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Hotels: Invest In Tech Before Recession Hits

February 11, 2020 | Sarah McCay Tams, Director of Content, EMEA

How hospitality may react to an impending recession, the evolution of traditional hotel management roles and the interaction of humans and technology were all big topics up for discussion in a 360-view panel discussion held at the recent Revenue Optimisation Conference hosted by HSMAI in London earlier this month.

Whether or not a recession is imminent is up for debate across all industries right now. At the ROC event, industry experts debated when, if and how the industry would react.

Michael Simon, General Manager – Distribution, EMEA & ASPAC at Marriott International, Inc., said the economy had been enjoying the longest ride. But is now the time for caution?

“We’ve seen signs of recession,” he admitted. “If we don’t hit a recession in five years’ time we will see a lot more digital taking over transactional roles—machines can do it better, faster, more efficiently. If we hit a recession, we might not have the money to invest in this technology. The evolution of revenue management and marketing will be impacted by our economic health. You need to invest now,” he told the audience.

Niels Mekenkamp, Director of Business Solutions, EMEA, Cendyn, was more definite: “We’re going to hit a recession,” he declared. “But are we going to see what happened in the past when recession hits and we all drop our rates? That’s the danger.”

He said it was important to foster an integrated seamless experience where guests are happy to stay with you, because then they will be more reluctant to leave you in the bad times. He said hotel companies need to nurture their guests and tap into the usability cultivated by OTAs such as “People find it easy, they have loyalty to Make it more easy for your guest to be at your hotel,” he urged.

Breaking Down Silos

Amanda Elder, Chief Commercial Officer at Kempinski Hotels and member of the Kempinski Hotels Management Board, discussed the evolution of the revenue manager role and other roles related to the revenue function.

“Four years ago revenue management was the country cousin and now it’s extremely main stage and all the other pieces tie into the revenue function. Kempinski made a decision a few months ago to take our head of revenue and distribution, Riko van Santen, and promote him to Chief Information Officer. He now heads up IT. We said, ‘If distribution remains purely in commercial and IT sees itself as separate from distribution, how are we going to convince it to put our agenda at the top of the platform to enhance distribution?’ Riko is now helping me to get the systems I need to push commercial,” she explained.

Technology Vs. Humans

Tackling the topic of ‘Technology or people what comes first?’ Mekenkamp of Cendyn commented that a lot of hotel chains still work like “tech is important, but the human part is important, too.” According to Mekenkamp a combination of human, AI automation and machine learning is the future. He cited how an RFP could be done automatically, while humans will nurture the business relationship.

“The traditional role of sales is having the contacts with your corporate clients. They collect all the rates and make sure they are loaded into distribution systems, to be bookable through agencies by your global accounts. Look at the amount of work involved in that. If that can be automated then that frees up time and one manager can take on more than just five clients, and have those human relationships,” he remarked.

Anant Vithlani, Vice President Sales, Nordic Choice Hotels, added: “A lot of sales done face-to-face will be done digitally, but we will still need face-to-face.”

The use of technology in pricing was also central to the discussion with all agreeing pricing should be guest centric.

Michael Simon from Marriott stressed that we’re still in a people industry and that we should be using digitisation to enable and enhance customer experience.

“Pricing systems make a lot of smart decisions that help revenue management to come up with the right price, but there should still be the human person at the end,” he said. Simon referenced the use of beacon technology employed by Carnival Cruises and Disney. He explained how the technology helped to customise the guest experience.

Mekenkamp explained how, with their ‘magic bands,’ Carnival and Disney are making it easy for a guest to acquire something. He said that the technology has boosted revenue. “If it’s easier for them to spend they will spend,” he remarked.

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