Curating Today’s Hotel Sales, Marketing, and Revenue Trends

As the first 2018 HSMAI Curate event approaches in April, insights from the more than 50 senior hospitality executives who met for the beta test of Curate last fall summarize the findings of an industry sentiment survey conducted by HSMAI that will serve as groundwork for this year’s first Curate.  The survey was designed to identify the emerging trends and key strategic issues impacting hospitality companies and the implications for their associates and themselves.

   

The survey identified a variety of issues and challenges though the different lens of sales, marketing and revenue management executives – and how each discipline saw the issues of the other disciplines.  The cross pollination of the various views were analyzed by HSMAI’s leadership to  further discussion the evolution and integration of the three disciplines that represent HSMAI’s core mission.

Strategic Industry Challenges

Three dominant industry challenges were identified – and they were different based upon the executive role of the survey respondents:

Executives surveyed	Dominant Strategic Industry Challenge Identified
Marketing	Cost of guest acquisition
Revenue Management	Disruption by outside forces which are the fastest growing forces impacting host cost structures, guest relationships and diminishing value for owners
Sales	Changing dynamics caused by disruptors which create rising distribution costs and impact profitability

Challenges of the disciplines as viewed by the discipline AND the other disciplines

The findings of each discipline about themselves and the other disciplines confirmed congruency in how the disciplines understand each other and are working in an integrated fashion to innovate and identify unique strategies to combat the challenge identified.  It also identified the gaps in alignment that generally exist between the disciplines as they sometime compete for internal resources to tackle the same issue.

Challenge identified through the lens of each executive	Marketing challenges	Revenue Management challenges	Sales challenges
Marketing executives lens	Cost of guest acquisition and connecting to and understanding the customer	Controlling and leveraging data to advance strategic decisions while avoiding analysis paralysis	Need increased proficiency to utilize digital and technology resources to connect to and relate to influencers and decision makers; deploy resources to reflect the changing buyer journey
Revenue Management executives lens	Proving the value of marketing and return on investment and identifying where to spend resources vs. what is costs to secure customers	Inadequacy of systems to process date and enable total profit optimization	Need to advance thinking on staffing models and processes. Lead generation, incentive programs, total hotel revenue optimization and establishing connections with customers
Sales executives lens	Measuring spend success and allocating resources to reach customers with a differentiation strategy	Securing integrated revenue management systems and strategy	Constant change in prospecting, procurement and Request for Proposal processes inhibit ability to connect with customer.

One additional theme that surfaced in the results of each of the executive audiences was the issue of talent.  The survey surfaced issues related to recruiting entry level and managerial talent for all of the disciplines, cultivating innovation and retaining talent in an industry with many legacy systems and cultures.

The Curate delegates selected three issues to review in depth and for each issues brainstorming what specifically is keeping the industry up at night about this issue, what would make it better for you or your company who else is doing a good job of managing this issue and why and what specifically could HSMAI do about it.

Strategic Issue	Summary of the primary reasons this issue is giving the industry heartburn
Customer Acquisition Costs	Accessing, compiling and measuring the data is difficult. Separating acquisition costs from retention costs has not been defined Acquisition costs for direct sales (group, wholesale, business travel) are different from intermediated sales. The results must be applied to your marketing strategy, sales deployment, and revenue management decisions based on net contribution. There is a lack of clarity and common measurement tools to accurately understand true customer acquisition costs. What should be, and should not be included? There is a lack of knowledge of how to effectively measure attribution, and it has not evolved over time – and how to ensure attribution costs across all channels adds up to 100% (not more). The best approach developed to-date to measure cost of acquisition by channel for the industry may not be the best way to measure acquisition costs for an entity within the industry. Also, the cost of booking may be considered much different than the cost of acquisition. Many times acquisition costs paid for existing customers, and not incremental business; there is a strong desire to use acquisition dollars primarily to identify new customers is further complicated by the industry’s fragmentation with low barriers for new distribution entrants. There is a lack of hotel level engagement (e.g., enrolling in loyalty programs) which could lower acquisition costs. How can technology be used to enable lowering of overall costs.
Damning the Sea of Sameness	Contrast of hotels (as commodity) vs. alternative accommodations (authentic, unique, etc.) further exacerbates perceptions of hotel commoditization. Brand proliferation leads to brand irrelevance. Hotel brands and the experiences have little differentiation in the eyes of the customer. The hospitality industry focuses too much on transactional versus experience. The industry is battling for the same lifetime customer against OTAs. Small gestures and customization creates a big impact and loyal customer.
Measuring Return on Investment	Data disparity due to systems integration challenges can limit analysis, insight, and attribution. Lack of alignment on strategy across groups. Lack of understanding at owner/operator of strategy and success metrics. Inconsistent measures and lack of benchmarks for performance. Attribution is hard; last touch vs long term; easy to tie to short term revenue vs. long term success. Attribution strategy & measurement (quantitative & qualitative) at every step of the customer journey. How to justify & measure value with same rigor & focus on the intangible stages of funnel with fewer quantitative metrics vs. inherently quantitative. Lack of alignment on organizational goals/strategy/accountability across all disciplines – including fundamental definition of what ROI is by sales, marketing, and revenue management and by the c-suite, owners and operators. Lack of consistent definition on what the ‘right’ things to measure; 101 Fundamentals, benchmarks, methodologies need to be standardized. Lack of talent, skill set, capability, structure needed to execute effectively. Lack of investment, time, tools, technologies or focus on data-driven decision making necessary.

The recommendations about what HSMAI could do to address this issue or better educate the industry about it are under review by the HSMAI Board and their Advisory Boards for the disciplines of sales, marketing and revenue management.

In 2018 the HSMAI Americas Region will host two Curate events, April 18-19 and September 5-6, with senior industry leadership representing the disciplines of sales, marketing and revenue management.  This events are specifically designed to identify issues and trends that are the most critical issues for hospitality companies.  Attendance at Curate is limited to delegates from companies who are Organizational Members of HSMAI. For more information, visit www.hsmai.org/curate2018.