We are currently in a digital age. The proliferation of new technologies and the uptake of them by
guests is changing the booking landscape so quickly that even technological adept hospitality managers
can find it difficult to keep up. The biggest change in recent years has been the rise and heightening
reliance on mobile devices such as smartphones and tablets, as well as the social media apps offered
on these devices, which are available at any time in any location. The transformation in the use of
technology is also turning traditional sales, marketing and revenue management on its head and
demanding a more holistic approach to how hotels run their business and interact with consumers.
New and Evolving Trends in How Travelers Book Hotels
Remember the days when the only option for your hotel guests was to either ring your property
directly or be booked into your hotel via a travel agent? Offering this style of booking travel is still vital
in meeting the needs of all travellers across all generations, some of whom still like to be able to
contact hotels by phone to ask questions or meet face-to-face with a travel agent to book their travel.
However, a large segment of the travel population sees this as an old-fashioned way of the past, with
these tech-savvy travellers ditching tradition, and its middleman travel agent, in favour of taking
charge of things themselves. They have fully embraced the ease of using their mobile device and
online apps to research third party unadulterated actual guest reviews, compare hotel rates across
multiple channels and book their own travels wherever and whenever it suits them.
The gusto in which many travellers are getting behind the new trend of booking their own adventures
online is reflected in statistics that show 148.3 million travel bookings, 57% of all travel reservations
are made on the Internet. And the most telling numbers of all for hotel operators is the fact that 65%
of same-day hotel reservations are made from a smartphone, 81% of travellers find user reviews
important and 49% of travellers won't book a hotel without reviews .
Hotels Need to Play Catch Up, Fast
The numbers clearly show that the new patterns in which people are researching and booking hotels
isn't creeping into traveller populations slowly. They are already well embedded and hotel operators
are currently behind the eight ball. They need to play catch up with their consumers, who are now
more than ever before driving the hotel booking environment.
As booking patterns continue to evolve, it is mandatory that hotel operators move towards an overall
convergence of disciplines that defies traditional sales, marketing and revenue management structures
and challenges traditional thinking. Today's hoteliers must take a holistic approach to generating
demand, digital distribution and revenue optimization in order to not just survive, but to thrive.
Most hotels have made attempts to integrate revenue management and marketing teams but only to
the point where they meet regularly. However, this barely touches on what is needed in response to
the new environment. Hotels need to put in place processes that maintain the unique purpose of these
teams, while also ensuring they are working as one toward the same overall business plan.
A hotel marketing team is charged with the task of connecting directly with consumers to generate
demand, whereas the revenue management team controls demand through profitable pricing
strategies. By joining forces, these two teams can complement each other. For instance revenue
management will be able to pinpoint areas of priority for demand generation, while marketing is well
placed to know which customers they need to communicate with to fill the void. By examining each
team's strengths and how they can be synchronised to help each other, hotels can more proactively
and accurately target the right types of hotel guests and boost their profits.
Hotels that have already integrated the work of their marketing and revenue management departments
have benefited from revenue increases of more than 6%, increased market share and increased
demand for shoulder and low-demand periods.
One Hotel, One Centralized View
A vital component of combining marketing and revenue management is to bridge the arms of a hotel's
operations and systems to offer a more integrated, relevant approach to information. Rather than
trading information in hard copy documents at weekly or monthly meetings, it is important that both
marketers and revenue managers can access any information that might prove helpful, at any point in
time.
Real-time, online collaboration ensures all marketing and revenue management decisions around
attracting the right guest at the right price, are in synch with the data and analytics across both teams.
Essentially this allows a breaking down of barriers between the two teams so that communication and
joint work is made with ease and supportive of the overall business plan.
Overhauling Workplace Culture
Many hotels are aware of the benefit of marketing and revenue management working hand-in-hand,
but the bigger challenge is overcoming the traditional mindset of marketing and revenue managers
viewing themselves as distinct from each other. Hotel management questions how they can change this
so that working together moves beyond an idea to a tangible and profitable business strategy. As such,
this can prove even more pressing a priority than technology or process changes in achieving an
eventual financial return from convergence.
Convergence in Practice
A perfect example of how marketing and revenue management teams can pair up for the mutual
benefit of both teams and the hotel as a whole in the new era of booking habits is through social media.
Many hotels merely see social media as simply a platform where guests now complain about their
services or property, and they in turn respond by attempting to rectify what caused the negative
review.
But the impact of social media sentiment on a hotel's approach to attracting guests has so much more
to offer. Recent research has shown that reviews and price are the most important influencers of
choice, and that lower price or higher ratings do not overcome the impact of negative reviews. Other
research has shown that if a hotel can increase their aggregate user ratings by one point (e.g. 3.3 to
4.3), they could increase their price by 11.2 percent before impacting occupancy. This is a huge area of
potential for hotel marketing and revenue management teams to jointly explore. For instance, if the
marketing team is responsible for keeping abreast of and analysing what social media sentiment exists
for the hotel, revenue management can use this analysis to understand how it is affecting demand and
how pricing might be adjusted in response to this. Similarly, there is also potential for revenue
management to go beyond relying on only studying competitor hotel rates when shaping their own.
They might work with the marketing team to monitor the social media standing of their competitors
compared to their own so that can also inform pricing.
And then there is the question of how marketing teams can interact with potential guests through social
media. As previously mentioned, revenue management teams are best placed to identify gaps in
demand. In the new booking landscape, they could team up with marketing to investigate which online
forums their guests commonly use – such as Facebook, Twitter, email or TripAdvisor – so that when
gaps in demand arise, revenue management can alert marketing to quickly target those channels with
personalised marketing messages.
These social media platforms also offer huge opportunities for marketing to gather and store a whole
host of information about guest use of social networks, personal preferences and booking habits that
helps revenue management take a lot of the guess work out of pricing. It provide a wealth of
information for them to take more control of whether to alter pricing for particular channels, guests,
times of year and much more. It also informs marketing on the best marketing message to feed their
potential guests via social media. Do they interact more with calls to action around last minute booking
discounts on Facebook, Twitter or through direct mail. Like or follow a hotel on Facebook or Twitter to
go in the running for a prize? Check in, upload photos or post positive reviews of a hotel on Facebook
or TripAdvisor to win an upgrade or extra services while staying at the hotel? The opportunities are
endless.
These are just a few of the options and there is much more room for marketers and revenue managers
to take working together to a new level to better meet their mutual goal of raising hotel profits. While
removing the boundaries between these previously separate business areas may not happen
overnight, by putting in place a long-term commitment to combining efforts, the teams and hotel will
see significant improvements in being able to attract the right guest at the right price.
IDeaS, a SAS company, is the world's leading revenue management software and services provider. Combining industry knowledge with innovative data analytics technology, IDeaS creates sophisticated yet simple ways to empower revenue leaders with precise, automated recommendations they can trust. With 35 years of expertise serving hospitality, including hotel, event, and parking clients, IDeaS delivers revenue science to more than 30,000 properties in 164 countries around the world. Results delivered. Revenue transformed. Discover greater profitability at IDeaS.com.
