Insights Type: Presentations

Forecasting Still Makes Sense

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing International (HSMAI)

Last June, hospitality revenue professionals from around the globe tuned in to HSMAI’s ROC@Home, a day full of presentations focusing on revenue in the age of COVID. Heidi Gempel, managing partner and founder of HGE International, presented on “Forecasting Rooms in the Age of the Crystal Ball,” sharing her thoughts on how to forecast even though past analytics aren’t relevant and everything is unprecedented.

After nearly a year of lockdowns and restrictions, Gempel’s advice is more relevant than ever. Here are key takeaways from her presentation:

SHOULD WE FORECAST?

It sometimes can be difficult to keep up with ever-changing trends and try to forecast when there isn’t a lot of data. Is it even worth it to try?

“My answer is a resounding yes,” Gempel said. “We need to forecast because we need visibility. Although you may be staring at a very foggy landscape right now, keep going and don’t give up. Your business needs this. The organization can adapt to the changing trends that you as a revenue manager can share with them. We need to be able to respond when business comes back. It is a business necessity.”

PAST AND PRESENT

Even though historical data may not be the most important thing to factor in, it still provides an important baseline, Gempel said. “Historical data is useless to predict the future,” she said. “But it’s still important to understand how your business operated. You can use it as a baseline and measure against it.”

Gempel recommended looking at past data to tell how much money was spent trying to attract new guests compared to trying to bring back past guests. “On a property level, we don’t spend a lot of time understanding why guests come back,” Gempel said. “You can look at data to reach out to guests that may have a reason to come back, and it may be less costly than trying to find new guests to come for the first time.”

When it comes to more-current data, Gempel suggested looking at the correlation between when restrictions were lifted and travel demand for a specific location.

PROPERLY PLANNING

If you only build one forecast, it is likely to be incorrect no matter what you do, Gempel said. To combat this, she suggested looking at multiple models with various assumptions.

“My recommendation is to build multiple models,” Gempel said. “Come up with a model that has multiple assumptions and break it down and make sure to record it. It is critically important to record what you base decisions on. Then monitor what legislation is changing and restrictions that are being lifted to determine the implications.”

Recovery Connections: Winning With Multi-Property Revenue Management

During a Recovery Connections session on Nov. 11 — part of HSMAI’s Road to Recovery 2020 program — IHG’s Sharon Paine, Aimbridge Hospitality’s Angela Englett, and Hilton’s Ivan Calil joined Red House Strategy’s David Warman to discuss how to implement revenue management for multiple properties, how to manage time, and much more.

TAKEAWAYS

Multi-property revenue management can work for all hotels. “From my experience, this works well for everyone,” said Paine, IHG’s vice president of revenue management. “Hotels get access to the best revenue managers and the cost is much lower than it would be if they have to have someone full-time. They only have to pay for what they use. And for the revenue managers, it’s a great experience. It is a great learning environment where they get to deal with a lot of different types of hotels to hone their skills. Then they can move to more complex hotels as they grow their skills. I haven’t found a hotel that it doesn’t work well for.”

But some hotels are more challenging than others: “Our most challenging are the larger hotels,” said Calil, senior director of Hilton’s revenue management consolidated center for the Americas. “One hotel in New York that we support has more than 2,000 rooms. There are multiple layers there. We’re not doing everything from Dallas, but we support and have a place in the equation. A hotel that size needs more than one person. We figured out a way to make that work. The common thread between all our hotels is that there’s a high degree of trust. The communication element of not being on property is immensely important. We try to get to the hotels quarterly and build the relationship. You have to have that relationship, and it’s hard to do that if you’re never there.”

Time management is key to managing multiple properties: “I don’t think the revenue mangers always understand the importance of this,” said Englett, Aimbridge’s corporate director of revenue management. “Our team manages multiple brands in multiple cities and people are usually only experts in one or two. The ability to know you need input from your hotel team or peers’ brand knowledge is critical. One of the biggest time wasters, especially for a remote person, is trying to find all the answers on your own. You should seek out answers as you start, on your own, but only for a reasonable amount of time. It’s not a good use of your time to spend two hours looking for an answer when you could quickly ask someone with more knowledge on the topic and allow time in your day to work on other strategies.”

Recovery Connections is a weekly program with sales, marketing, and revenue optimization tracks that mix best-practices presentations with interactive small-group discussions. Sign up to watch a recording of this session, access an on-demand library — and register for the next session, “Maximizing and Measuring Your Marketing Efforts,” at 2 p.m. EST on Nov. 18.

