HotelIQ uses data from your property management system (PMS) and other internal and external sources. Users access HotelIQ from the web... read more
- Based in Atlanta, GA
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HotelIQ uses data from your property management system (PMS) and other internal and external sources. Users access HotelIQ from the web... read more
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Last week Hotel Tech Report attended ITB to discover the most cutting edge innovations in travel and hotels. Each year thousands congregate at Messe Berlin to connect with peers, partners and clients from around the globe. Below are 5 key trends that every hotelier needs to know about this year. In this article we outline each trend, tell you how it impacts your hotel and give an overview of the companies that launched or showcased on trend products at ITB. For those of you who couldn't make it to Berlin we also cut a reel from the show so you can get the next best thing to being there. Check out Hotel Tech Report's official ITB Berlin 2019 Recap video above 5 key trends & takeaways from ITB 2019 1. Automation is going mainstream 2. Software tools are breaking down operational silos 3. Hotel software is moving towards self service 4. App marketplaces are soaring 5. Meeting venues are getting wired up Our take on automation in hotel software Automation allows for time consuming, tedious and repetitive processes to be handled completely by software. When a task or process reaches the limits of the software’s capability, the appropriate team member is looped in to take over which is a beautiful thing. Let’s face it, if you’ve ever worked in a hotel you know that there are dozens of repetitive tasks that seem like a computer should be able to handle and in many cases perform even better, and now they can. Automation frees up staff to focus on the things that those computers can’t handle like high level strategic thinking, trying new products and serving guests. Many hotels are still afraid that technology and the personal touch are conflicting ideas; however, innovative hotel groups are realizing that technology and automation actually enable them to focus on the personal aspects of experience in a way they couldn’t when they were bogged down with repetitive tasks. What's new in automation? IDeaS launches Investigator to let revenue managers uncover the rationale behind automated pricing decisions by asking Alexa. IDeaS announced Investigator, an intuitive way to answer your management's question: How did you achieve that price and those results? IDeaS G3 is the most popular RMS on the market and now clients can ask the system via Amazon Alexa to rationalize the decisions that it automates to provide transparency into the decision making process that is out of a revenue managers hands and handled by the systems powerful A.I. engines. Hotelchamp launches Autopilot to help hoteliers leverage web data and user behavior to deliver personalized web experiences to boost conversion. Hotelchamp announced Autopilot technology, which wants to transform how hotels approach their online guest bookings and experience. Autopilot uses AI to deliver an adaptive experience that is tailored to every single website visitor, and is completely GDPR compliant. Using an A.I. engine to identify customer segments and audiences, Hotelchamp Autopilot can automatically serve the best information for each guest. Autopilot has been trained using pre-populated content, insights from the Hotelchamp data science team, and millions of A/B test impressions. Using this knowledge and live insights from the hotel’s website, Autopilot recognises and personalizes the website experience in real-time to convince visitors to book direct. All Hotelchamp tools can now be controlled by Autopilot, meaning the system will only deploy the right tools at the right time to the right audience. This process happens in real-time and is entirely personalised to each individual website visitor and moment in the booking phase. Crave Scheduler enables hotels to send targeted automated messages generating $5,000/mo in late checkouts. With the amount of times mobile comes up in conversation and the media, you might think BYOD (bring your own device) is the only way to go but the reality is there are lots of occasions where hotels just simply don’t have the ability to get a guest’s contact info or get them to download an app. Crave Interactive has a unique, and near unavoidable, position in the guest’s periphery with its in room tablets that see upwards of 90% guest engagement. At ITB, Crave announced a new feature called Crave Scheduler that puts a unique spin on automation allowing hotels to set rules to send target messages to guests. One of the prime use cases that Crave customers have been taking full advantage of is timed late checkout offers which have seen upwards of $5,000 month in revenue at Crave hotel partners who received early access to the feature. UpsellGuru announced "Auto Pilot" which automates the entire up-selling process. Upsell Guru now sends targeted emails, calculates the dynamic minimum and maximum upgrade bidding prices, sets up the system to decide which offers to accept and when, updates the PMS - all fully automated not requiring human interaction. The new feature allows hotels to up-sell their rooms & ancillary services without moving a finger. This saves hotels plenty of time and allows them to use the system without having to log-in on a daily basis. They’re initial trial was successful with a British chain of 30 hotels where they achieve GBP 65,000 per month in up-selling revenue without any manual human work. Quicktext showcased its website chatbot to help guests find answers faster while unlocking $140,000 in requests per 100 rooms. With Quicktext, guests can book at your hotel through a conversation (on various channels like WhatsApp, Facebook Messenger, Website Live Chat and SMS), something that has been mainstream throughout Asia (specifically China) via WeChat but has been slower to catch up in the West. The most practical use of chatbots is on a hotel website where prospective guests often get lost looking for basic information. A chatbot can answer critical questions instantly like “how far is your hotel from the convention center?”, “what is the best way to get from the airport to the hotel on public transportation?” and “can we add a cot to our room?”. This helps shorten the time needed to research the hotel and in turn increases conversion into your booking engine flow. Humanise.AI had Gem on display boasting automation of 80% of inquiries. Humanise.AI announced automated web-chat for hotels ensures that guests get an immediate response most of the time, but can still summon a member of hotel staff when needed. When hotels use human-only web-chat systems, they often struggle to respond to enquiries quickly enough, meaning guests leave the web site before they get a reply. With Humanise’s Gem product, they claim to automate ~80% of enquiries, radically improving the guest service and improving conversion-ratios for direct bookings. SABA put its multilingual guest request and F&B ordering chatbot on display. SABA Hospitality Technology announced a bespoke and fully automated hospitality chatbot (SABAGuest Request). This multilingual chatbot and digital F&B ordering platform provides guests with a seamless communication experience, without the need for downloads. It provides operators the opportunity to eliminate language barriers, provide instant answers to all guest requests and enquiries, and engage with guests on their preferred communication platform: messaging. This allows for the redeployment of staff away from call centers and other low-value repetitive tasks, to engage in meaningful guest interactions that help build long-term guest loyalty. Our take on breaking down silos in hotel organizations It’s no secret that hotels have historically suffered from siloed organizational departments because historically without better communication tools and access to data, teams were essentially on an island in their own physical locations. Technology companies are starting to realize that their products and tools can help hoteliers to become more effective by aligning departments around common goals, systems and data. At ITB we saw a lot of this happening as evidenced by a shift where CRM companies are starting to focus heavily on the operational applications of their guest data where historically that data has just been used for marketing purposes. Who's breaking down operational silos? TravelClick weaves Demand360 data into its Campaign Advisor toolkit to leverage market intelligence data to optimize marketing campaigns fostering collaborative efforts between revenue and marketing. TravelClick announced the addition of Demand360 to the Campaign Advisor toolkit. Building on last year’s email send time optimizer, Campaign Advisor now allows hoteliers to take the guesswork out of marketing by providing them with recommendations on when to run marketing campaigns based on predictive occupancy in the market. Demand360 is the hospitality industry’s competitive market intelligence product providing forward-looking reservation metrics and competitive share by segment and channel. Hoteliers using TravelClick’s GMS and Demand360 products will have access to current and projected occupancy data versus competitive sets to best identify the most valuable time periods to run campaigns, allowing them to avoid offering discounts and packages during peak market occupancy and place campaigns when they need it most. A huge pain point for hoteliers is knowing when to send promotions