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Selasa, 20 Desember 2016
Three Game-Changing Hospitality Trends for 2017
Farley, President &
Co-Founder, The Rainmaker Group
on 20 Dec 16
There is an old adage that says, "The only
constant is change." Although attributed to Heraclitus, a Greek
philosopher who lived around 500 B.C., apparently that statement is as true now
as it has ever been - perhaps even more so. 2016 has proven to be a year of
tumultuous change in the hospitality industry, from the dizzying pace of
technological advancements and fluctuating global economies to the introduction
and adoption of entire new segments of the business. With rapidly advancing
technologies in just about every sector of the industry, hospitality has
experienced an exponential transformation over the past several years,
dramatically changing the face of one of the world's oldest occupations.
As another year draws to a close, savvy
hoteliers are beginning to reflect on all that has transpired in 2016, in order
to effectively plan and implement strategies that will optimize revenues in the
coming year. In 2017, hoteliers and revenue managers will need to quickly grasp
these significant market changes and understand, on a deeper level, the effect
those changes and resulting trends will have on the industry. They will also
need to analyze how each hotel sector and each individual market and property
should approach doing business under these new realities, in order to maximize
their market share.
Understanding what has happened, however is
only a piece of the puzzle. Even more important is knowing how to leverage
these changes -- or combat them. Current industry trends such as the escalating
push for direct bookings, the return of group business, and the continued
growth of the "sharing economy" are three key topics that will likely
shape the hospitality landscape over the course of 2017. Following are some
effective ways that hoteliers and revenue managers can take action as we head
into a new year, in order to make these trends work for them and ensure
1. Competitive Insight Delivers Direct Bookings
While hotels benefit from the exposure and
reach the OTAs can provide, it's no secret that they would prefer to avoid the
resulting 20-30% commissions by channeling potential guests to their own direct
booking engines on their proprietary websites. With gated loyalty rates
continuing to gain in popularity among hotel brands as a way to circumvent rate
parity agreements, it's important to note that it's only a matter of time
before the OTAs implement a counter attack to keep their competitive edge.
Large OTAs have already made claims that they will follow suit with their own
loyalty programs and discounted rates, creating the potential for a price war
that will drive rates and revenue down for everyone.
It's essential for revenue managers to have
access to the omni-vision, so to speak, that competitive pricing information
provides. This intel is a crucial aspect for revenue managers in developing pricing
strategies that keep them ahead of the game. Particularly for independent and
boutique hotels which have traditionally been unable to go toe-to-toe with OTAs
in attracting direct bookings, the ability to quickly and affordably gain
insight into pricing data across all channel types is highly beneficial. Using
this competitive intelligence, hotel properties can effortlessly monitor both
OTA and brand.com rates in order to implement meaningful revenue strategies.
Without overstretching resources, these hoteliers can overcome once-limited
opportunities to directly market to guests without the need for loyalty
programs, in order to funnel traffic directly to their own websites. With the
ability to automatically obtain rate information from the same OTAs and
brand.com websites that travelers themselves visit, revenue managers can
quickly gauge where their property stands in local markets, and adjust prices
Once a process involving painstaking hours of
research and analysis, today's advanced rate shopping solutions provide
hoteliers with the ability to gather the data they need instantly, and with a
fraction of the staff time once required. In addition, these solutions can
filter data on competitive pricing in any way hoteliers might need, customizing
this data to fit the specific needs of a property or across a brand. These
properties can then make sense of what's happening in their specific markets
and gain critical insights into pricing data across all channel types.
With this up-to-date data that can be readily
acted upon, hoteliers can then more effectively compete with their
better-equipped competitors having access to key intel on what those particular
competitors are doing. With supply increasing and occupancy predicted to level
out in 2017, revenue management strategies based on intel from competitive
pricing will only grow in importance as hoteliers work to maintain and maximize
Using new sources of rich data to boost group
business As markets inevitably continue to evolve, so too does the makeup and
importance of various guest segments including group business, which promises
robust growth over the coming year. This fact demands analytics that are
capable of determining the best pricing strategy for each group, in order to ensure
success. Using historical data, hoteliers can establish micro-segmentation and
predict price-sensitivity, using that information to configure optimal pricing
strategies for future group business. Further still, such information can also
be used to determine which groups are more profitable.
