The hospitality industry still faces an uncertain future, and for some hoteliers, any business can seem like good business after operating with low occupancy rates for the past two years.
NB: This is an article from IDeaS
For others, the journey along the road to recovery is already underway. While no one can confidently predict how long the industry will be impacted by COVID-19, for hotel executives, it is dangerous to assume things will bounce back to the usual pre-pandemic business patterns anytime soon.
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Hoteliers should take the opportunity now to ask, “How can I reset, or restructure, my business to thrive now and beyond these uncertain times?” Here are five ways – plus a bonus step – hoteliers can reimagine their commercial organization for the pandemic operating environment of today and the post-COVID new normal of tomorrow.
- Break Down Data Silos
Hotel departments have historically operated independently from one another, with different priorities, technology platforms and performance metrics. And yet decisions in one department can directly impact another.
Now is time to break the silos and encourage collaboration, not only the organizational barriers between departments, but also ensuring the data that sits in a hotel’s various systems is widely shared. Digital technologies produce a tremendous amount of information for hospitality companies, but how to consolidate data from sales, marketing, reservations, and revenue management becomes the inevitable challenge all hoteliers must face.
With clean, accurate data, hotels can isolate and understand their channel costs, ascertaining which is effective and profitable business. When departments align and data and market intelligence is shared, staff have a clearer idea of which strategic business opportunities to pursue, negotiate or decline.
- Review Your Systems & Integrations
Hoteliers are increasingly reliant on the various operational systems and technologies throughout their properties today. Without automation, it is difficult to compile and analyze all the disparate data points hotels collect accurately and in a high-speed environment. Manually collecting and analyzing data is slow and highly susceptible to error.
However, while hotels are increasingly open to using technologies that support their business operations and eventual recovery, many properties have incompatible systems that reduce productivity. Hospitality organizations need to review the systems they operate and ensure they are working effectively together in a truly integrated fashion.
Hotels with a well-integrated RMS, PMS, CRS and CRM possess a competitive advantage through having greater visibility into their businesses’ true performance, allowing them to make more effective commercial decisions.
- Assess Your Data
Data quality and data cleanliness are major issues facing travel and hospitality businesses today. Hotels are hungry for more data to better predict future revenue performance, but information sources have been severely disrupted due to the impact of COVID-19. Given the current conditions, hotels must establish clear standards for data collection processes. After all, if a hotel company doesn’t have clear standards in market segments and rate codes, it would be difficult to analyze patterns and optimize performance.
Revenue managers should also be mindful that not all data is created equal. To build an accurate vision for the future, hotels must gather macro-level intelligence such as border and travel restriction policies and how they impact market trends and travel intent, along with generating granular-level data, focusing on the transaction level, aggregating, and benchmarking rate category, channel, cost of acquisition, arrival and departure dates, lead time, length of stay, loyalty contribution—even at the individual travel agency or corporate account level.
- Know Your Hotel’s Capabilities
The effective management of a hotel today can only be achieved through the optimal alignment of people, process and technology capabilities.
A hotel may have significant capabilities in one of these areas, such as the latest technologies and operational systems in place, but if they don’t have experienced, properly-trained staff to utilize these systems, they will not get the maximum benefit. When people, processes and technology are in balance and integrated effectively into an organization’s commercial culture, then the real potential of revenue management and a hotel’s true financial performance can be realized.
- Enhance Business Intelligence for Revenue Managers
Corporate and cluster revenue managers responsible for multiple properties or estates face daily challenges to compile, organize and transform historical and forward-facing raw data into insights and make strategic decisions for their portfolio. The process often takes days, or weeks, all while poor performance goes unnoticed and untreated.
Today’s hospitality leaders need customized dashboards to monitor the signals and metrics based on real-time data instead of legacy reports to quickly identify trouble spots, recognize micro and macro booking trends, measure key performance indicators and easily slice and dice their data.
Ultimately corporate revenue managers need effective visual tools that help them better understand their data, supporting more informed commercial decisions.
Bonus Step: Assemble Your Commercial Strategy Team
The challenge in applying revenue management across an entire hotel relates to the convergence of the traditional roles of sales, marketing, distribution and revenue management, in addition to including food & beverage, banqueting, finance and other departments. It takes an entire team—not just one department or group—to capture the right guest, at the right time, for the right price, and in the right space.
To ensure a hotel is correctly pricing itself in a volatile market, hoteliers should consider assembling a cross-functional commercial strategy team that meets regularly to review and adjust strategies based on macro environmental changes like COVID-19 lockdown restrictions or governmental policies.
This group would enable all views of a hotel to be considered and foster collaboration between departments, enabling a hotel to operate in an agile and responsive manner based on wider market conditions.