Recovery Connections: Inspiring Guest Confidence

During a Recovery Connections session on Oct. 21 — part of HSMAI’s Road to Recovery 2020 program — Explore St. Louis’ Brian Hall, Hyatt’s Liz Schultz, and Aqua-Aston Hospitality’s Theresa van Greunen joined Sassatto LLC’s Dan Wacksman CHDM, CRME, to discuss “Inspiring Guest Confidence: The New Value Proposition.”

TAKEAWAYS

It’s important to balance self-promotion with safety: “We’re finding that the use of video content online of people having a good time outdoors is providing some substantial levels of engagement from a digital standpoint,” said Hall, Explore St. Louis’ chief marketing officer. “We think that combination of sight, sound, and motion and seeing people traveling and connecting and having an experience is moving the needle. It’s just an altered version of what we think of as normal. We feature people on location wearing masks, and it seems to be a good balance between the pragmatism of wearing a face covering and families having a good time and living their lives. We feature masks in all of our marketing. We’re not bashful, because we want folks to have the expectation that when they come here, they need to mask up.”

Creating value doesn’t mean cutting price: “What we have found interesting, because the leisure segment is traveling, is that there is a need for value,” said Schultz, Hyatt’s vice president of guest experience, strategy, and innovation. “The people willing to get on the road already have a higher confidence level than most, and there is a pent-up demand. They want things to be made easy for them — people are tired of doing things themselves like preparing food. This audience is ready to embrace an upcharge if you’re providing that level of convenience. The message is that if people have the confidence to travel and want to escape, they’re willing to pay extra to have the luxuries of not having to cook, clean, and park their own cars.”

Hotels have a major advantage over Airbnb properties: “We agree with the sentiment that travelers are going to seek less crowded experiences and may feel more comfortable in a residential environment where they can cook their own food and have a more spacious accommodation to spend time” said van Greunen, Aqua-Aston’s associate vice president of corporate communications. “We are a professionally managed organization. We have stringent protocol following CDC guidelines. We use medical-grade disinfectant and follow a 30-point checklist. It’s difficult to compare that to a self-managed Airbnb run by a regular person who isn’t in the loop with best practices. We’re even sealing doors, so guests have a sense of confidence that they’re the only ones entering their room once it has been disinfected. We’re providing more peace of mind for both guests and for our associates, so they’re not being exposed unnecessarily.”

Recovery Connections is a weekly program with sales, marketing, and revenue optimization tracks that mix best-practices presentations with interactive small-group discussions. Sign up to watch this session, access an on-demand library — and register for the next session, “The Metrics That Matter,” at 2 p.m. EST on Nov. 4.

‘Recovery Is Going to Take Time’: Leading Economist on 2021 and Beyond

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

As part of HSMAI Road to Recovery 2020, leading economic Bernard Baumohl discussed “The Changing Economic & Business Landscape” during a webinar on Sept. 29, offering his predictions for the hospitality industry and the U.S. economy overall for 2021. “We are in the middle of a Category 5 economic hurricane,” said Baumohl, chief global economist at the Economic Outlook Group LLC. “We have to brace ourselves for what’s likely to be very bumpy ride.”

Baumohl explained that there are four main factors that will affect the economy over the next year or more: the path of coronavirus, Congress’s next stimulus package, the outcome of the presidential election, and what happens after the virus is an active threat. Then Baumohl laid out what he believes to be the most likely scenarios — Joe Biden winning the presidency, a vaccine becoming widely available in early 2021, and Congress passing a strong stimulus package in early 2021.

“We have to be patient, because recovery is going to take time,” Baumohl said. “I cannot tell you when, because it depends to some extent on all of these factors.”

THE PATH OF CORONAVIRUS

As scientists continue to work to develop an effective vaccine against COVID-19, there are three possible scenarios, according to Baumohl:

Scenario 1: The vaccine becomes widely available during the first half of 2021. We will see higher rates of infection between now and then. After the vaccine comes out, deaths go down, but with no pandemic stimulus package (or with a weak package), Baumohl estimated the probability of a recession at around 50 percent. This is the scenario that Baumohl said is most likely to occur.

Scenario 2: The public won’t have access to the vaccine until late 2021. This means that infection rates remain high through 2021, business failures accelerate, and more workers are unemployed. If no stimulus package is released, Baumohl put the recession probability at 90 percent.