and emails to customers, as hoteliers do not have a clear picture of how their future occupancy compares with their comp set. It’s hard to determine the most valuable time to run a campaign. The Campaign Advisor and Demand360 integration, which is proprietary to TravelClick, takes guesswork out of the equation and enables hoteliers to leverage market data to feel confident that they are choosing the best time to run campaigns and capture demand. Serenata CRM announced Decision Maker, a solution that combines business intelligence with campaign management. Serenata Intraware's Decision Maker allows different users groups like owners, management, operations and marketing to view the same data but from different perspectives to get an optimal view of the hotel operation, identify potential problems and take corrective actions. The Decision Maker KPI dashboard gives a high-level insight into revenue, OTA share, loyalty contribution and other key metrics and trends. Other dashboards give subject matter experts from operations and marketing the ability to drill-down and identify the root cause for a problem and based on this insight create marketing campaigns using micro-segmentation to mitigate the problem without changing tools or breaking the workflow. Cendyn announced eNgage which brings marketing’s CRM data and customer profiles to front line operations teams bringing the gap between marketing and operations. Cendyn's next generation product empowers front-line and call center staff to instantly access guest profiles including historical guest feedback, membership information, brand-wide stays, social profile information and more. Used in conjunction with Cendyn’s eInsight hotel CRM, eNgage sits on top of a hotel’s property management system or call center application and intelligently guides staff to create authentic, meaningful encounters and upsell offerings based on guest history, preferences and loyalty status. This lightweight application can be accessed on any device and features configurable messaging prompts and data displays. Like all Cendyn products, eNgage integrates seamlessly with other hotel systems, utilizing an open architecture that ensures the accuracy and completion of guest information for all team members at every touchpoint in the guest journey. Cendyn’s eNgage solution allows hoteliers to provide the right approach to personalization for guests throughout their stay. eNgage brings to life all the data that hotels are collecting on guests and it displays it in real-time through an application window that always sits on top of the hotel PMS. For staff on the front-line, access to data instantly is critical for them to manage their workload and allows them to navigate every situation elegantly with customer service and upselling, so guests feel known and valued, not overly monitored. Fornova expands its business intelligence offering to create a cross department interface for data insights. Fornova announced that they recently acquired HotelsBI, a hotel Business Intelligence platform. With this acquisition, Fornova now caters to all roles and departments in the property and chain. With this acquisition, Fornova now has three product offerings; Distribution Intelligence, HotelsBI & eCommerce Optimisation. HotelsBI simplifies the process of analysing internal and external data sources thanks to simple, intuitive dashboards - enabling faster, data-driven decisions to optimize hotel performance. Revinate’s CRM is now being used by front desk staff and showcased the scalability of its platform on newly AWS servers. This shift allows Revinate to scale more efficiently and ultimately open guest data to new departments. Revinate showcased the capabilities that get unlocked when front desk staff and managers can access CRM data. MeetingPackage.com brings revenue management and pricing optimization to your sales team. The Company announced a partnership with IDeaS revenue solutions to bring real time dynamic pricing to meeting venues. When paired with MeetingPackage’s online booking engine for event spaces, this is a truly groundbreaking development providing hoteliers with real time insights to optimize pricing and a seamless, intuitive, flexible and real time booking experience. Our take on self service software in the hotel industry This is one of the trends that we’re most excited about at Hotel Tech Report. Freemium and free trials are ubiquitous in the software world but it’s not until recently that it’s broken into the hotel market. The challenge historically with hotel software has been that you need to ingest data from core systems like the PMS to make any software work; therefore, it’s hard to offer a free trial or self service. As the hotel software market moves this direction we’ll continue to see exponential upticks in innovation and sophistication. Another key reason that hotels don’t like trying technology is because even if they like the solutions that they try - they’re so busy that they don’t want to add one more thing onto their teams’ respective plates. Long complex implementations have stifled innovation for years and lead to a massive trust gap between buyers and sellers. At ITB, Oaky cracked the code on this problem by launching it’s simple onboarding wizard which helps hotels go live in just a few simple steps. Who's helping you take things into your own hands? Oaky’s new self service onboarding lets hoteliers start upselling in under 5-minutes. Oaky announced an onboarding wizard which allows hoteliers to go live themselves, by completing a few steps. This reduce onboarding time and effort, and allow hotels to buy Oaky from marketplaces and go live without human touch. Inside the wizard they’re putting together many millions of upsell moments, and predicting the optimal upselling set-up based on the type of hotel and its guests. From combining variables around the upsell, with data around the guest and the property - they suggest the optimal setup for the hotel (what deals to sell, which content, and so on) which also predict how much conversion and ancillary revenue guests that have not yet booked will spend using this setup. In today's revenue management, the room rate is often based on the room and not taking predictable revenue from segments into account. This upsell variable can impact the distribution decision and help hotels better price their rooms. When the revenue management system knows the upsell spend of a guest from various booking channels, they can deduct the distribution costs and end up seeing how to price their rooms for a more profitable booking. Some segments spend 20% on top of the ADR, which makes sense for the hotel to 1) have an upsell setup that allows for that, and 2) an RM strategy that takes it into account to acquire more of those (more profitable) guests. Atomize’s self service functionality lets hoteliers try out automated revenue management on their own time. Atomize showcased its advanced revenue management platform that has flexibility that allows hotels to control as much or as little as they’d like when it comes to revenue strategy. Atomize’s mobile first platform has been designed from the ground up with the idea that hoteliers should be able to go live and try it out without ever speaking with an Atomize rep. The company’s founder, Leif Jaggerbrand told us that he’s had clients come in that his team has never met from countries he’s never heard of. This dynamic is widespread in the broader SaaS industry and companies like Atomize are bringing this dynamic to hotels. Cloudbeds’ PIE bakes new revenue management capabilities native into the PMS. Cloudbeds announced PIE - Pricing Intelligence Engine. PIE is built directly into Cloudbeds hospitality management suite. It is seamlessly integrated with the entire Cloudbeds suite, including PMS, booking engine and channel manager. This helps hoteliers and hosts who want one easy-to-system to manage everything. Many of Cloudbeds’ clients have never used revenue management software before so this provides a lightweight way for them to get started making better pricing decisions. Our take on hotel software app marketplaces Marketplaces are nothing new to the software industry. The reality is that it’s impossible for one technology company to be the best at everything. Historically the hotel tech industry has taken a different approach where incumbents have tried to bolt all functionality into the PMS and maintain a closed architecture but that is rapidly changing as hoteliers are increasingly unwilling to work with closed vendors and sub-par tools. In response to the shift most forward thinking providers are taking towards open architectures, several innovative cloud PMS companies have taken note from tech darlings like Salesforce, Intuit and Apple by creating marketplaces. These marketplaces facilitate seamless integrations and eventually the ability to easily try new products with the click of a button making it easier than ever to find the best tools to grow your hotel business. Cloudbeds, Mews, Hotelogix, protel and Apaleo were the latest entrants into the marketplace space each launching their own native marketplace baked into their PMS empowering hoteliers to easily tap into a plethora of best-of-breed tools to grow their businesses right from their PMS. eRevMax was the first non-PMS marketplace on the market and Snapshot was next but SiteMinder and more recently BookingSuite are clear favorites in the race to marketplace dominance. Hapi is also taking a unique and differentiated approach by building a marketplace that is solution agnostic. Hoteliers should note that none of these marketplaces have gained significant traction from a demand