Integrating Technology in a Post-COVID Marketplace

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.

Group Sales in a Post-COVID Marketplace

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

The group sales landscape likely will be very different in the near to medium term. The entire world has watched meetings and events scheduled for the first half of 2020 either cancel or postpone to later in the year, or even move to 2021. The challenge is knowing the best time to rebook. Hotels will need to be agile in pivoting to whatever the new normal looks like.

Approach conversations with your group clients in a transparent and partner-like way, displaying a sense of togetherness, compassion, and care and offering significant flexibility. The following is a list of key items that group representatives are expecting from hotels:

  • Cancellation and cutoff dates may need to be reevaluated for the remainder of 2020 to provide more flexibility in decision timelines.
  • Attrition clauses may no longer be accepted. Hotels will need to think about what is more important — group business at 50 percent of expected size or no group at all?
  • F&B minimums may have to be removed.
  • Room-to-space ratio requirements should be reexamined.
  • Program designs will have to allow for more space between attendees. There may be fewer attendees but the same space requirement to allow for social distancing. Rounds initially planned for eight people may go to five. Think in advance about how to handle groups that are “space heavy” and have an “off-rooms-to-space ratio” in their ask.

Alleviate client concerns in advance by communicating measures your hotel is putting into place before the question is even asked. These groups selected your hotel based on certain services and staffing levels, so it will be important to provide them information on what they can expect now:

  • First, reassure clients that your hotel is open and ready to welcome their groups.
  • It will also be important to address your staffing and planning for groups. Many hotels were forced to furlough much, if not all, of their staff. A natural concern will be who is available to prepare and support clients in advance of their programs. Communicate that staffing — and plan in advance, so clients have confidence.
  • Communicate service adjustments you are putting into place. How will you handle buffet or food stations? Will there be a pass-through cost for these changes?
  • Offer floor plans showing new room setups with social spacing options.
  • Should every table have not just pads and pens but also sanitizer?
  • What about the financial stability of your hotel? A legitimate concern of some clients could be the liability of deposits and the solvency of the hotel. Perhaps reassure them by offering to put deposits into an escrow account.
  • Does your air-conditioning system circulate recycled air or fresh air? If your hotel has been closed for a period of time, the HVAC system should be inspected to ensure that it is free of contaminants.
  • What virtual capabilities and internet strength can you offer for attendees who participate remotely?
  • Communicate the cleaning process, including sharing videos about it. Perhaps offer to put cleaning solutions in the rooms for guests who want the added comfort and ability to do it themselves.

Hotels that alleviate concerns in advance of any questions will provide significant comfort to group clients and have the best chance to secure the business. Give clients what they need. It won’t be about rate — it will be about trust, care, and communication.

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.

 

New Research on the Barriers and Pathways to Strategic Innovation

In preparing for HSMAI’s very first Curate event, held in April 2018, we surveyed sales, marketing, and revenue optimization professionals working at our Organizational Member companies about the main challenges facing the hospitality industry. They identified nine, including a lack of innovation — which Curate attendees then chose as one of three priority issues to focus on.

Since then, we’ve regularly focused on innovation as a topic, featuring speakers from inside and outside the industry at subsequent Curate events, interviewing the authors of relevant new books, and more. Our latest resource is a new HSMAI Special Report, Strategic Innovation in U.S. Hotel Companies, featuring original research conducted for us by Ecole hôtelière de Lausanne (EHL). As the industry pivots to recovery in the aftermath of the coronavirus pandemic, this Special Report offers valuable insights into the barriers and pathways to innovation, which will — or should — be a part of every hotel company’s strategy moving forward.

The report offers three key findings:

1. There is little strategic innovation: Innovation in hospitality sales, marketing, and revenue optimization (SMRO) is risk-averse, focused on the short term, and convoluted. It’s big on tactics but light on strategy.

2. Silo thinking impedes strategic innovation: Despite sharing common innovation challenges, there are few synergies across the SMRO disciplines.

3. The solution is personalization and data management: Predictive personalization by means of social media data emerges as the key innovation in data management strategy.