With a recent PricewaterhouseCoopers study
indicating that the meetings industry spends $39 billion on accommodations
annually, hoteliers clearly stand to gain significant revenue growth by better
understanding how to attract and earn the loyalty of this highly profitable
segment. Powerful technologies and tools have evolved as a result, and are
capable of pulling rich data elements to help revenue managers make optimal
group pricing decisions in seconds. Gathering and assessing historical data on
these groups, such as how many rooms washed from the group block between the
booking date and arrival date, can enable hotels to refine their forecasts and
better optimize future group pricing.
With revenue managers experiencing record high
levels of group RFPs, yet often lacking the ability to respond in a timely
fashion, many hotels are losing potential group business to first responders.
Even in successful RFPs revenues are often being left on the table due to many
hoteliers over-relying on Minimum Acceptable Rate (MAR) strategies. Here too,
we see the rise of big data analytics helping to redraw the lines in the
landscape by providing hoteliers with tools capable of prioritizing and
streamlining the RFP response process.
Now able to quickly leverage information from
lead-scoring sources such as Cvent, revenue managers can confidently prioritize
RFPs in seconds by implementing group pricing analytics; effectively
shortcutting a procedure once infamous for its lengthy time-consuming nature.
Today's revenue managers as a result, can finally look forward to pricing RFPs
optimally in seconds, slashing response rates. With the risk of losing business
to the first responders now significantly reduced, hoteliers can also find
themselves increasingly able to tailor services to group needs; enhancing their
odds of ultimately winning a proposal, while ensuring that the ability to earn
maximum revenue is realized.
2. Factoring the Impact of the "Sharing
Economy" on Traditional Pricing Strategies
As the hospitality industry undergoes radical
market changes that include an increased inventory of alternative
accommodations in the majority of markets, it is more vital than ever that
hoteliers equip themselves with data that allows them to adapt to this evolving
landscape. With regard to these new categories of competition, big data stands
to pave the way for hoteliers to alter strategy at the very moment that a
market's landscape changes.
Lodging options, such as Airbnb, boutique
hotels and lifestyle brands, have seen unprecedented success in catering to the
changing needs of guests, since they add personalized touches that make guests
feel comfortable during their stay. These accommodations typically go above and
beyond what hotels have traditionally included in their base rates, making them
more attractive to some travelers. While alternative accommodations, like
Airbnb, have heavily penetrated several large, urban markets, other cities and
regions have still remained relatively unaffected by them. This is changing
rapidly, and hoteliers need to take notice in the coming year to properly
assess which types of accommodations are moving into or growing in their
particular market and how they are accomplishing that growth.
Despite an obvious inability to prevent this
sort of change within the hospitality environment, more traditional hoteliers
can adapt their services and pricing strategy in order to remain competitive.
In again leveraging the potential that big data can provide, hotels and resorts
can ensure that prices take both conventional and unconventional trends into
account. By doing so, revenue managers can always remain fully confident in
decisions made over which channels are used, when they are used and at what
3. 2017 and Beyond
In the year ahead and beyond, the trends that
are shaping the industry will continue to evolve. The drive for direct
bookings, the growth of group business and the cultural shifts that are a
result of "the sharing economy" will all significantly impact hotel
revenues in all markets and demand new strategies, in order to survive and
excel. To that end, leveraging the power of big data will become even more
vital in implementing true revenue management and profit optimization for hotel
organizations around the world, regardless of size, brand or market position.
Fortunately, big data is becoming easier to navigate; ensuring that revenue
managers can more efficiently and effectively decipher changing market trends
and guest behavior.
To plan effective strategies, revenue managers will need to
implement solutions that help them drive direct bookings through competitor
pricing analysis, maximize profitability from group business and evaluate
market penetration of alternative accommodations and new lodging options. These
goals are all now much easier to accomplish, due to the availability of robust
tools that allow for the strategic analysis of big data. Using these
strategies, hotels can successfully minimize potential obstacles or threats in
the market, and ensure continued business success, not just for 2017 but for
years to come.