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Revenue Management

Hotel Business Intelligence Software Articles

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How Technology is Helping Independent Hotels Develop Competitive Revenue Strategies

by
Hotel Tech Report
3 hours ago

In recent years, many independent hotels have come to realize that technology gives them tools to compete with larger hotel brands in the digital marketplace, helping them to remain competitive and drive share of market.But how exactly can technology add value to a hotel like yours? Duetto, known for their pioneering revenue management software, recently spoke with independent hotels to better understand how they use technology to get ahead of the curve. In this article, we’ll share some of Duetto’s findings: real-life examples of hotels that make software an integral part of their revenue strategies. These examples may spark ideas and inspiration for you as you consider adopting technology at your own property.

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Hotel Profitability Analysis: A Step by Step Guide

by
Hotel Tech Report
1 week ago

 Do you know how profitable your hotel is? Maybe you know your occupancy and RevPAR like the back of your hand, but when was the last time you took a deep dive into your profit and loss statement? Profitability seems like a simple metric to measure, but performing a profitability analysis can be challenging if you aren’t familiar with P&L statements. In addition, you may want to add context by benchmarking your performance against some competitors. This article will give you all the tools you need to read, interpret, and contextualize your P&L so you can truly understand your hotel’s revenues, expenses, and profitability.

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How to Optimize Hotel Forecasting with Technology

by
Hotel Tech Report
1 month ago

How long does your budgeting process take? And how often do you update forecasts within the month? For most revenue managers, forecasting and budgeting is a painful, manual process which is stuck in the last millennium.In an effort to unlock the power of data-driven forecasting without the manual overhead, HotelIQ has launched an AI-driven forecasting management system that incorporates historical PMS data into its predictions.Tons of variables could lead to a hotel needing to update forecasts like unexpected seasonality, competitor pricing updates, renovations that affect room rates and more. Hotel management is extremely complex and requires constant demand forecasting and a careful eye on key metrics to ensure optimization of key performance data and healthy operating margins.In this article, we’ll walk through the challenges with the standard hotel industry forecasting process and then show the improvements and efficiencies that HotelIQ can bring to your hotel. With a more streamlined and accessible forecasting process in place, you can achieve higher RevPAR and hit your revenue targets.

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Comp Set: A Step-by-Step Guide to Determining the Right Competitors for Hotel Benchmarking

by
Hotel Tech Report
4 weeks ago

How is your hotel performing? Many hotels leverage tools like STR reports to answer that question, but a STR report is only effective if you have picked the right properties (direct competitors) to compare your hotel against.Without context, your ADR and RevPAR might as well be numbers you pull out of a hat. A competitive set, or compset, can add necessary context to help revenue managers, leadership teams, and owners understand a hotel’s performance relative to similar hotels in the market. But in order for compset data to provide this valuable benchmarking context, the compset must include hotels that are close competitors of your hotel. In this article, we’ll explain the power of selecting the right competitive set and walk you through the process of building and maintaining a solid compset. Then, you’ll be able to use your compset to unlock insights and opportunities to capture higher ADR and more occupancy in the market.

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What is Dynamic Pricing in Hotels and Why Does It Matter?

by
Hotel Tech Report
4 weeks ago

If your hotel is still using seasonal room rates, we can confidently tell you with (100% certainty) that you are leaving money on the table.  If you aren't updating room rates to reflect real-time market conditions you are without a doubt selling your rooms in a suboptimal way.  Either you're over-pricing and missing out on selling hotel rooms to drive occupancy or you're underpricing and leaving critical ADR (average daily rate) dollars on the table.  Either way, good luck beating your compset on RevPAR.So how do you maximize revenue in changing market conditions and with fluctuating demand? In short, you'll need to tap the power of automation by implementing a hotel revenue management system.  As a hotelier, you want to sell the right room types to the right guests, at the right prices, at the right times. But the “right price” can mean very different things to different guests, and the “right price” in the middle of your slow season is drastically different from the “right price” on a peak demand date. It’s clear that a one-rate-fits-all approach doesn’t quite work; a dynamic pricing strategy can increase your revenue and occupancy by adjusting rates up or down based on a variety of factors. In this article, we’ll explain how dynamic pricing works, the costs and benefits of adopting a dynamic pricing strategy, and some best practices for effective use of dynamic pricing.The hospitality industry is notoriously complex when it comes to pricing and distribution.  This has become even more pronounced with massive market fluctuations in the wake of the pandemic.  In order to effectively leverage the automation techniques required for effective hotel dynamic pricing you'll need to incorporate competitor pricing and market data so granular that it's simply impossible for a human to catch up without computational assistance.