Read the full report to learn even more about strategic innovation as it is, isn’t, and might be practiced at U.S. hotel companies.

Planning for Hospitality Revenue Recovery

Let data guide your recovery plan. These questions should stay top of mind for you as your revenue strategy evolves:

Market demand: How has this changed today? What does this look like for each of the four stages of recovery? Forward-looking data, search volumes, and potential future demand peaks caused by the rescheduling of events and conferences are all good examples. Analyzing any and all data at your disposal will help you make more confident business decisions.

Feeder markets: Which markets are open now, and when are others indicating restrictions will be lifted? What segments and channels are still creating bookings? Take note of key dates for when the hotel and greater hospitality industry can operate.

Existing and new business: Are there any new potential customers to include in your scope? How many of your existing customers have rebooked? With demand down, now is the time to expand your reach and target as many potential bookings as possible.

Visibility: What are your competitors doing? Have they promoted discounts or launched new marketing messaging? Are there ways to break through the noise with your own distinct messaging?

By taking the pulse of the market and your current place in it, you can start to identify areas of improvement for your current revenue strategy to determine your most profitable business mix.

Excerpted from Planning for Hospitality Recovery – Revenue Management, a new playbook available from HSMAI and Amadeus. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Planning for Hospitality Marketing Recovery

How you interact with customers amid change and stressful situations can make or break your brand reputation. Studies indicate that consumers will remember how brands reacted during this time, creating trust that can lead to future bookings. To continue relationship building for each phase of recovery, you should:

  • Leverage your CRM and let your audience know any updated health and safety measures and that you are open for business. Maintain flexible cancellation policies as recovery continues, and include any specific offers (seasonal/holiday promotions, special events, etc.) to incite bookings.
  • Pay special attention to guests with upcoming bookings and communicate frequently with them. If possible, use surveys to understand any additional measures you can put in place to reassure them during their stay. Once they leave, send follow-up emails with offers rewarding their loyalty and links to surveys to assess their perception of your property from a health/sanitation and experience perspective.
  • Reach out to any guests or groups yet to rebook and think of ways that you could encourage them to repeat their business.

Excerpted from Planning for Hospitality Recovery – Marketing, a new resource guide available from HSMAI and Amadeus. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Planning for Hospitality Sales Recovery

During economic downturns, it’s more important than ever to keep your sales team motivated, engaged, and empowered as you navigate towards recovery. Reopening to your local markets and then to the broader market will put an emphasis on new skills and lines of communication. The following strategies will help you capture as much from the reopening process as possible:

Keep in touch. It’s critical to maintain regular communication with anyone that you may be hiring (or rehiring) soon. Even if they are not on-property yet, it’s essential to make your future colleagues feel valued and part of your business plan to move forward.

Invest in learning new skills. This recovery will demand new skills from your sales team. With such a sharp drop in demand and restrictions on physical meetings, the sales environment of the recovery will reward those who can prospect digitally. Provide training plans that will allow the team to develop the skills they need, such as digital relationship building, consultative selling, or software training. View this as an investment that will reward you as the market continues to build.

Formalize information sharing between sales and other teams. Sales teams need to be intimately familiar with new pricing strategies, technology investments, operational changes, and community developments. Formalize cross-functional communications between sales and the rest of the organization.

Position sales as intelligence collectors for the property. Sales teams are your eyes and ears into a changing world. Let your sales teams do what they are trained to do (building relationships, networking, and understanding customer needs), and elevate their insights to property decision makers.

Excerpted from Planning for Hospitality Recovery – Sales, a new resource guide available from HSMAI and Amadeus. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Marketing Content in the Post-COVID Marketplace

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

Hotel marketers are already thinking about creative new campaigns to help capture travelers once coronavirus-related restrictions are lifted. Some hoteliers have continued communicating with guests to keep them informed of the hotel’s status and provide relevant, fun programming, while others are waiting until they get closer to reopening.

