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Hotels always talk about how focused they are on guest satisfaction. But studies such as the ACSI Travel Report consistently show hotels coming in way below even banks and limited-service restaurants in guest satisfaction, and just barely above airlines and gas stations. And it’s getting worse: 2019 showed a 1.3% drop over 2018. Net promoter scores for most major hotel brands are lowest for millennials and Generation X, which does not bode well for the future. A 2016 study by Revenue Strategy Summit showed that poor service delivery accounted for 56% of negative trip reviews.

Could QR codes revolutionize the hospitality industry? While far from being mainstream in Australia, the use of QR codes is on the rise thanks to improved technology and innovations in consumer engagement.

From the company’s simple beginnings in a Beijing apartment to the global expansion and recent major technology acquisitions, over a short period of time Shiji Group has experienced fantastic growth to serve a fully worldwide customer base. Looking back over the previous decade, Kevin King, COO of Shiji Group, shares the company’s background and pathway moving forward mixed with a desire to push the boundaries of technology for the hospitality industry. Below are some key takeaways from Mr. King’s article:

Are you demanding enough of the spaces you own and have access to? How many times have you walked into empty hotel gyms, restaurants and meeting rooms, or oversized lobbies that seem to have no purpose in life?
 
How can you optimize these areas to their full revenue potential?
 
And, even when you are able to optimize a space operationally, how can you insure that you are able to acquire the customers you need to commercialize it effectively?

These questions all have answers. However, you need to be honest about how you can do this, and the effort that you can realistically place on direct versus indirect acquisition in your overall strategy.

Enterprise System Pitfalls: Summary
Today I’m wrapping up a series of posts on the broad topic of Enterprise System Pitfalls. In this series, my hope was to help shed light on the primary problems that cause us to miss budgets, fall short on capabilities, or completely fail when implementing an enterprise system. 



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Pitfalls of a Pricing-Only Approach for Hotels

08/04/2016
by Charles Wang
Not All Revenue is the Same

What happens when hotels use revenue management approaches that focus only on pricing and exclude other analytical aspects? 

Quite simply, it leaves them at an unfortunate disadvantage. Hotels that optimize both pricing and inventory (i.e., business mix, stay patterns, strategic overbooking) improve revenue performance over hotels optimizing pricing alone.

A pricing-only approach focuses attention on pricing single arrival dates. This leads to key factors being neglected, including length of stay, derived rates and other rates – such as contracted rates that need their availability managed to prevent overselling cheaper rates.

The best overall revenue optimization is achieved through finely balancing the management of all business – not just the priceable business. A dynamic pricing approach analytically assesses price sensitivity while accounting for season, day-of-week, days-to-arrival and length of stay. Additionally, this approach helps manage rate availability, overbooking and stay patterns to drive the most revenue overall.

An easy way to think about the differences between a dynamic pricing approach and a pricing-only approach is to look at the quality of your revenue. Pricing-only approaches will fill your hotel fast and easy. While it may seem great having those initial bookings, hotels relying solely on pricing-only strategies see the inevitable crash and burn, eventually losing higher paying customers and revenue. Dynamic pricing approaches, on the other hand, use both pricing and availability to fill hotels while providing long-term sustainability for healthy revenue performance and growth.

Not all revenue is the same. For healthy revenue performance, it is critical to use analytically-derived dynamic pricing strategies to fill your hotel with quality business that provides the greatest revenue performance.

About The Author
Charles Wang
Regional Head
IDeaS Advisory Services


Charles Wang is the regional head of IDeaS Advisory Services and leads team members in demonstrating the capability of improved revenue performance and building data-driven and process improvement revenue management cultures for clients within the Asia Pacific and Greater China region.

 
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