By Christopher Durso, Vice President of Content Development, Hospitality Sales & Marketing Association International (HSMAI)
When you’ve been honored with one of HSMAI’s Lifetime Achievement awards, it means that you’ve had a long, accomplished career in hospitality — and that you’ve seen a thing or two. Robert Cross, who received the Vanguard Award for Lifetime Achievement in Revenue Optimization, certainly fits the bill. And the chairman of Revenue Analytics and author of the classic Revenue Management: Hard-Core Tactics for Market Domination, had a lot to share when we recently talked to him about how hospitality revenue professionals should be responding to the coronavirus crisis — a conversation inspired by “Leadership in Changing Times,” which was to have been the theme of our Spring Curate 2020 event until COVID-19 forced its cancellation.
Cross’ main advice for hospitality revenue optimization professionals right now: This is your time.
Does this situation remind you of any previous crises that you’ve experienced in your career in hospitality?
No, I’ve got to say it’s the worst aspect of two that come to mind — 9/11, with the immediate grounding of the airplanes, and then the financial crisis of 2008–2009. You put those two together and then multiply them by pi, I think that’s probably what we’re looking at. It’s got that immediacy effect, plus it’s going to have a long tail. There’s just no doubt about it.
How is coronavirus impacting your business?
About half of our clients are travel and transportation. Half of them are cruise lines and hotels. So, it’s affected us, but nothing like it’s affected them. We’re trying to do what we can for them. We had some big batch reports that we ran weekly for them, so we’ve redone them so they can run daily, because they need daily news of what’s going on. We’ve done a lot of ad hoc reporting, because we have such big databases and because there are questions about, well, what’s happening here in this marketplace? For some of the forecasting models and things like that, we’re resetting parameters and making them more responsive.
So, we’re just trying our best to help out our customers who are absolutely in dire straits. As you know, they’re closing hotels, they’re laying off people, they’re parking cruise ships. It’s horrible, and we’re just trying to help.
What are some of the mistakes that you’re seeing hotel companies make in responding to coronavirus?
I’m not seeing any really big, broad mistakes. You hear anecdotally that some hotels are dropping their rates and there’s some panic pricing, but I haven’t seen that much.
What should hotel companies be doing right now?
The answer is, right now, don’t do anything stupid that’s going to hinder the recovery. Remember, we’re going to get through this, but you’ve got to do the triage. Unquestionably, there’s triage right now that you’re going to have to do, so do that. Take care of the wounded, but remember, we’re going to get through this.
What is the role of hospitality revenue management right now?
They have access to enormous amounts of data — more granular data than probably anybody in the hotel does — and so they can be doing a lot of answering the ad hoc questions: How many floors can we keep open? What kind of staff do we need? They can help answer those kinds of questions, because they have access to all of this real-time data.
If you’ve got any automated pricing, make sure that you’ve updated your price floor, so you’re not dropping the price too deeply. I’ve heard people say, “Oh, don’t drop the price, because people have to travel.” Well, they have to travel, but that doesn’t mean they’re completely price-insensitive. You still have to be aware of the price sensitivity of people who are traveling. It’s all about being smart, being true to your brand.
How far ahead should revenue professionals be looking as they are figuring out their response?
It’s so hard right now for people to look beyond tomorrow, but the truth is, if anybody can really have good visibility beyond two weeks, you’re smarter than I am.
Are there any lessons that we can apply from previous crises such as 9/11 and the 2008 financial crisis?
I’ve got an article coming out about this. This is our time. In revenue management, this is what we’re built for. We deal with uncertainty, right? That’s what we understand. That’s what we deal with day in and day out: uncertain situations. We’re forecasting demand in the future, whether it’s tomorrow or whether it’s a month out or whether it’s a year out. We’re trying to predict what’s happening, and then we’re making decisions based upon uncertain and vague and often conflicting data. And then we have to change our decisions, so we’re recognizing that every decision we make is just a transitory one. We’re making the best decision at the time based upon the data we have, and then we’ve got to make another decision.
That mentality is exactly what is needed right now. The ability to access all this granular, micro-market data is exactly what’s needed right now. This situation is made for people in revenue management.
For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.