The Holy Grail of the Hospitality Industry: The Commercial Strategy Platform
The hotel industry is, once again, in a state of flux; the COVID pandemic forever changed how hotels operate, but we are currently in a second evolutionary phase, in which the convergence of technology and strong commercial leadership, is proving to be an operational imperative for hotels to ensure profitability over the long-term.
An important first step in this new operational evolution is the implementation of a commercial leader to oversee all the internal departments responsible for revenue generation. In the past few years, commercial teams have started being established in big, branded properties, but today, it is important for all properties – from a 50-room independent property to a 1000-room resort – to implement a commercial leadership role or department to be successful going forward. And, even if you have a small 10-room BnB, changing to a more commercially focused mindset will do nothing but good for your operational efficiency and your bottom line.
Here’s why…
A hotel's success relies heavily on the ability of its revenue management, marketing, and sales departments to seamlessly collaborate towards shared goals, breaking down the siloes that traditionally exist between these operational departments. This is made possible through the implementation of a robust commercial leadership team, who will oversee the three departments, keeping them working towards common business goals through collaborative action. With access to shared data, departments are no longer working in isolation, but rather collaboratively shaping strategies that respond dynamically to market trends. This strategic alignment ensures that all efforts are synchronized, maximizing the impact of the hotel's commercial initiatives.
Strong leadership fosters a culture of collaboration, innovation, and adaptability, which is hugely important in our ever-changing hospitality industry, but leadership alone will not give hoteliers the edge that they need to stay ahead of the curve. Informed interdepartmental decision-making, based on easy-to-understand unsiloed data, is the cornerstone of successful commercial strategies, making a commercial strategy platform the catalyst for a property’s strategic alignment.
One important caveat: Many solutions call themselves a commercial strategy platform but they don’t actually perform functionality beyond that of a data well, which will unsilo your data but will not have a real impact on your property’s bottom line. The real ROI of a commercial strategy platform is the strategic insight that it offers, which enables each revenue generating department to take proactive, clear, forward-thinking actions.
What is a commercial strategy platform?
A commercial strategy platform is a centralized hub that provides an aggregated and real-time view of critical metrics, which eliminates the traditional data silos that have existed between a property’s operational departments. Using a shared pool of information across the revenue management, sales and marketing departments allows for a more holistic understanding of the market, guest behaviors, and the overall performance of the hotel, which is beneficial for all three departments’ deliverables and responsibilities. From adjusting room rates based on demand and consumers’ willingness to pay, refining marketing campaigns to target specific demographics, or optimizing sales efforts for peak periods, a commercial strategy platform provides a single source of real-time data upon which all strategic decisions should be made, ensuring more effective, data-based decision-making.
Commercial strategy platforms provide hoteliers with the property data that traditional business intelligence solutions offer, as well as real-time demand and market data, in addition to providing valuable revenue management functionality, such as rate optimization, group rate optimization and forecasting functionality. But the best part is that commercial strategy platforms give your revenue management, sales and marketing teams access to strategic recommendations on how to best accomplish their departmental business goals. These actionable insights are truly what makes this solution invaluable to hotels, as it eliminates all of the guess work and encourages proactive action, more quickly.
By providing all the data that all three departments could need, from a centralized solution, it empowers the departments to act independently, without the need to request information from other departments to facilitate timely decision-making. It also enables the departments (and the individual team members) to be more nimble and quick-to-action, as the hospitality industry and the destination’s supply and demand changes, resulting in the ability to shift from being reactive to proactive in identifying new sources of revenue and internal areas that need improvement.
Commercial strategy platforms don’t just benefit the individual departments; in fact, they can be a hugely valuable resource for the commercial leadership team because, as a centralized data center, it makes it easy to provide the property’s corporate leadership, investors and stakeholders with the data that they need, while still leaving time for the commercial leadership to do their most important work: moving the property towards accomplishing their overall business and revenue goals.
Lori Kiel, CCO of The Kessler Collection, shares the experiences that lead her to implement a commercial strategy platform:
“Whether I’m giving the investors what they want or not, relative to our targets, I’m in a constant state of explanation. If I’m constantly explaining, that takes away from the time that I get to spend on doing the actual strategy, and the time that I can spend moving us forward. It had served me well to bring my three teams together under one commercial umbrella from an operations perspective but, my data (which is how I explain the “why”) was still incredibly siloed, so the problem was not resolved; however, I am in the process of implementing a commercial strategy platform to break down the silos between my teams’ data, which will help me find a proper balance between explaining and putting in the work to accomplish our overall strategic objectives. I am confident that the platform will have a positive impact on our overall productivity and profitability.”
Overall, deeper clarity on the state of a hotel’s business, derived from a single source of data (a commercial strategy platform) + AI-powered strategic recommendations for all of your revenue generating departments, fosters the ability for both the commercial leadership team and the property’s internal departments to make bold choices and truly lead, resulting in improved operational efficiencies and increased profitability, especially over time.
By combining the insights gained from a commercial strategy platform with effective leadership, hotels can unlock their full commercial potential. As the hospitality industry evolves, hotels equipped with both elements are better positioned to navigate any challenges that appear, capitalize on potential revenue opportunities and continue to thrive in our highly competitive market.
So, what are you waiting for? Start breaking down your property’s interdepartmental silos using a commercial strategy platform today; trust me… your bottom line will thank you for it!