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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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.