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A great deal has been written over the years about the viability of moving a hotel’s property-management system (PMS) to the cloud to take advantage of the latest technologies, but hoteliers need to realize that it’s not the only viable option. All platforms have advantages, including self-hosted, private cloud and on-premise solutions that leverage the latest mobile, contact free and web-based technologies. Independent operators can still enhance the digital guest experience, support personalized and mobile check-in, deploy contact free technologies, and secure hotel/guest data even if their PMS does not reside in the cloud. It should not be a question of “Cloud or On Premise?” but rather “Does the PMS solve your business objectives in both technology and service?”

Much has been written in the mainstream hospitality press about the challenges COVID-19 has presented to the industry. Hotels are in more pain than at any time in our memories. Because of the extensive media coverage, I won’t dwell on this topic further in what is primarily a technology column. But it’s the background for this week’s column, and so merits acknowledgement.

Are You All In?
Posted: 07/27/2020

Imagine everyone in your organization engaged, aligned, and performing to their potential. Imagine everyone playing “All In.”

Great organizations have synergy. Their culture allows them to play to a rhythm at a different tempo than the average organization. How do you get that at your organization?

Many front-line hospitality workers rely on tips for a significant part of their paychecks. If not for tips, many hotel associates who serve as waitstaff, bartenders, housekeepers, bell staff, concierges and pool attendants would soon be looking for other jobs. This is a regional issue: in most of Asia and Europe, staff get higher base pay, and tips are either not expected at all, or are truly discretionary. But in the U.S., Canada, Britain and other countries, tips are an important reality, and one that’s not likely to change anytime soon.

As somebody who’s helped to grow a company from 13 people to nearly a thousand, I know very well the excitement that comes with having a mindset focused entirely on growth. Every newly acquired customer, every new office and every milestone means the gap between you and your nearest competitor is that much bigger and that much harder to overtake.

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Success in Today’s Revenue Management: 6 Areas to Invest in Success

by Rajesh Rajan

Revenue management continues to evolve at a very fast pace and compared to a few years ago we need different types of tools, skills and mindsets operating in this critical role.

As we prepare for the Revenue Optimization Conference this week we look at the opportunities to expand the revenue management position. An immense investment is required for a revenue practitioner to succeed and the learning never really stops. The revenue manager role is critical in a hotel and it is essential to its success. Apart from the individual, you need much more to achieve a successful revenue management setup.

Consider these six areas to achieve success in today's environment.

1. Data access, integration and analysis. Today data silos within revenue management are a big problem. The data is locked into multiple platforms which makes it harder to easily see a complete view of the business.

In many cases it is quite difficult to access as well. This data could be in your PMS or your booking engine. How ever you get to it, there is a need to be able to access it with ease. Ideally there should be integration between the tools you are using so it doesn’t create a scenario like this. When you are considering your tools for the trade always check on how deep is the integration with your existing set of tools.

Once you get access to this data it is all about analysis. The reporting of data typically gets most of the focus, but the analysis of it is where insights are revealed. As these insights direct you to the next action, spend most of your time here not struggling with access to it or reporting it, but analyzing it.

2. Understand the interconnectivity of various departments to revenue management. Revenue management is the intersection of multiple departments in a hotel. Sales and revenue typically end up working very closely with each other. However, marketing and operations play a critical role in generating business and executing on strategies. It is important to understand the nitty gritty details of how these departments work with each other. For example, direct booking is considered one of the cheapest channels, however, there is a significant cost involved in getting people to buy from a hotel website. Consider the amount being spent on pay-per-click ads or efforts on improving search rankings.
If the marketing team can figure out how to reduce the cost of customer acquisition it ends up improving your overall profitability.

3. Customer Experience. When thinking about revenue strategy it is important to think from end-to-end experience point of view.

How a guest experiences the offer that is being put in front of them? How will they access it? What happens when the click on it?

These questions initially may not seem important but customer experience is increasingly one of those things that can make or break an offer or strategy. Consider this: You are promoting a really good offer for your need dates and you have the same offer available on Expedia to book. Someone looking to travel to your location has an Expedia app on her phone. She does a search and looks at the available offer. Separately she looks at the hotel website, makes it to the booking engine, which is mobile optimized but she has to enter the information on the phone screen. However, the Expedia app has all her information and she just needs to tap through to select and book the hotel. Which channel will she end up choosing?

This is not to point a finger at OTAs. It is about delivering a better customer experience. And, frictionless booking is an experience worth investing in.

4. Revenue Management System Architecture. When thinking about RM sometimes the tools required are not considered as part of the equation to have a competitive edge. Increasingly your technology setup determines your competitive edge. The system architecture comprises of revenue management software, channel manager, booking engine and property management system. We can also consider a business intelligence tool, but some revenue management systems are able to provide detailed enough insights to substitute for it.

I have not included Excel in the list as that is the default of doing revenue management in most hotels. There are some statistics that say only 10 percent of the hotels in the industry use revenue management software to manage rates. We all know certain things Excel can do really well but when you have outgrown it, you need to consider a system that assists in managing rates. However, a revenue management system is just one of the software needed to build an architecture.

Some hotels still today do not utilize channel managers or booking engines that can feed rates to their OTA partners. Ideally, you want a setup where if a rate is changed in your RMS or PMS it syncs everywhere.

When you are setting up these systems there are critical considerations you should make around how well these systems integrate with each other. Does the data flow through and is it easily accessible for you to analyze? Remember silos are the enemy.

5. Digital Marketing. This is one area where an independent RM practitioner gets exposed to more than a brand RM practitioner if we compare at the hotel level. However, it remains important that both individuals understand how it works. If you receive 20 percent to 25 percent of bookings from your website and you don’t understand digital marketing then it means you don’t know how that percentage of business comes in the door. If this was a group market segment or another then it would be considered a big issue.

However, it is not recognized as such in most hotels.

Understanding how digital marketing works allows you to have better revenue management strategies. When both these practices are in sync then your marketing efforts act like an amplification tool for what you are trying to achieve. And, then you get a deeper understanding of what works or doesn’t. As customer acquisition costs increase it is important to focus on how we get guests to stay with us.

6. Decision Making. As a revenue management practitioner the one thing you always have to do it create buy-in. As an integral part of the business and with so many stakeholder consensus building is a common occurrence. You have to align everyone to the same goal.

It also means, sometimes, you have to make unpopular decisions, that are backed by data, or recommending strategies that may seem counterintuitive. The best revenue management practitioners work with other departments, collaborate, and use data to help shape the conversations so everyone gets involved.

These are just some of things you need to consider to succeed in today's environment. But, as it is an ever-evolving discipline, this will change.

About The Author
Rajesh Rajan

Rajesh Rajan has over 10 years of experience in grown hotel revenues and is the co-founder of website personalization platform Offerly. He has been responsible for pricing, distribution and demand optimization for both branded and independent hotels and has provided insights on the intersection of new technology, trends and tools.

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