The ongoing desire for travel continues while hoteliers face looming inflation and rising operational costs, leaving operators wondering if they should be swinging for the fences or watching for a rain delay. Travel trends continue to change rapidly, so most hoteliers aren’t sure how to differentiate between enduring trends and fads. Operators who can look beyond historical data are in a different position. They use revenue management technology to apply real-time analytics to emerging trends, allowing them to load the bases during this recovery period by investing energy in areas that will benefit their business over the long term.
If hotels want to chart their course across this unpredictable recovery period accurately, they must rely on data and take a realistic approach to hospitality’s potential. Reports from industry analysts in May predicted ongoing headwinds were likely to depress any potential significant gains this year among high Federal interest rates and unpredictable inflation. However, leisure travel endures, and group bookings are returning.
In some instances, a hotelier’s most significant hurdle is relying on historical data to help them make pricing predictions and decisions. This limitation has left some needing more insight to compete against those competitors who are equipped with revenue management and advanced data analytics. Hoteliers with access to advanced data visualization tools and up-to-date insights have more time and flexibility to adapt to fast-changing demand fluctuations
Advanced pricing tools are giving hotels greater insight into their channel mix, room nights, and ADR by segment to provide the insight operators need as they approach the future. Hotels with access to these tools are loading the bases today, creating more revenue opportunities when the next wave of travel crests.
Staying Close to the Ground
No one can see the future, but we’re always interested in batters who notice when a pitch begins to break. The pace of business today necessitates near-instantaneous decision-making based on actionable data. This information isn’t always freely available, but improving your hotel’s approach to pricing and forecasting is necessary.
If hotels want to be successful today, they need a plan backed up by current data in a way that can be understood simply and clearly. This requires a visual understanding of the implications of guest preferences and competitor rates, as well as information on domestic and international current events. After aggregating this information, hotels can adapt at a moment’s notice to new developments in travel and optimize guest rates.
For example, hotels with access to airline information may be better positioned to adapt and capture bookings from canceled flights or adjust promotions based on events in their area that draw last-minute travelers. Or, hotels anticipating large groups can quickly react to room block cancelations and adjust prices based on last-minute availability. Access to this type of data improves operational efficiency and revenue potential and can help update a hotel’s budgetary decision-making.
If this sounds harder than watching the interplay between pitcher and catcher for tells and signals, that is an understatement. Data visualization tools are invaluable in helping hotels find those market "tells" to investigate further and identify key guest insights. The ability to parse competitor rates, guest booking preferences, and other key figures, then compare and contrast them against long-term trends, allows operators to understand the potential impact of different demand forecasting strategies.
Lessons from the Last Inning
Today’s data is more precious than ever, indicating that guests’ current and future purchasing habits can evolve. The real-time insights gained from revenue management are so impactful that they drive the industry’s adoption of automated technology. This level of automation is designed to help hoteliers focus on operations while giving operators the information they need to push rates when guest activity swells.
Combining data visualization, real-time trend analytics, and revenue management automation tools is a winning mix capable of helping hoteliers achieve total profit optimization–and one that may be vitally important to all hoteliers in the near future. . In early August, two of the industry’s leading market analysts lowered their year-over-year growth projections for the hospitality industry by 0.5 percent, forecasting nearly equal reductions in occupancy and revenue per available room. These findings suggest hoteliers are preparing to increase competition over the next few years, making it all the more important to embrace total profit optimization and the tools capable of helping hoteliers achieve it.
If hotels want to be fully prepared for recovery, they must have the capability to aim high and strive to exceed their perceived potential for profitability. Doing so includes having access to overbooking and cancellation controls to manage room revenue better, the flexibility to offer guests their desired experiences, and a higher degree of customizability.
This level of customization will only expand in the near future through implementing Attribute Based Selling (ABS) strategies. ABS allows guests to book the specific amenities, offerings, and experiences they wish to access on property during booking. This will enable guests to plan their entire trip from beginning to end, including all the amenities they desire in the guestroom, restaurant reservations, and other requests well in advance. Advanced knowledge of guest purchasing decisions allows hotels to fully prepare for their needs and expectations, providing a high-quality experience while optimizing operators’ purchasing and staffing decisions.
Hoteliers are awash with uncertainty, but technology is stepping up to the plate to address these concerns across the industry. Revenue management technology, in particular, has showcased an ability to improve profitability, customer satisfaction, and hotel operations across all departments thanks to the insights it provides. When the time comes, hoteliers with access to these capabilities will enter a new era of profitability and outpace their competition without embracing unnecessary risks.
ABOUT THE AUTHOR
Geoff Roether is a Regional Solutions Engineer at IDeaS, where he serves as a trusted advisor to new and existing IDeaS clients as they navigate complex solutions around system integrations and optimal business practices. Geoff possesses a broad background in hotels, having spent time in sales and operations, with a particular focus on strategic hotel revenue and profit management. In his spare time, Geoff serves as a player/manager for the Savage Grizzlies in the Minnesota 50+ Baseball League…where he sports a 3-2 record as a pitcher and a .383 batting average as a hitter. While he has lost some velocity on his fastball, his curveball is still quite effective.