perspective so the field is wide open. While the idea has been around for some years we are still in the early innings. Two-sided marketplaces require supply and demand to develop but those rarely happen simultaneously. Each of the players below has focused on signing supply/tech partners lately so it will be interesting to see which is able to deliver the best user experience and actually change the way hotels interact with their software. Who's who in the rise of marketplaces Cloudbeds Marketplace. On top of announcing its native revenue management tool, PIE, Cloudbeds announced the official rollout of its marketplace offering enabling its 20,000+ hotel clients to access a variety of best-of-breed 3rd party tools to mix and match to find the perfect fit. Mews Marketplace. In a blaze of glory Mews Systems continued its streak of creative conference displays to showcase its marketplace with this year’s theme of Pimp Your PMS (a parody of MTV’s Pimp My Ride) and its booth was cleverly referred to as ‘The Pitstop’. In true Mews style, each team member was adorned head-to-toe in race car pitstop jumpsuits with patches for various apps that are integrated into their marketplace. Touche team Mews, touche... Hotelogix Marketplace. Hotelogix Marketplace launched at ITB and is a one-stop shop for all the hospitality technology needs of a hotelier. It helps hoteliers find and evaluate best-in-class Hotel Technology products on a single platform. Hapi. Hapi is taking a unique and differentiated approach by building a marketplace that is solution agnostic. Why is this important? By being solution agnostic, Hapi's marketplace is freed from the confines of being locked into a single PMS. In fact, Hapi offers technology partners (ie marketplace apps) a way to normalize fragmented and messy data into a streamlined and unified structure opening up the potential to integrate to multiple PMSs (as well as various other hotel systems). Their marketplace offering enables partners to gain exposure to hotels on the platform and enables hotels to tap into other available systems that are connected to Hapi. Although Hapi is a smaller marketplace with only about 30 partners currently, its connectivity to multiple solutions from companies like Oracle, Infor and Salesforce signals a great deal of potential. apaleo. apaleo announced its One connection, where data from all pre-connected tools within apaleo's store is available directly within apaleo’s property management system. No switching between browsers or systems. It happens all too often that hoteliers start off their work day organized, and then somehow within a matter of hours (or sometimes even minutes!), end up with dozens of browser tabs open and many systems running. Especially for front desk staff, it takes tons of clicks and searching around to find the info they need, when they need it. It isn't pleasant. With apaleo One, all the info that hoteliers need is visible within apaleo's PMS, saving staff time and creating a more seamless journey for guests. protel Services Marketplace (SMP). While not quite its first appearance, protel proudly featured its services marketplace at ITB showing off its shiney new native ratings and reviews (syndicated from yours truly) to help hoteliers research, vet and discover the best tools to grow their businesses without leaving the protel app store. Pretty awesome! From the protel team, “The SMP empowers protel customers to choose from a variety of certified and evaluated 3rd party technology vendors covering all the essential hospitality technology services, such as RMS, CRM, PMS and POS. In other words, it's THE App Store to start integration with protel. It's also the point of entry to integrations for any 3rd party vendor to showcase and offer their powerful services to our 14,000 customers around the globe.” The protel SMP marketplace features reviews from Hotel Tech Report to deliver transparency for its users BookingSuite App Store (by Booking.com). BookingSuite unveiled its app store for the first time where hoteliers can use single sign on (SSO) to activate new apps. Many hoteliers are naturally wary of relying more on Booking.com or giving them more data, but overall it is a clear strategic move by Booking to provide more value to hoteliers to mend their often shakey relationship. BookingSuite’s approach is similar to the way LinkedIn, Google, Amazon and Facebook allow users to login to 3rd party apps with their APIs. The difference between BookingSuite and these other tech giants is that they want to take commissions (into perpetuity) from technology vendors. The commission vendors pay in the BookingSuite App Store is 25% for year 1, then 15% into perpetuity. If you are a vendor with an average monthly revenue of $800 per hotel and a 7 year average customer lifetime that means you'll be paying Booking $2,400 in year 1 and $10,080 over the duration of the contract to acquire that single customer. In our opinion, this fee will eventually be passed to the end user (hoteliers) over time and is just another form of integration fee. Google and LinkedIn give away this service free to foster innovation and strengthen their respective platforms. So while BookingSuite’s tech is innovative we’re concerned about their commercialization model and understand why hotels and vendors might want to remain cautious. eRevMax. eRevMax rolled out updates to its LiveOS platform that allows its hotel clients to centralize the usage of various software applications into one interface using single sign-on. While the LiveOS platform was one of the first to offer a marketplace offering, they seem to have fallen behind the competition with a limited range of apps available but seems to be pushing forward continuing to try to continue to explore the potential of LiveOS as a central operating platform, that can plug in various systems to help hotels make critical and time saving decisions across multiple systems without having to piece the data together manually. Our take on wiring up meeting spaces for easy booking During November’s Phocuswright event Hotel Tech Report tried to book the rooftop of several hotels for a client event. In order to book the spaces we had to go to the hotel websites and fill out a form, then wait for responses from sales reps. Some websites didn’t even have a form so we had to manually email reps based on contact info from their website (that we had to dig around for). Out of the 5 desired locations which were some of the hottest hotels in downtown Los Angeles - not a single one responded within 24 hours and 1 didn’t respond to our inquiry at all. Then to make matters worse, by the time they responded the first question was ‘how much budget do you have to spend’. Needless to say, this was a pretty horrible customer experience so we decided to take our business elsewhere and avoided hotels all together for our event. Imagine if you had to write to a hotel to inquire about availability. Now imagine that when you wrote, the hotel wrote back asking “what’s your budget?” The idea is absurd. Hotel websites and OTAs have wired up the industry to make sure this would never happen again. It starts the relationship off with a bad taste for the customer and completely undermines the intended nature of a collaborative ally that a sales manager should be for any client but especially given that they are a prospect who intends to spend thousands of dollars to throw an event. Meetings and events contribute $325B of direct spending in the U.S. alone (source AmexGBT) - so it’s about time this highly profitable inventory got wired up. Who's laying the groundwork to wire up meeting venues? MeetingPackage.com brings channel management and a seamless booking experience to your meeting space inventory. Meeting Package’s Joonas Ahola Joonas also announced his firm’s launch of a meeting space channel manager which allows inventory and rates to syndicate not just on a hotel’s website but across a myriad of 3rd party channels that have popped up to help them find new demand to generate additional revenue . Meeting spaces today can be booked on platforms like AirBnB as well as on niche marketplaces like Breather, Bizly and VenueBook. Venuesuite launches demand side marketplace to help venues and planners work better together online. Announced its direct booking platform (or marketplace) that helps venues & planners work better together online. The platform significantly simplifies the RFP process and sourcing of venues. The time required to book a venue for a meeting/event is reduced from days to minutes. Both planners and venues. It enables planners to find venues fast, book instantly and configure meetings & events 24/7. For venues it generates more revenue via qualitative leads & higher conversion rates as prices are shown upfront to bookers. Within 10 months 1,000+ spaces available in The Netherlands via dedicated venue partners who've joined the new way of online (platform) working. Other notable product launches and showcases Business Intelligence Pegasus announced its Business Intelligence Platform. It's difficult, if almost impossible to transform raw data into actionable insights - it pains most hotel companies, particularly independents. Pegasus BI combines guest data from multiple sources and deliver it with automated intelligence and an easy-to-understand dashboard. Hoteliers can gain immediate insights that allow their properties to increase bookings, revenue, occupancy and profitability. Revenue Management RevControl announced rate recommendations calculated by room type separately. This announcement is specifically meant for hostels where the rate difference between private rooms and individual