Revenue Management Today: Balancing People and Processes

By Mark Ricketts President & Chief Operating Officer, McNeill Hotels | October 08, 2017

While there are many service industries, hospitality is certainly one of the most complex. The closest comparison may be a cruise ship, or, to a certain extent, air travel. But for something firmly rooted at all times to the ground, we’ll take bragging rights.

We are providing an extremely intimate service, lodging, within the confines of what is nothing more ambitious than running a small city. The modern hotel comprises housing; utilities and other infrastructure; security; an employment force; a commons, i.e. lobby; and, oftentimes, food, beverage and recreation. We bring together under one roof people from all walks of life, with varying needs, expectations and personalities, everyone from a business executive stressed over tomorrow’s important meeting to a senior couple celebrating their 50th anniversary.

The analytical side of the hospitality business is also extremely complex. At the heart of the income side of operations is deciding at what price to offer a room ( of which we have a fixed number ) and the allocation of them, which rooms and for how long.

It’s no easy chore. There are so many factors over which operators have no real control. These include everything from weather events, flight cancellations, or changes in plans by prospective guests to expansions and contractions of supply in certain markets or the pricing strategies of competitors.

Perhaps, one of the newer twists for us is the complexity of assessing and interacting with not just our competitors, but, also, our guests. In today’s digital age, with the Internet and social media, smart apps and OTAs, there really is a three-way conversation going on between our property, which includes our brand partners; our competitors and our guests.

Certainly, the cost of acquiring reservations is an ongoing industry concern. Additionally, the power that consumers seem to wield at times can be challenging or disconcerting. In particular, the plethora of access points for consumers to make a reservation and the freedom with which they can post reviews or social media comments on the Internet can make us feel less in control.

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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.