As the COVID dust is settling, we’re finally able to look around and see what our new reality is. Due to the major forces that disrupted the hospitality industry in the last few years and altered it forever (and not just the pandemic but also the evolution of technology and the growth of the alternative accommodations sector), the reality is that we cannot carry on doing things the same old way. It is very clear that the world has changed and we have to adapt.
Adopt a holistic, profit-orientated approach. A key transformational element from the operations standpoint is steering away from only looking at top-line room revenue towards a bottom-line, profit-oriented approach. This requires all departments to collaborate closely with each other.
The revenue management discipline (and RMS tools in particular) play a crucial role in achieving this, tying all key stakeholders together, like a glue, a core that feeds everything else with data, insights, forecasting, optimization decisions, strategy, etc.
Popularization of cloud platforms like AWS (Amazon Web Services) and GCP (Google Cloud Platform) has resulted in the rapid growth and development of technology in all sectors due to the following trends:
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- Affordability: the cost to start a software business or adopt new technology has significantly declined.
- De-wireization: more things are becoming wireless, and legacy promise-based systems are being replaced by younger-generation, cloud-based solutions that are safer, more user-friendly, mobile-friendly, and less costly.
Data analysis and workflow optimization will be an interesting growth market going forward. Because these markets are still immature at this point, companies that can become central market players will have a very attractive position. The largest barrier for growth for tech vendors today is the complexity of the hospitality ecosystem, in combination with the lack of data standardization. The latter has become a major issue preventing us from truly utilizing the data we have on hand. And the amount of data is accumulating every day. Many companies are sitting on pots of gold without even realizing it.
End-to-end solutions. Being able to take the complexity of solution design and become a comprehensive one-stop-shop is an attractive proposition. However, it’s still hard to achieve, considering the complex world of use cases in hotel operations (from chatbots to labor management and scheduling, to campaign management, to payment processing, the list goes on) and the growing number of tech vendors addressing them. Some hospitality tech companies provide the key elements in their stack while allowing other vendors targeting less critical use cases to connect via open API connections.
Reimagining The Tech Status Quo
Historically, the PMS has been the center of the tech universe but this is changing. There is a chance that PMSs will be soon dethroned, and the laurels will be given to RM/BI (Revenue Management and Business Intelligence) solutions. The reason being is that the capabilities and the data needs of an RMS are far superior to the data needs and capabilities of a CRS or a PMS.
There's a lot to be said for seeing the revenue management platform as the center of the ecosystem. It’s all about data after all. Most advanced hoteliers now understand that they need to start building their tech stack from the most ‘data demanding' piece that plays a key role in their business strategy and then work backward to find the right PMS and not the other way around.
And as the distribution landscape continues to evolve, and complexities and costs grow, effective distribution, pricing, and profit optimization strategies are gaining importance, which makes it even more critical to ensure that operators have the right tools to build those strategies optimally.
Many things that we’re doing now (the way we build our teams, the way we approach customer acquisition, the way we segment our business, the way we forecast, etc., etc.) are done out of habit. But do we understand why we’re doing these things in this particular way? Is this optimal and does it drive ROI and improve operating efficiencies? Does the new reality dictate a new approach? Can we do better?
The possibilities are infinite and it’s all in our hands. All we need to do is embrace the change.
Learn how hotel revenue leaders like you are planning to optimize their business mix in the year ahead. Download our latest Special Report, Re-booting Revenue: Refreshing Strategies for 2022 and beyond.