beds in a dormitory is huge and unrelated. It is now possible to use a separate set of business rules for each room/bed type and link each room/bed type to its exact match at hotels in de comp set to get individually calculated rate recommendations for each room/bed type. RateBoard announced revenue management modules for leisure hotels. RateBoard offers a special module for leisure hotels, taking historical holiday seasons from different countries, matching this data with the booking window of the different nations and optimizing the forecast due to this important factors. HotelPartner Yield Management announced the implementation of success-based billing models. The implementation of success-based billing models aligns incentives between HotelPartner and clients since they don't charge new partners without having achieved added value in regards to room revenue. This is an interesting and innovative approach - we're curious to see how it works as demonstrating uplift is a really difficult thing to prove given market fluctuations and the massive # of variables that can't be controlled. Marketing Travel Tripper announced Real Time Ads & Metasearch Direct. These tools help hotel marketers minimize costs and maximize RoAS on their digital marketing campaigns. Real Time Ads is the first digital marketing tool that allows hotels to advertise—in real time—their rates, availability, popularity and more right on their Google search ads, delivering double the conversion rates. With Metasearch Direct, Travel Tripper has helped hotels generate 38x their spend on metasearch with our direct connect to Google Hotel Ads. Their unique commission model means that independent hotels with smaller budgets can play on the metasearch channel without any risks—and for less cost than an OTA commission. Travel Tripper announced ADA Monitoring Platform. Many hotels in the U.S. are in constant risk of ADA compliance lawsuits simply because their websites are not accessibility friendly. Not only does the TT Web team offer full-service ADA audits on websites, but they also have built out an automated ADA monitoring platform that performs website checks in real time to ensure compliance. Hotel marketers are immediately notified whenever an element of their site falls out of the accessibility guidelines (for example, lack of alt tags, color contrast etc.) Serenata CRM & IgnitionOne launched a next generation CRM partnership that combines both historic guest information combined with real-time intent data. By tracking and scoring website visitors interests and propensity to convert hoteliers can tailor messaging, content and offers, both on the website and in the booking engine accordingly to this data. The scoring technology also supports new guest acquisition by identifying unknown website user that show high interest in a hotel property or a specific offering from the hotel. Based on the interest and score, the visitor can be prompted with personalized newsletter invite. This approach has proven to massively increase the number of newsletter signups, something necessary for many hotels after recent introductions of privacy regulations like GDPR that eliminated a large part of the hotels marketable profiles due to lack of marketing consents. The newly created newsletter subscription profiles are enriched with the interests and intent information from the IgnitionOne scoring engine monitoring the hotel website and can be used for marketing purpose complementing the historical data points already stored in Serenata CRM. With Serenata CRM and the real-time intent triggered personalization powered by IgntionOne you can deliver a true personalized experience for your guests and website visitors to drive incremental revenue. Integrator announcements HAPI announced it’s recent Salesforce integration following a 2-way oxy connect with Oracle’s PMS dailypoint™ - software made by Toedt, Dr. Selk & Coll. GmbH announced a data cleansing solution which allows hotels to automatically clean, correct, and de-duplicate their guest profiles and push that data back to the hotel’s PMS. The fully automated, AI-based process includes hundreds of steps, reviewing all key data points within the guest profile. It removes duplicate profiles, corrects mistakes made from human errors, corrects addresses for more than 240 countries and ultimately creates one single, accurate guest profile for each guest. This data is stored in the central data management solution by dailypoint™ as well as pushed to the hotel’s PMS so that data is accurate across all key sources. Operations Customer Alliance announced Customer Experience Hub extending their surveying capabilities from solely focused on post-stay reputation and review gathering into the full guest journey. The Customer Experience Hub allows hoteliers to customize automated messaging based on events through the guest journey to collect feedback and pipe it in real time to the department or team member who can act on it to recover fast, improve the guest experience and in-turn--improve review sentiment and gss scores. Betterspace GmbH announced Smart Check-out feature with digital invoice and the Self-Ordering function, both for the digital guest directory iQ Tab.The Smart Check-Out enables guests to comfortably check out of the hotel and allows them to view and split their invoice digitally and receive it by e-mail. Thanks to this feature, long waiting lines at the reception desk are a thing of the past. Self-Ordering for the digital guest directory gives guests the opportunity to order food and drinks with the digital guest directory - without leaving the hotel room. Orders are sent directly to the hotel restaurant Both features simplify operational workflows, optimize processes and thus relieve staff and relax guests. This reduces administrative/bureaucratic efforts, saves time and money and the time saved can be devoted to what is important: hotel guests. Travel Appeal announced Mobile Coach, a mobile app designed for on-the-go managers. By combining artificial intelligence with human experience, the Coach is able to detect even the most granular details from customer feedback. It’s the perfect solution for obtaining actionable insights about everything that really matters to a business. Review and operations management, made simple. The Coach app not only improves and simplifies business strategies, but helps users manage and respond directly to customer feedback - reviews, posts and photos published by customers are delivered directly to your mobile. Uncover what your clients really think to offer the best experience and maximize satisfaction. Live updates and a seamless user experience allow managers to track competitors and monitor brand reputation while also collaborating and assigning tasks to staff members. hotelkit GmbH announced a HOUSEKEEPING module. Their existing platform is used by over 40.000 hotel employees in more than 800 hotels worldwide. This new solution now focuses on all housekeeping needs and guarantees high-quality housekeeping standards through fully digitalized processes. Through an easy and modern paper-free task allocation, housekeeping processes are way more efficient. The workload can be distributed efficiently according to an employee's time and skill credits, thus, productivity is enhanced. Through digital checklists, quality standards are significantly high and the entire cleaning process can be monitored easily through real-time tracking. Smooth and efficient housekeeping routines are a crucial aspect in hotels, as cleanliness is particularly important when it comes to the guest decision making process. However, typical housekeeping processes within hotels are still highly inefficient. In order to be able to substantially increase guest satisfaction, hotelkit HOUSEKEEPING was developed together with several luxury hotels - among them the Sacher Hotel Vienna and Salzburg, and the Radisson Blu Hotel Hamburg Airport. As all processes are digitized, fast reactions, increased quality standards, and high guest satisfaction can be guaranteed! Knowcross announced PANIC BUTTON. Hospitality workers are subjected to an inordinate amount of sexual harassment and abuse, which is why as a technology provider we considered the introduction of Panic or Safety Buttons as our way of giving back to the industry. Panic buttons give hospitality workers the ability to summon assistance when needed. PANIC BUTTON helps hotels to provide a safer working environment by instant reporting of harassment complaints by hospitality workers by using technology such as GPS and Bluetooth. Guest Applications & Devices Criton announced multiple property group functionality which was piloted with London-based Cheval Residences became the first brand to adopt the new product. Created specifically for the hospitality sector, the new product gives accommodations providers with multiple properties a platform to include information on each one within a single parent app. With locations across the capital city, luxury serviced apartment specialist Cheval Residences are the first group to adopt the new technology with eight of their luxury properties contained within their new app. Group functionality is a game-changer for multi-property organizations like Cheval; enabling them to showcase the unique personality of each property while reinforcing their brand, increasing direct bookings and driving loyalty from new and repeat guests. GuestTraction announced online check-in to reduce queuing at Front Desk by moving check-in to pre-arrival. More than a third of guests polled (38%) indicated that a source of frustration was the front desk taking too long to complete requests.
