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V Jornadas Universitarias – Revenue Management: A new management philosophy to crisis management

Last month I attended the V Jornadas Universitarias which took place at the Universidad Rey Juan Carlos in Madrid. The event focused on various hotel technologies and how the application of these technologies along with revenue management techniques can help hoteliers to cope up in difficult times.

With an excellent speaker line-up the event turned out to be very fruitful for all attendees. Professionals from companies like Vincci Hotels, NH Hotels, InterContinental Madrid Hotel (IHG Group), RateTiger, Marketing Surfers/Buzzturistic, ITH, Hosteltur and Sol Meliá shared their knowledge and experience and gave fantastic presentations on their chosen subjects. My presentation focused on the importance of rate shopping, benchmarking and the future of hotel business intelligence.

Today’s paradigm in the hotel business is focused on price optimization where:
•    Price is a function of demand and demand is a function of price, and 
•    Decisions should be based on demand, availability and relative competitor price positioning. 

Apart from the current challenges of managing data and various systems, hoteliers are further facing the obstacle of silos throughout our companies. We only get to see a small piece of the big picture. The need is for, and in a few cases the trend is towards, a strategic integration of revenue management, marketing and guest analytics.

In a world where consumer segmentation is becoming difficult and distribution is becoming increasingly complex, how will hotel executives keep up? Through business intelligence!
 
Business intelligence is moving towards providing:
•    Better industry benchmarks centered on profitability, not just revenue
•    Market relevant price optimization tied to distribution strategy
•    Behavioural economics and neuromarketing embedded into pricing and marketing decisions
•    Integrated technology with CRS, RMS, PMS, POS, social media, loyalty and sales data all blended into one system and/or data source

Hence what we try to derive here is that – to achieve better benchmarking, optimized pricing and integrated behavioral economics, hoteliers need to focus on integrated technology systems.

Further the conference saw hoteliers discussing the growing trend of new positions coming into being – the likes of Community Manager, Channel Manager and Guest Experience Manager are making inroads into the organizational structure of companies.

Pilar Sanchez Aita is Sales Manager – Spain & Portugal at eRevMax and is responsible for sales of RateTiger products in the region. She is based out of Madrid and can be reached at pilara@ratetiger.com.


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Road to Effective Channel Management – Part 1: Understanding today’s scenario


Heads in beds is the key driver for all hotels – we know that if you don’t have the occupancy to meet running costs then you will become another of those properties closing each week. The recession has bitten hard but it’s also the result of a much more competitive hospitality industry.

Today’s world requires a much more aggressive approach to sales and distribution. Your hotel needs to be visible, it needs to be value driven and it needs to be easy to book.

You may have developed clever ancillary revenue strategies, improved your customer service or completed a major refurbishment of your rooms – but without a clear distribution, pricing and revenue strategy you will continue to struggle against stronger and more knowledgeable hoteliers.

City markets are becoming more volatile with hoteliers selling on an average of 10 websites, some sell across as many as 24 or more, are you matching this sales technique?

Hoteliers can update their rates up to five times a day to secure their much needed occupancy levels, you too need to ensure that your rates are consistently reflective of market conditions and you do not price yourself out.
 
To help assess the effectiveness of your hotel’s channel management techniques, you need to measure and benchmark your current strategy.

We no longer sell rooms, we sell products. For the guest it’s the entire experience from researching accommodation, booking, checking-in right until check-out.

You need to know who your product appeals to, or who you want to appeal to.


Start by finding out what people already think of your product by looking at guest reviews. This will also give you more information about your guests – who they are, what they like, age, and lifestyle – from a review you can build a whole personality profile.

Once you have identified your target audience and what you are selling, you then need to market it. You wouldn’t market a business suite to leisure travellers, so you need to make sure you are visible in the places corporate travellers’ book.

You need to know what other hotels are charging, make sure that you know the exact value of your product against others. It is important that your walk-in rate is different to your online rate; this will help you secure more bookings in advance while maintaining integrity. 

Check out Road to Effective Channel Management Part 2.
 