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Actabl Wants to Revolutionize the Way Hotel Operations Teams Leverage Data

by
Jordan Hollander
4 weeks ago

Commercial teams in the hotel industry have come a long way in leveraging data across departments like revenue management and marketing - but hotel operations for the most part still remain in the dark ages with hoteliers making decisions based on feel and conjecture.Remember when retail behemoth Target learned how to leverage website browsing data to predict pregnancy? The data that lead to this goldmine of an insight was somewhat surprising, “Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date.”  This insight gave Target a competitive advantage in the highly lucrative “new-mommy” category so imagine what kinds of competitive advantage could be unlocked at your property using similar techniques.Every hotel GM, operations manager and management company knows that there are a myriad of opportunities to generate more efficiencies (and profit) in their businesses but historically it’s been incredibly difficult for hotels to see true cause and effect in a brick and mortar environment.  The key barrier to making these connections is a lack of insight on the impacts between inputs and outputs.  In the Target example, the retailer’s ecommerce website analytics and sales data are fully integrated which made that insight possible - but the integration of inputs and outputs typically isn’t present in hospitality operations.For example, let’s say you want to run a test to see if sending a different sequence of upsell messages to guests yields a material change in total guest spend. Historically, hoteliers could see how those upsell messages directly converted but couldn’t see whether that guest was more likely to book a massage, for example, if they didn’t convert with that exact promotional campaign.  There are literally thousands of small experiments hoteliers can run to optimize their businesses. But, since inputs and outputs haven’t historically been in the same dataset it’s been challenging to justify outside the box experimentation.The secret sauce behind the success of tech giants like Google, Airbnb and Amazon are precisely in their ability to run consistent, rapid tests over extended periods of time to develop compounding gains (and a competitive advantage).  What if you could easily run dozens of small experiments in your brick and mortar hotel business that would compound over extended periods of time to drive dramatic improvements? The team behind Actabl believes that they can do exactly that by bringing data science into hotel operations.Actabl, launched on June 28th at HITEC 2022 in Orlando, is the brainchild of leading technology investment firm ASG and is a culmination of their vision for the future of hospitality.  ASG has strategically acquired several leading tech firms in the space and is now bringing them together to provide hoteliers with a completely new kind of operational tool that will enable rapid compounding experimentation.Actabl has some BHAGs (big hairy audacious goals) that they are aiming to accomplish that will unlock value for hotels. Actabl wants to: Combine insights and operations to create a feedback loop that will allow hotel operators to build a living playbook that serves as a new standard for operations. Empower hoteliers with actionable (or ‘Actabl’) data from across their tech stacks so that they no longer have to “shoot from the hip.” Allow hotel operations teams, for the first time ever, to set up optimization ‘experiments’ and measure the true impact of initiatives by controlling inputs and outputs under one roof. Launch a hotel operations data science renaissance like the ones that revolutionized revenue management in the 90s and digital marketing in the 2000s. Actabl’s vision is to bring digital attribution to brick and mortar hotel businesses.  For brands: Actabl will unlock opportunities for the big chains (who don’t control assets) like never before by bringing together operational data from franchisees into a single, actionable business intelligence dashboard. For independents: Small and medium sized operators will be able to run experiments like large enterprises and access data and benchmarks beyond the scope of their four walls.In this article, we’ll dive into the opportunities that are being unlocked as Actabl brings these historically distinct datasets under oneroof.