Marketing campaigns will have to be timed appropriately to ensure alignment with a consensus that it’s safe to travel again. Yes, consumers will be looking for deals, but more importantly, they will want hotels that provide them with a sense of health and cleanliness. Now is the time for marketers to review content on all channels and all forms of communication to ensure that it is being presented from an entirely new perspective:

  • Should your hotel consider a new section on its website that addresses healthy and safe business practices? Legal counsel should be considered.
  • Review hotel imagery through an entirely new lens. Should hotels start including images representing cleanliness or the sanitation process? Also, displaying groups of people close together may not be ideal to lead with anymore.
  • Are your reservation sales agents — onsite and call center — armed and ready to speak to safety, cleanliness, and spacing concerns?
  • Communicate how your hotel is transforming its physical spaces to accommodate more room in public areas.
  • Consider written content on all channels. Ensure that content on channels such as website, GDS, and OTAs represents the right descriptions of any new safety practices, change of services, and amenities.
  • Have the check-in and checkout processes been revised to allow less human interaction or touchpoints? If so, make sure that this is being communicated in all areas.

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 Resources page.

COVID-19 & The Hotel Industry Worldwide

HSMAI Asia Pacific and RateGain special report focusing on the impact and the coping strategy for the hotels across the globe.

This study is a detailed representation of the answers to the key questions being asked by hoteliers:

  • How’s the epidemic impacting the hotel bookings in a particular country or a region?
  • Are the cancellations up?
  • What advise do the experts have to give to the hotels? And much more..


Access Report

The Future of Pricing

Since its inception in the late 90s and early 2000s, pricing and revenue management has become a key function in hospitality. In the early days of revenue management, revenue managers focused on inventory optimization, opening and closing pre-set rates according to demand to ensure the best possible utilization of the limited capacity of hotel rooms. Today, a dynamic distribution marketplace allows consumers review all the prices in the market, making pricing a critical focus for revenue management.

Evolutions in the digital space, and related technical and analytics advancements, continue to drive revenue management practices and systems forward. It is clear that the future of pricing in hospitality is data, automation, and analytics. The only question is how to best automate to align with your market and strategy. In this paper we explore the current state of revenue management and the approaches used by revenue management systems (RMS) to support hotel revenue management. We also explore new trends in revenue management systems and analytics that are shaping the future today. Finally, recognizing that revenue management technology is not a “one size fits all” product, we make recommendations regarding RMS approaches and trends that hoteliers should consider, based on their specific market and strategy.

Read the full report from HSMAI Europe by Kelly A. McGuire and Alex Dietz

 

Shifting From a Transactional Mindset

What do you do when you’ve spent the last 10 years taking inbound leads for granted — and you’re facing the possibility of an economic slowdown? Pivot to proactive selling. A new white paper from HSMAI and Knowland, Finding the ‘Right’ Group Business, explains how. Read an excerpt below:

This proactive strategy — centered on smart, data-driven outreach — should be the new normal. For many hotels, it means a shift from a transactional mindset to one of business development, in which salespeople are focused on the long game. This can pay huge dividends down the line, when your team doesn’t have to scramble to keep up with potentially irrelevant leads.

For relatively smaller brands, such as Rosewood Hotel Group, proactive selling allows for a more consultative approach, especially as it looks at overall long-term spend. Thanks to powerful intelligence on its potential customer needs, Rosewood Senior Corporate Director of Global Sales SiuYin Ko’s team is able to have more candid conversations with key clients about how best to secure more business. “We can also have honest conversations when there isn’t a fit,” Ko said, “so that we can be respectful of their time.”

Through this model, traditional sales roles become a thing of the past. Already, some hotel companies are testing an overhaul of their teams. Take Prism Hotels & Resorts, where an upcoming beta change to the sales-organizational structure will see sales managers dedicated to proactive selling and administrators redeployed to respond to inbound leads.

“Was it broken before? Absolutely not,” said Allison Handy, Prism’s senior vice president of sales, marketing, and revenue optimization. “But success in this market is about strategic changes you can make for incremental improvements, and this is one of them.”