Karen Codilla, Corporate Director of Commercial Strategy, Prince Resorts, HSMAI Revenue Optimization Advisory Board Member
Personalization is not just about personalized pricing; it’s a revenue driver and powerful conversion tool for all commercial strategy disciplines that is capable of increasing revenues by up to 40%. I brought this topic to HSMAI’s Revenue Optimization Advisory Board for discussion. In this article, I outline our group’s key ideas for effective personalization.
1. Understand Your Guest’s Needs
To effectively personalize pricing and revenue optimization, it is crucial to have a deep understanding of guest preferences and needs. This requires collecting and analyzing data about guest behavior, preferences, and purchase patterns. By understanding what aspects of the product or ancillary offerings resonate with guests, hotels can tailor their pricing strategies and digital guest journey experiences accordingly.
2. Get Granular with Segmentation and Leverage Technology
Segmenting customers based on their preferences and behaviors allows hotels to offer targeted content and custom offer options that are most relevant to each segment. Technology plays a crucial role in personalization and revenue optimization. Hotels that leverage AI and data analysis to gain insights into guest preferences and behaviors will take the lead in enabling automated personalized offers. Direct bookings benefit the most from personalization, as this segment is most likely to have the guest data available for analysis and the customized communication and offers. The next step is how to partner with travel agencies and third-party partners to customize guest communication while being compliant with data privacy regulations.
3. Partner with all Commercial Strategy Disciplines
Collaboration between revenue optimization professionals, marketing, sales, distribution, and reservation contact center teams is essential to leverage personalization effectively. Personalization isn’t just personalized pricing, it’s a true personalized experience. This collaboration ensures that personalized pricing, targeted ads, customized guest journey and revenue optimization efforts are aligned with the overall commercial strategy of the hotel.
4. Take an Iterative Approach
Personalization and revenue optimization strategies should be continuously evaluated and refined. By analyzing guest data, monitoring the effectiveness of revenue optimization strategies, and collecting feedback, hotels can iterate and improve their personalization efforts over time. This approach allows hotels to adapt to changing guest preferences and market dynamics, ensuring that personalization efforts remain effective and relevant.
- Revenue management and the role of personalization | AWS for Industries (amazon.com)
- The Next Level of Personalization in Retail (bcg.com)
- Personalization in the Hotel Industry | HSMAI Global
Questions for your team:
- What are the best practices for personalized pricing with hotel rooms? Ancillary revenues?
- What recommended systems should be in place for ideal personalized pricing?
- Where should an independent or franchise brand hotel start with wanting to implement personalized pricing?
- How should revenue optimization professionals collaborate with marketing professionals to create a commercial strategy approach to personalized pricing? How can the areas divide and conquer?