The 2022 Autumn HSMAI Curate Roundtables, held at the Hilton London Park Lane, focussed on commercial excellence and the “evolution within the hospitality industry to break down silos between commercial disciplines.”
Conversations centered around how to design and build a commercial-centric organization that is strategically designed to optimize profits.
Setting the Scene
We have talked about VUCA (finding opportunity in Volatility, Uncertainty, Complexity & Ambiguity) a lot over the last few months; we can’t escape the constant pace of change or the impact the global political landscape has on the hospitality industry. HSMAI identified the ongoing challenges of talent, supply chain shortages, record inflation, and the climate crisis, and the impact it has on hoteliers. James Wheatcroft, SVP Marketing and Brands, Accor, summarized it as the “perma-crisis,” with not much view to a change going into 2023.
So how do we drive forward a commercial-centric organization that is agile, responsive, and designed to optimize profits? Wheatcroft explains that “Agility beats uncertainty,” and what we are looking to achieve across our commercial functions is aligned thinking.
Targeting Commercial Excellence
The emergence of the word “commercial” in titles at the property and corporate level has created much conversation about strategy, organizational design, and scope in recent months, but let's start with “what is commercial excellence?”
According to a quick poll from the HSMAI members, it is:
- Customer-centric
- Alignment on commercial strategy between sales, marketing, and revenue
- Driving profitability
- Optimizing your return on capital employed
And as with most well-informed programs, it begins with data. By managing the right data, you can find the right solutions.
Remy Merckx, Senior Advisor - Head of Travel & Hospitality, eclerx, described commercial excellence as: “Data-driven customer experience designed to optimize profitability and commercial excellence.”
Data allows us to make better choices, and build a path to success based on the behaviors of our customers. You must focus on data management first, if you don't fix your data you cannot meet your objectives.
When considering an integrated tech stack what we want to ask is, ‘How is the data distributed across your different channels and how do those channels talk to each other to present usable data that allows you to make informed decisions that drive revenue?’
Forecasting tools, innovative visualization dashboards, and the prediction of user actions based on their previous behaviors online are all minimum requirements that we should be expecting from our data management systems.
Though even when we have usable data we still need to monitor it, validate it, and detect anomalies. This is where the intersection of data and human qualitative research excels, it allows us to take the usable data and have it inform our decisions based on our knowledge of the desired outcomes and direction of the business. Revenue managers are seeing this as the new critical part of their commercial function, taking the data to inform their revenue strategy and to optimize pricing, accurately.
The realized benefit is a holistic view of performance, and at this point, scenario testing can begin.
Building Beyond Uncertainty
Accor then discussed how to use that data to build a sustainable future beyond uncertainty
The ultimate shared goal for Shumi Khan, SVP Business Intelligence & Revenue Management, and James Wheatcroft of Accor, who described marketing and revenue as “frenemies turned to great friends”, is having an aligned way of measuring success between revenue, marketing, and e-commerce functions.
How do you create an environment to spot early signals and respond fast enough to ensure brand strength? Use data. Data helps you to take bold decisions and helps constantly build capability, it provides us with a single point of truth.
Transformation is always difficult to manage, but if there is one thing to take from the last few years, it is absolutely possible to throw out the old and bring in the new.
We should be aiming for a global long-term view with the ability to deliver and activate locally in markets.
A commercial dashboard for all departments can go a long way to achieving transparency and accountability. Through the use of common language, common data sources, common goals, and common metrics we can enable the functions to operate as one commercial team.
We are expecting to see more rapid change, and therefore the need to adapt and respond is increased. A more agile, cross-commercial view of revenue planning, with one shared view on revenue - across all teams - is the goal going forward.
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