As providers of the leading Business Intelligence (BI) and Analytics platform for the hospitality industry (HotelIQ), at Intelligent Hospitality we’re often asked to replicate existing reports that hotels produce manually. The thinking behind such a request is understandable: “My hotel spends X hours producing reports at regular intervals (usually daily, weekly, or monthly). We like these reports. If they can be automated by a tool, that would save us a lot of time.” While on the surface, that logic is reasonable, it completely misses the advantages of analytics solutions. More importantly, it highlights a big gap in our thinking and approach towards analytics in the hotel industry. If you are making the decision to move on to more sophisticated technology, it is important to understand and leverage all its benefits. Not just to get a substantial ROI out of it, but to be able to compete in today’s market. My grandfather loved his typewriter and never used a computer. According to him the only reason to switch from a typewriter to a computer would be to get clearer print. A computer was too expensive to do just that, so he never bought one. We all understand today (hopefully) that the ability to type and print is the least of a computer’s capabilities. We look for speed, memory, connectivity, and overall computing power when we are in the market for a computer. In fact, it is inconceivable that someone could survive in today’s job market without basic know-how about computers. Similarly, with the information era in full swing, hoteliers who don’t “get” analytics solutions won’t be able to compete in a market full of data-savvy OTAs and rental alternatives like Airbnb. These new players have already mastered data analytics; They live and die by it. If you still think it’s “just reporting”, I have taken up too much of your time already. This article is intended as a starting point for those hoteliers who want to take a more analytical approach to their business. If you’re still reading, I promise this will be more fun than it sounds. However, just to test your commitment, I will start with something dry… Definitions Here is how Adobe defines Reporting and Analytics respectively: Reporting is “the process of organizing data into informational summaries in order to monitor how different areas of a business are performing.” Analytics is “the process of exploring data and reports in order to extract meaningful insights, which can be used to better understand and improve business performance.” You don’t have to memorize these definitions. Just remember one thing - reporting is “monitoring” while analytics is “exploring”. When we run day to day meetings using templatized reports, we condition ourselves to look for and monitor specific cells/fields – day after day, week after week, month after month. We only react when we see a significant fluctuation in those values, and even then, we must wait for an analyst to go and get us the answer to our next question. It’s a slow and reactive process. Yet, it’s familiar and comfortable. Analytics on the other hand, is driven by curiosity, competitive drive, and a sense of adventure. It gives us multiple views and perspectives by dimensionalizing data. It takes us on a journey of discovery by giving us the ability to answer questions on the go. Thus, it expedites the discovery of opportunities and threats while minimizing surprises. Visualization Looking at familiar designs and layouts makes our eyes dull to minor changes. Hence, we don’t see what we don’t expect to see. Here’s a rose: Can you spot the Dolphin in this rose? What if I told you that there is a dolphin inside the rose? Can you find it? Hint: Take a closer look at the petals. I hope you were able to find it. However, I doubt anyone would have noticed it had I not pointed it out. A wall of numbers in a spreadsheet is no different. You see rows and columns populated with figures. Unless you know what to look for, it’s hard to see it. Spotting the proverbial "dolphin" in this wall of numbers is near impossible Good data visualization should not just be pretty, it should draw your attention to what needs your attention. To be able to do that, you must crunch huge amounts of data, contextualize, compare, and conditionally format. And that’s just the basic stuff you should expect from your BI/Analytics solution. The HotelIQ dashboard draws your eye to critical insights via red dots on the map The above dashboard consolidates a ton of information. It includes data by hotel, by month, and by market segment - actuals, OTB, STLY, Budget, and Forecast. Plus, based on current and historical trends, it also estimates where you are likely to finish against your goals. Yet, it only needs three simple visuals to convey all that information and more. The goal is not to bombard you with information, but to highlight what’s most relevant. Interactivity Looking at the map, you know right away which hotels in which markets need attention. The color and size of the bubbles can change instantly to indicate the risk levels based on various parameters. It becomes even more engaging and meaningful as you easily zoom in, filter, and dissect the underlying cause(s). All this momentum and insight with just a few clicks! In contrast, with a typical report produced manually by the hotels and consolidated at the corporate office, users would either make due with an aggregate figure or painfully (depending on the size and scale of your operation) go over each hotel one at a time. Even when you are looking at a single property there are many dimensions like market segments, profiles, feeder markets, channels, and room types that you have to look into and consider in order to make the right business decisions. And should you have any further questions…like Adobe says, reports are for monitoring, not exploring. That is the fundamental reason why reports don’t translate well into an analytics environment. They are restrictive because they are built using simpler tools with lower technical complexity. When you transpose those reports into an analytics environment they often bring along with them the limitations of their original design. Effort and Opportunity A lot of hotels have Excel junkies on staff who copy & paste data from various sources, run macros, build pivot tables, and go through data gymnastics every day to lay out the information in a manner the GM likes. They love these “spread-marts” because they have birthed them at their hotels. So please forgive me if it sounds like I’m calling your baby ugly. However, no matter how much you master these basic tools, they are no match for the BI tools used by Data Scientists (with degrees in Computer Science and Data Analytics) to design robust analytics solutions. Cooking steak in your backyard is very different than running a commercial kitchen My neighbor can grill a mean steak on the BBQ in his backyard but that doesn’t mean you should trust him to run a commercial kitchen. It’s nothing against steaks, BBQ, or my neighbor. We understand that a trained chef in a professionally equipped kitchen can do a lot more with the same ingredients. A hotelier’s job is to optimize profits at the hotel while ensuring that guests get the best experience possible. The hotel staff should be focused on the achievement of those goals rather than toiling with data for hours – just to create a report. What you get at the end of the day may be familiar but is also probably outdated information and subject to human error. Instead, if the same talent that produces reports focused on discovery and insight using the latest BI and Analytics solutions, you’d go much further. Start Exploring The objective of this article is not to put reports down. In fact, reports are an important part of analytics. But hotels need to elevate their standards towards analytics. Stop asking your BI solutions to give you more of the same. Stop staring at the same rows and columns waiting to see different results. In this age of information, data fuels success. If you want to stay relevant, challenge yourself to go further with data analytics. To help you achieve that, in the coming months I will be taking a more tactical approach to discuss topics related to hotel analytics like improving your hotel’s forecast with the help of analytics, optimizing the performance of hotel sales team with data analytics, and using analytics to run more productive meetings at your hotel.