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How Customer Insights Helped Duetto Reimagine Hotel Forecasting and Rate Management

by
Hotel Tech Report
4 weeks ago

While technology obsessed consumers have grown accustomed to clamoring around big splashy launches like the latest iPhone or social media app, innovation in the hotel technology space is more nuanced, often requiring a refined eye to understand them. This complexity leads to a unique challenge for hospitality tech buyers and users: how do you spot innovation in hospitality? Cutting-edge hotel tech rarely makes the headlines, and you won’t see star-studded launch events in this ecosystem. Instead, innovation in hospitality is won in the long game.In this article, we’ll study real-world examples that show how Duetto, a leading revenue management system, ideates and prioritizes product changes, then develops and rolls out new features via the Cloud to help their customers gain readiness for rapidly changing market conditions.

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Inflation’s Ripple Effect: High Debt Costs - A Risk for Hotel Investors

by
Alex Sogno
5 months ago

The hotel sector has grown used to absorbing the blows as the pandemic has thrown punch after punch in their direction. Yet now, as the rather choppy recovery progresses, inflation could well be the blow that lands the knock-out punch to some in the sector.For those with hotels situated in areas with strong tourism demand, there has been the chance to increase ADR, sometimes with the added benefit of high occupancy, to help soften the impact of wage and cost inflation, but for those dependent upon business travel, the surge in demand is yet to materialise, meaning many remain on the ropes.Inflation - and the added spectre of stagflation - is greatly feared by both economists and the wider population alike. For those with debt, however, there at least used to be a silver lining as the loss of value in money has a corresponding effect on any debt. This is a particular favourite among some governments, who have been known to use inflation to reduce their borrowings and get out of periods of high spending intact.But you can go too far. If inflation starts to run away, the borrowing to deal with it can outpace any reduction in value, and then a spiral begins, which is hard to break.Away from the macro, is the mechanism traditionally used to control inflation in the form of increasing interest rates, leading to significantly higher debt coverage - a negative sting in the tail.The hotel sector has been through a phase of borrowing just to stay afloat. While we saw Marriott International and Hilton using their loyalty programmes to raise money to build up cash cushions, for the rest of the sector, government support and additional borrowing were the route to staying afloat.With supply chain issues, inflation, and war in Ukraine grabbing governments’ attention, supporting the hotel sector while it tries to move towards stabilised trading is not a popular issue. Many loans are now being demanded back by governments eager to balance their books.Of those who looked to the private sector for loans and investment, many are finding money taken to save a business is harder to pay back than they had hoped, hindered as they are by inflationary pressures and increased debt costs. In addition, lenders have continually adjusted their risk appetite, leading to pressure to enforce covenants.Hotels are finding that what kept them afloat may now sink them as they find ever-decreasing volumes of cash available to meet such demands, let alone service debt, which could drive an acceleration of loan-to-own scenarios as well as an increase in transactions in general.A critical additional factor is the impact this scenario has in terms of the valuation methodology applied, and the increased potential for the sort of downward pressure on asset values many investors anticipated (and in some cases hoped) would lead to forced sales before now.Although the focus on the top lines is necessary for a speedy recovery, it’s recommended asset managers and hotel owners re-run their projections: evaluate the inflation impact on their 10-year projection, and clearly estimate the risk of a high debt ratio on the discounted cash flow. It is important not to misjudge the inflation threat until it is too late.Although tempting, it is important not to play down rising prices and concentrate only the recovery efforts on the operating departments. It is essential to evaluate the potential exposure below GOP and value the risk of rising inflation and cost of debt. Although hotel value is holding up, for now, the current market conditions will soon impact hotel valuations. Combined with the geopolitical instability, the situation may worsen rapidly.The sector is not yet in desperate straits. The latest study from HotStats, for April, reported: “The higher cost for goods is not yet wrecking traveller appetite. Despite record gas prices, ballooning airfares and crippling inflation roiling the globe, hotel performance remained widely steady, if not getting better, in April, with increases in both the top and bottom line.”The M&A market is, however, ticking up. 2021 was a year of strong recovery for European hotel transactions. A total of €16.4bn [1] worth of hotels changed hands, representing 322 individual transactions, 498 hotels and 79,000 rooms. Institutional investors and private equity investors were the largest net buyers as they rushed to deploy capital which had been hard to move at the height of the pandemic.2022 is expected to show increased volumes. Lenders who have been lenient so far are expected to lose their patience, and hotels are forecast to sell rather than refinance. Some owners have been down on the canvas but bounced back due to pent up tourism demand; some cling to the ropes in the hope that improved trading will ensure few fire sales; but investors are still holding out for a bargain, and many are poised, and ready to pick up those who are forced to throw in the towel.

