Profitability erosion - why me? What can I do about it?
OTAs (Online Travel Agencies) have an important role to play in selling perishable goods (rooms) and should be integrated in a well-defined corporate and property-based revenue management strategy. As we move into a world where data is king, we are also convinced that comprehensive, organised and easily retrievable guest data will be a vital ingredient in the profitable growth of operators going forward.
“Revenues may be rising but simultaneously hotels face rising cost pressures to sell rooms. One area where hotels have to spend more is acquiring customers through Online Travel Agencies and other intermediaries - this continues to push up commission fees and challenge hotels.” Liz Hall, Head of Hospitality & Leisure Research, PwC UK
Changing guests needs - how can we adapt to the needs of new market segments?
Two tools are becoming indispensable for hoteliers who want to find out what guests want. First, hoteliers need to thoroughly analyse online guest reviews and use review comments as a foundation for capital expenditure and operational process decisions. Online comments should not be a ‘nice to have’, but should be treated as the most important source of guest feedback and taken as a basis for change. Secondly, the industry needs to leverage rapid developments in digitalisation and big data to capture, segment, analyse and group guest data in the most useful way.
“A key risk for hoteliers is the ageing of the customer base and the need to capture a new generations of customers. We carry a lot of discussions with start-ups to better understand how we can collaborate to reach younger customers and see how we can adapt our offer to better suit the needs of Millennials.” Julien Guintrand, Group Finance Director, B&B Hotels, 2018
The threat of over-tourism - when is many too many?
Increasing international demand for key destinations needs to be carefully managed. An approach to controlled growth should include formulating a clear destination strategy, including a clear positioning, as a basis for government action and the provision of private services. This could include city planning and zoning, hotel development regulation, centralised product offering planning, infrastructure planning, and so on.
“Its primarily up to destinations to exert a controlling interest. Intelligent marketing concepts can help reduce the numbers at hotspots.” Norbert Fiebig, President, German Travel Association, German Travel Association DRV*
*TTG 15/03/18 "Intelligent marketing key to stop overtourism"
Sharing economy - ignore or embrace it?
The hotel industry should take care not to make the same mistakes with shared accommodation providers that it made with OTAs 20 years ago, when most players expected the new channels to disappear as quickly as they had sprung up. Guess what: they’re still here. Instead, the industry should listen very carefully to guests who are saying that they’re looking for authentic, real and tailored accommodation products for a variety of needs - on different occasions the same person may be travelling with their spouse, on business, or on a stag or hen weekend and take cues in terms of their products and service offering.
“The phygital model is at the heart of hoteliers' concerns. It has become essential to ensure continuity in the customer relationship, by combining a high-performing digital platform (i.e. including a chatbot) and a strong human dimension. This model should allow hoteliers to better know and understand customers and to provide more personalised services.” Nicolas Broussaud, Head of Transactions, Accorhotels