For hotel owners, a positive, productive relationship with hotel managers is central to a hotel’s performance. There can often be a breakdown between hotel managers, who deal directly with front-line staff to navigate day-to-day challenges, and hotel owners, who are not always in-tune with the current state of the business. Since owners often have other corporate entities, or represent entities like Real Estate Investment Trusts, there’s not always enough time in the day to stay up-to-date. Other owners may have little operational expertise within the hospitality industry, which can make communicating succinctly and accurately with hotel managers difficult. In either case, the owner may be perceived by hotel management as out-of-touch or uneducated when it comes to the hotel’s day-to-day operational realities. This disconnect can diminish trust, cause miscommunications, and lead to unrealistic expectations that set the manager up to fail. Management is doing things right; leadership is doing the right things. ~Peter Drucker To combat this disconnect, and foster a relationship built on trust and respect, owners should strive for a thorough and detailed understanding of the business -- a bar that’s incredibly difficult to reach for a non-operational partner. That’s where technology comes into focus. With tools that provide real-time insights through mobile-optimized interfaces, owners can stay connected to the pulse of the hotel from anywhere in the world. This effort to stay informed builds an owner’s operational credibility with their management teams, which models the kind of leadership and engagement owners themselves expect from their management teams. Leveraging technology is not only the most efficient way to stay in touch with the business but it’s also the most reliable route to tackle the most common complaints managers make. By proactively addressing these issues, owners are setting their teams up for success. After all, trust is the defining feature of a fruitful relationship between the hotel manager and ownership. With trust, even conflicts and complaints become opportunities for action and collaboration. Finding common ground gets things done -- and ultimately builds a healthier hotel. “They don’t understand nuances of hotel operations” Common sense says that a hotel owner is either passionate about the business, or at least understands it. However, some hotel general managers feel that hotel owners “don’t get it,” focusing only on short-term performance and a hotel’s bottom line. A savvy GM respects the owner’s own business acumen and thus will communicate everything that the owner needs to know about the business -- and nothing that they don’t. A savvy hotel owner will engage at a deeper level to develop a solid understanding of the management’s challenges and the hotel’s performance. To achieve this nuanced perspective, hotel owners should be familiar with business intelligence software for hotels that tracks performance and offers analysis at a glance. When integrated into a hotel’s operation, BI tools help owners stay current without wasting time trudging through spreadsheets. Another input comes from Revenue Management Systems (RMS), which reveals the “why” behind pricing decisions. So, rather than going on “gut” instinct, the team’s pricing decisions can be rigorously informed by data. Owners can turn to this data for a clear view into the hotel’s revenue profile, using the data as the basis for incisive, probing questions that inspire the team to better performance. Better questions get better answers! Deployed in combination, the RMS/BI toolset makes for more productive meetings with management, builds stronger staff relationships, and aligns managers and ownership around a shared perspective on performance -- with minimal time investment for owners “They don’t invest in technology or aren’t digitally savvy” Owning a hotel doesn't necessarily require extensive operational expertise, which is why building owners often outsource management to third-parties. This is especially true in the case of Real Estate Investment Trusts or owners with businesses outside of hospitality. Owners rely on the expertise of management companies to deliver reliable profitability and consistent returns on the asset. Even so, owners should stay engaged with the business and build trust with their lieutenants by introducing new tech products to their teams. With the information provided by these tools, owners can ask engaging questions about both the business and the problems solved by these technologies. With this lightly hands-on approach, owners build trust with managers without micromanaging and demonstrate a healthy understanding of trends in both the business and the broader industry. Hotel owners have a few levers to show their digital savviness. First, ensure that the team has the tools necessary to run a cutting-edge, modern hotel that guests expect. Guest rooms should feature solid entertainment options and potentially guest room automation. The hotel should consider a guest messaging platform to reach guests in the channels they prefer, including chatbots, which not only makes guests happier but also makes staff more productive. Digital marketing agencies can be powerful allies for hotel owners, offering expert opinions on performance that can inform how an owner approaches marketing discussions with their team. Other technologies for the tech-savvy owner to consider include metasearch management software, website optimization, hotel CRM, upsell software and on-demand staffing platforms that tap into the booming gig economy. During meetings with the hotel’s team, owners should propose relevant new technologies to solve the problems that the team mentions -- and that the owner identifies from the hotel’s business intelligence tools, review and reputation management software, and revenue management platform. “They don’t invest in my staff or understand how hard we work” Empathy for a hotel manager’s work is an owner’s greatest asset. Hotel managers have a tough position as liaison between hotel ownership and staff, as they must simultaneously motivate staff and fulfill owner expectations. An owner must help the manager navigate this terrain and proactively solve staffing issues. For example, when hotel staff feels overworked, or not heard by hotel management, they may begin looking for work elsewhere. Also, under-investment in staff training may lead career-oriented employees to leave the hotel in pursuit of more supportive professional opportunities. These negative perceptions affect the hotel’s ability to hire and retain workers, which may trickle down to the guest experience -- a huge issue for owners. “With owner expectations of a high-profit margin and keeping variable expenses low, we run very lean operations these days. It’s hard to find good, customer-centric employees who are willing to work for pennies over the minimum wage. It’s hard to be as customer-focused as you want to be with a skeleton crew.” -Amanda Singer, former hotel trainer for IHG Thankfully for hotel owners, maintaining profitability doesn't necessarily mean placing limits on staff investments. There are several categories of technologies that provide outsized impact relative to the investment (high ROI). First off, implementing an Applicant Tracking System for hotels helps management be more productive in their rolling hiring efforts. A hotel thrives with great staff, and an organized process for inbound applications encourages quality candidates. Once quality candidates are hired, it’s all about loyalty and engagement. It takes a lot of time and money to find good people, so it’s worthwhile to invest in loyalty. First, offer a mobile-optimized scheduling solution for hotels that empowers staff with more control over switching shifts. Next, encourage collaboration and accountability to foster an “owner’s mindset” with both a hotel task management and collaboration tool and modern housekeeping software. Each of these tools gives an owner instant access to the pulse of the business through real-time reports and analytics. Finally, maintain the momentum with hotel employee engagement software. With these mobile-optimized tools, staff stay aligned and feel heard and happy at work. For the hotel owner that really wants to recognize a hard-working staff, check the hotel’s reputation management software at regular intervals to highlight exceptional experiences and reward staff for exceeding guest expectations. *** Relationships are built on trust. And when it comes to hotel owners and general managers, that trust is forged through proven performance. Owners appreciate managers that focus on performance, share wins, and showcase staff. Owners must also provide the tools management needs to achieve that outsized performance. It's a delicate balance that both sides must calibrate to keep a hotel profitable in the near-term and competitive in the long-term.
