predict, price, distribute and analyse their progress for future success. Now, let’s take a closer look at why.
A survey conducted by OTA Insight in the first quarter of 2022 painted a revealing picture of the complexities hoteliers and their commercial teams are facing in the current landscape. In the context of an industry emerging from its biggest crisis, a lot has changed. And, while the fundamentals of any commercial team: to sell the right room to the right consumer, at the right time and at the right price, remains the core aim, the historical way of doing things can no longer be relied upon to navigate this new market landscape.
In fact, the biggest challenge facing hoteliers in 2022, cited by 68.4% of survey respondents, is the complex and chaotic market conditions, largely stemming from the pandemic. Sudden changes in demand, as travel sentiment ebbed and flowed according to the policies in local and source markets, meant that hoteliers have had to respond to shifts with speed and agility to counter further losses.
While policies were swiftly implemented, they were less hastily reversed resulting in prolonged periods of low demand, followed by sudden pickups as travellers looked to release some of their pent up travel demand. Shorter booking windows further compounded the challenge. Hoteliers, and in particular, their revenue management teams, needed to keep up to speed with their markets at all times.
As inflation bites, both consumers and businesses will feel this pinch, and the post-pandemic boom will eventually level off. Revenue teams will need to be sensitive to new travel trends emerging so that they can take necessary actions - make gains where they are able to, and avoid losses as best they can. To do this they will need to track which aspects of their revenue strategy are working, and where they can improve.
Hiring and retaining staff was the second biggest challenge mentioned by 38.5% of hoteliers. Decreasing revenue meant that many properties had to cut back on their costs, leading to many job cuts in the hospitality industry. As travel opens back up, the industry continues to be faced with a massive staff shortage. Coupled with the revenge travel boom, the industry is simply unable to cope. As inflation hits, and the cost of living becomes increasingly greater, hiring and retaining staff is going to become more and more difficult. Faced with the dilemma of more jobs to fill than there are candidates in the market, employers will likely have to increase salaries to attract talent.
With every team member that leaves, so too does the knowledge resource that they would have gained around the hotel’s operations, its market, and the commercial strategies that drive its success. It’s not only a loss of people power, it’s also the set of skills and people power that would need to be filled - not easy in the current landscape. It leaves a big hole in the commercial team, and requires time, resources and training to fill again, and leads to the third biggest challenge facing hoteliers in 2022.
Time - or lack thereof. 34.6% of respondents found that they do not have adequate time in the day to do all the tasks they need to. Gathering data is time consuming, as is the time it takes to analyse it. Expected to do more with less means that commercial teams have less time to get into the details, beneath which, opportunities lie. In a competitive landscape, volatile and complex, hoteliers can’t afford to miss any revenue-generating opportunities.
In essence, hoteliers have less time and less resources to navigate an increasingly complicated landscape. This is unlikely to change anytime soon.
For revenue managers faced with less time and limited resources, cumbersome manual tasks are an impediment to efficiency. Especially as the rate architecture, promotions, and policies become increasingly complex. We’ve seen the rise of semi-flex rates, the growth in mobile discounts and now the return of non-refundable rates to the pricing pot. Being able to monitor these trends in real-time gives hoteliers a competitive advantage, and valuable insights, into the pricing strategies of their market’s competitors.
Simply gathering data is not enough. It’s time consuming, and it’s not going to increase your bottom line. Gone are days where a revenue manager could rely on an overnight rate shop. The market has changed, and revenue managers and their commercial teams need to be able to pivot as the market dictates. Only by turning data analysis into revenue generating decisions are you going to maximise your revenue opportunities.
Now though, through OTA Insight’s cloud-based intelligence platform, hoteliers can interact with the important data - the data that drives revenue - in one easy-to-use dashboard. The most recent launch of the Overview homepage, in May 2022, brings all the key metrics together into a dynamic platform that guides users to quickly take appropriate action when and where it is needed
As a result, revenue managers can easily see, optimise and execute on their commercial strategy with even more efficiency. With a quick glance, commercial teams have key insights into their revenue, distribution and market performance and can make relevant actions to ensure their KPIs stay aligned. Critically, the OTA Insight platform allows hoteliers to track their performance against similar periods, and their competitors, and get notified with any changes in their market.
Forward-looking data, which analyses consumer flight and hotel searches, gives valuable insights into their changing booking habits, providing early pre-booking demand data for upcoming important dates, enabling commercial teams to see any changes in the market. By spotting early opportunities before their competitors, they can adjust their strategies to ensure they are capturing their share of the market at the right price.
With a clear and cohesive snapshot of the overall performance and market conditions accessible to all members of the commercial team, data centric teams can create a culture of sharing and collaboration that breaks down outdated commercial silos. It means that new members joining the team can log in, and get an instant overview of what is happening not only in the hotel, but at a macro view of the overall market as well.
An integrated tech stack gives hoteliers back the time they need to take control of their commercial strategies. By drawing from all the key data points that hoteliers need to navigate this volatile market landscape, revenue teams can stay focused on their overall goals while uncovering new opportunities, without having to do any of the heavy lifting. In the process, it streamlines a hotel’s commercial strategy so that the whole team can react, adjust and regain its impetus, despite the ongoing challenges.
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