How are you adapting your revenue strategy for the return of demand? How can you embrace the ‘unknown’ that lies ahead? And how could technology and automation help you to drive efficiencies and improve pricing decisions? These and many more hot topics were up for discussion in our recent webinar, ‘Re-embracing the Unknown: Hotel Revenue Strategy and the Return of Demand’.
Todd Rollin, Director of Marketing, and Gary Glodowski, Director of Customer Success, took the audience through key tactics hoteliers can employ right now to shore up their revenue today and for tomorrow.
[Watch the webinar On Demand here]
Focusing on segmentation, forecasting, pricing, and automation, Todd and Gary provided some real use-cases for what hoteliers are doing in different markets to maintain and exceed market share.
Gary took the audience through how US-brand The Standard adapted its revenue strategy in 2020 and 2021 at its properties in New York City and London.
Read more on The Standard New York and The Standard London.
Segmentation
A new example of re-segmenting observed by Gary was building out a new segment that was specifically geared towards tracking COVID-related promotions so that when hotels look back and are budgeting a year from now, they can decide what data is relevant going forward.
Todd talked about looking at different room types and rethinking those mixes. “Maybe we're shifting from looking at a regular business segment to a different type of group or long-term segment; maybe you're looking to extend the length of stay so that you can shift the number of people you have working at a given time and you're getting longer stays, and you can focus on housekeeping and other areas where you're concerned you may not have enough staff. It's rethinking the mix and your pricing needs,” he said.
They also discussed building segmentation into reporting. Gary advised teams working on multiple properties to clean up segments to be able to unlock benefits when it comes to multi-property reporting.
“Doing this, teams can take less time putting reports together for different brands, different locations, and build efficiencies,” he said.
Forecasting
With hotels opening and closing due to COVID, data became difficult to rely on in terms of being able to forecast.
According to Gary, “At Duetto, we realized hotels couldn’t rely on Same Time Last Year (STLY) data to power forecasts. We had to rethink forecasting. The result was our short-term forecasting rules, which became quickly available to all hotels running on Duetto.”
“It helps revenue teams predict what's going to happen, especially within the 30-day booking window. That's really where a lot of markets saw their booking window shrink to. At the end of the day, it's just about giving you an accurate forecast, which allows you to then price to achieve that,” Gary said.
He talked through the Forecast and Budget builder in Duetto, which provides revenue managers with the ability to build different scenarios, have ad hoc comparisons, and schedule those to come to their email or their stakeholders. This was one of the tools adopted by The Standard.
“For The Standard, it really allowed them to spend less time in the weeds from a data standpoint and find ways to build efficiencies in the process, and ultimately provide what their stakeholders were looking for in terms of forecasting and reporting,” Gary explained.
Pricing Rules
“Room type pricing has been reimagined for most of our clients and hoteliers that I talk to in the industry. Where you're looking at different competitive sets, you're rethinking your differentials between your room types and almost starting over,” said Gary.
Citing The Standard, Gary explained how their hotels got creative with their offerings, targeting local guests, and finding new ways to attract them, and tying it all together with pricing strategies by flexing on and off some of their pricing rules.
“Using pricing rules to flex discounts based on conditional elements such as occupancy, demand occupancy, or lead time, they found a lot of success,” Gary explained.
Revenue Automation
Using controlled automation in Duetto revenue managers can set parameters that enable the system to auto-publish rates during specific periods or for specific business scenarios, such as once a hotel has reached a certain occupancy.
On this topic of automation, Gary referenced a Duetto resort client in Mexico who has adopted automation.
“They are doing it in an intelligent and conditionally dynamic manner. And that's the beauty of the AutoPilot features, where you can say, ‘I only want to auto-publish over the next 30 days’, or ‘I only want to auto-publish when I am above a certain occupancy percentage’,” he explained.
Gary continued to outline the benefits of using automation when you're not in the office, enabling you to dynamically price 24/7.
“Going back to the lack of resources in the industry, what we hear from a lot of people is, ’I just don't have time to price’, ‘I don't have time to go in and see what the recommendations are from my RMS to take advantage of that’. Unleashing the power of automation within the parameters you set gives you the ability to price on weekends, after hours on when you go on vacation,” he explained.
Revenue Health Check
Todd and Gary highlighted key areas that businesses should consider in terms of evaluating RMS tools, looking at:
- Flexibility (e.g. forecasting, segmenting, data)
- Operational Efficiency / Automation
- Demand-Driven Pricing
- Intelligent (machine + human insights)
Gary asked the audience to consider, were their systems flexible enough to re-segment information and have multiple forecast scenarios accounted for?
Were they building operational efficiencies through an accurate forecast, as well as taking advantage of automation?
Did their system allow them to collaborate with the entire organization?
And were they then combining the machine and human insights to make pricing as intelligent as possible?
Is it time to reconsider?
While the pandemic has challenged the hotel industry, it has also forced us to look differently at how we do things.
“The pandemic has given hotel revenue teams a chance to modify, change and move in new directions, and to understand that their revenue strategy shouldn't be constrained, but that it should move along with you. And this is exciting,” said Todd.
Now is a good time to ask, is it time to reconsider revenue management and move away from very manual or Excel-based systems to something different, whether it's Duetto or any of the other modern systems available in the market?
“Automation, automation, automation, is the key and it's not about taking the reins away from the hoteliers, it's about unleashing your strategy and doing it in a very conditional and dynamic manner and not sitting on an opportunity when it comes. Being able to react to that is ultimately how we're all going to be able to be successful, whether you use Duetto or not, it's something that we need to be able to continue to lean on as an industry,” Gary concluded.
Missed the ‘Re-Embracing the Unknown: Hotel Revenue Strategy and the Return of Demand’ webinar? Don’t worry, you can catch up on the whole conversation On Demand here.