Revenue management has made great strides in recent years. The transition to cloud-based systems built flexibility into the software development process, accelerating the pace of new features. The shorter cycles allow the software to more accurately meet the evolving needs of hoteliers. This is a relief to many hoteliers with less-than-pleasant memories of the shackles of frozen legacy technology. “Hotels face large hurdles to shrug off legacy back-end systems. Revenue management and the related issues of marketing and distribution require a full set of data to be done right.” -Skift A review of today’s revenue management technology highlights just how far the industry has come in fulfilling a vision of connected revenue management systems that use data to dynamically price room inventory. Real-time, data-driven intelligence now comes standard in the industry-leading tools. An agile approach to releasing new features is also a requirement. As the industry experiments with new ways to sell its inventory, such as attribute-based selling, the best revenue management software anticipate change, test features, and deliver on the promise of true revenue optimization. Even so, only 1 in 10 hotels deploys some level of revenue management software, due largely to the complexity of practicing proper revenue management. A comprehensive approach to revenue management generally includes a solution from each of the following categories: CRS, RMS, rate shopper, and business intelligence. Some solutions offer more of a one-stop-shop, while others overlap. Whether you choose to stick with one multi-purpose solution or craft a bespoke tech stack, be sure to prioritize agility, flexibility, and extensibility. You want a vendor that keeps ahead of the trends, while also offering a flexible product that can be customized to your needs through flexible implementation and extensible integrations. With that in mind, here are the top tools you need to improve your revenue management, as rated by the Hotel Tech Report community of verified customers. Central reservation systems (CRS) The central reservation system is the heart of revenue management. Everything pumps through the CRS: each reservation is processed and managed in this centralized hub which prevents double booking and keeps availability updated in real-time across all systems and channels. As such, the CRS acts as your distribution hub. Any inventory distributed to third-party channels will flow out from the CRS via a two-way connection that pulls inventory once its booked while also pushing out newly available inventory for potential booking. While there are technically CRS platforms that do not automate availability across channels, this approach is not recommended. Manual updates to third-party channels nearly always result in double-booking. That being said, some may prefer a basic CRS augmented with a channel manager. Desirable features: XML connectivity to your preferred third-party channels, extensible modules that allow you to reduce the clutter of unwanted features; decent reporting with visibility into channel profitability; integrations with your other technology solutions; 99.9% uptime; 24/7 customer support; compliance with global security standards. The top three central reservations systems solutions: TravelTripper. The TravelTripper CRS integrates with major PMS software to ensure accurate distribution of rates and availability. Windsurfer by SHR. The Windsurfer CRS features an Internet Booking Engine (IBE) to merchandise and sell your rooms, packages, and add-ons in any configuration. TravelClick’s iHotelier. The CRS from TravelClick maximizes visibility across all distribution channels and drive demand to your property, with a focus on direct bookings. The Travel Tripper RezTrip CRS dashboard is intuitive as it's booking engine is beautiful Related article: Why these 3 hotel groups love Travel Tripper's RezTrip CRS Revenue management software (RMS) Revenue management software, also known as revenue optimization (RO), focuses on optimizing revenue through better pricing decisions. While inputs vary across solutions, the two primary factors that determine price are the demand forecasts for an individual property, as well as the local market’s popularity. Automation factors heavily in RMS, although some solutions provide levers to control these pricing decisions manually. Desirable features: real-time direct connects to the distribution channels you use most; real-time calendar updates of new bookings and cancellations; demand-based pricing optimization at both property and market level; integrated demand forecasting to inform pricing decisions; customizable levels of automation for adjusting pricing in real-time; easy integrations with your CRS and business intelligence tools. The top three revenue management software solutions: IDeaS G3. One of the largest incumbents, IDeaS is a division of global conglomerate SAS. The company serves 10,000 properties with its revenue management software that increases “better revenue” opportunities across the entire hotel operation. Duetto Gamechanger. Duetto’s “revenue strategy platform” focuses on pricing decisions based on micro-segmentation, which means that each channel, room type, and segment can be independently yielded in real-time. Atomize. The only startup on the top three, Atomize’s cloud-based system can fully automate pricing decisions, or provide pricing recommendations based on revenue urgency for manual adjustment. The IDeaS G3 dashboard seamlessly blends automation with self service Related articles: These are the 6 most powerful IDeaS G3 revenue management software features and services Atomize founder on automating revenue management Rate shoppers Rate shoppers save time. Lots of time. Only recently, a revenue manager would pull rate data from the competition in a spreadsheet to track changes. Or perhaps rely on a rudimentary module baked into an existing technology solution. Today’s rate shoppers make manual updates and inaccurate competitive rates a thing of the past. A rate shopper has two primary functions: to see how your hotel’s competition is pricing rooms and to identify channels that violate parity agreements. This information can then be used to react to competitor pricing and to rectify parity violation with offending channels. Rate shoppers are the most easy-to-implement revenue management solutions. As they shop publicly available rates, there’s no integration hurdle to clear. Within a few days, a hotel’s rooms can be mapped, its competitive set defined, and reports pulled that accurately guide pricing decisions. Desirable features: Rate data pulled from sanctioned direct API connections; robust room mapping that allows you to build an apples-to-apples comparison; easy-to-understand visual reports that identify parity violations; comprehensive event schedule to accurately identify factors impacting market demand. The top rated rate shopping solutions: TravelClick Demand360. Recently acquired by Amadeus, Demand360 offers a segmented view of historical and future pricing across the market and a hotel’s competitive set. Rate Insight by OTA Insight. A relative newcomer, OTA Insight’s Rate Insight product has captured a sizable chunk of the market with a focus on data visualization and ease of use. Business intelligence If the central reservation system is the heart of revenue management, business intelligence is the brain. Your BI system will process and analyze your hotel’s data, alongside market demand data, and deliver insights that help you understand performance. It’s true that most revenue management software has reporting functionality. However, the more data-hungry visualizers won’t be satisfied with limited analytics and reporting. BI solutions unlock insights hidden in data, while also providing a gut check for hoteliers with robust reports. Since BI tools are integration-heavy, they often paint the most accurate picture of a hotel’s performance. By pulling in data from multiple sources, BI improves the accuracy of its own analysis and insight into the true state of a hotel’s revenue forecasts. Desirable features: Customizable reporting according to your own individual KPIs; real-time connections across your hotel’s tech stack; visual dashboards that are easy to understand; exportable reports to share with your team. These are the top three business intelligence solutions for hotels: HotelIQ. The HotelIQ solution pulls in data from the property management system, as well as other connected operational software, to glean insights. Reports can be at the property level, portfolio, or brand. Revenue Insight by OTA Insight. The business intelligence tool from OTA Insight features a flexible approach for smarter hotel analytics. Year-over-year performance is trackable and combines future and historical performance. Juyo Analytics. Juyo Analytics uses dashboards for data visualization, forecasting, and revenue pacing. The tool also allows for productivity tracking of sales teams. Related article: Hotel analytics series pt 1: Why your reports are not analytics Channel managers A channel manager is a specialized tool for those hoteliers seeking much tighter control over where and how inventory is distributed. If the CRS is the heart, the channel manager is the valves, controlling where your inventory flows. Many RMS solutions have integrated channel managers, so this may be redundant functionality for some. Nonetheless, for those looking for a light-touch software approach that doesn’t involve RMS, a channel manager can be used in conjunction with a CRS and rate shopper to adjust pricing based on internal property targets and external demand factors. Desirable features: Easy, stress-free connectivity to your CRS; ability to update the content of individual room types across channels; allocation management to control availability on each channel; consider GDS/metasearch connectivity; decent reporting that provides visibility into channel profitability and booking trends. These are the top three channel managers for hotels: MyAllocator by Cloudbeds. The Cloudbeds channel manager connects the property management software in real-time to global distribution channels, including Airbnb and niche sites for hostels and backpackers. SiteMinder. With 350 direct connections to distribution channels, as well as 250 integrations with popular hotel software, SiteMinder’s channel manager has wide reach. Cubilis by Stardekk. Stardekk's channel manager helps with online management of availability and rates on many booking channels. With their integrated booking engine is you can receive commission-free bookings through your hotel website. Related article: SiteMinder CEO: "Best-of-breed solutions for every type of hotel"
