What Keeps Hoteliers Up at Night?

Q&A with Fred Deschamps, Carlson Rezidor Hotel Group

By Suresh Acharya Vice President of Product Development, JDA Software Grou | January 06, 2013

What are the major drivers of change confronting the hotel industry? To delve deeper into these issues and more, I recently spoke with Frederic Deschamps, vice president of global revenue optimization at Carlson Rezidor Hotel Group, about the issues that currently keep him up at night. His concerns are not much different from executives in other industries; like many others, he stays awake thinking about pricing and the impact of social media, mobile technology and big data. Excerpts from our conversation follow:

What are the business critical issues that keep you up at night?

First, price transparency's fundamental reshuffling of the transaction with the customer. We used to be able to rely on channels to target customer segments with distinct needs. Now customers have access to all the rates in real time so we have to rethink how we segment and what the customer is willing to pay.

Additionally, the meaning of brand has evolved. Brand is a way to convey product content and set expectations with the customer. Until recently, that's really all the customer had to go on, with the occasional magazine review and hearsay. Today, numerous websites aggregate customer feedback into satisfaction and product content indicators so the brand level expectations are supplemented with a finer, individual hotel level of detail and there is instant accountability on delivering these expectations.

Finally, the "now" phenomenon, the ubiquitous availability of information, is shortening the customer's decision cycle. There is instant access to ratings, comparisons, and opinions ‒ both expert and experiential - so customers research and decide basically when the need occurs. Electronic payment options further facilitate this. The specific impact to hotels is that the booking curve is growing ever shorter. This deprives the hotel of vital information on how to price a room night, as forecasting what ultimate demand will be is based on ever shorter booking curves and can become less accurate.

What are some of the dominant challenges facing the hotel industry in 2013 and beyond?

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