EyeforTravel is now Reuters Events - LEARN MORE
YOTEL’s top RM tip: look at your data in more ways than one!
An exclusive Q&A with a revenue expert at innovative hotel brand YOTEL delivers tops tips and insight into the evolving field of RM
With the promise of a ‘whole new hotel experience’ UK-based YOTEL is for the traveller that values quality but ‘doesn’t need the fuss’ of a traditional luxury pad. So how does it do revenue management? EyeforTravel put some questions to Joe Pettigrew, SVP Commercial Strategy at YOTEL, who is speaking at the upcoming Revenue and Optimisation Growth Summit in Amsterdam (Nov 26-27).
EFT: In a surprising, but then again not so surprising move, Marriott recently signed a deal with the Expedia Group that could shake up hotel distribution. The move will see Expedia become the sole gateway of Marriott’s wholesale rates, availability and content. What do you make of the move?
JP: In my view, the move will benefit the hotels. This is because today the wholesalers undercut rates everywhere, including on corporate booking tools (and soon all global distribution systems), so having a single trusted partner to maintain the integrity of onward redistribution of rates can be massively beneficial to hotels. I think this is a good deal for both Marriott and Expedia if the execution remains as promising as it sound.
EFT: How do you view the role of the OTAs/wholesalers/metas now in the distribution mix - what is the right balance in an environment where margins are shrinking?
JP: In my view, all these channels are converging to become more like one another. For example, the wholesalers are selling more of their inventory on OTAs unbundled, and therefore we will soon be in a place where every channel has the same rate, and that rate will be whatever the lowest rate is tht the hotel distributed to a single partner. In other words, metasearch will soon lose its appeal if they continue to compare the booking sites on price alone. So, it’s very important for hotels to understand this now and start migrating away from fixed wholesale contracts to protect their rate integrity. Then focus on delivering a consistently unique and differentiated experience to your guests to strengthen your own brand to increase the repeat rate of your guests.
EFT: There is a view that organic SEO is getting much tougher thanks to Google? Do you agree and how are you addressing this?
JP: I wouldn’t say it’s harder, but the value of organic search listing has diminished. Not only has Google expanded the number of paid result listings from three to four with expanded texts, the Google Hotel Ads 4-pack listing has now replaced where organic listing used to be, pushing the organic results even further. Having said that, I would say that hotels still have a plenty of opportunity to improve their visibility on Google by focusing their efforts in local SEO, thereby optimising for the 4-pack Google Hotel Ads.
EFT: Where should hoteliers be spending their marketing dollars today?
JP: Definitely start with the lowest hanging fruit, and that is by protecting your own brand search demand. Once that’s in place, then move up the conversion funnel to capture market share and mind share. I say more about this in this blog post.
EFT: What role does marketing play in RM today, and vice versa?
JP: It is integral to shaping the overall revenue strategy. As traditional revenue management transitions from what was fundamentally demand management into a holistic commercial strategy both generating and optimising demand across all channels and segments, marketing also has to evolve. It must play its role in generating both the organic and paid demand to support overall strategy. In short, commercial strategy can only be shaped with the organic strength of the brand and the tactical performance marketing to generate any incremental demand. Marketing plays vital part in both.
EFT: Getting a single view of the customer is said to be a challenge - how can brands address this?
JP: Fundamentally, this is a technology stack challenge. Our industry relies too much on a fragmented set of systems and the property management system (PMS) to be good at everything - which it can’t! The problem is exacerbated by the fact that we begin the project by thinking about ‘what we could do’ with the single customer view (SCV) rather than having a clear objective of ‘what we want to do today and what do we need to get that done’. This then puts a laser focus on delivering a SCV that satisfies the objective so the hotels can deliver their strategy. Otherwise we spend too much time trying to ‘perfect’ the SCV with no material output.
EFT: What are your top RM tips for hoteliers?
JP: Always look at your data with a minimum of two dimensions. For example, don’t just look at your booking curve taking into account days before arrival. Do that by days of arrival AND room type, and you’ll get far deeper insight. Don’t build a strategy based on a single hotel, but on a collection of different room types and products.
EFT: What skillsets do revenue managers need today and how has this changed?
JP: Revenue managers today are no longer pricing optimisation specialists, which is what they were previously. The role has evolved to be more of a commercial manager defining the entire business plan and commercial strategy of the hotel. Therefore, strategic thinking and a widened technical knowledge covering wider disciplines, such as sales, distribution, and digital, are all important skillsets.
EFT: What keeps you awake at night?
JP: It goes back to your question #2. There will be a point where my lowest rate to a single partner will show up on every channel, including corporate booking tools and GDS. The second thing that I think about is what happens when voice search becomes the mainstream (if not already)? You can already book hotels on Google and they started offering best-price guarantee on flights. This then becomes more of a brand challenge, where we as hoteliers need to focus on delivering unique and differentiated experiences in order to bypass the platforms, search engines, and OTAs in order to maintain our profitability.
Join us at the Revenue and Optimisation Growth Summit, Amsterdam, Nov 26-27 to hear more from YOTEL and other leading travel brands and innovators such as Booking.com, Finnair, Louvre Hotels and many more