While in high school, I traveled with my family to San Jose Del Cabo, Mexico. It was my first time south of the border, and though it had been over a year since I completed my last Spanish class, I was excited to have the opportunity to show off my dual language skills. My first opportunity came shortly after we arrived in town when we stopped at the supermercado to pick up some groceries for the upcoming week. As I walked through a crowded aisle, I came across a young couple scanning the shelves with their cart blocking the way. Ever the diligent cultural ambassador, I gave them a warm smile and indicated I’d like to move by with a polite “escúchame.” Rather than part the way, they looked back at me with an odd expression. Unable to navigate around them, I reversed direction and headed back down the aisle the way from which I’d came. As I made my way through the rest of the store, this experience repeated itself several times—each polite “escúchame” met by a confused look and lack of movement. Frustrated, I relayed this experience to my older sister as we checked out and left the store. She had previously spent several months in Mexico and was intimately familiar with their customs and cultural norms, in addition to being fluent in Spanish. “Did they see me as an impatient American rudely cutting my way through everyone?” I asked. “Or perhaps my accent was too thick?” Struggling to contain her laughter, Jess kindly informed me that “escúchame” was not a request to squeeze by, but rather an order to “listen to me.” With a sheepish smile, I realized that although I’d been operating under the assumption that I was speaking the same language as those I’d encountered at the supermercado, I’d conveyed something altogether different than what I had intended. Years later, as a greenhorn Director of Revenue Management, I had a similar experience during my first annual budget meeting. As I laid out my strategies for the upcoming year and the tools I’d need to achieve our projected growth, I worked to articulate the benefits of the investments I was asking our owners to make. “This revenue management system will reduce the amount of time needed to update rates,” I stated, “freeing me up to spend more time analyzing the big picture.” With an odd look on their faces, our asset managers nodded their heads in an indication of agreement. However, several weeks later, I discovered my suggested investments in technology had died on the proverbial budget chopping block. As I reflected back on how our owners could have possibly missed seeing how my ideas would benefit our hotel, I realized that I’d once again failed to communicate in the language of my intended audience. If I’d spent a little more time gaining fluency in their language, I’d have more effectively sold my priorities and obtained a commitment to invest from our owners as part of the budgeting process. KEYS TO IMPROVING BUDGET OUTCOMES LEARNING THE LANGUAGE When pitching investment ideas to owners as part of the budgeting process, it is important to understand the ways in which they make money through their participation in hospitality assets. 1. Operational Income Operational income is the wealth creating mechanism with which hotel managers are most familiar. Any time a hotel charges a guest more for their room than they incur in costs to support the sale of that room, it generates income for the owners. As a rule of thumb, each dollar in revenue generated results in some portion of that dollar being recorded as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) on a hotel’s income statement. 2. Equity Paydown Similar to the paydown of the mortgage on a single-family home, hotel owners build equity by paying down their note. Ideally cash flow from operations will cover any financing costs so that the owners of a hotel will not need to budget for additional financial resources to pay down the mortgage. 3. Asset Appreciation Hotel owners also make money via the appreciation of their assets, which can take place via inflation, repositioning, and/or operational improvements. Given that hotel assets generally run a high gross profit margin, increases in revenue often have a much more substantial impact than refining the hotel’s expense model. UNDERSTANDING NUANCES There are a number of ways that hotel owners can be categorized. Examples of hotel owner categories include private equity funds, high net worth individuals, pension fund investment funds, and real estate investment trusts (REITs). Targeted objectives will vary considerably based on the type of organization involved. For example, private equity investors such as Blackstone often approach hotel investment by buying underperforming assets (either large hotels or entire branded portfolios) and improving operations before selling the asset at a market premium or unwinding their position via public offerings (IPOs). On the flip side, REITS may take a longer-term view when purchasing assets; buying assets with a lower risk profile in order to benefit from stable cash flows and the long-term potential for appreciation. Economic cycles often also have a significant impact on the way in which hotel owners view investments. For example, when capital is cheap and hotels are trading at bargain levels, owners may prefer to invest in new assets rather than deploying their cash to improve the operations of existing hotels. Conversely, as interest rates rise and/or hotel asset values skyrocket, owners often prefer to generate returns through improvement of their current assets as it becomes increasingly more difficult to purchase new properties at compelling values. Taking the time to fully grasp the incentives of your owner(s) will allow you to better understand the way they consider additional investments in technology, FF&E, or property enhancements. This understanding will allow you to ensure that you are pursuing the right investment strategies, thus making it easier to gain approval for future expenditures. CONVERSING FLUENTLY Once you have a strong understanding of the priorities of your owners, it is important to calculate the financial impact of any recommended investments in relation to any competing opportunities. Focal has created a detailed investment calculator to assist in your budgeting process. By walking through the steps that follow, you will be able to calculate the financial impact of new investments and convey them in a language your owners understand. 1. Determine Available Options Start by listing out all strategies for the upcoming year and the resources you will need to execute them. Perhaps you plan to renovate your suites in order to drive room type upsells. Or, perhaps you plan to deploy a new business intelligence system to reduce the time spent on menial data gathering tasks and free up your team for more strategic concerns. Once you’ve identified the tools you’ll need to execute your business strategies, research a minimum of two to three providers for each tool. In addition to obtaining pricing for each, a thorough evaluation of features should be completed in order to determine the value provided. 2. Establish Performance Targets Develop an estimate for any revenue increases or expense savings generated by the investment being analyzed. This step can be the most challenging as it relies on assumptions regarding both tangible and non-tangible benefits. For example, a business intelligence system may not reduce staffing expense materially. Instead, it will allow your current team members to repurpose their time towards deploying marketing campaigns, directing outbound sales efforts, and shifting to a more profitable business mix. In cases where established benchmarks are unclear, it can be helpful to consider prior performance gains from similar initiatives or strategy deployments in the past. For example, if reducing the time spent on compiling and analyzing data via a new business intelligence system allows for the deployment of one additional marketing campaign and the acquisition of three new corporate accounts from your competitors, a 1-3% increase in hotel room revenues does not seem to be unreasonable. Performance targets may vary for each option analyzed. When gauging the relative impact of each, it may be helpful to refer back to the feature evaluation completed in step one. 3. Calculate Total Cost of Ownership When compiling your budget assumptions, consider all costs associated with implementation and continued support to ensure any hidden costs are accounted for. For example, often times business intelligence providers do not include any costs for property management system interface fees or additional servers needed to utilize their products. Fortunately, the industry is headed towards a more open pricing model, with new providers such as Focal Revenue Solutions including all associated costs in their price quotes. It is also crucial to include any initial setup costs in addition to the recurring costs, as they will have a material impact on the total cost of ownership. In order to provide an apples-to-apples comparison, it can be helpful calculate all costs over the duration of the project or contract. Focal’s Investment Calculator allows you to compare total cost of ownership for multi-year periods. 4. Evaluate Return on Investment In order to assess return on investment, any revenue increases established in step two should be marginalized in accordance with the hotel’s net profitability benchmarks in order to provide an indication of the additional money an owner can expect to take to the bank at the end of the year. Once the profit impact has been calculated, Return on Investment (ROI) and Net Present Value (NPV) can be used to compare alternative options. Doing so will allow you to analyze the payback threshold for the investment as well as the cash flow the hotel’s owners can expect to receive, and adjusts for the fact that one dollar spent today is worth more than one dollar received a few years from now. Focal’s Investment Calculator contains additional information regarding Total NPV and Annualized ROI, as well as the calculations for each. 5. Analyze the Impact on Asset Value Hotel asset values are often calculated as a multiple of annual net operating profits using the capitalization (cap) rate from recent comparable transactions. In order to calculate the impact of a given investment on a hotel’s asset value, divide the increase in net operating income by the average cap rate for similar property types. If you’re unsure of the appropriate cap rate to use, ask your owner. They have likely been tracking recent comparable sales and can provide you with a benchmark rate for your location and property type. You may notice that it’s possible for an investment option to have a higher ROI but lower impact on asset value than its alternatives. This may initially seem counter-intuitive. However, you’ll notice the ROI calculation highlights profitability in relation to expense without considering variability in total profit contribution from one investment to the next. For this reason, it’s important to consider both metrics when comparing the merits of competing investments. For the true nerds reading this- while we’ve recommended the cap rate methodology for calculating asset value given its simplicity, there are a number of additional ways to calculate asset value. By pitching budget initiatives in the language of your owners, you’ll find that it’s easier to align priorities and obtain investment.