Revenue Management in the Value Chain War

The Lone Ranger and the Herd Mentality

By Mario Candeias General Manager, Espinas Hotels | September 27, 2015

In the globalized world of today, with information at the tip of everyone's finger, there are millions of examples for any statement of any sort one wants to defend or argue about. Visionaries that went broke. Fools that succeeded, due to a fortunate twist of events. Players that went down and rebound. Players that didn't rebound. Others that were never down. Well, you name it and a story will pop up that will suit your purposes, whether you are in a conference room trying to sell your new product, or you are a keynote speaker wanting to evangelize your audience or even, for example, if you are writing an article for the global hotel and tourism community.

So, no point in bringing you more Steve Jobs or Warren Buffett success stories. They are out there in abundance and the trained mind should be fed up with them by now, despite their obvious educational value. Nonetheless, people who see what others don't, when others don't, tend to be the key disruptors, innovators and progress inducers. Risk takers with strong will. Better informed. Prone to action on their own, Never taking the words of others as final. Thinking by themselves, avoiding following the herd. We need a lot of those in the Tourism Industry at present; Lone Rangers who can spearhead the industry in the permanent fight for value creation.

The Industry has been experiencing great business years. More tourists, more average spend per capita, meaning more OCC and ADR in hotels, more hotels in the development pipeline, more and different distribution, and intensified air wars. Lower oil costs, a stronger dollar, favorable regional situations (ex: devalued Euro), growing middle classes, democratized airlift, improved regulatory framework, better awareness to manage and induce new Tourism flows by National Tourism Offices, all good fundamentals for our industry in the developed world and will help to deliver continued growth.

But growth induces change and change induces growth for the ones who better adapt to it.

The online world brought abundant change, from Distribution to Online Reputation. Some fortunes have been made with the reengineering in the way people "buy" Tourism. There's been a huge fight between mass global distributors and smaller merchant model players, the latter suffering the most.

As to the hotel industry, it seems that the actual status quo of OTA dominance is generally accepted. There's this herd mentality that keeps telling us of new paradigms as if new always means more. We are learning now that it actually means less for the existing players and more for the new players.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.