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Newshound – 05/05/2011

Global Hotel Market Proves Resilient in March

Corporate travel reservations grew in March 2011 over 2010 by +30%, while revenue climbed +42.5%, aided by a +6.9% increase in average daily rate (ADR). Following a growth dip in February, March global leisure bookings achieved the second highest growth pace in the last year, climbing +10.8%, while revenue jumped +15.5%.
http://www.etravelblackboard.us/showarticle.asp?id=98408
New Travel Study Defines Digital Genius
No industry has embraced digital faster than travel. It’s not just online sales that are impressive. It’s the reality that the digital space is providing a whole new arena in which travel brands are beginning to engage customers and serve them in ways never before possible.
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=149598
Online travel to experience solid growth in Middle East
The online travel and tourism industry is poised to “experience solid growth” over the next five years – with the Middle East and Africa leading the way in percentage terms, reveals research from Euromonitor International. Online hotel sales in Middle East and Africa over the period will grow by more than 12%, sharing the top slot with Latin America which sees the same growth rates for accommodation.
http://www.ameinfo.com/263959.html
Local OTAs rule India’s growing online travel market
The global OTAs may be the biggest names in online travel, but Indian travelers clearly prefer the flavor of OTAs grown closer to home. A recent report by travel industry research authority PhoCusWright revealed the dominance of India’s homegrown OTAs.
http://www.traveldailynews.com/pages/show_page/43037-Local-OTAs-rule-India%E2%80%99s-growing-online-travel-market
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RateTiger in the News: eBay as sales channel for hotels

Online distribution specialist Cultuzz Digital Media has partnered with RateTiger to offer hoteliers an easier update on eBay alongside other distribution outlets. The agreement makes RateTiger the first channel manager able to distribute inventory and rates to eBay via the CultBay platform. eBay will become an additional channel within RateTiger to sell rooms and update rates and inventory as per the sales platform’s rules.

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RateTiger @ ITB Berlin 2011

As the organizers describe – “ITB Berlin is THE B2B-Platform for trade visitors – an excellent opportunity to meet business partners and to do business. For all other visitors ITB Berlin is a wonderful possibility to discover the whole world within a few hours.” I completely agree with the event’s definition based on my experience at ITB Berlin 2011.

This year had a buzz like no previous that I had attended – this was my third time in Berlin for this mammoth travel event and no longer did we have people wander past our stand asking us what is channel management? Instead hotels wanted and needed a channel manager. This was such an amazing positive change for us and the industry. 

We had over 6 journalists come by for conversations with us to discuss some of the key trends in social media, new digital sales techniques and integrated channel management technologies. Many were very interested in the NH Hotels implementation of our tools.

Siew Hoon of Web in Travel stopped by and we had a vibrant conversation on how we can best educate hotels and make them into more informed buyers – so it looks like I have a lot of work on my hands to create more content and informative articles.

Among the various topics of discussion, I attended two sessions as part of the hospitality distribution programme; Holiday Hotels and Online Booking Behaviour that showed how the online buyer has changed and should not be stereotyped however it did find that expensive luxury trips are still more frequently being purchased offline – from findings by GfK Research Panels.

I also attended Social Media and Mobile Devices and the types of people using these for booking and research; it was interesting that only a few years ago we were saying that ‘nearly’ 50% of travel is booked online, now we are saying ‘over’ 50% of travellers are engaging with social media and consumer travel reviews that is having a major affect on purchase decisions both before and during the holiday.

We had so much to talk about and so many developments for the business that the discussions were much more diverse than just hotel channel management – this makes me look forward to next year’s event.

Ryan Haynes is the Marketing Head at eRevMax and is responsible for driving all PR and Marketing activities of RateTiger and eRevMax brands globally. Ryan is based out of London and can be reached at ryanh@ratetiger.com

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Online Revealed, Canada

Online Revealed, the Online Marketing Conference for travel industry professionals has grown rapidly because of its hands-on approach to learning and the pioneering efforts of ‘a couple of chicks’ an e-marketing company that gave birth to this event.

This year Online Revealed celebrated its 6th anniversary at the Sheraton Centre Toronto Hotel. To add to its existing allure, this year it was held in association with the Canadian Tourism Marketing Summit and the Annual Conference of Hotel Association of Canada.

I was invited to be a speaker at a breakout session on ‘Managing Your Online Distribution’, which had a fantastic turnout. During the workshop I covered various topics including online distribution landscape, useful tools for online distribution, finding and working together with online partners, considerations to maximise your online revenue and top tips for selling online. The audience was very interactive which always adds to a great workshop and controversial discussions such as rate parity, commission fees, and online reviews.

It was a great event and I look forward to the next year’s edition.

Casey Davy is Sales Manager – UK at eRevMax and is responsible for sales of RateTiger products in the region. He is based out of London and can be reached at


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BAHA: Revenue Management Breakfast Workshop

The Hospitality Revenue Management Community of BAHA organized an open workshop on 4th March 2011 at the Mint Hotel Tower of London.

The aim of this breakfast workshop was to bring together Revenue Managers and those connected to it, to discuss and debate current industry challenges in a way that was lively and participative, yet still challenging and educational.

One of the major challenges facing Revenue Management is the future ‘pipeline’ of talent. Hence the community invited a selection of RM students to give them a chance to interact with current professionals, build relationships with potential employers and gain valuable insight into the realities of the role.