Scenario 3: COVID-19 may never go away — with or without a vaccine. “I don’t mean to unnerve anyone, but we have to keep this in the back of our mind,” Baumohl said.

CONGRESSIONAL STIMULUS PACKAGE

“We are in a race against time,” Baumohl said. “We need this financial bridge, a lifeline to keep businesses afloat and make sure households are full. We need to make sure that stimulus package is available until we get a vaccine.”

Baumohl predicted that a stimulus won’t be passed this year, leading to a further 5-percent decline in the economy. Right now, Baumohl said, Congress is more concerned with holding Supreme Court hearings than addressing another stimulus package, which means that a package likely won’t be passed until after the election — and possibly not until the next president takes office. “It is crucial for a financial vaccine for the economy for the duration until we get a coronavirus vaccine,” Baumohl said. “What is the most critical is funding for state and local governments, because their budgets have been decimated. Forty-nine are operating under a balanced-budget requirement, so if they don’t get more money, they have to cut jobs.”

Other critical parts of a stimulus package, according to Baumohl, include extending the $600 pandemic unemployment assistance through January and expanding the Paycheck Protection Program to keep people employed. Baumohl praised the Federal Reserve for the steps it has taken during this time, including dropping short-term rates and opening lending facilities to make sure there is ample credit and liquidity. “There’s not much more they can do,” he said. “Any more support has to come from Congress.”

The hospitality industry in particular is in dire need of support. Baumohl noted that the latest proposal in the House of Representatives includes funding for the restaurant industry but nothing for the lodging industry. Because airlines, hotels, and other travel and service-related companies are still making large layoffs, this means that none of the companies see recovery coming anytime soon.

THE PRESIDENCY

Baumohl examined two scenarios: if Donald Trump is reelected and if Joe Biden is elected, in each case assuming that both houses of Congress are controlled by the same party as the president. By examining data from nonpartisan websites FiveThirtyEight, The Cook Political Report, and RealClearPolitics, he concluded that Joe Biden will win the White House.

If Biden wins, Baumohl said, we are looking at 3.4 percent growth in 2021 and 4.3 percent growth in 2022, including a generous pandemic stimulus package. He also predicted more spending on climate protection, education, and health care, an increase in corporate and high-income taxes, less uncertainty over U.S trade policies, setting the stage for more business investment, and Jerome Powell’s reappointment as Federal Reserve chair, bringing stability to the market.

If Trump wins, he said, we are looking at 2.2 percent growth in 2021 and 2.6 percent in 2022. Baumohl predicted we will see more tax cuts and additional spending on infrastructure and border security, but because Trump has stated he wants to focus on debt reduction, social policies such as Social Security and Medicare will be cut because money will not be coming in from taxes. He also predicted that geopolitical tensions would increase and that Jerome Powell would not be reappointed as Fed chair, leading to more unstable markets.

POST-COVID WORLD

Whatever happens with the first three factors, companies and individuals will have to readjust to the new reality of life after the pandemic. Baumohl listed 10 factors that will have an impact:

1. Economic divide: Low-income households and minorities have suffered disproportionality from the disruption brought about by COVID-19, leading to a widened income-inequality gap, limiting the U.S. growth rate for years.

2. Deglobalization: Due to rising wages, geopolitics, and high shipping costs, China is no longer the world’s manufacturing hub, which could bring some production back to the United States.

3. Environmental awareness: We’re seeing more investments in sustainability and renewable-energy sources.

4. Telework: We will see more employees working remotely, which is cost-efficient for businesses.

5. Less travel: Corporate travel as we knew it is over. Baumohl predicted that 10 to 15 percent of business travel will never return.

6. Changes in human behavior: Cash is being used even less than it was before the pandemic, and people are migrating away from urban centers.

7. Public health: Public health becomes the highest national security priority, leading to less reliance on other countries for medicines and medical equipment.

8. Ecommerce: Online shopping dooms large retail malls.

9. Xenophobia: The fear of future foreign-born pathogens entering the United States will raise barriers on immigration and trade.

10. Debt: Politicians may pressure the Federal Reserve to monetize massive debt.

Baumohl also noted that on a global level, 93 percent of countries are in recession, and that number won’t bounce back until international travel returns to normal. Other hazards include people’s confidence in taking a vaccine, the budget deficit, the stock market potentially bursting, and trade wars.

Watch Bernard Baumohl’s full presentation on “The Changing Economic & Business Landscape.”

