Industry leaders from Shiji, SiteMinder, and Duetto came together on September 5, 2023, for an insightful APAC-focused webinar - How to Practically Apply Total Profitability to Your Property Revenue Strategy.
The three APAC-based speakers joined forces to share their insights on why Total Profitability is crucial for the success of a hotel's revenue strategy, and how hoteliers can apply it practically. It covered:
- How to elevate your integrated tech stack
- Best practices from customer properties across APAC
- The science behind attribute selling and its curation
The panelists were:
- Jeong Pyon, Director of Hospitality Solutions, APAC, Duetto
- Bradley Haines, Market Vice President of Asia Pacific, SiteMinder
- Anthony Stevens, Regional Director Operations, APAC, Shiji
This blog is a recap of the webinar. To watch the entire discussion on demand, visit https://go.duettocloud.com/webinar-how-to-practically-apply-total-profitability-to-your-property-revenue-strategy
What is Total Profitability?
Anthony Stevens kicked off proceedings by asking the panel ‘What is Total Profitability?’ Bradley Haines answered that, fundamentally, Total Profitability is about looking at all possible revenue streams across the hotel.
“Quite often we hear the term TrevPAR being thrown around, but in terms of looking at the opportunities on where that profitability comes from, the true value comes from understanding the guests themselves, and understanding where you're getting those guests from. But also, understanding how much they cost to acquire through the different avenues, and channels that you can utilize,” he said.
“It's being able to utilize the tool sets that are available, the technology that's available and to understand the revenue streams that drive into your property and how you can maximize on those,” Haines added.
What Contributes to Total Profitability in the Hotel Industry?
Referring to some of the main elements of Total Profitability within the hotel industry, Jeong Pyon said: “When you look at the profitability of each revenue stream, you're looking at rooms on average for 70%, and 30% profit for F&B. And then perhaps an even smaller profit margin for other revenue streams and so I believe that rooms will continue to be the main focus for properties around the world. But, I still think that the ancillary revenue streams matter in the sense that they represent the experiences that are provided by the property.”
Giving an example, Pyon added: “I used to work at a property which had a spa, and when the property's occupancy was low, the spa performance was low. There was a strong correlation between the two so we tried to market the spa more. By doing so we drove room occupancy and revenue as well. By having them as separate revenue streams and monitoring the performance via the transaction code, even from the revenue management side, I could see what was going on in the property with data and numbers. I was able to curate the services that I was providing to the guests and it ended up helping the room performance. That's how we should focus on doing total revenue management,” Pyon continued.
Moving on to how customer satisfaction impacts maximizing Total Profitability, Pyon added: “Customer satisfaction is pretty much why we're all in the hotel industry! No one comes into it saying, ‘Hey, I can't wait to work with data and understand what type of customers are going to hotels!’ We start working in hotels because we want to create unforgettable experiences for customers. And we can do that by being able to understand what the customers want and curating the experiences they want. You're not thinking about the revenue, you're thinking about the customer satisfaction. You're making them happy. You're giving them what they want when they come to your property, and that will result in a higher revenue.”
Identifying Revenue Opportunities to Enhance Profitability
Anthony Stevens discussed how hotels can identify revenue opportunities to enhance profitability. He said: “The main way to do this is to take all the data in, get it correct and cleansed, then analyze it and make decisions to identify revenue opportunities.”
He then added: “One thing that we're doing within Shiji is data analytics. When we get close to a certain ADR or a certain occupancy, alerts can go out to the team, and then from there I can start looking at and adjusting, what their strategies are for that day or going forward.”
The Link Between Data and Maximizing Revenue
The panel also discussed the importance of good customer data and how it can be utilized to promote a personalized experience and maximize revenue.
“Bad quality data is worse than having no data at all. Because when you have no data, you're in a state of uncertainty. But if you have bad quality data, you will end up making the wrong decision for your organization,” Pyon commented.
Haines added: “Creating a personalized experience has become more important post-pandemic. A lot of people are still feeling the pinch from COVID financially and so they want to make sure their next trip is a good one.
“Knowing more about your guests and having that data on hand allows you to be more effective at providing a better customer experience. And that in turn helps to drive back to increasing ADR and profitability.”
Missed the webinar? Don’t worry – you can catch the whole conversation On Demand. Visit https://go.duettocloud.com/webinar-how-to-practically-apply-total-profitability-to-your-property-revenue-strategy to access the recording.
Want to learn more about Total Profitability? Download our free ebook - How to Boost Your Hotel’s Total Profitability.