Seven trending news items that will impact your hotel Revenue Strategy.
1. High-Tech Travel Goes Mainstream
Faced with tight competition for traveler dollars and more demanding, better-informed consumers, travel and tourism companies are turning to next-generation technologies such as robots, data analytics, artificial intelligence and augmented reality, according to this consumer Globe and Mail report.
“Travelers have more choices than ever, so we’re seeing more and more travel companies deploying these technologies to elevate the customer experience and set themselves apart from the competition,” Michael Coletta, manager of research and innovation at Phocuswright Inc., told the media outlet.
But does high tech necessarily translate to high times for travelers? For instance, do smart bathroom mirrors that digitize and e-mail guests’ scribblings on fogged-up surfaces actually improve customer experience in a meaningful way?
The best customer-facing technologies in travel are often those that don’t feel like tech at all, says John Padgett, chief experience and innovation officer at the cruise operator Carnival Corp. in Miami.
2. Has Expedia Reached Full Potential?
Expedia Group’s strategy is to go wide by expanding into new countries and to build up its hotel and apartment supply, with CEO Mark Okerstrom citing the small share of digital travel the company currently has.
Outlining his expansion plans in “wave one” markets, Okerstrom said last week during the company’s third-quarter earnings call that the “overall opportunity” — notwithstanding heightened competition — “remains very significant.”
An analyst asked Okerstrom about how he views growth and market share in the coming years given Google’s gains, the hotels’ push for direct bookings, and the emergence of alternative accommodations.
“Well, I think, first of all, we think that the overall opportunity we were moving into remains very significant,” Okerstrom said. “You continue to have a massive industry. You’ve got offline to online trends and, yes, we hear this industry is fully penetrated. The answer to that is not even close. If you look at where we are in the U.S., it’s, call it, high 40s, 50 percent online penetration. It steps down from there the further you move away from, call it, Manhattan.”
3. A New Generation of Revenue Managers Needed
Today, there’s a need for a new generation of hotel revenue managers, according to RM guru Bonnie Buckhiester.
Buckhiester says that, as need periods are identified (often with less than desirable lead time), GM's typically turn to the Director of Revenue and say, "do something!"
“Although revenue management is meant to be more about managing demand, not creating demand …what can the revenue manager do at that point? Often, it's a matter of going out to the OTAs, offering specials, paying for better placement and using price as the primary weapon. All tactics that escalate acquisition costs, destroy flow-through, and attack profitability which in turn erodes asset value.”
4. Two New Low-Cost Hotel Brands Pop Onto Scene
Another week, another couple of new hotel brands. Skift reports that Hilton will debut a new brand, called Motto, starting in London, and Premier Inn intends to trot out its first Zip property in Cardiff, Wales.
Hilton’s newest brand, its 16th overall, is an urban microhotel concept called Motto by Hilton. It is just one of many new microhotel, or pod-like hotel concepts to be introduced in the past few years.
Also, Whitbread has added a new budget brand to its hotel portfolio: Zip by Premier Inn.
The first 138-room property will open in Cardiff, early next year with a second planned for Southampton. The concept involves creating smaller rooms — less than half the size of the standard Premier Inn offering — and selling them at prices starting from $25.
The move brings Whitbread’s hotel brands to three, the other two being Premier Inn and Hub by Premier Inn.
5. Report: Engaged Guests Spend More
One of the most common challenges from hoteliers is finding ways to engage guests to drive additional revenue. Engaging guests has major implications for your bottom line. In fact, fully engaged hotel guests spend 46% more per year than actively disengaged guests, according to this report from Zingle.
Increasing revenue per guest typically means upselling. But not in an annoying or intrusive way. What we’re really talking about is identifying services, upgrades, activities, and available opportunities for improving a guest’s stay; providing guests with the kind of personalization that says, “Based on our relationship, we think this will make your experience better.” And with only 22% of guests reporting that they believe hotel offerings are relevant, personalization is paramount when it comes to driving additional revenue.
6. Barr’s Focus for IHG is Agility
In a quick-hitting but wide-ranging interview, IHG CEO Keith Barr discusses changes he’s made to the global company and its renewed focus on the APAC region.
“My focus when I became CEO was how to become more agile, how do we move faster, how do we accelerate our growth and how to put more resources close to our customers and close to our owners to drive performance,” he told Hotel News Now. “We’ve put a lot more resources into the market, so we’ve scaled up in Australia, Japan, southern Asia, the Middle East … put more boots on the ground to drive performance there, and it’s paying dividends. You look at the first half of this year, it was our best signings and best openings in over 10 years.”
7. Hotel Email Marketing Trends that Boost ROI
Compared to other marketing channels such as social media, direct mail or paid search, email delivers the highest returns on investment for hoteliers, according to this Revinate report that appears in Phocuswire.
The e-mail contents — and timing — of emails sent by hotels often determine how well any given campaign will perform, and segmented campaigns and transactional emails result in high engagement.
Reducing how frequently emails are sent could result in higher open rates and conversions, the report says. Segmented emails — which typically pull customer data from a hotel’s PMS — result in a 20% higher open rate, a 70% higher click-through rate and 73% higher revenue per recipient than non-segmented campaigns.
Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.