Five trending hotel news stories and Duetto’s Take on how they will impact your hotel Revenue Strategy.
1. Revenue exec: Communication drove my success
Revenue strategists—whether at the property level or in a corporate setting—juggle a lot of disciplines, but communications is the most important one, says Kathleen Cullen, Senior Vice President of Revenue and Distribution at Commune Hotels & Resorts.
In her long career in Revenue Strategy, she’s also found the ability to build bridges between all parts of a hotel organization as the key to her success and the success of her hotels. Soon, she’ll be working on another bridge-building project as Commune merges with Destination Hotels & Resorts. Full story at Hotels Magazine.
Duetto’s Take: Cullen’s strength has been to teach the intricacies of revenue strategies to others and help them replicate her success. Likewise, the job of any director of revenue management is to align the hotel’s sales, finance, marketing and operations departments around a strategy that fills the property for the most revenue so that all teams can execute their roles.
As new revenue management systems largely automate and streamline the setting and publishing of rates, a DORM should have more time for strategic team building and coordination. Duetto CEO Patrick Bosworth expands upon that in this video on Revenue Strategy.
2. Hyatt’s book-direct scheme angers travel agents
Hyatt Hotels’ new discount rate program for frequent guests who book directly has angered the American Society of Travel Agents. Under the program, members of Hyatt’s loyalty program receive room rate discounts up to 10% if they book directly with the chain. Travel agents are eligible to access the discounts but they must book through Hyatt’s website. The chain has not made the discounted rates available on agents’ global distribution systems, in contrast with Marriott and Hilton, who have pushed their direct-booking rates on GDSs. Full story at Travel Weekly.
Duetto’s take: Our guess is Hyatt will capitulate to ASTA’s demand or, at the very least, the two groups will find a compromise. Closing off a distribution channel like a GDS runs counter to the Open Pricing philosophy, which would allow hotels to flex the discount to an amount agreeable to both the hotel and its travel agent partners. There may be times when a property needs to drive occupancy this way, so it should be flexible with brick-and-mortar agents and OTAs.
3. What’s the right balance in responding to online reviews?
It’s drilled into the head of every hotel general manager that he or she must respond quickly and appropriately to online reviews, such as those on TripAdvisor. A new academic study from Cornell’s hotel school finds that to be true—but only up to a point. While responding to reviews and encouraging guests to post reviews has a positive effect on a hotel’s revenues, there is a point of diminishing returns. Full story at Cornell.edu.
Duetto’s Take: While you can’t argue the data, it seems the chances of over-responding to reviews are slight. GMs should err on the side of over-response rather than under-response. Especially if the pricing engine in your RMS incorporates social and online-review data.
5 trending #hotel #RevenueStrategy articles and @OptimizeDemand’s take, via @freedtotravel Click To Tweet
4. Facebook bot could be new distribution platform
It’s still in beta test, but Facebook’s Messenger bot program could introduce another distribution platform for hotels. The seemingly low-cost, low-fuss platform would allow users to communicate with a hotel to ask questions, determine pricing and ultimately book rooms. Full story at Koddi.com.
Duetto’s Take: The barrier to entry is very low: Small hotel chains can create a Messenger bot for a far lesser cost than developing a fully-fledged app. Other positives include relatively high conversion rates through the comparison shopping process for other apps, as well as all the important customer information that can be gleaned by selling hotel rooms through Facebook. Keep an eye on this development, and experiment where your hotel can.
5. British government to investigate OTAs
The hotel industry in the United Kingdom is celebrating a recommendation from Parliament to probe the business practices of OTAs. The hoteliers hope the investigation will lead to a ban on rate parity clauses in OTA agreements. Full story at Hotel Owner.
Duetto’s Take: Mandated “rate parity” in certain terms is gone by the wayside. But OTAs are still demanding your best rate or threatening major punishment by where they put hotels in their search results. For 10 proactive steps hospitality companies and their revenue managers can take in this new environment, download Duetto’s whitepaper, “How Rate Parity Changes Will Affect Your Revenue Strategy.”
Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.
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Jason Q. Freed, Managing Editor
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Tags: direct-booking, distribution, Facebook, hotel revenue strategy, Hyatt Hotels, online reputation management, online reviews, OTAs, rate parity, total revenue management