Recovery Connections: Sales Strengths vs. Sales Skills

During a Recovery Connections session on Oct. 14 — part of HSMAI’s Road to Recovery 2020 program — Prism Hotels’ Allison Handy and Hilton’s Eric Kreins joined Johnson & Wales University’s Katie Davin to discuss how to “Leverage STRENGTHS, Not Skills, to Drive Results From Your Team.”

TAKEAWAYS

Collective goals first: “You really can’t figure out how you’re going to deploy your team until you have a true understanding of what your goals are,” said Handy, Prism’s senior vice president of sales and marketing. “In the past, every single person on the team was able to write their own goals for what they were going to be responsible for, but when you have a shrunken team, it’s no longer about the individual goals — it’s about the collective goals. You have to start with determining the prioritization of what your goals are, from the most important and the most critical to the business on down.”

The power of strengths: “Skills are learned attributes that you gain through practice, repetition, and education,” said Kreins, managing director of strategic accounts for Hilton. “Strengths are attributes that you’re born with; they’re your innate personality traits. You can refine them, but they’re really part of your personality. The reason they’re important is, a lot of us now are living in a world with reduced resources, smaller teams — less of what we used to have — so we have to really be flexible and maximize what we have today. One of the best ways you can do that is to really leverage the strengths you have at your disposal.”

TOOLS AND TIPS

StrengthsFinder: “It’s an assessment that helps identify your top five strengths and force-ranks your overall set of strengths,” Kreins said. “What I’ve really liked about StrengthsFinder is, because these are innate skills, if you do the assessment, it doesn’t really change over time.”

DISC Profile: “Each letter — D-I-S-C — is a different category of personality, i.e., strength,” Handy said. “It’s a tool we use religiously for all our management-level hires. It tells you what to expect when you hire a person — how you should expect to manage them, how you can motivate them, what you can expect to get out of them.”

Recovery Connections is a weekly program with sales, marketing, and revenue optimization tracks that mix best-practices presentations with interactive small-group discussions. Sign up to watch this session, access an on-demand library — and register for the next session, “Hitting the Bullseye When Your Target Shrinks and Expands,” at 2 p.m. EDT on Oct. 21.

Revenue Strategies for Recovery

Tim Wiersma, founder and principal at Revenue Generation LLC and chair of HSMAI’s Revenue Optimization Advisory Board, led a breakout session on “Revenue Strategies for Recovery” as part of the HSMAI Washington, D.C. Chapter’s State of the Industry event on Sept. 24. Wiersma highlighted the following points:

CONSUMER SENTIMENT: Consumer uncertainty has increased since COVID-19 began. More than one-third of Americans do not believe that COVID will be over until the end of 2021 or later.
FOCUS ON THE RIGHT MARKETS: Drive traffic is a crucial segment of business. Consumers are willing to drive longer distances instead of traveling via airplane. They are particularly interested in visiting outdoor attractions such as national parks. It’s crucial to home in on the most qualified audience with relevant, sensitive messaging related to those consumers’ behavior.
CUSTOMER NEEDS: While pricing will always be important, customers are more focused on assurances of safety, flexibility, and experience when making buying decisions these days.
ELIMINATION OF SILOS: Departmental silos should not exist any longer. Revenue optimization provides strategic analysis and communicating opportunities to sales and marketing as the three areas align their strategies.
DATA: Data needs to guide all recovery plans. Analysts should utilize market data as well as researching what competitors are doing to promote themselves.

View the Presentation

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Recovery Resources page.

Generation Alpha and Family Travel Trends

The Lightning Round is a signature program at HSMAI’s Marketing Strategy Conference — giving six marketing executives just six minutes and 40 seconds each to share a best practice, strategic insight, or big idea. At the 2020 Marketing Strategy Conference on Jan. 22, Derek Price, director of business development in North America for Expedia Group Media Solutions, focused on how families travel in a Lightning Round presentation called “Generation Alpha and Family Travel Trends.”

KEY TAKEAWAY: Generation Alpha is made up of kids born after 2010 — and they’re already having an impact in the travel space. According to Price, they love to travel and are actively involved in planning trips with their parents. Most families need help planning their trips, and the biggest opportunity is using appealing imagery in digital marketing which attracts Gen Alpha as well as their parents. “Everyone wants to be entertained and everyone wants to have fun,” Price said. “They’re making their decision based on the destination activities available.”