Distribution should be mission critical for hoteliers
One of the subjects under the spot lights in the hospitality industry is “Distribution” and in this article John Burns shares his thoughts with Ed Watkins at Duetto on how “Distribution should be mission critical for hoteliers”. It is important to create the right balance between hotels and OTAs. They should not be overused and on the other hand not completely ignored. The hotels need to understand which extranets to turn to, which ones are the right choice for their market segments, not only to decide how much inventory to offer. The powerful worldwide channels are significant, however it is also essential to get to know the local and regional ones.
It is vital for hoteliers to know the importance of distribution and how to deal with it. The right strategy must be in place and above all it needs to be consistent with the hotel’s vision and the right person should deliver that, the necessary expert should be part of the team.
The main issue here is that the extranets have all the means to convince their audience. They know when to talk, what to say, how to say it and how many times. The OTAs use 100% of their resources to sell, hotels use 95% of their resources for operations, to offer the best service and only 5% to sell. Clearly there is a disadvantage.
It is also significant to understand how the revenue management, a pretty new discipline, is evolving very fast. This role is crucial in a hotel team, as a head of department its responsibilities are constantly growing.
Are hoteliers ready for post rate parity era?
Nowadays the most popular subject of hospitality is “Rate Parity”, we even write it with the capital letters everywhere. Everybody has something to say about it, which is great, discussing and communicating our own thoughts and experiences is important to improve and to learn more as well as to understand what colleagues and owners think about it. The odd part is that everybody argues about it, nobody just discusses. The tone of voice about it is always very loud. We want to be heard, but I think that we all have lost the reason why we are arguing about.
Do we really know what this “Rate Parity” is all about? Have we in fact thought about the consequences of this action? The focus is not only for the hotels to control their rates and do what they want with it. Hospitality is not made only by renowned hotel chains or by big properties, but also by small independent hotels. Do those properties have enough internal power to advertise, to survive? How do they get their promotions, lastminute offers and existence out on the market? How do we find them?
Then, at this stage, to stop paying too much commission to the OTAs, they just need to invest in a better technology, man power, software, tools and keep up with the new generation of guests as well as with the big competition. Is this better than maintaining the so bad Rate Parity?
In this article on Hotel News Now, Max Starkov shares his thoughts on the new post Rate Parity era. A really good and interesting reading, which might give some better insides on what we are all talking about.
The fundamentals for forecasting success
You will usually expect that your revenue manager can achieve your targets and more, submitting the winning strategy, an accurate forecast and getting the right response from your market. This is possible, however it is not a one man job. In this article Alicia Hoisington, Managing Editor at “Hotel News Now” presents a very clear and straight forward discussion among a few panellists of “Forecasting fundamentals” panel at the Hotel Data Conference in Nashville, TN. It explains that to produce an accurate forecast the management team must work together; sales, marketing, finance, front of house and of course the general manager and the owners. Data must be gathered, as well as everybody’s experience brought to the table.
Here the highlights described in the article:
“[…]When it comes to forecasting via data, accuracy is key[…]”
“[…]Revenue managers need to have goals that are measurable, and they need to hold people accountable[…]”
“[…]A must for forecasting is a marketing plan that is not a static document[…]”
Hotel growth to slow in 2016, says PwC
In 2014, London has been considered the only city worldwide that has seen a consistency of new hotel openings while at the same time none have been closed down. They have been sold and they have seen different management teams come and go. However, the doors have been kept open.
According to a PwC forecast for 2016, it is interesting to see that the market for hotel growth is likely to still increase, albeit at a slower pace. You can read more about it in this article written by Tom Davis and Michael Northcott in the hospitality magazine “Hotelowner”.