Changing With the Times: The Need for Hotel Marketing and Revenue Management to Converge

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | April 20, 2014

With all the negative reporting around economic recoveries running out of steam, it is pleasing news indeed for hoteliers around the world that travellers, both business and leisure, are spending more money than ever before and the biggest chunk of their money goes toward booking accommodation. In 2012, $162.4 billion was spent on travel world-wide, compared to $145 billion in 2011, and 39% of spending was on hotels, compared to 37% on flights . Yet with increasing levels of competition, more hotels than ever before are vying for a slice of the same traveller spending pie, forcing hoteliers to rethink and fight harder to capture the attention of potential customers and retain existing guests.

We are currently in a digital age. The proliferation of new technologies and the uptake of them by guests is changing the booking landscape so quickly that even technological adept hospitality managers can find it difficult to keep up. The biggest change in recent years has been the rise and heightening reliance on mobile devices such as smartphones and tablets, as well as the social media apps offered on these devices, which are available at any time in any location. The transformation in the use of technology is also turning traditional sales, marketing and revenue management on its head and demanding a more holistic approach to how hotels run their business and interact with consumers.

New and Evolving Trends in How Travelers Book Hotels

Remember the days when the only option for your hotel guests was to either ring your property directly or be booked into your hotel via a travel agent? Offering this style of booking travel is still vital in meeting the needs of all travellers across all generations, some of whom still like to be able to contact hotels by phone to ask questions or meet face-to-face with a travel agent to book their travel. However, a large segment of the travel population sees this as an old-fashioned way of the past, with these tech-savvy travellers ditching tradition, and its middleman travel agent, in favour of taking charge of things themselves. They have fully embraced the ease of using their mobile device and online apps to research third party unadulterated actual guest reviews, compare hotel rates across multiple channels and book their own travels wherever and whenever it suits them.

The gusto in which many travellers are getting behind the new trend of booking their own adventures online is reflected in statistics that show 148.3 million travel bookings, 57% of all travel reservations are made on the Internet. And the most telling numbers of all for hotel operators is the fact that 65% of same-day hotel reservations are made from a smartphone, 81% of travellers find user reviews important and 49% of travellers won’t book a hotel without reviews .

Hotels Need to Play Catch Up, Fast

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.