Insights Type: White Papers

The Hospitality Sales and Marketing Association International (HSMAI) and Knowland present The New Sales Team, a white paper that discusses how the evolving tactics of hotel sales teams are in turn changing the dynamic between hotel management companies and owner groups. The new sales team is focused on direct selling, fulfills multiple functions across a tiered organization, and does not rely on inbound leads.

While the white paper focuses on sales teams, the information within it is applicable to hoteliers across the commercial functions, as the dynamics continue to change and disciplines increasingly overlap.

Through interviews with industry leaders, the white paper examines how sales teams are moving from an overreliance on inbound leads to a renewed commitment to hunting and data-driven selling, and how this affects the type of data that sales teams, management companies, and ownership groups need and how they use that data.

Access the full white paper here.

“Indeed, the pandemic has actually created an opportunity for hoteliers to shift revenue strategy and reconfigure their sales teams in a way that may not have been a priority during the previous levels of economic boom and oversupply of RFPs. Making these changes permanent and setting now smaller sales teams up for overall success requires more than an everyone-do-more-with-less ethos. Sales teams need to be equipped with strategies and data tools to pivot from a reactive to a proactive approach as demand returns.”

Even before the pandemic, hospitality revenue management systems (RMSs) were not perfect. Many revenue leaders have long felt RMSs weren’t keeping pace with platforms in other industries, to say nothing of the increasingly robust consumer technologies we enjoy.

COVID-19 has only made the problems worse. As revenue professionals have been forced to do more with less, the weaknesses in their RMS platforms have become untenable for many. As a result, many revenue leaders are reevaluating their RMSs and the entire tech stack, looking for better solutions to meet their rapidly evolving needs.

To start, the shifting realities of revenue management have created new priorities and new must-have features for any RMS. These are the priority features that revenue leaders from across the hospitality industry identified:

Affordability: Budgets are still tight, and that won’t be changing anytime soon. In fact, this is part of a trend that predated COVID and has only gotten more pronounced, which makes cost-effectiveness a top priority for any RMS.

“Leadership has looked for immediate opportunities for savings,” said Eric Gravelle, vice president of revenue management for Diamond Resorts International. “Is it slashing a program we’ve been using that looks like a luxury item? The number of people performing analysis? We’ve been hit hard with that.”

Resilient forecasting: Forecasts are broken. We heard that from our expert sources time and again. “The RMSs having most success use multiple forecasts,” said Timothy Wiersma, CRME, principal of Revenue Generation LLC. “They’re not placing their bets on just one forecast, but they’re playing multiple algorithms to come up with a forecast and then tracking the results for accuracy.”

Native multi-property functionality: More hotel companies are shifting to clustered and centralized models for their revenue teams and need an RMS platform that is purpose-built for that dynamic. “Most RMSs were designed for one-property directors of revenue management,” said Dax Cross, CEO of Revenue Analytics. “But there’s not many of those people left anymore. That was true before the pandemic and is doubly true now.”

GM orientation: Because general managers are the ultimate decision makers at the property level, your RMS also needs to feel accessible and useful to them. “You’re asking GMs at limited-service properties to do things like configure overbooking by room type,” said Jennifer Schneider, vice president of revenue optimization for the Americas for Radisson Hotel Group. “It’s complicated, and the training is complicated. Now more than ever, we need a better way because of GM turnover.”

Profit optimization: Another trend that the pandemic has intensified is the shifting focus from revenue optimization to profit optimization as it’s become even more important that every dollar counts. “All of our Revenue Optimization Advisory Board meetings recently have revolved around profit optimization,” said Nicole Young, CRME, senior corporate director of global revenue management for Rosewood Hotel Group and chair of HSMAI’s Revenue Optimization Advisory Board. “It’s absolutely critical.”

Flexible reporting: In a turbulent, ever-changing environment, your RMS has to deliver centralized, accessible, easily digestible information to revenue and nonrevenue professionals alike. “With revenue managers overseeing more hotels and the increased scrutiny over what they need to stay on top of,” said Sean Lynch, vice president of revenue management for Graduate Hotels, “it is not sustainable to log in to six to seven separate systems to get the data — future market, competitive pricing, pricing recs, group data, etc. — to piece together what you want to do. There needs to be a single place for this data to reside.”

User experience: The consensus among the experts we talked to is that RMS platforms aren’t easy to use at a time when they really need to be. Things take too many clicks, implementation is too painful, and training is too hard. “We work in a hotel, right?” said Terence Sham, head of revenue management for Ace Hotels. “It shouldn’t be that complicated. If it’s that complicated, then it’s not that intuitive.”

Adapted from The New RMS: A Buying Guide, a white paper from HSMAI and Revenue Analytics.

By Kathleen A. Cullen, Senior Vice President, PHG Consulting

Conducting rigorous benchmarking, preparing accurate projections, and developing a responsive new business mix — the pillars of sound revenue optimization and the foundation of a strong post-COVID business strategy — all are dependent on technology systems that are being used to their full potential. It’s in your hotel’s best interest to ensure that all system versions are up-to-date, that system integrations are implemented and working properly, and that each system is configured with the ideal optimization, understanding its impact on each of the related systems.

While hotel technology is still fragmented in that there are many systems for differing needs, it is important to understand that the configuration and use of each one affects the output and success of the others, and therefore the hotel’s optimization and profitability. For example, how your central reservation system (CRS) and property management system (PMS) are uniquely set up directly affects your revenue optimization processes — both manual and automated.

Here are some questions to consider as it relates to your revenue-related technology assessment:

• Does the hotel have sufficient interfaces allowing technology to help in cost efficiencies?
• Are these interfaces set up optimally? Or are there regular errors or translation challenges causing the team to constantly research and correct or find counterproductive workarounds?
• If you have a revenue management system (RMS), have you reviewed the configuration and decision outputs since the COVID-19 outbreak, including:
• Review the business rules that the RMS is currently using for decision output. The initial “rules” configured likely will be completely different based on the new landscape. Examples include but are not limited to lowest acceptable rates or “hurdle rates,” group ceilings, rooms-to-meeting-space ratios, and cost information.
• Booking activity has completely changed since you originally set up your RMS. It’s wise to review the decision output to ensure the system is properly calibrating to these new conditions.
• Does the hotel have an automated commission processor to ensure agencies get paid in a timely manner, and therefore have confidence in sending business to the hotel again?

Excerpted from New Rules to Be Market Ready, by Kathleen A. Cullen, a new white paper available from HSMAI and PHG Consulting. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Recovery Resources page.