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Is the Future of Revenue Management Humanless?

by
Jan Hejny
7 months ago

According to McKinsey, AI-based pricing can deliver between $259.1B to $500B in global market value. But the critical question remains: can Revenue Management be completely automated? The answer is: theoretically, yes, but, in practice, things are a little more nuanced. But let's step back for a second and try to reword the original question, at least slightly: should Revenue Management be completely automated? The answer, in this case, is a big, resonating, capital letter YES. A recent study by MIT-BHI showed that companies that “undertook AI-driven pricing transformations achieved more than $100 million of revenue improvement 70% more often than companies that focused on another area”."Self-learning algorithms are evolving fast, becoming highly sophisticated, and they already have a high impact on operational efficiencies and increased yield. As a result, there is no doubt that the future of revenue management will be fully automated," says Alexander Edström, CEO, Atomize.The pieces of evidence are all around us, and not only in travel. Some examples? Amazon uses artificial intelligence to drive dynamic pricing; Starbucks adopts predictive analytics based on its data from over 90 million weekly transactions, and multinationals such as Coca-Cola or Johnson & Johnson have been using AI pricing for years. During the 2019 edition of the Revenue Management & Pricing in Services Conference, hosted by the prestigious Ecole hôtelière de Lausanne, Kevin Hof, Data Scientist at RoomPriceGenie, shared several case studies where hotels experienced an average of 22% increase in revenue by adopting RMSs, and similar results can be found on dozens of similar publications."The hospitality industry is very fragmented when it comes to tech adoption and AI implementation in revenue management. Many hoteliers are still very protective of their own pricing and strategy; they believe that their historical knowledge and gut feelings know better than any algorithm. The truth is: that they don't trust what they don't necessarily know, understand, and cannot control (like a Human Revenue Manager). That's when tech Vs. human becomes a dilemma, and that's when we need to go back to basics and work on the "tech it easy:" step by step education followed by measurable results. Revenue Management is a hybrid human+tech cooperation, and the future is already now," says Silvia Cantarella, Commercial Strategy Expert & Founder Revenue Acrobats.

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How Nationwide Hotel Management Outmaneuvers the Competition with Decision Intelligence

by
Hotel Tech Report
7 months ago

How can data unlock decision intelligence and help your hotel stand out from the pack? The pandemic made hoteliers reconsider many aspects of their operations, and perhaps you’ve also had to figure out creative ways to do more with fewer employees or with less budget. As you navigate this new world, one of the most critical inputs to your decisions should be reliable, timely data about your reservations, your guests, and your financial performance. As you’ll learn in this article, real-time data can unlock better decision-making at all levels of your organization.We talked with Robert Goad, the Senior Vice President of Revenue Management at Nationwide Hotel Management Company, which operates roughly 120 Woodspring Suites hotels across the United States. The Woodspring Suites brand, which is part of the Choice Hotels umbrella of brands, sits within the economy extended stay segment and attracts guests who stay anywhere from one night to many months, which presents unique operational challenges, especially during and after the pandemic.Robert and his team have partnered with HotelIQ to develop a strong culture of decision intelligence and real-time data, which we’ll dig into in this article. Whether you operate one hotel or a hundred, or if you have a team of 10 or one-thousand people, you can take some nuggets of wisdom from our interview with Robert to improve decision intelligence in your own business. These principles can help your team harness the power of data, make decisions more quickly, and achieve better revenue and occupancy performance while keeping costs low.