There were 5 workshops held in parallel sessions, namely Long Term Impact of Price Slashing, Customer Relationship Tactics, Total Revenue Management, Centralization of RM and Market Segmentation. My colleague Stefan and I took part in the Total Revenue Management workshop and found it really interesting and worthwhile. We had a great discussion and stressed upon how selling efficiently online can help Revenue Managers achieve targets. We found the event to be a good opportunity to meet industry peers and like all BAHA initiatives, it was well organized.


Sunaina Jagtiani is Sales Manager – UK at eRevMax and is responsible for sales of RateTiger products in the region. She is based out of London and can be reached at sunainaj@ratetiger.com

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BTL

The 23rd edition of Bolsa de Turismo Lisboa (BTL) took place from 23rd to 27th February 2011 after having been postponed from January. The change in dates proved to be a good decision by the organizers as this year’s event saw over 74,000 visitors and around 990 exhibitors, a big jump from all previous editions.

The organizers of BTL were overwhelmed with the response and said, “This year’s success strengthens the position of BTL as a business platform of reference for both professionals (9% increase in national professional credential) and for the public seeking a chance to meet in one place. BTL is today the largest and most comprehensive international tourism fair to be held in Portugal. The date change has proved correct in the areas of internationalization and strategic marketing of package tours for the general public, which corresponded with a great turnout.”

The hotel industry in Portugal is experiencing falling occupancy and RevPar, reason why hoteliers and revenue managers were keen to find ways to boost revenues. We spoke to many hoteliers and helped them with their concerns and queries. I personally consider BTL to be a productive event as I had the opportunity to organize 28 one-on-one meetings with hoteliers and local OTAs to show them the benefits of channel management products. The local media too was interested in meeting with us to gain more information about our products and services.

I have been attending this event for the last four years and I see a growing change in the Portuguese hotel market. Hoteliers now understand the need for a channel manager and are maturing to the concept of online distribution. They are aware of the benefits and ROI they can derive if they leverage the right technologies properly.


Pilar Sanchez Aita is Sales Manager – Spain & Portugal at eRevMax and is responsible for sales of RateTiger products in the region. She is based out of Madrid and can be reached at pilara@ratetiger.com

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Florida Huddle

Organized at the Daytona Beach from 23 – 25 January, Florida Huddle turned out to be a great event for us.

The event focuses completely on buyer-supplier meetings and is a good platform to meet prospective buyers and close deals. This year’s event saw a turnout of over 350 people which is very good for an event of this size.

The discussions revolved around the hoteliers’ concern over the extremely low ADR in Orlando while Miami and other south coastal areas witness an improvement in performance and rates. More than 200 hoteliers were present and all were eager to find out the best way to take prices up again.

RateTiger’s major advantage this year was our stand’s location in the VIP lounge, receiving a lot of visitor traffic. Jonathan and I managed to meet a lot of attendees to whom we showcased RateTiger and its suite of premium online channel management tools.

From the business perspective, presence at Florida Huddle is always lucrative as it allows decision makers from the buyer and supplier sides to meet directly and cut deals. RateTiger signed many new contracts at the event therefore very successful.

Siobhain McArdle is Sales Manager for south eastern states of USA at eRevMax and is responsible for sales of RateTiger products in the region. She is based out of Florida and can be reached at siobhainm@ratetiger.com
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FITUR 2011

With the recovering markets, we were excited to see how major trade events in Spain would open. The first major event of the year – FITUR 2011 hosted a total of 10,500 exhibitors from 166 countries and regions in January. It showcased a good representation of hospitality companies and technology providers while the increase in visitor turnover reached 200,000.

Her Majesty Queen Sofia inaugurated the 31st edition of FITUR. This official opening by the Royal family once again proves their unconditional support for the tradeshow and, in general, for the Spanish tourism sector.

During the FITURTECH conference, the discussions focused mostly on topics like online sector, web 2.0, innovative technologies, social networking and video marketing among others. Further hoteliers were also keen to discuss about the market conditions as well as means and ways to improve the Average Room Rate.

We represented RateTiger at the event and had various meetings pre-arranged at our stand. We also attracted a lot of general visitors which gave us an opportunity to showcase the main product line RTSuite and at the same time highlight new tools like RTReview and other additional modules.

It was a well-planned event and we look forward to many more editions of this wonderful event.

Catch all the action at RateTiger stand here in these pictures.


Pilar Sanchez Aita and Cristina Hernandez are Sales Managers at eRevMax and are responsible for sale of RateTiger products in Portugal and Spain. Reach them on pilara@ratetiger.com and cristinas@ratetiger.com respectively.