Let digital marketing aid your hotel Revenue Strategy

Revenue management teams need to work together with the marketing department if they are to adopt an agile Revenue Strategy that maximises on market opportunities, according to speakers on a webinar titled, How Digital Marketing Can Power Your Hotel Revenue Strategy, which took place on 26 October 2017.

Three industry thought leaders came together to discuss how, in today’s constant technically evolving marketplace, hotel management teams should be working together on their marketing message and Revenue Strategy.

Michael McCartan, Managing Director for Duetto’s EMEA team, tackled the hot issues of the day related to Revenue Strategy, including digital disruption, total hotel integration and guest-centric pricing.

“In the early 2000s, distribution became much more complex as Internet intermediaries inserted themselves into the process. Yet many hoteliers are using the same methods created in the ’90s to price their rooms. Providing the same price through different channels is an inefficient way to price, yet this is still the standard followed by the industry today,” McCartan said.

The evolution of Revenue Strategy

McCartan went on to explain that oversimplification of pricing was acceptable when there were fewer distribution channels, but things have changed and as a consequence Revenue Strategy needs to evolve too.

According to data from Kalibri Labs, hotels are capturing less revenue and paying intermediaries, such as online travel agents more for that revenue. It looks like hotels are performing well, but at the bottom line they are worse off.

“Pricing needs to be guest-centric,” McCartan said. “We need to be more responsive to market. Hotels need to look at data sets and read the market. For example, travellers book airlines before hotels, and they shop online before they book hotels. Hoteliers need to understand how many people are looking at their destination and gauge demand.”

According to McCartan, hotels need to factor in all data sources to create an integrated Revenue Strategy. And the only way to achieve this is to be cooperating with other hotel departments.

“Revenue Management has to be fully integrated with marketing,” he said. “They need to talk on a daily basis and start collaborating on the same documents and data points to share insights and address opportunities.”

Adopting agile marketing

Sam Weston, Marketing Manager for 80DAYS, a creative and digital marketing agency operating within the luxury travel sector, discussed agile marketing and how marketing and revenue management should be working as one.

“Every digital marketing channel contributes to acquiring guests," Weston said. "But channels are only as good as your product offering and the guest's perception of that. The fundamental thing is delivering a standout guest experience. Digital marketing is the amplification of that guest experience. But to begin with, the successful acquisition of that guest comes down to the right price and positioning of your product."

He talked about the value of adopting an agile approach to marketing by reacting quickly to the market.

“We need to change perspective,” he urged. “What is changing by the minute is the market in which our hotels are operating. We need to be able to create campaigns and offers on the fly to reap the rewards.”

However, Weston explained that in order to do this, hotels needed to have a quick, easy, defined decision process to sign off on an offer quickly.

“The marketing manager needs access to reliable data in order to react. They need to be able to look at what is trending and see how they can use this information. It’s about having the mindset of ‘What can this do for my business and what can my business do for this?’” he said.

Control your inventory

Chris Lynch, General Manager at the Nira Caledonia, provided an hotelier’s perspective to how Revenue Strategy and marketing can work together.

The Nira Caledonia implemented Duetto’s Revenue Strategy solutions in July 2016.

We were looking to take back control of our inventory. We had embarked on many relationships with third-party distributors and it was costing. For a small, 28-room hotel in a highly competitive area of Edinburgh, I want to carve my own success,” Lynch said.

He went on to explain how part of that process involved finding the balance with the OTAs and other channels, and then assimilating, quantifying and understanding the value of those relationships.

“We have to think like an airline: be aggressive, understand demand, invest in pricing, distribution and aggregation tools. Airlines seek to find what can the market bear. What is the trigger price? That was a key turning point for Nira Caledonia. Duetto allows us to find what the market can bear,” he said.

According to Lynch, the secret is to allow your business decisions to flow. “Our marketplaces change at a phenomenal pace. People are constantly on the go, and they can be researching via their Smartphone at any time. You can now reach customers while they are commuting to work. With this information, you can take calculated risks.”

Since implementing Duetto in July 2016, the Nira Caledonia has seen ADR jump 20% and RevPAR increase 29%, he said.

Webinar questions

There were plenty of questions from the audience at the close of the webinar, including

What is a poor, good, and excellent conversion rate for independent hotels?

Weston: “It depends on factors such as star rating, how much inventory you release to OTAs and how much you have to convert on your own website. The UK average for independent hotels is 0.5% in the five-star market.

Can you have specific rates for each loyalty guest?

McCartan answered: “Yes. Open Pricing allows you to price rates independent of channel, guest and other factors. When it comes to loyalty, you can price by group of similar customers, assign a rate group, even go right down to individuals if you have high-value guests you want to offer a unique package to.”

If you missed out on ‘How Digital Marketing Can Power Your Hotel Revenue Strategy,’ watch the webinar on demand here.


Sarah McCay Tams, Director of Content, EMEA

Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.

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